Huntsville Housing Market

Huntsville Housing Market – 1st Quarter 2012

Our last market update post took a long term annual perspective and highlighted where the Huntsville Real Estate market was at the end of 2011.

This weekend, I have been looking in some detail at how the 1st Quarter of 2012 has shaped up in comparison to the last few years, and while my conclusions are positive they are not as optimistic as much of the recent hub-bub around our market has been. Nonetheless there is much more good news than bad, and I must say that is one positive trend I can definitely live with.

Huntsville Home Sales – A Two Year Positive Trend

In the 1st Quarter of 2012, Home sales on a transaction basis rose by 2%, following a year-over-year increase of 5% recorded in the same quarter of 2011, thus for the first time in 5 years Huntsville Home Sales are on a steady upward incline.

Nonetheless while this new positive trend is welcome news for home buyers and sellers alike, one doesn’t have to be overly observant to realize that if the present positive trend continues it will be another 3-5 years before the Huntsville Housing Market attains the pre-housing crisis levels of 2006 and 2007.

1st Quarter – Huntsville Home Sales

 

Huntsville Home Sales Multi-Year Performance

Click to Enlarge

 

When one looks closely at the Huntsville Real Estate market month to month several aberrations stand out associated with abnormal events, such as the Tax Credits of 2009 and 2010 as well as last April’s tornado furry that struck our local market with a vengeance.

Nevertheless by clicking on the chart to the left and examining the 12 month moving average, in some detail, one can tell that 2012 is really a year to pay close attention to, as it could be pivotal and the teller of events to come.

Huntsville Median Home Prices – Up or Down?

Click to Enlarge

 

If one watches closely the month to month market reports generated by the Huntsville Area Association of Realtors as well as others, it is a bit confusing because as often as Home Prices are reported to be up, they are also reported to be down.

Thus is the case when the actuality is that Huntsville Home Prices are Flat and neither up or down since Home Prices also adjust seasonally along with Home Sales. So don’t read too much into these month to month reports.

Flat home prices are just that: flat. By clicking on the chart above you will see exactly what I am saying. Yet given other markets across the US flat home prices would certainly be welcomed news.

Enhanced by Zemanta

Real Estate Professionals More Optimistic As Summer Approaches

Summary The survey projects expectations for the 2nd quarter of 2012. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.

The professional Real Estate community’s optimism continues to improve. The outlook for sales (yellow) this quarter is at the highest level recorded in the three years this survey has been conducted, 61, a five point improvement from last quarter. This is one point higher than last year at this time.

While all scores are up to new highs, the survey participants are still expecting continued declines in prices (47) and credit availability (48). The national score at 52, up from 48 last quarter, indicates that respondents are more constructive on the overall economic picture. The participants moved to positive sentiment on the statewide conditions at 59 up 5 points from last quarter. Sales expectations are more positive at 61 again up 5 points from last quarter. Inventory expectations improved to 52 from last quarter, the first time this indicator has been above 50 indicating improving conditions expected. Sellers are likely to be frustrated by pricing, and buyers will continue to have problems getting financing.

Regional Results:

The sales expectations for each region are within 1 point of each other from 60-61.

This quarter showed an improvement in all measures and in all regions. To some degree this is a seasonal phenomena, the levels are at high points in the three year history of the survey. Of course the three years of the survey have been some of the most challenging in recent times. None the less the results are encouraging, and taken together with the early results of actual sales in the 1st quarter and the new ABRE sales projections for the remainder of the year that ACRE/Brander has recently released all point to improving conditions.

Commercial market participants (the majority of the respondents are from the Birmingham market area) moved to projecting a continuing improving market this quarter at 59 this quarter vs. 54 last for sales expectations. Price expectations are still soft, at 48 vs 45 last quarter indicating pricing pressure. The score for credit availability has turned constructive, at 54 up from 48 points from last quarter.

North Region

North Alabamaexperienced a consistent improvement in all scores. The total score of 53, up from 51, a 2 point improvement from last quarter. The Rural markets were an exception to the increasing sales expectations with a drop to 50 from 59 last quarter.

