Here's some good news about the real estate market, and we need some good news right now:
As of the second quarter of 2022, home ownership rates were rising. So that's good.
And we say, well, why would anyone not want to be a homeowner? Right? When we're in the real estate business, we think everybody should be a homeowner.
But sometimes, renters have a hard time getting over the hump of deciding if it is a good idea to become a homeowner. Especially when we're seeing interest rates rise. We've seen prices still rising in some markets by double digits.
One thing you can point to, which is really powerful, is the concept of inflation.
Everybody knows what inflation is and inflation is touching everybody. And so you can point out that, "Hey, you know, I'm sure you're aware that inflation right now is at a record high, a 40-year high. The last reading was 8.5% inflation. But what people don't realize is that rents are...
53% of today's clients that you're dealing with in the real estate industry are actually millennials. They represent the largest group of buyers and sellers in our business today.
And here's what's interesting:
Millennials actually trust referrals from family and friends over all other advertising messages. In fact, they're very distrustful of traditional media marketing.
So what do we do with that information? How do we adjust to that information?
Well, one thing we have to understand is that reviews and recommendations are becoming a really important part of our business. Which means we need to be focused intently on getting reviews and recommendations and endorsements online.
So, I want to ask you: do you have a process? Do you have a plan in place for collecting these reviews and recommendations?
Here's an example:
If we take a brand new agent in this industry, but an agent that's aggressive and doing well, and we...
A stat from a Zillow study that came out shows that 30% of Americans have cited climate change as a reason to move in 2022.
Now, I think about that and I reflect on my own market where I live here in Southern Oregon. And I think, well, a lot of people wouldn't consider this being a climate change issue here, but it is.
You see, we've had, and we've been surrounded by fires for the last four or five years in our community. And those fires create smoke. And it creates a situation where people don't love going outside during the summer, one of the best times to be outside. Coupled with the fact that last year we had a fire rage through the entire city and burned down 2,700 homes. I had three duplexes burned down myself.
So when people have that experience, it's very detrimental. They are in fear of it. Of course they might think about moving. And a lot of people did move away because of that.
Or think about your...
Hey guys, I'm seeing something in the market that I've never seen before, which is really interesting.
We're seeing a mass migration of people moving from one state to the next because of political reasons.
Now, we haven't seen that. In my 33 years in the industry, I've never seen a mass migration because of political reasons. People are moving because they don't agree with the local politics or the state politics. And they're going to where they agree more with the politics of that other state.
So you might say, well, that's interesting, Jim, but how in the world do I capitalize on? How do I use that in my real estate business?
It's interesting because we all know some folks around us—family and friends—that have actually made the move. So isn't like way out there. This is like close to almost all of us.
So I'm gonna give you a simple technique today that you can implement right now.
Hey guys, we are still in a low supply market. It's the lowest supply real estate market we've ever seen.
Despite the marketing changes and interest rates rising and the market dynamics kind of influx, still low supply and high demand.
So based on that, how can we go out there and still crush it in the market? How can we thrive despite the market conditions starting to shift under our feet?
One strategy is use the "Pocket Listing Strategy."
It's one of my favorite strategies and it's totally underused. Very few people do it.
Here's the concept:
One in seven homeowners today has raised their hand and said they're interested in selling the next three years. That's 15% of the population.
Drive through any neighborhood, and one of every seven homes you drive by is thinking about selling in the next three years.
There's a massive pent up seller demand, but how do you turn the key to unlock it?
Well, a large group of those people may not be...
Some pretty amazing news from CoreLogic this week shows that the average American in the country had an equity gain of drum roll
That's more than a lot of people making a year with their normal wage.
So that's a huge increase. That's why real estate's one of the number one wealth pullers in America is this equity buildup.
Now, if you happen to be on the west coast where I live, it's even greater. And in a lot of areas of the country, it's even greater. For instance, in Washington state, that number was $95,000. Where I live here in Oregon, it was $59,000. And if you happen to live in California, one of the highest equity gains in the country, $117,000 in equity gain. Now, what do we do with this information?
Well, one thing we can do is do a social media post or an email out to our entire database.
And here's what we might say:
"Hey, your home is better than average, right? The average...
I'm gonna give you two techniques today that can really transform what you're doing on social media.
Because a lot of agents on social media are doing the same old, boring posts. They're not getting a lot of engagement. Nobody really cares. Nobody's really watching. And so they wonder why they're struggling and other agents are doing so well.
There's a few reasons.
Now one is that people are seeing repetitive posts. They're seeing the same posts from the same REALTORS over and over and over again. And they get boring. They just become noise. So how can you break through?
I'm gonna give you two strategies right now:
1. Educational marketing
Educational marketing means you're teaching somebody. So you're the teacher, they're the student. We're experts in this industry. And we could come up with a list of a hundred things we could talk about about the real estate market easily that other people outside the industry don't know.
Here's a number that we should be talking about with our spheres of influence, our friends, our social media audiences:
And this is 15.9.
Now what's 15.9 represent?
15.9% is the amount that the average renter had as an increase in the rent last year.
And it's likely that this is gonna have again this year or some similar high number, and probably the year after that.
It's supply and demand. There is high demand and low supply. So it's the same thing that's happening to us in the real estate industry, right? We have low supply, high demand causes prices to rise.
So if renters aren't careful what can happen is if rents continue to rise, they could have rent that's increasing by 10%, a year or more over the next 2, 3, 4, 5 years. They could easily be paying 30, 40, 50% more for rent in a few years.
And they think their rent's high now. Wait another couple years, it's gonna get higher.
So what can they do? What's the...
My wife and I had something exciting happen: We downsized! We moved out of our big house into a much smaller house because three outta four of our kids are out of the house and we want to travel some more.
We're like a lot of people in our generation. We're in that mindset of scaling down. But what's interesting is over the years, in our big house, we received a lot of marketing messages from REALTORS and the marketing messages always focused mostly on the agent getting a listing. For instance, the marketing messages would be a postcard, a door hanger, etc. and it would say something like this:
"Are you considering selling? Call me."
"Would you like to know what your home is worth? Call me."
"I have a buyer who may be interested in your home. Call me."
Now, what are all those marketing messages center on? The agent getting your listing. And I get it. I've been guilty of the same thing.
But what if we changed tactics and we focused on...
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