With less than a month left in spring, now is the time to start planning if you haven’t started yet. If the first half of 2020 has taught us anything, the second half will be unique and full of surprises. In this article, I will share the state of the real estate industry, project where it's going this summer, and recommend tips for preparing your real estate business for summer 2020.
- The State of the Real Estate Industry
- The Real Estate Industry in June 2020
- Tips for Preparing Your Real Estate Business for Summer 2020
1. The State of the Real Estate Industry
According to NAR’s May 2020 Existing-Home Sales report, Existing-Home Sales dropped by 17.8% to a seasonally adjusted annual rate of 4.33 million in April 2020. Total Sales decreased year-over-year, down 17.2% from a year ago (5.23 million in April 2019). Home sales have decreased nation-wide, but the West region is seeing the biggest drop.
The last biggest drop for Existing Home Sales was -27.2% to 3.83 million in July of 2010, two years after the financial crisis of 2008 and when the homebuyer tax credit expired at the end of April 2010.
Fortunately, interest rates are at an all-time low at .25% and that will be a major driver for home buyers this summer.
2. The Real Estate Industry in June 2020
June will be very difficult to predict because there are too many variables. Yes, businesses are reopening, the stock market is increasing, and people are going back to their “normal” lives which will reignite the economy and the housing market. However, if there is a backlash and a second wave of outbreaks hits the country, we’ll either see a continued decrease around 17% or slighlty lower, around 15%. Of course, each state and each county has different guidelines for reopening, so check your local government website to ensure you follow them.
Even though there will be too many variables to predict for the next few months, one thing is for certain. It will be summer – the busiest season of the year for real estate. Prices typically begin to increase in spring and peak during June, July, and August, allowing summer to have more transactions with higher prices than other seasons. Summer sales typically accounts for 40% of the annual sales volume for real estate professionals. Summer is a popular season in real estate for several reason. First, Summer is the optimal time for home sellers because kids are out of school and parents want to find a new place before the new school year starts. Second, Many home buyers will have extra cash in their pockets because of their tax returns.Finally, renters are more likely to buy in summer too.
Note: It’s important to mention that seasonality is regional, so it has varying degrees of influence depending on your location.
3. Tips for Preparing Your Real Estate Business for Summer 2020
- Determine your target audience
Would you rather work with home buyers, sellers or both? Once you’ve determined who you want to target, you can cater your market strategies to appeal to that specific audience. If you haven’t decided, consider researching the historical trends for your local market, current inventory, and how long listings are on the market to predict your local market’s demand.
There will be new trends during Summer 2020 that are caused by the coronavirus. Three common trends coming out of the pandemic will be increased divorce, death, and job changes. These are also three common indicators that a home will go on the market soon. In Wuhan, China, divorce rates double after the shelter-in-place orders were lifted, according to a GlobalTimes.CN article. The US might not experience as large of a spike in divorces but it's a demographic to keep your eyes on. Additionally, as the US exceeds 100,000 confirmed deaths cause by the coronavirus, the surviving members of the family may need to see their relatives' home. Finally, there should also be a spike in home foreclosures too due to high unemployment rates - over 36 million jobless claims as of May 14th, 2020. - How Will Your Reach Your Audience?
Once you’ve determined your target audience, consider the best channels to reach them – keep in mind consumer behaviors have changed during this pandemic. For example, since traditional lead generation tactics – like door knocking and open houses - are irrelevant now due to social distancing measures, you must rely on digital strategies to reach your audience. Digital lead generation strategies like Facebook Ads and Pay-Per-Click Ads are very powerful tools that capture new leads, increase your sphere of influence and grow your real estate business.
If you want to learn more about generating home buyer leads via Pay-Per-Click Ads, request a free demo to learn more about Torch X's software >>> - Give Your Leads Peace of Mind During the Transaction
One of the easiest ways to understand a lead's concerns is simply by asking them. If you know their concerns, you can properly recommend solutions and make them feel safe. There are three different type of consumers that you may encounter in this situation: Consumer A - has minimum health concerns, Consumer B - has moderate health concerns, and Consumer C - has high health concerns.- For Consumer A, you may not need to alter your current strategy too much. At the minimum, you and your lead must wear a mask, practice social distancing, decrease in-person meetings, more video calls, and wash hands frequently.
- For Consumer B, you may need to decrease in-person meetings and leverage digital channels to build a relationship and entice your lead to buy or sell. Some digital strategies that you can use to overcome moderate health concerns include virtual tours, video calls, recorded walkthroughs, adapted-conventional walkthroughs, and scheduled open house appointments. Along with decreased in-person meetings, you and your lead should also wear a mask, practice social distancing, and wash hands frequently. If you choose to have a walkthrough, make sure to bring the proper equipement to disinfect possible contaminated areas of the home like doorknobs, counter-tops, and appliances.
- For Consumer C, you must ask for their concerns because they’re likely to be case-by-case or very specific to the lead. Along with minor tweaks, you should be able to get by with the same strategies used for Consumer B but use caution, be empathetic, and actively listen to your lead to overcome their concerns.
- For Consumer A, you may not need to alter your current strategy too much. At the minimum, you and your lead must wear a mask, practice social distancing, decrease in-person meetings, more video calls, and wash hands frequently.
Summer 2020 in real estate is going to be volatile. As real estate professionals reopen their businesses, they must overcome consumer health and safety concerns to complete a transaction. If they don't reopen properly, the US might see a second wave of the coronavirus. Since Summer is less than a month away, you need to determine who your audience is, how you will reach them, and how you will give them peace of mind during the transaction during these unprecedented times. In addition to overcoming conventional real estate concerns, you must also overcome coronavirus concerns. You can do this by purchasing masks and disinfectants for yourself and your leads, minimize in-person meetings, use more video calls, and transition your strategies to be more digital.
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