North Central Region

The North Central Region overall score improved to 54 from 50 last quarter, The sales score improved 6 points to 61. Inventory is continuing to improve at 53 with, pricing, and credit below the 50 mark at 47, and 49 respectively.

South Central Region

The South Central Region participants outlook for sales improved 6 points to 61. Rural participants sales expectations improved 10 points to 60.

South Region

The Southern Region sales score improved 4 points to 60. Rural participants sales expectations improved 7 points to 57.

About the Alabama Real Estate Confidence Index and Survey:

Almost 500 professionals responded to the 2nd quarter 2012 survey which was conducted during the month of March 2012. The survey, conducted by the Alabama Center For Real Estate now has the largest participation of any real estate survey. It provides important market insights. Full history and scores for each market segment are located here on the web http://goo.gl/n6o8O

The ACRE Leadership Council determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, Council Member, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce itsAlabama Real Estate Confidence Index (ARECI). The Council appreciates everyone who participated.

For further information contact Tom Brander at Tombrander@tombrander.com or Grayson Glaze at gglaze@cba.ua.edu

Posted in ACRE, Alabama Center for Real Estate, Alabama Real Estate Confidence Index, Baldwin,Birmingham, Forecast, Huntsville, Jefferson County, Montgomery, North Alabama, Shelby County, Tuscaloosa, Uncategorized | Tagged , , , , | Leave a reply

Enhanced by Zemanta

Birmingham March Residential Real Estate Sales Soft

Birmingham Area MLS* Monthly Observations for March 2012

Sales in March improved 17% to $162,227,603 from February’s $139,164,184, down 1% from last March’s $164,121,105. The 12 month moving average line for total dollar sales is tilted upward.

Unit sales were up 15% to 1060 in March from 919 in February, an increase of 141. This is off 1% from March 2011 at 1,076. This is 21% unfavorable to our projection of 1,279 sales expected for March and 15% unfavorable year to date. The complete monthly projections from ABRE (a joint project between ACRE and Brander Real Estate) can be found here http://goo.gl/WFHrO (along with the worksheets that show the methodology). It is likely that the results will close in on projections as the spring unfolds. New sales declined 11% to 102 homes this month from 114 in February, a decrease of 12 units. Used sales improved 19% to 958 homes in March from 805 last month, an increase of 153 (Sect E p.3).

This month total inventory is dramatically lower at 10,138 vs. 12,900 last year and 10,720 last month. The drop in the current month is caused by month-end expirations which should come back on the market shortly. Active New listings decreased to 834 in March from 1,123 in February, a decline of 289 units (Sect E p.3).Housing permits showed an increase in Jefferson County to 95 in February from 79 in January. Shelby County was down to 15 from 20 (see website for details).

Absorption rate for New and Used homes is improving.New homes are at 7 months supply this month with a reduced sales pace, and about even with last year at this time at 8 months (Sect E p.3). New home supply seems to be stable. Under $100,000 New homes are at 20 months supply. The New homes in the $100,000-$400,000 price range have an almost normal inventory level in the 6-7 month range. (Sect C p.1 and Sect E p.3.)

Absorption for Used homes in March shows 10 months, four months better than 14 months last year. Used Active listings at 9,304 are lower than the 11,754 last year (Sect E p.3), (Sect E p.3).

Birmingham area Average Days on Market for New houses was 194 compared to last month at 208 . The Used homes DOM was 146 in March, compared with 153 last month (Sect A p.18). NOTE: DOM for Used Homes indicates that well priced homes are moving in less than 6 months. The high months of inventory indicates that sellers, including bank owners, are still holding out for higher prices. Again: If the home is not selling, reduce the price, particularly since we are in the more active sales season of the year.

Average sales price for Sold New homes decreased to $237,079 from $237,357 last month (Sect A p2). Average sales prices for Sold Used homes increased to $144,098 from $139,262 last month (Sect A p2). The twelve month moving average price line for Used Homes has been quite steady since mid 2009. Average Home prices, new and used, have stabilized (Sect A p2). The price of any specific home still remains under pressure.

