We are in what we might describe as a normalizing market. What does that mean?
We've been in an abnormal market for several years. Our market's been almost a vertical. We've had double digit appreciation for several years. And this has been a run that we've never seen before.
We're about 12 years into a 7-year cycle. So there's an expectation that we're starting to see the markets shift.
A lot of us are seeing a slowdown of showings and energy. And there's some data that backs this up. Here's some of that data:
New listings in the largest 50 metro markets across the country rose 5.1% last month.
And 17.3% of all listings in the country had a price reduction in the last 30 days.
That's in line with pre-pandemic levels, what you would expect in coming into fall. So that's like 2016-2019 levels. Last year, we didn't see that because the market was straight up. It was on a tear.
But right now sellers are starting to say, "Hey, wait a second. I'm not getting the energy, the activity that I used to be getting. So I'm going to adjust my price."
The question for you guys is this: Are you adjusting your prices fast enough to keep up with the competition?
You don't want to be the last one in the market to turn the lights off. So what I mean by that is there's a lot more listings coming to market every single day. And the sellers on the market that aren't selling are starting to get wise and adjusting their price.
You do not want to be the highest priced property in your price market or category.
So you need to be constantly studying this every week because the market's changing that fast. What we got away with being overpriced six months ago, you can't get away with it today because people are undercutting you. They're now coming under you because they want to generate showings, activities and offers.
So how do you get price adjustments?
You earn price adjustments by having a conversation with your sellers every single week about their listing.
And here's the things I want you to cover:
You're going to talk about their peer group, the active listings they're competing against. Have there been price drops? You want to look at the things that have gone pending, the things that have sold. Look at what they had to do. Look at the history of the listing. Did they drop their price and then went pending? How many days after they dropped the price, did they go pending?
Dig deep into this data.
But here's something else I want you to do:
I want you to look at virtual showings. You take one thing away from this video hear me here:
You need to be talking about virtual showings. So I need to know my data. For instance, I need to say, "Hey, on my website, we had 32 virtual showings last week. On realtor.com, we had 22. On Zillow, we had 32 virtual showing. So combined, we had about a hundred virtual showings. Of that, three converted into an actual live showing." Or whatever your numbers are.
It will be a low number. Don't panic, that's natural. But if you're consistently getting high virtual showings, meaning people looked at the listing details—that's a virtual showing—and then decided based on what they saw online, not to come look at your listing. There's a couple reasons for that.
Either your marketing wasn't that good. In other words, your photos, your description, your virtual tour wasn't that great. That's probably not the case. Most of us are doing a pretty good job. Or the property is overpriced.
So my conversation with my seller would be, "Listen, we had 100 people look at the house online, but that's where they stopped. And I think the reason they're stopping there is they're seeing other things that they'd rather see and usually that's based on price. Price is the ultimate marketing tool."
That's the conversation you need to have with sellers. You got to get comfortable with uncomfortable conversations. You'd rather have an uncomfortable conversation and get the listing sold than not have that conversation and waste all your time and energy on a listing that sits on the market.
So that's my message for you today guys. Make sure you earn the right to have these conversations by having your Monday Morning Power—where you're calling and talking to your sellers, updating them about the market, and looking at those virtual showings.
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