Ten Housing Market Predictions for 2021

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Go check it out right now. Visit LOKestudy.com and download your free copy today. Hey, listeners, what's up, Jeff Zimfer. Welcome to this final episode of December 2020. I want to wish you guys a Merry Christmas. A Happy New Year. I hope you are taking some time for what's really most important in your life and that is people that matter, right? Family, friends, relatives. I know it's challenging at this time of the year to be able to get with people based on some of the restrictions and so forth. So I just want to say I appreciate you guys. And if you want to have a deeper conversation, if you like what you've been hearing here on the podcast and are looking for more, make sure you join our free Facebook group. Just go to Facebook and type in mortgage marketing radio and we're going to be doing more good stuff in there coming in the new year in terms of live streams and additional content and special features and guests and all that. So jump on in there, say hello, answer a couple of questions. We want to make sure you are practicing mortgage loan originator. That's who that group is for and we'd love to see you in there. So say hello. And also, if you haven't gotten a copy of my book yet, you can go to getdisruptordie.com. And get a copy of my latest book, which is Disruptordie, how to survive and thrive the digital real estate shift. You're going to be hearing a lot more from me about that in the new year, this concept of being a hybrid loan officer. What is a hybrid loan officer? A hybrid loan officer is a mortgage professional who gets business and has systems and process and technology in place to get business from the more traditional sources such as referral partners, pass clients, database, sphere of influence, etc. But also from a more modern perspective, consumer direct, let's say, online, digital marketing, perhaps some paid traffic, organic content marketing, etc. That's what you're going to hear a lot more about for me in the coming months of the brand new year, how to be a hybrid loan officer because the truth of the matter is you've got to have both funnels of business, if you will, I think to succeed in what it's going to look like in a more, you know, in the new era. And that's exactly what I wanted to talk to you about here today, which is an article which I'll put a link to it in the show notes from Redfin News. So I just wanted to kind of, you know, kind of what do we call here? I'm in a spitball, right? I'm just going to riff on this article and talk about some things that it might make sense for you to pay attention to in the new year. So Redfin's 2021 housing market predictions, 14.5 million Americans will move out of town fueling 10% sales growth. So what they're saying is that with the end of the pandemic in sight, more people will leave, more people will relocate than in over a decade. So what does this say? This says that the year, the coming year 2021 is going to be a great year for purchase business for sure, right? And many of you, most of you already know that's where a majority of your attention should be. But let me walk through some of the highlights of this article. Clearly, it's going to be a strong market. Rates are going to remain arguably low, making this the strongest year of home sales since 2006. Okay. So let me go through some of these predictions. These are predictions. Do I have a drum roll? No, I don't. But I have a prediction number one. What will happen to mortgage rates that will remain? Can you guess historically low at 3%. All right. So everybody gets that. That's cool. I want to predict your number two. There will be more home sales than in any year since 2006. As I said, but price growth will slow. So the rate of appreciation will slow, right? They say annual sales growth growth will increase from 5% in 2020 to over 10% in 2021. That's double, right? Areas with the fewest COVID-19 cases per capita are seeing 60% faster growth in the number of people listing homes for sale than areas with the most cases per capita. And this goes on to talk about as COVID-19 cases, hopefully the client due to vaccination, what you can expect is more new listings to make for a more balanced market, more home sales. Yay. We need more listings, right? Because new listings declined 3% in 2020 as compared to the previous year. But in 2021, red fins expecting new listings to grow by over 5%. Well, that's nice, right? That means perhaps less competition, perhaps less multiple bids, perhaps more buyers can actually get the houses that they want. That's a really good thing, right? Okay, prediction number three, there will be more new homes built than in any other year since 2006. So there's a building boom going on. And if you are somebody who wants to target builders or has been targeting builders, you know, and you've got relationships there, now's the time to dig in and build your relationships over there. Building permits were up 21% from September to November compared to the same time last year. So low rates have been making it easy for per four home builders to borrow more cheaply. Rising prices for existing homes will increase driving more buyers to consider a new one. Uh-huh. And because home buyers are now eager to buy in suburban and rural areas where land is cheaper than in cities, there will be more areas where homes can be built profitably. All right. So get your new build game ready, right? And all that goes with that, your competitive sales proposition. Prediction number four, the number of Americans relocating will be the highest