As more REOs flood the landscape, sales commissions are in decline for many agents. The Obama Homebuyer Tax credits were exhausted a few months ago. This has fueled a steep decline in home sales. The average drop when compared to Q3 2010 to Q3 is in the double digits in all 50 states. In some parts of the country, it's as high as 27% (Rochester, NY).
Some agents are referring to REO's and HUD homes now as "crack houses," which are selling for as low as $18,000 (Warren, Detroit area). Our virtual tour kits are quite popular with several of them. They snap one panorama of the sidewalk and one indoor 360 of the kitchen or living area.
Smart agents who can flip REOs quickly can make good money. But to earn what they made in sales commissions in 2005 -- they're having to work 3 times harder and process a Neptune massive pile of paperwork on a lot more homes.
With thousands of FOR SALE, FORECLOSURE and BANK OWNED signs out there, is it any wonder why homes aren't selling like hot cakes? After all -- it is a buyer's market.
If you're wondering where all the younger buyers are -- you first need to understand the psychology of them.
Generation Y isn't placing the same value on home ownership as Baby Boomers once did.
Gen X is skeptical and they have every right to be that way. We already saw one recession in late late 90's. Now we have another one just ten years later. They've taken up the "See? Told ya so," attitude. More than 41% of unemployed Americans are in the Gen X category.
Many Gen X'rs are also suffering with foreclosures. If they've managed to avoid bankruptcy and were saved by a short sale instead -- many of them simply can't buy a new home as their FICO scores are in the toilet. The ones with GOOD FICO scores are sitting on the fence -- anxiously waiting for this recession to be over. Many in this group are renting instead of buying.
And this is the same problem with the Gen Y crowd. They actually prefer renting over buying a home. This trend is why rent is going up all over the country. And if you've ever thought of getting int the property management business -- Now would be a good time.
Gen Y has huge debts to pay off and they continue to live in debt. The single biggest reason they can't buy a home is their high student loans. They also place a higher value on their "digital lifestyle" over home ownership.
Did I say that now might be a good time to get into the property management business?
The typical Gen Y right now owns;
- More than one iPod
- iPhone or Droid SmartPhone
- A laptop and a home computer
- 32-inch or larger LCD TV
- Bose sound system and home stereo with dock for their iPod or iPhone
- TiVO or Apple TV
Who is Gen X?
- Born between 1965 and 1978
- Skeptical. Cynical. Conservative.
- Cumulative spending power is $150 billion a year.
- Gen X is the most techno-savvy member of household, and they are often consulted by family members before making any major purchase decision.
- TARGETING GEN X: Convince Gen X to buy is to show them that others are doing the same thing.
Who is Gen Y?
- Born between 1978 and 1986
- Less skeptical about the economy. More liberal.
- Spend, Spend, Spend. They live in debt.
- Many Gen Y'rs have 2 jobs to support their spending habits.
- Pop culture. Digital Media / Digital lifestyle.
- TARGETING GEN Y: They do not want to be treated like kids. They don't respond well to condescending (know-nothing) kind of marketing/advertising. They don't like advertising. They scream when they get ads pushed onto their SmartPhones.
Where Gen Y spends their time
- Movie theaters, Bars, Nightclubs
- Extreme sports. Mountain biking, kayyak-ing, white water rafting, skate boarding
Social Media
- Gen Y spends average of 28 - 33 hours a week on facebook, four square and stumbleupon.com
- They spend less than 1 hour on Google, Yahoo or Bing per week. Why? Because you can't hang out at search engines. You CAN hang out on Facebook.
The REALTOR Exodus?
The impact of no more Obama tax credits, the recession and a buyers market with nobody buying homes is starting to take it's toll now on real estate license renewals.
With just a few phones calls I made on Friday, below are some disturbing facts I learned that clearly shows our base of real estate sales professionals is shrinking -- not growing.
Many states are reporting license renewals are down 21% to 33%. New Mexico for example had 10,309 agents in 2007. Today there are 7,617.
That's a big drop of 38.2% in just 3 years. But as I made more phone calls to other states, I quickly learned that a 30% drop was about average.
Illinois reported a 30% drop in the total number of REALTORS registered when compared to 2006. At the close of 2009, 43,305 agents were registered.
Wisconsin reported a 27% drop.
The LA Times just two days ago reported home sales have slumped in San Francisco. Bay Area home sales have been down four months in a row. Total sales of homes and condos in the Bay Area are down 19.6% when compared to September 2009.
Did I say that NOW might be a GREAT time to get into the property management business?
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