Don't Tell; Ask

Don't Tell; Ask

Every company and producer follows black-and-white sales data to find out how they did; but the gray realm of consumer sentiment research provides great insight to help organizations and sales people determine what to do.

Fannie Mae has released its latest Home Purchase Sentiment Index (HPSI) and the June data shows clear correlations between consumer attitudes and the housing inventory shortage that's been driving values up and homebuyers into fierce competition. For example, the number of consumers who think "now is a good time to buy" has been at 61.5% over the last twelve months, while the number who thought "now was a good time to sell" has averaged just under 56%. 

Seller enthusiasm reached a 13-month high and outpaced buyer optimism in June and that's likely due to market activity and consistent value increases that are expected to continue throughout this year.  But CoreLogic's June Home Price Insights predicts U.S. home prices will grow 5.3% between May of this year and May 2018, which is down slightly from the 5.7% reported by Zillow for all of 2016.

Just as MLOs have been warning potential buyers that "historically low interest rates won't last forever," Realtors are probably explaining to homeowners that value increases fueled by demand will slow when buyer appetites do. Though true, both of these caveats can easily be interpreted by the public as thinly-veiled sales tactics.

Effectively sparking interest in real estate opportunities today requires more than deciding what to tell people; attracting prospects that become closed transactions depends on what you ask them.

Other sentiments from the June 2017 HPSI offer a broader look at how the public is feeling:

Personal Finances

  • 28% say their income is significantly higher than it was a year ago, compared to 11% who said the opposite
  • 49% expect their personal financial situations will improve over the next 12 months and 37% expect no change
  • 83% are not concerned about losing their job

Ability to Get a Loan

  • 59% believe it would be easy to get a mortgage today
  • 37% are concerned getting a mortgage would be difficult

Real Estate Perceptions

  • 58% expect home rental prices to go up over the next year
  • 67% said they would buy if they were going to move versus 28% who would rent

The HPSI numbers reveal that many Americans have a rosy outlook when it comes to the main areas related to real estate and mortgage financing right now. If the number of people who think it's a great time to sell is rising, why is housing inventory low? If nearly 60% think getting a mortgage is easy, why isn't your pipeline bursting?

Make sure you're engaging prospects and past clients in ways that will start a dialogue:

  • Homeowners: Whether you're targeting a farm or database, a great question to ask would be, "Can you see 2019?" It's hard not to wonder why someone would ask that, and it sets the stage to show that home prices are expected to begin tapering off in the next year and allows you to offer a current market value and suggest an equity position review in relation to short and long-term goals. If someone is thinking of "selling in a couple of years," the hard question of what the market would be like then is a good one to consider now.
  • Renters: A great subject line for an email to a buyer prospect would be, "What do 59% of Americans believe?" Use the fact that nearly 60% of people think it would be easy to get a mortgage today and ask the prospect directly if they agree or disagree with the majority, which is a built-in call to action if you encourage the lead to reply or call. It's helpful to add lines that address fear of qualifying and phrasing like, "pre-approval doesn't take long and there's no commitment required" to help put people at ease.

Mortgage and real estate professionals are great resources for the public; but you're more likely to connect and establish relationships if you are truly seeking what your target customers think instead of talking at them with what you know.

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