that's been in 16 years, which will help the economies of affordable places like Buffalo, shout out to Buffalo. My old stomping grounds actually grew up there before I moved to New England, Cleveland and Pittsburgh, okay? So obviously the pandemic has created a lot of movement and disruption. There will be a 25% plus increase in out-of-town movers last time there was this much cross-country migration was 2004 when 15 million Americans moved counties and obviously with the increase of remote work many families are able to move to more affordable areas away from the office. So there's a couple of things in here in terms of predictions and what's happening in trends and things like that, that, you know, this is the time for you guys when it comes to content marketing, when it comes to your brand, when it comes to you showing up and be present, what are you talking about online? You know, I work with a handful of people, just a handful, right? Realtors and mortgage originators who are doing a good job of putting out content relevant to these exact people that are migrating, that are moving out of perhaps big cities or costly areas such as California, New York, etc. And they're moving to more affordable areas such as Nevada, Arizona, Colorado, Florida, you know, I mean, if you pull a list, search Google of, you know, where people are moving out of and to, you're going to get a lot of insights, okay? So that's good news for those local economies, right? Because what's happened is back in the day, people lost a lot of their populations, right? Like Buffalo, I mean, I left Buffalo, right? Because the heck the winners were terrible. But Buffalo, Cleveland, Pittsburgh, right? They lost over 40% of their population since the 1970s. Why? Because high earning remote work was migrate to, you know, where the jobs were and where the economic opportunity was and so forth. Does that make sense? Okay. All right. So prediction number five, the home ownership rate will reach 70%, 70% for the first time since 2005. Wow. That is amazing. So one point the article talks about here with prediction number five is that, you know, people living in expensive cities, only to be close to work. Of course, remote working now. They're abandoning their apartments to buy their first home in more affordable places. As small time landlords in urban areas lose tenants, they will sell their investment properties. So if you're looking to buy investment property condos or whatnot apartments, this might be an opportunity for you. The surge in condos for sale will sell according to this for a discount, right? Roughly 17% relative to single family homes. So what's happening is that's going to give many city dwellers the opportunity to become first time home buyers as well. So again, another positive trend towards first time home buyers. Again, think about your content, think about the narrative, think about the discussion, think about how can you insert yourself into the dominant thought that's already in a lot of people's minds? And what is that? I got to get out of the city. I got to find a more affordable place to live. I'm looking to have a change of lifestyle. I'm looking to get out of this state or that state. I'm considering to move to a certain area. I mean, again, back to my example, in working with certain people, loan officers and realtors, one area of opportunity to have a presence around this is YouTube, right? Because guess what the second largest search engine in the world is? No, it's not being, it's YouTube, okay? What I mean by that is people go to YouTube to search for answers to questions similar in the way they do to Google, right? As a matter of fact, even if they do go to Google and there's a video that is relevant and has a decent view, you know, a watch time, there's a good chance that that video's going to get served up as an option during the Google search, okay? So this again, guys, is another reminder. I talk about the hybrid originator, right? This is the game we need to play. This is, we need to be where the attention is. And right now the attention is online. People are searching for this stuff. I mean, if you go to, you know, different search engine tools like, let's see here, I believe this is a good one. HREFs, keywords research tool. If you go to just, you know, use the Google search tools. If you want to, what is that one tool? I forget what it is. So yeah, you can go to Google trends and find a different trending searches, right? So what I'm telling you is this is the way to get attention and become known, which, by the way, is a requirement in this business unless you are well established and have, you know, a solid book of referral pass client database and all that stuff. But most of us are still, right, in the space of we need to become known and generate and prospect, right? Generate opportunities. Well, again, the hybrid loan officer does that in combination of ways. One is, of course, the referral partner relationships. We talk about that a lot here. It's the pass client database. We talk about that. But it's also the, you know, kind of the more proactive, if you will, content marketing, personal branding through content, because content is how you become known. Content is how you engage with others and people are searching for content. What are you putting out for content, be it videos, articles, you know, whatever the case is, your newsletter, okay? But again, this is a trend and it's about getting in front of a wave and benefiting from it. So start to think about, are you in an area where people moving into, right? Are people evaluating, should I move to this