Real Estate Industry News – October 2023

Piatt News | October 2023 Edition

According to National Association of Home Builders and the Wells Fargo Housing Market index, “Homebuilder sentiment goes a negative for the first time in 7 months.”

What are they blaming this on? And why all of the sudden. Here is what they are saying.

The three major indicators all declined in August:

• Current sales conditions fell 6 points to 51 (anything below 50 in considered negative, so we are not quite there yet?)
• Sales expectations in the next six months also dropped 6 points to 49.
• Buyer traffic decreased 5 points to 30.

What is causing all this?

• Higher mortgage rates
• The average 30-year fixed (on average) has been over 7% since June.
• And…. Prices points have not dropped.
• There is still lack of supply

And let’s talk about the supply front for these builders:

• Facing a lack of construction workers
• No Buildable lots
• More government regulations

As a result:

• Builders are starting to offer more incentives (in some areas. Check your micro markets)
• In September, 32% of builders said they cut prices
• Verses 25% said they cut prices in August
• If this is accurate, that’s the largest share of builders reducing prices since December 2022.

But is this true or even consistent with what we are seeing in Oregon?

• We do have a lack of inventory.
• We do have a lack of buildable lots.
• And supply has not caught up with demand…. At least not in the Valley and in the Portland metro area.
• I am NOT seeing price cuts from builders, nor huge buyer incentives.
• I believe this to be true in the national market; especially, when you consider that major-metro markets always get hit the hardest and always accelerate the fastest; this can skew the data.

What I am seeing in this market | Year to date:

• Prices remain flat
• Closed sales have decreased
• Day on market have increased

Lead measures:

• Price adjustment increases.
• Expired(s)
• Active inventory is up

We could be in a position for a more balanced market. AND you need to keep your professionals LOCAL!

My 2 cents, position yourself to GET listings and KEEP them.

3 Strategies to Keep Those Listings

1. Price adjustment system
   1. Have a system in place at the listing presentation.
   1. Be specific, set dates to adjust, set dates to make the call
   1. Expect longer days on market
   1. i.e. “At day 30, we decrease by “x”; at day 60, and so on.
   1. OR call, and say, I know we talked about a price adjustment at day 30 but we had 4 showings, and we should hold for a few more days. I’ll call you Thursday, if I don’t have an update before.”
2. Expired listing agreement
   1. Listings will expire, get your system in order
   1. Pick two dates a year, June 30^th and December 31^st.
   1. Decrease the likelihood of your expired listings being stolen.
   1. “Seller, I have to expired dates for listings each year, depending on when I take yours, yours will be “x”
3. Put your past, unsuccessful buyers on speed-dial. See above.
   1. Sell your own listings
   1. Win/Win for both clients

And 3 Ways I can Help:

1. Need the dialogue?
2. Need the system?
3. Need the resource?

We NEED to meet…. ASAP. Reply to this email to schedule your one on one appointment.

We do more than just close escrows, we provide solutions.