By Beth McGuire
Power Brokers Prep Agents to Compete in a Low-Inventory Environment
For the first time in a long time, the outlook for residential real estate is decidedly bullish. Stock markets and consumer confidence are riding high (at press time), job growth is continuing to rise, and interest rates—though on the upswing—can still be categorized as low. Despite insuperable student debt and the continued lure of renting, consumers across all demographic groups are most definitely in favor of homeownership. Yet, there’s a rub—and a big one: lack of inventory. In fact, a whopping 62 percent of respondents to RISMedia’s 2017 Power Broker Survey* reported that a lack of inventory was their biggest challenge in today’s market. And with low inventory comes pent-up demand and rising prices, putting many on alert for another potential bubble. So what’s a Power Broker to do? Make sure their agents are well prepared for the challenge.
The Race for Marketshare
While a concern in many markets last year, this year, the inventory crunch is being felt across the U.S., not just in major metro areas or hot spots like Southern California and the Pacific Northwest.
“Our biggest challenge is lack of inventory in the entry and move-up price points,” confirms Rei Mesa, president and CEO of Berkshire Hathaway HomeServices Florida Realty. “There is demand, but a great deal of it is pent-up. This is a challenge for all of us, not just my firm. To combat this, our focus is to make sure we’re getting our fair share, if not the largest percentage, of what’s available by using our brand and tools to increase our listing capture.”
Mesa’s sentiments are shared by his peers across the country, like John Collopy, broker/owner of RE/MAX Results in Eden Prairie, Minn. “The biggest change I’ve seen in our market is the constant lack of inventory available to our buyers,” he explains. “In the next couple of months, I think our biggest challenge will be to grow the individual productivity numbers of our sales executives.”
Dan Kruse agrees. “Our biggest challenge is probably the same for all markets in the U.S.: shortage of inventory,” reports the president of Century 21 Affiliated, serving markets in Wisconsin, Illinois, Indiana, Michigan, Minnesota and Florida. “To address the changes in our markets, we have regular communication with our agents. When our agents are armed with the right information and tools, they find success no matter the market conditions or competition.”
Lennox Scott, chairman and CEO of John L. Scott Real Estate in the Pacific Northwest, has been suffering through an inventory shortage for some time, and its effects are creating stagnation for current homeowners as the shortage causes prices to rise. “We are experiencing a frenzied market for homebuyers trying to get a home,” he explains. “We are virtually sold out of inventory, so each new listing is receiving multiple offers. With such a severe shortage of inventory, it is now creating seller gridlock in the more affordable and mid-price ranges. Sellers are afraid to put their home on …read more
From:: Real Estate News