city or town? Or what's happening in your local city of town, right? Maybe there is a bunch of new builds going on. Maybe there are actually some condos that are that are being built for, for first time home buyers, right? I mean, obviously not everyone is going to or can move to a rural area, right? There are still people who are going to live in condos and apartments and stuff like that. So let's move on point number six, prediction number six. What are the housing markets, hottest housing markets? Well, according to this, San Antonio Tucson Tampa, along with Austin, Phoenix, Miami, um, oh, wait a second, I said that incorrectly, San Antonio Tucson, a Tampa will be the hottest housing markets as major southern cities like Austin, Phoenix, and Miami become unaffordable. Well, I don't know if I agree with that. I wouldn't characterize Phoenix as unaffordable. Austin is, yes, seeing prices come up because of the influx of people from California, for example, somewhat true in Arizona, somewhat true in Nevada as well. Miami, I don't know if I'd call that unaffordable. I guess it's all relative, right, based on your income, but we look at some, some stats here, according to this, right, for years, Americans have been leaving expensive coastal cities for more affordable southern cities like Austin, Phoenix, Miami, but they also have become unaffordable for both court residents and new potential migrants, as we experience of increase in population and housing markets heat up. And let's see here, they go through some housing numbers in terms of average costs and stuff like that. So, but as the article, I just pointed out, most of the buyers are coming from out of the state, California, Seattle, Oregon, some East Coasters too, said Tucson, Red Fit Agent, Kendra, Harrow. They're usually torn between Tucson or Phoenix, but they'd like Tucson more because it has less traffic, it's small, you can get even more for your money. So again, people are in this situation of where they're looking for quality of life, right? And this goes back to your content strategy. How can you demonstrate and show quality of life in your local area, right? How can you show like the top 10 cool, fun things to do in your town when it's not a pandemic, right? I mean, for a long, long time, right, the goal you've heard the term digital mayor, you as a mortgage professional, equal opportunity as a real estate agent to become the digital mayor. As a matter of fact, you could team up, you could interview, you could highlight and feature and sponsor one agent a month as you being the digital mayor to help them help you feature local happenings in hot areas and talk about stats and data and what's happening in the average market updates and things like that. So again, this is your opportunity to get out in front of this trend and enter, right, insert yourself in the dominant thought that's already happening people's mind. You will benefit from this. Okay, prediction number seven, pretty obvious, expensive cities will invest in their culture and lifestyle to attract residents and tourists. So pretty clear that as employers decide to stop expanding their offices and expensive cities like San Francisco, Seattle, Boston, New York, they'll expand their satellite offices in more affordable places like Phoenix, Atlanta, et cetera, and this will of course encourage even more office workers to leave expensive cities. But these cities won't die just because office workers leave. These cities will have to be reborn with a greater emphasis on culture and lifestyle to attract residents and tourists. Yeah, so I think that's what's going to happen, right? You see people talk about New York City being a ghost town or whatever and all that stuff. I think it's just right because of COVID, it's going through a shift, it's going through a change, a rebirth, and they're going to have to adapt and attract people for different reasons. So I think it's going to take some time, but obviously they'll definitely succeed at that. Prediction number eight, most home buyers will make an offer on a home site unseen. Get that. This is the time to get with your realtor partners in spring of 2020, 45% of recent home buyers reported they had made an offer on a home site unseen and recent trend data showing the trend is becoming more common. Views of 3D walkthroughs on Redfin where a home buyer can point and click through a 3D scan of a home if increased 560% since February, video tours where an agent views a home while the buyer is on a video call represented less than 1% of all tour requests on Redfin before the pandemic and now account for one in 10 home tour requests. So it's spiked up, surged in a significant way. And it's only, you know, the question is, is this going to continue and I think what's happening because of COVID in the pandemic is that there are new, there's always been this hope with this expectation of that real estate mortgage would adapt and become more tech friendly and look, virtual tours have been around for a while, right 3D walkthroughs have been around for a while. It's not necessarily new, it's just now it's brought to the surface as one of the first things people might consider or ask for. Does this mean that the majority of people will buy a house site unseen, probably not, but do they want the luxury or opportunity of possibly doing it? I don't know, maybe sometime down the road, we will see, you know, most of the people buy a house site unseen and I think people are, you know, kind of taking that on, what I am seeing happen though is that people are asking, hey, do I really need to go look at 10 homes to