TWB 4/6/12

Posted in Alabama Center for Real Estate, Birmingham, Construction, Forecast, Home values,Jefferson County, MLS, Monthly comments, real estate, sales forecast, sales projections |Tagged , , , , , | 2 Replies

Enhanced by Zemanta

March 2012 Residential Sales Soft On The Alabama Coast

Baldwin County & Alabama Coastal MLS*: Observations for the Month of March 2012

Sales Dollars increased 21% in March to $78,411,645 from February’s $64,803,320. This is 8% above March last year at $72,390,530. (Sect A p.2). The 12 month moving average line of sales is flat once again. Inventories are continuing to come down. It is hard to read too much into comparable sales in these slow months.

On a unit basis, sales of all houses improved 24% to 383 this month vs. 308 last month, which is 2% down from last year’s 390.

Used Home sales improved 31% to 354 this month vs. 271 last month, which is down 1% from last year’s 356 (Sect A p.18). There was a noticeable increase in sales in the under $200,000 range, to 226 units. New Home sales were 29 this month vs 37 last month. Low sales of New homes reflects intense competition from existing, and the shutdown of new construction.

New listings for New homes decreased to 39 from 53 in February. Used houses New listings increased to 631 from 629 in February with net inventory down.

The absolute number of Used Active homes on the market, which had a slight peak mid-summer of ’09, has once again been improving. In March, there were 3,431 Active Used homes, a reduction from 3,818 in February. The New home market, which peaked in March 2006 at 2,144 Active, now sits at 297.

The Absorption rate for New homes was 10 months of inventory for March vs. 12 in February. The Absorption rate for Used homes was 10 months of inventory for March vs. 11 in February. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in March 2008 to 10 months this March.

Average sales price for all homes has been stable for the past year.For New units, prices increased to $230,466 from $185,463 last month. (Sect A p.14). Average Used home prices decreased to $202,622 from $213,805 in February.

Average Days On Market for New Sold properties in March was 206 this month vs. 176 last month. Days On Market for Used was 178 this month vs.196 last month.

We modified the subdivision charts to show those subdivisions with more than 20 sales since 2008 rather than 2005, we hope it make it easier to find subdivisions of interest.

TWB 4/8/2012

Posted in Alabama Coast, Baldwin, Home values, Monthly comments, real estate | Tagged, , , , | Leave a reply

Enhanced by Zemanta

Sales Projections for Alabama Real Estate Markets 2012

ABRE Analytics studies correlation between unemployment rates and future real estate sales projections; projects statewide real estate sales growth of 13%

With the release of the metro unemployment data for January 2012, ABRE Analytics is pleased to present our combined projections and commentary for the Alabama real estate market. One note, the current projections are considerably more optimistic than the preliminary ones due to the much better than expected unemployment rates.

Area 2011 Projection 2011 Actual 2011 Error 2012 Projection Correlation% 2004-2011 % change from 2011
Statewide 37,118 36,965 -0.41% 41,992 83.68% 13.60%
Huntsville 8,259 8,610 4.23% 9,050 77.60% 5.11%
Birmingham 12,737 12,468 -2.15% 14,550 86.77% 16.70%
Auburn 1,016 1,132 10.27% 1,138 83.40% 0.49%
Tuscaloosa 1,662 1,743 4.64% 1,826 80.62% 4.78%
Montgomery 3,335 2,774 -20.24% 3,679 84.65% 32.63%

Preliminary looks at the Mobile and Baldwin county areas showed poor results, probably mostly due to exogenous events like hurricanes and oil spills. The projected increase for Montgomery seems out of line. It is also noted that the performance of the projection for 2011 in Montgomery was quite poor. Possible reasons include the high dependence on government employment and the high uncertainty surrounding it in spite of the low, and declining unemployment rate.

ABRE Analytics present these projections as a “work in progress” and as a tool for assessing how well current sales are performing against some level of “informed” expectation. You should not rely on them, but nonetheless we hope you will find them useful.

It is always possible that catastrophic financial events or natural disasters will dramatically change people’s outlook for the future and therefore immediately impact the plans for home purchases. For the time being however we do not see anything that predicts nearly as well as unemployment. Unemployment rates have issues such as people dropping out of the workforce, but overall dropping rates are one of the best indicators of consumer expectations, and therefore predictors of home buying intent.

