“Fear Of Missing Out” drove the real estate bus in early 2022.
The whirlwind of all-cash offers, over-offering, forfeited inspections, and fast grabs for properties was unlike anyone had seen in decades.
Since pickings were slim, buyers were ready to snag anything that turned “active” on MLS. They would even put an offer on a home without even seeing it in person. After demand escalated to dizzying heights, the fervor gradually relaxed to accommodate choosier buyers who had more time to make a move.
Now that the pendulum is swinging in the direction of buyers’ favor, how can builders and other home sellers adapt to a market that is no longer in “FOMO mode?”
The key is to work with a real estate brokerage that can adapt to these kinds of market changes. Marketplace Homes is a nationwide full-service brokerage that has been around since 2002. We have seen a great deal of different circumstances and market conditions.
We’ve experienced the major housing bubble of 2008 and the subsequent crash and recession. We’re still here, and we developed many solutions that have helped our clients buy their dream homes. If you want to find out how to deal with real estate FOMO relapse, contact us today. We can share some fresh perspectives and offer unique solutions that are difficult to find elsewhere.
Today’s Cooling Market
The only certainty in life is change, and the real estate market isn’t immune. Rising interest rates and a slowly growing inventory are working together to cool demand as the Fed wrestles with stubborn inflation. Buyers now have more time and leverage to choose the house they really want.
Unfortunately, the rising interest rates have impacted the first-time homebuyer market the most, since entry-level buyers need to save more to afford an advantageous down payment and can’t take out equity. Thankfully, builders can adapt to these circumstances by focusing on these facts:
- Non-entry-level housing isn’t as sensitive to rising interest rates. If you’re a builder of move-up homes, then your clientele is made of mainly buyers with more assets to work with, such as selling a first home and using equity to pay down all or most of the new build. They may also be able to pay down most or all of the new build’s cost upfront.
- Not every market is affected uniformly. If you’re a national builder working in different markets, you will notice that while one area may be flat or declining, another may still be growing in spite of what the news says.
- Teamwork is dreamwork. When you partner with a real estate brokerage, you can gain some strategic advantages. Mainly, a pipeline to qualified and motivated buyers.
We can also shift our marketing focus to what today’s buyers want. Now that they are able to shop around a little longer, it’s important to emphasize value.
Adjusting to a New Market
The recent mass house grab taught us that there are many different circumstances that motivate buyers. While between 2006-2008 lax lending standards and ample inventory led to a buying boom, early 2022’s surge was all about low inventory. Low supply = high demand no matter the quality of the product. But when there are more options, people start to get pickier. When you offer a good product, you don’t need scarcity to motivate buyers. Here are some more ways to market to buyers:
- Focus on the value of a long-term investment. Buyers who are on the fence are concerned about the current economic situation. However, you can shift your marketing focus to quality and the value of a long-term investment. This isn’t the time to buy and move quickly, but instead, highlight your area’s strengths such as good schools, upcoming developments, and any plans for major employers to plant roots nearby.
- Stand out from the competition. By offering high-quality homes, you can appeal to the buyer’s need for a forever home. Offer customizable floor plans and material options. You can also offer top-notch service that includes digital staging and tours, sending material samples, virtual consultations, and more.
- Partner with a brokerage that offers new build perks. When you’re not spending time looking for buyers, you can focus on creating beautiful custom homes. Marketplace Homes has been connecting buyers with builders for many years through our special incentive programs like Guaranteed Buyout and Lease Buyout which takes away a lot of the common barriers to getting a new build. When a buyer chooses to work with one of our builder partners, we offer special savings on commissions. We also take away the nuisances of moving twice or paying to break a lease through our special incentive programs.
- Inventory is still considered “low.” While January had around one month’s worth of real estate inventory, our current housing inventory is still lower than the balanced market inventory of 4-6 months. This means that builders still have an advantage of creating new constructions in a market that has slightly fewer options than a standard healthy buyer’s market. So, while buyers aren’t in panic, they are still aware that the pickings are slimmer than normal and a good home may not always be available.
- Cater to the rising rates. While interest rates just rose, they are slated to rise again a couple more times this year and even well into 2023. Buyers who want to save the most can – in fact– experience a touch of FOMO when it comes to mortgage rates. Those who lock in on a new build that’s ready for the closing table can end up saving a few hundred dollars on a monthly mortgage payment compared to delaying into the new year.
Adapt And Overcome
As you can see, there is a strategy for every type of market, and Marketplace Homes has navigated many different scenarios. As a result, we have become more creative and versatile, leading to the formulation of special incentive programs and efficient real estate teams.
We take pride in our strong relationships with builder partners and ability to offer unique solutions that benefit both buyers and builders. Contact us to find out more about how we make it all work and how we can help you adapt to this Market that’s no longer in a hyper seller’s market.
Alicia Persson is a Content Strategist SEO writer at Marketplace Homes, utilizing previous years of experience on real estate teams that specialized in investments and property management. Before she joined Marketplace Homes, she was also a freelance writer for 7 years, leading to a specialization in real estate and home living content for boutique digital marketing agencies. During her writing years, she learned the basics of SEO and gained experience writing for many different clients, making her versatile at creating diverse content.
She is a proud University of Virginia master’s graduate and enjoyed her undergraduate years at the University of Mary Washington. When Alicia is not writing, she plays keytar and sings in a local 90’s rock cover band, or she spends time with her amazing family.