find the one I want to buy? I can't, I just do a virtual tour of the 10 and then pick the one or two or three that I actually want to go see inside. So that's definitely happening as well, but I do, you know, real estate agent classes every single week on Zoom and I asked this question of realtors all the time, have you sold a home site unseen, right, this year? And the number of hands are going up, yes, yes, yes, and the frequency or the quantity of homes in a one large, very successful agent in Tennessee who has sold 10 homes site unseen this year, whereas prior to the pandemic, it was one home, right? So it's accelerated, the demand, the expectation again comes back to you, ask yourself the question how can you position yourself in front of this? How can you step into the conversation that's already happening and create awareness for you become known? Could you learn how to do a virtual tour? Could you offer to, right, walk through a house and open house on behalf of real estate agent and have your halt, you don't have to do a live stream with your mobile phone and just walk around, show the home off, right? These are different ways to get, notice, get attention to leverage content and become a hybrid loan officer, become digital savvy. As a matter of fact, in the classes that we teach, one of the classes we have, that loan officers teach to real estate agents is how to host a virtual tour, how to host a virtual open house, right? How to do a live stream virtual tour and we walk them through processes and step of how to do that. Why? We just need to know how to do that and if you as a mortgage originator can help them get started doing that by just simply educating them, right? That will drive conversations and opportunities for you to engage, right? And that's the name of the game, guys, right? We got to fish with a better bait. We can't always be fishing with, hey, I'm a great lender, I close on time, I got great rates and just give me a shot and I, you know, all that usual traditional stuff. How about offering some real true value with an educational platform? That's just one of over 15 ways, 15 different classes, different topics that we have on that. And if you want to learn more, you can go to mortgagemarketing.pro. Go to mortgagemarketing.pro, watch a brief video and all the classes are Zoom friendly and ready to be delivered over Zoom and will successfully drive conversations and engagement and referrals for you with real estate agents just as it has been done for many, many of our members. So you can go check that out. All right, prediction number nine, we're almost at the end of our list here, 2021 will usher in a new era of price competition for real estate agents. Wow, like it already wasn't competitive enough. I'm just reading through the article right back, I said I'm riffing on this, I'm just spitballing here, okay? Okay, so just a couple of comments about Redfin, yeah, fees won't drop overnight but increased transparency will usher in a new era of price competition, a buyer will be a buyer, able to see what her agent will earn on a sale, may negotiate for a refund or work out a fee for service arrangement, sellers will now be able to see the commissions their neighbors are offering. We'll factor this into what deciding what commission to offer on their own homes. Okay, I buyers, you've heard of them, instant offers from Zillow, open door offer pad, right? I buyers and builders will also put downward pressure on buyers agents fees as they look for ways they could cost because they're selling multiple homes at the same time. In the same market, they have been able to experiment with harbouring a lower commission to the buyer's agent, blah, blah, blah, blah, blah, all right, well, which is face it, if it's still going to be a very frothy market, there's still going to be some pricing competition for sure. I'll be it hopefully less if we get some more less things that come on the market, like we talked about earlier, that would be a nice relief to see. But once again, see, I look at every one of these things and I'm asking, where can I help as a mortgage originator? Where can I make a difference? How can I help my buyer offer be accepted? For instance, as a loan officer, when you're representing the buyer, do you call the listing agent and introduce yourself, right? Reestablish reassure confidence in your buyer, right? I mean, because basically it's your job to sell the capability and the assuredness of that contract to close to all parties, to the agent themselves representing the buyer, right? Obviously, to the underrider, right? To the listing agent, though, I mean, when I asked this question of loan officers, it's only a handful of loan officers that actually call and make a case. What would that sound like? It would sound like, you know, hey, Bill Smith, this is Jeff over at ABC Mortgage and I'm representing the buyer, that you're listing at 123 Main Street. First of all, I want to say congratulations, fantastic property, great listing, I'm sure you get a lot of offers on it, right? Well, cool. Hey, I just want to let you know, I'm representing the Smith family and I've got their entire documentation here, their assets, their income, right? We've reviewed, we've reviewed credit and I just want to know that there are a box solid buyer, right? I've got a pre-written underriding approval here, I've got this, I've got that and this family, by the way, you know, this term is this agent at 123 Main Street listing, this family is an amazing family. Let me just tell you, they're good quality people, they're kids, they're dogs, they're dogs, right? I'm