Report from Denver

I just returned from a meeting of similar companies from around the country, held this time in Denver.  We always poll the group about market trends, and there was a great deal of commonality this year. Inventory, or the lack thereof, is the driver in most of the United States.  Even Connecticut is short on supply in the lower price ranges, and in the healthy range for all but the million plus category.  That higher supply in more expensive homes is also true in most areas around the country, but the real story is that starter homes and homes under about $500,000 have marketing times that are measured in days in most communities.  This is driving up prices, which hasn't happened here as often yet, although we are seeing it with well-maintained and desirable homes.  Mortgage rates are headed up as well, so time matters for many lookers.

Another big trend is in marketing.  With the exception of certain kinds of direct mail, mostly postcards about homes just listed or recently sold, advertising is going digital at a rapid rate.  We in Greater New Haven spent more on newspaper ads than almost anyone else, and very few did print advertising at all anymore.  Digital ads (SEM) or organic search tools (SEO) dominate the field, along with costs of website improvements and video production. Lead generation is front and center, often focused simply on how to track leads. Some are even spending money to appear in the answers given by Alexa!

Some things haven't changed much.  Personal relationships still account for most agent transactions, and, although people search for an agent on line (and pay a lot of attention to client testimonials), they are often starting with a recommendation from someone they know.  Good agents still generate a lot of repeat business, and good agents are doing more and more of the total transactions.  Real estate is an expensive business to be in for agents and for brokers (lately, even agents might feel sorry for the pressure put on broker returns!), and more is sold by a few top agents than ever before.  As the market improves, more people are going into the business again, and they are more likely to be younger, but the industry as a whole skews old and non-diverse.

Companies are also consolidating, so that megafirms are more and more a dominant force.  Teams have mostly taken the place of small firms,  and are run as companies within companies.  Legal and ethical compliance are big reasons for this tightening of the market, along with cost drivers that favor economies of scale.  One-half of one percent of brokers did a third of all the business in the last year reported.

Buyers haven't varied in their desires as much as most thought they would, given the demographic profiles we see.  Gen Xers and Millennials nationally still favor traditional homes with outdoor space, and in good school districts.  That's good news for sellers, although the younger buyers are much more concerned with maintenance and walkability scores.  Since there hasn't been enough new housing built in many regions, buyers will eventually have to buy what sellers have to sell, at least in the short run.

What are the takeaways here?  Almost everyone thinks that mortgage rates will rise, and prices will rise as well, making now the time to buy.  This is especially true at the high end of the market.  Buyers will still want personal assistance in navigating home ownership, and sellers want that touch as well. Therefore, we will be reaching out to them in new and different ways, but with the same message:  We're here to help.

Live Time Chat

As we tread further into the brave new world of digital marketing, we try new ways of reaching and serving our clients all the time.  This week, we have begun offering "live time chat" on our Pearce website.  People who log onto our site between 8 AM and 1 AM will see a pop-up box after they begin browsing, that will offer them the chance to talk to a person immediately.  While that person is not an agent, and will ultimately be referring certain questions to our offices during business hours, it represents our latest attempt to give buyers and sellers what they want, when they want it.

It's certainly been a long journey since the days when buyers had to come into a physical real estate office, and sit down with an agent to go through "the book".  That was the MLS compendium of currently listed real estate properties, and it came out every two weeks, with the latest in inventory available twice a month.  Twice a year, we could buy a book that had the sales for the past six months chronicled for our use.  We didn't give out maps or addresses of listed properties, and most information we did give out was only available on little cards, that we kept in a little box that looked like something in which you would store recipes. It seems strange now, but it was what we had, and it seemed normal to us!

We've gone all the way in the other direction now, and you can find out almost anything about a property, currently listed or not, with the flick of a finger on a mouse.  It may not all be accurate, but it is readily available.  Real estate agents, on the other hand, have morphed too; they've become consultants and counselors.  They no longer control the information, but they are adept at interpreting it, as well as in streamlining the process of buying or selling.

So, if you are scrolling the internet at midnight, and you happen to talk to our live receptionist, think for a moment of how much things have changed!  And how much they still remain the same--we're still here to help you in any way we can, to make the very best real estate decisions for you, your families, and your firms.