In the process of developing this methodology we also tested it in other geographies and found similar results. Further, we tried to find correlations to mortgage interest rates and found them to be not at all predictive of home buying activity.

Month to month break-out of the yearly projections are done by taking the sum of the 2004-2011 monthly volumes, for each market, and deriving the monthly spread of sales from those volumes.

The monthly estimated volumes do show more variation since we are dealing at finer levels of detail. The monthly tables are located here http://goo.gl/WFHrO, along with all the worksheets for deriving the forecasts.. The detailed spreadsheets also show the 1st two months projections vs. actuals for 2012, which look quite accurate, except for the previously mentioned Montgomery.

About ABRE Analytics: Strategic collaboration is one of the keys to accelerating the flow of insights in the 21st century. The Alabama Center for Real Estate (ACRE) and Tom Brander has been successfully collaborating since 2009 when Mr. Brander was appointed to the ACRE Leadership Council. Council members provide insight and counsel on current market trends, and enhance the sustainability of ACRE through vision, resourcefulness, and creativity. Without creativity and collaboration, two recent ACRE projects, the “Alabama Real Estate Confidence Index” and the “Alabama Residential Data Center” gadget for smartphones would still be on the drawing board. The flow of ideas that in turn lead to solutions to better serve the Alabama real estate industry and consumers is virtually an endless stream and ACRE and Tom Brander are forming ABRE (ACRE/Brander Real Estate) Analytics as a strategic collaborative umbrella that will foster future creative thinking while also providing hands-on experience for student/interns of ACRE.

This latest initiative explores methods to project future residential real estate sales. “Late last year, Tom shared his published preliminary projections that were based on estimates of the US Bureau of Labor Statistics January unemployment rates for a limited area in Alabama. The preliminary results looked quite good and initial test showed high accuracy for 2011 (when calculated blind from the 2011 January unemployment data) and ACRE desired to broaden the project across applicable statewide markets”, according to Grayson Glaze, executive director of ACRE.

About ACRE: ACRE, housed within the UA’s Culverhouse College of Commerce, collects, maintains and analyzes the state’s real estate statistics, and is a trusted resource for Alabama real estate research, education and outreach. The relationship between the Center and our industry stakeholders is one of the Center’s greatest strengths. Alabama companies and individuals partner with the Center bringing a wealth of resources and experiences, becoming, in effect, extensions of the Center, a network through which our outreach to the Alabama real estate industry is enhanced and enriched.To learn more, please visit www.acre.cba.ua.edu.

About Tom Brander: Tom provides Real Estate market reporting services which can be found at http://tombrander.com and Software services for Web, mobile and Data analysis, using Open Source Software, more information at http://oswco.com . He is a senior member of the ACRE Advisory council, and assists ACRE in its research programs.

Posted in Alabama Center for Real Estate, Auburn, Birmingham, Huntsville, Montgomery, North Alabama, real estate, sales forecast, sales projections, Tuscaloosa | Tagged , , , , , , , | 6 Replies

Enhanced by Zemanta

February Birmingham Real Estate Sales a Good Harbinger For Spring

Birmingham Area MLS* Monthly Observations for February 2012

It is shaping up to be good spring! Sales in February improved 20% to $136,263,984 from January’s $113,514,352, up 18% from last February’s $115,791,214. The 12 month moving average line for total dollar sales is tilted increasingly upward.

Unit sales were up 18% to 906 in February from 771 in January, an increase of 135. This is a 17% improvement from February 2010 at 773. This is 2.7% unfavorable to our preliminary projection of 930 sales expected for February. Our full year projections will be revised up due to the final January 2012 unemployment rate being better than expected. (I did not want to hold this report up any more to wait on that). New sales improved 29% to 111 homes this month from 86 in January, an increase of 25 units. Used sales improved 16% to 795 homes in February from 685 last month, an increase of 110 (Sect E p.3).