just saying credit case, credit story, right? Because I've talked to loan officers who do that and the listing agent winds up taking that offer simply because you did a better job representing the buyer than perhaps the other loan officer agent that might be another offer or something like that from a different, right? Collection of people. I mean, really, besides that guys, it's another way to grow your sphere of influence and build relationships, you know, the automated updates that go out from your LOS and your system. Wow, that's great. That's wonderful. That really doesn't create a connection. And if you're not doing regular status updates to the listing agents as well, you're missing out on an opportunity, okay, so I'll just share that with you. Prediction number 10, everything associated with buying or selling home will be offered at one stop shops. Uh oh, what does this mean for you? What does this mean for all of us? I mean, what does this really say? It says the biggest real estate companies work to become a one stop shop for customers, integrating home trade in cash offers, concierge listing prep, mortgage, title insurance, home warranty and moving services. I mean, let's face the consumer has spoken and wants that, right? They want is a smooth frictionless transaction as much as possible. And the one stop shop has been appealing, right? That's why you've seen companies like Zilla try and do that and real estate companies have in house mortgage companies and title and insurance and all that stuff, right? Consumers want real estate to provide the on demand service they've come to expect in other industries, right? From Uber to grocery to Amazon, right? They're being trained on what the consumer experience should be from other industries and companies. So agents, for example, they're going to probably be continuing to look for companies if they want to remain relevant, looking for companies that help and deliver that service. So how can you really make an impact here or difference, right? You can't control what agent or what company an agent works for, but what you can control is the consumer experience. The degree to which you minimize and reduce and remove friction from the transaction. And while it's easy to sit there and point fingers and blame this person or the agent or blame your processor or this or that or whatever, I mean, ultimately, I would be taking a look at my business and part of my strategy for the new year would be where is it broken? Where are there inefficiencies? Where is there, quote, friction to use that term, which might be overused, but it's quite descriptive. Have you done an audit on your own customer journey, your own sales process, your own approval process? Have you done post-close interviews with your referral partners and clients? Are you actually actively, proactively looking for where you can improve the process, the communication, the back and forth to the best of your ability, allow the consumer to feel that it's a one-stop shop? Because I remember reading research from the past that said one of the biggest frustrations with clients is that they feel that the realtor and loan officer don't talk, like they're not on the same page. So I don't know if that's you, maybe, and I'm sure it's different with different agents in terms of how active and engaged they are, but again, guys, this is your opportunity, right? Here's, you know, we, you get what you tolerate. Let me say that again, you get what you tolerate. So if you're tolerating inefficiencies, if you're tolerating unprofessional agents, right? If you're tolerating drama, maybe it's time to take a look and re-evaluate that. Same is true for your own internal team, where can you have conversations that will improve the process? Are you meeting and doing pipeline reviews often enough, minimum, minimum three times a week for 15 minutes minimum, right? How often are you pulling back the curtain and taking a look at where you can get additional efficiencies with people, process, and technology? Because as a hybrid loan officer, the future of your business is in both your past clients, your sphere of influence, right, your database, and what you do online in generating content and awareness, your personal brand, self-gen leads, and consumer direct. You've got to be successful at both, right? So the first place I would take a look at is what your customer experience process like, because if you're going to be going consumer direct and your process sucks, you're not going to do well. So these are the 10 predictions from Redfin 2021. I'd love to hear your thoughts on this. Jump in the Facebook group, go over to Facebook, type in mortgage marketing radio, give me what your thoughts are on 2020 housing 2021, housing market predictions, and what areas you're going to be focused in working on. I hope you got some value from this. I'll put a link in the show notes to the article. You can dive into it yourself. And we're going to continue to talk about some of these topics in the coming year. I just wanted to send you off with a couple of little things to think about as you're heading into perhaps a window of time where you can evaluate what parts of your business to focus on in 2021. With that said, I bid you do wish you a Merry Christmas and a happy New Year. And we'll see you on the next one. Bye for now. Hey, guys, what's up? Real quick. You've heard about the mortgage marketing pro membership before. And I just want to quickly remind you of that you're in a place in your business where you simply need more purchased loans. 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