Your clients always want to know, “Is now a good time to buy or sell?” To uncover the answer, one of the first places experts look is at the amount of new construction and building permit applications. Many experts view home building as one of the most reliable leading indicators of economic activity. Not only does increased home construction indicate more housing demand, it fuels jobs. It is estimated that for every 1,000 homes under construction, 2,500 full-time jobs are created.
Although housing starts rose slightly over February in March 2015, to 926,000 overall, new housing starts declined 2.5 percent in the first quarter. Building permits, which are seen as an indicator for starts to come, are still on a slow rise, which provides some optimism for what will happen in Q2.
aha – Look Beyond the Hammers and Permits
For an accurate picture of the housing market, look not only to the construction pipeline, but to mortgage applications and existing home sales as well. Housing starts apply to new construction and are just one indicator of housing demand. As more buyers enter the market, more homes are needed to satisfy the demand. And with existing home sales and mortgage applications rising, inventory remains below demand.
What does this mean for your clients?
As a sellers agent, you might be experiencing quick offers or multiple offers. Based on recent news about the market, your clients’ expectations are likely that their home will sell in record time above asking price. While this is happening in some parts of the country, there are others that are not performing as well. It is helpful to talk with your client and show them how your local market compares to the national market. The result will be realistic expectations and satisfied clients.
As a buyers agent, your clients might be experiencing some frustrations. Making the decision to purchase a home is a big decision. People do not want to feel rushed or pressured when making a purchase this big. You can take this opportunity to empathize with your buyers and help them understand what to expect. If they are serious about buying, before you begin the home search process with them, give them examples of recent client experiences and timelines. You can explain that you are not rushing them to make an offer so that you can make a commission. You are, in fact, looking out for them and have seen too many buyers lose their dream home because they didn’t get the offer in on time. If your clients understand market conditions, they will have a deeper appreciation for all you are doing for them to make sure they get the home they want at a price they can afford.
This is the third article in the series for Q1 2015