This month total inventory is dramatically lower at 9,756 vs. 12,483 last year and 10,519 last month. The drop in the current month is caused by month-end expirations which should come back on the market shortly. Active New listings decreased to 807 in February from 1,076 in January, a decline of 269 units (Sect E p.3).Housingpermits showed an increase in Jefferson County to 79 in January from 64 in December. Shelby County was up to 20 from 6 (see website for details).

Absorption rate for New and Used homes is improving. New homes are at 7 months supply this month with a reduced sales pace, and about even with last year at this time at 8 months (Sect E p.3). New home supply seems to be stable. Under $100,000 New homes are at 18 months supply. The New homes in the $100,000-$400,000 price range have an almost normal inventory level in the 6-7 month range. (Sect C p.1 and Sect E p.3.)

Absorption for Used homes in February shows 10 months, three months better than 13 months last year. Used Active listings at 8,949 are lower than the 11,320 last year (Sect E p.3), (Sect E p.3).

Birmingham area Average Days on Market for New houses was 208 compared to last month at 215 . The Used homes DOM was 153 in February, compared with 143 last month (Sect A p.18). NOTE: DOM for Used Homes indicates that well priced homes are moving in less than 6 months. The high months of inventory indicates that sellers, including bank owners, are still holding out for higher prices. Again: If the home is not selling, reduce the price, particularly since we are entering the more active sales season of the year.

Average sales price for Sold New homes decreased to $240,076 from $242,347 last month (Sect A p2). Average sales prices for Sold Used homes increased to $137,881 from $135,288 last month (Sect A p2). The twelve month moving average price line for Used Homes has been quite steady since mid 2009. Average Home prices, new and used, have stabilized (Sect A p2). The price of any specific home still remains under pressure.

TWB 3/16/12

33.499584 -86.755692

Posted in Absorption, Birmingham, Building Permit, Construction, Forecast, Home values, Jefferson County, Monthly comments | Tagged , , , , , , | Leave a reply

Enhanced by Zemanta

February Real Estate Sales Soft In Huntsville

Huntsville/North Alabama Area MLS Observations: Real Estate Market February 2012

February sales improved 10% to $87,702,197 vs. January at $80,004,946. This was 6% below last year’s $93,076,486. The twelve month moving average line on the total dollar sales chart is flat.

Total unit sales increased to 610 in February vs. 536 in January, an increase of 74. This was favorable to last year at 585.

Note that our projection for February was 607 so the actual results were .5% favorable. This will probably increase as late sales are reported. We will be revising the full year projections now that the final un-employment statistics for January are available, but I did not want to delay this report. But based on the close results I think we are onto something!

New sales remained at 110 this month vs.110 last month.

Used sales increased to 500 this month vs. 426 last month, increasing 74 (Sect E p.3).

Used inventory levels remain high this month at 12 months (see the chart Sect C p.1), with the situation particularly challenged in the higher price ranges. Used homes over $100,000 are still over 12 months of inventory and over $400,000 have two or more years of inventory.

New home absorption is 8 months of inventory overall, (with last month at 10 months), (E-1). The New Home inventory level in the $300,000-$400,000 is approximately 5 months (not bad).

There continue to be a large number of housingpermits issued in Huntsville city, given the market conditions. January increased to 74 vs. 56 in December (chart on the web site).

Total Active listings decreased this month to 7,959 compared to last month’s 8,512, which is below last year at this time at 8,958 with the reduction exaggerated due to month-end expirations. (Sect A p.4 and Sect E p.3). The reduction, even if due to discouraged sellers, is a good thing.

Active New listings decreased from 1,479 last month to 1,216 in February, down 263. (Sect E p.3). Active Used listings decreased from 7,033 last month to 6,734 this month, down 299 and below last year’s amount at this time of 7,619. (Sect E p.3)

Average Days on Market for Sold New homes was 186 vs.163 days last month, with Used at 166 in February compared with 167 in January (Sect A p.18). Days on Market at or below 6 months, while the inventory numbers are way higher, indicates well priced homes are selling. Sellers, including bank owners, who do not adjust to the new price reality contribute to the buildup of inventory.

