The mortgage and real estate industries are reflecting and looking forward as we near the end of the third quarter. In our latest podcast, “Third Quarter is Almost Over,” Joe Welu discussed market conditions and attitudes across the country and revealed a generally positive outlook. Reports from top companies and producers so far this year include:
- Bets they made last fall on recruiting, technology investments and other big initiatives for their businesses are paying off heading into the final quarter of the year.
- Honest reviews of strengths and weaknesses and the search for leakage in their business and processes are ongoing; repairs and revisions are constant.
- Course corrections to remain aligned with goals and business plans are taking place at regular intervals rather than waiting for year-end.
On the sales front, supply has certainly affected volume this year as low inventory has become the "new normal" in the housing market, and even consumers realize that finding the right home will take far longer than in the past. Other market conditions that emerged so far this year:
- Median home sales in January, February and March outpaced June, July and August by a half million homes, according to the National Association of Realtors (NAR) Existing Home Sales Indices 2017.
- 20% of Millennial homeowners are carrying average student loan debt loads of $41,200 compared to their average incomes of $38,800, according to the NAR/American Student Assistance Survey, April 2017
- The number of homeowners who are "underwater" has decreased to 5.4% from a crisis-high of 26%; there are still 2.8 million U.S. homes in negative equity position, according to CoreLogic Quarterly Home Equity Analysis Q217.
In addition to low inventory, variations in the sales cycle must be considered in order to grow and succeed. On one hand, the sales cycle is longer and mortgage loan officers (MLOs) and Realtors must stay in front of their prospects and continue to add value over a longer period of time – from the initial home search to closing on a property. In other instances, we see a condensed sales cycle in which consumers decline to engage professionals until they've identified a property they want. Both scenarios require good systems in place to not only capture and convert prospects, but uncover the type and timeframe of a lead. Companies that are succeeding this year are using the SWOT matrix to evaluate what they're doing now - and what they can improve upon:
The SWOT (Strenghts, Weaknesses, Opportunities and Threats) Model
- Strengths: What are you doing well as a company, team leader or producer? How can you expand on this?
- Weaknesses: Where's the leakage in your processes and performance? Are your leads and databases organized and are you consistently in touch with relevant, compelling content? Where do you see waste of time or effort?
- Opportunities: Are you maximizing all of the opportunities within your market, database of past clients and sphere of influence? Are you developing multiple channels of business and deploying your efforts via email, print, social and other media?
- Threats: Who's beating you – and why? What does your competition have or use that you don't? Have you failed to adjust to changing market factors, consumer preferences and advances in industry technology?
Choose adaptation over stagnation
If you or your company have been slow to get on board with the latest technology and adjust to the new demands in the consumer experience, there's still good news: The early adopters weathered a lot of the pain, and onboarding and adaptation gets easier all the time. However, don't use that as an excuse for further delay.
Better results and increased success in the coming year depends on setting up your organization, planning for and capitalizing on new initiatives, and committing to change. Failure to adapt will be evident in production and profit numbers, which could result in being swallowed by bigger, more innovative companies – or driven out of business altogether.
Next year holds tremendous opportunity as the biggest segment of home buyers to hit the market in U.S. history continues to mature, increase their income and require professional mortgage and real estate guidance.