No Inventory in Real Estate - Now What?

In just the last thirty days, there has been another noticeable change in the Southern California Real Estate market.  Homes are selling.

I know, in 2012, more home sold than anytime since 2007, but there is more to the story.  If you look all around the county, homes that have been sitting for a year or more are now moving into escrow.  When these homes leave the market, then the average Days on Market or DOM drops further.  The key here is with fewer homes on the market these homes moving off market will have an even greater impact statistically.

What does all of this mean?  It means a clear shift in the market is happening.  The bottom diggers have scrapped everything off the bottom there is.  So now the big investors who are a little more conservative are putting up money for people to buy.  One loan agent says that even though "liar loans" have gone the way of the DoDo bird, there are still ways to do creative financing.

Private equity is once again pushing the limits on payment to income ratios' allowing people to buy into the more expensive homes that have been sitting.

A billboard in downtown LA proclaims "Home Loans Up To $10 Million".

The tide is shifting.

From the agents perspective, I am seeing a few very smart agents start to roll with this new market.  Mass marketing in Real Estate hasn't been cost effective since 2007.  Mass mailing email lists to thousands of people is a waste of time, since there are a dozen other agents and websites that will do it for them.

The agents that are starting to roll are adding value.  Private open houses, active buyer lists with qualified buyers and very direct person to person marketing is working.  This will be the new reality for a while I believe and it will filter out the incomes of many agents even further.

Online and mobile marketing tools that reach directly to sellers and buyers are going to continue to grow in popularity and importance.  Why?  Simply put these tools allow the buyers to keep a bit of anonymity until they feel like they have met the right agent or found the right deal.

Agents will need to know everything about a property.  "It is really a great house" won't cut it anymore.  If the internet can tell the prospects more than you can, chances are an internet agent will get the sale.

An app for that?

While the big websites have mobile aps for their potential customers, individual offices and agents have been behind the curve.  New tools are emerging that will change that.

Getting listings may really have to go all the way back to door knocking, which in some areas is very difficult.  Agents will likely need to live in their neighborhood and really know everyone in order to get a listing.   Listings are going to be life for agents moving forward.

Agents who mass market will spend too much time chasing maybe's where the agents that hold the line and only work with qualified buyers are going to move homes.  Imagine someone knocking on the door with three familys that want in your neighborhood and an agent with three signs that have been up for six months.  Who do you want to talk too?  One moves homes, one has signs.

The tide is shifting.