Average sales price for Sold New homes was $208,768 vs. $229,095 last month. (Sect A p.2)

Average sales price for Sold Used homes was $129,475 vs. $128,649 last month. (Sect A p.2)

The Average price lines for Used homes, which was on a upwards slope for a while, is now on a downward trend. New homes average price seems to be showing some positive direction. Prices for individual properties remain under pressure.

TWB 3/18/12

Posted in Absorption, Building Permit, Forecast, Home values, Huntsville, Monthly comments, North Alabama, real estate | Tagged , , , , , | Leave a reply

Enhanced by Zemanta

Coastal Real Estate Sales Off to A Slow Start in 2012

Baldwin County & Alabama Coastal MLS*: Observations for the Month of February 2012

Sales Dollars increased 34% in February to $64,295,045 from January’s $48,065,756. This is 7% below February last year at $69,394,255. (Sect A p.2). The 12 month moving average line of sales is headed down once again. Inventories are continuing to come down quite dramatically. Sales for the last three months have been disappointingly below the comparable prior year. It is hard to read too much into comparable sales in these slow months, but it is worrisome and a contrast with what we are seeing in other markets.

On a unit basis, sales of all houses improved 11% to 304 this month vs. 273 last month, which is 8% down from last year’s 330.

Used Home sales improved 11% to 268 this month vs. 241 last month, which is down 14% from last year’s 312 (Sect A p.18). New Home sales were 36 this month vs 32 last month. Low sales of New homes reflects intense competition from existing, and the shutdown of new construction.

New listings for New homes increased to 53 from 48 in January. Used houses New listings decreased to 626 from 700 in January with net inventory down.

The absolute number of Used Active homes on the market, which had a slight peak mid-summer of ’09, has once again been improving. In February, there were 3,528 Active Used homes, a reduction from 3,755 in January. The New home market, which peaked in February 2006 at 2,144 Active, now sits at 327.

The Absorption rate for New homes was 12 months of inventory for February vs. 12 in January. The Absorption rate for Used homes was 11 months of inventory for February vs. 12 in January. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in February 2008 to 11 months this February.

Average sales price for all homes has been stable for the past year. For New units, prices decreased to $184,142 from $190,503 last month. (Sect A p.14). Average Used home prices increased to $215,171 from $174,148 in January.

Average Days On Market for New Sold properties in February was 176 this month vs. 229 last month. Days On Market for Used was 196 this month vs.161 last month.

While we have developed some interesting projections for the real estate market in the statewide, Birmingham and Huntsville markets, the numerous events on the coast such as the oil spill and several tropical storms, make the methods we used in the other markets unsuitable for the coast, but we are thinking about the problem!

TWB 3/18/2012

Posted in Absorption, Alabama Coast, Baldwin, Home values, Inventory | Tagged , , , , , | Leave a reply

Enhanced by Zemanta

Huntsville AL Market Trends – January 2012

By: Huntsville Real Estate Expert Mike Manosky On March 2012

2012 is off to an encouraging start. Mortgage rates have remained under 4% for nearly two months. Home sales are strengthening and pending home sales, a measure to gauge future sales, are at their highest levels since March 2010.

Job growth increased during most of 2011, with unemployment dropping to 8.4%. As more people are getting jobs, consumer confidence has also been increasing. However, underemployment with a rate of 18.1% continues to be a problem for a stronger recovery. There are still a significant number of people working part time, who would like to have full-time work.

Even with substantial national improvements, the recovery is spotty. Payroll jobs were up in 25 states, but down in 24, demonstrating the delicate state of the U.S. economy. Global factors such as the European debt crisis are also complicating a more robust recovery.

What does the recovery look like in our local real estate market? Take a look at January figures.

Madison County/Huntsville AL Real Estate Sales Statistics

Huntsville AL and Madison County saw an decrease of 29% in sold listings in January 2012 when compared to December 2011. It is not uncommon to see a drop in January closings due to many buyers taking time to enjoy the holidays instead of house shopping in December. The average list price decreased 2% to $191,199 and the average sales price decreased by 2% to $185,514. The average price per square foot remained consistent to December 2011, while market times increased by 12 days.

Date Sold Listings Average List Price Average Sale Price Percent SP/LP Average DOM Average Price Sqft
January 2012 258 $191,199 $185,514 96.26% 107 $79
December 2011 365 $195,544 $189,818 97.25% 95 $79

For more information about Huntsville AL real estate, please visit MoveToHuntsville.com or call me at 256-508-0211.

To begin searching Huntsville AL homes, please use my complimentary MLS search.

Statistics are based on information for the North Alabama Association of Realtors and are deemed reliable but not guaranteed.

Bookmark It

Add to Bloglines Add to Del.icio.us Add to digg Add to Facebook Add to Google Bookmarks Add to Slashdot Add to Stumble Upon Add to Squidoo Add to Technorati Add to Yahoo My Web

Tags: Huntsville AL Real Estate, madison county, market trends, mike manosky


Enhanced by Zemanta

How to Become an ‘Expert’ Real Estate Agent: Part I

People value and pay more attention to experts in their respective fields. That’s true of most professions, including doctors, lawyers and, of course, Realtors. Experts usually earn more money, too!

coins image via shutterstock

Would you trust a mechanic who claims to be able to fix every make of transport, be it plane, car, boat or bike?

Of course not! Nor should a real estate agent claim to know everything about everywhere.

Consumers spend six or even 18 months researching towns, neighborhoods and home types, using sites like Zillow and Trulia, usually without ever speaking to a real estate agent.

Having done their research, consumers are looking for advice and interpretation of local market conditions. They are often more knowledgeable than the average agent is about localized data.

When you meet one of these educated consumers, you had better know what you are talking about, or they will dump you and quickly find an agent who does.

The very first step to expert status? Creating your own niche!

Once you focus on a niche, you differentiate yourself from the thousands of other Realtors in your market, but it has to be something that you are (or can be) passionate about.

A niche can be any of these, or even combinations:

-a price range or property type;

-a particular demographic — first-time buyers or single women;

-a geographical location;

-hobbies/interests such as horses;

-a profession such as attorney or engineer;

-a subdivision or tract.

portland sign via shutterstock

Using Portland, Ore., as an example …

… It would be a stretch to claim you cover the whole city of more than half a million people.

If your home is located on the edge of the city, perhaps Cedar Mill, even if your office is located some miles away, wouldn’t it be more appropriate to concentrate there, and the neighborhoods that are close by?

Neighborhoods that you can get to know really well and get excited about?

Page 2 of the search results pages just does not cut it for lead generation.

When I checked, there wasn’t a single agent on the first page of Google for the search term Cedar Mill real estate, and only one for Cedar Mill homes. The results are dominated by the aggregators: Trulia and Realtor.com sites.

A well-optimized WordPress site concentrating just on Cedar Mill and a couple of adjacent neighborhoods such as Oak Hills and Bonny Slope, with tons of localized content, would surely make the first page for both search terms along with other long-tail results for other specific neighborhoods.

The next step: You must be sure that your chosen niche is worth the trouble.

Before you jump in and fully commit to your target niche, ask yourself this crucial question: “Is there enough business to go around?”

Look at the demographics. Cedar Mill has a population of a little more than 12,000, with just under 5,000 households and around 130 homes currently listed.

Run multiple listing service reports to list the homes that have sold over the past five years (10 would be better) in your proposed niche. Compare these sales, year by year, to see if there is a trend up or down.

Work out the commission volume.

Evaluate the competition. If you will be targeting listings, is there a dominant agent who does most of the business, or are there many agents involved? Personally, I would prefer the latter.

The last step: your elevator pitch!

elevators via shutterstock

Now that you have chosen your niche, it’s time to perfect your response to the question people will ask you: “What do you do for a living?”

This, in essence, can be better described as your elevator pitch, because that’s exactly what it is.

From this point forward you can stop responding with “I’m a Realtor” because that’s never, ever going to start a meaningful conversation.

Wouldn’t a phrase like this — “I love helping people find really nice homes in Cedar Mill” be more appealing and appropriate?

This article is the first in a five-part series during the course of this week. Tomorrow we will be exploring how to do your homework and research your market, because you need to know more about your niche than either your competitors or your clients.

, ,

Enhanced by Zemanta