What can you tell your listing clients about real estate pricing in 2022?
I’m reading all sorts of things, and of course those things depend upon which market the writer is looking at when they state what is going on.
One article stated that correct real estate pricing in 2022 means staying ahead of the market.
In other words, convincing clients to list a bit below the most recent comps. The writer warned that pricing at what you would normally have recommended could be a big mistake.
If you use the most recent comps and do good comparisons, you might already be over pricing. That might cause the houses to remain on the market too long and result in an even lower price.
That article also stated that you should encourage people to list now rather than wait – because a month or two from now, selling prices will be even lower.
But then another article reminded me of government-speak.
You know how they love to tell us that they’ve slashed some budget by 40%? We think it sounds good until we learn what that really means: they’re only increasing it by 60% as much as they planned.
That was the gist of the second article, which declared that prices are falling.
It went on to say (for example) that prices rose 25% last year. But now they’re only rising 20%. That means prices are falling.
My question is this: “Are prices really falling anywhere? Or are they just not rising as rapidly?” I’d love it if you’d share your thoughts and findings about your own market in the comment section below.
What is really happening in YOUR market?
That’s the question whose answer you have to know if you plan on correct real estate pricing in 2022. It means you need to do your homework and really watch what’s going on, especially in the price range you usually serve.
Real estate pricing in 2022 must be consistent with your local market.
Stress to your prospects that every market is unique, so what they see or read on national news might not apply to your market.
You may be in a market where prices really are coming down.
If so, your potential listing clients will be disappointed. However, they’ll be even more disappointed if they list too high and sit on the market until prices drop even more.
You could help them make a realistic decision by doing a market analysis featuring homes that sold within the last couple of weeks; homes that sold 3 months ago; and homes that sold 6 months ago. If you want to go more in depth, you could include a year-old sale or two.
Be sure to include homes that are currently on the market, so those potential listing clients can see their competition. If their answer is “But my home is nicer,” you could offer to take them on a tour.
The important thing is to help them get it right – so that all of your efforts are not just a waste of time and energy.
What if prices are leveling off in your market?
Document that as well, so you have facts and figures when you speak with potential listing clients. With all the conflicting news they’ve been seeing, they’re likely to be a bit confused.
How can they not be confused? One article I read said that for every 1% rise in mortgage interest rates, home prices will decrease by 7%. Another article I read the same day said they’d decrease by 12%. But of course, either or both of those writers could have been using the “government-speak” definition for “decrease.”
There ARE reasons to think that prices might come down – or at the least stop rising. Those reasons include rising mortgage interest rates, an increase in inventory, and inflation. In the future they could include an influx of bank-owned properties as jobs are eliminated due to inflation.
You have no way to know what will happen in the coming months, so perhaps it’s time to simply give those potential clients some food for thought.
That’s what they’ll get should you choose to send my “Why List in 2022” prospecting letters.
This prospecting letter set outlines the changes in the market due to rising interest rates, inflation, and more inventory coming on. They don’t offer any predictions. But of course, if you have a strong prediction, you can add it to one or more of the 6 letters.
If prices are still rising, then real estate pricing in 2022 should be business as usual for you.
Keep doing what you’ve been doing. Of course, you may want to add the facts and figures that I’ve been talking about. Just like everyone else, they may be confused by the national news reports.
Will your future listing prospects be Expired Listings and Short Sales?
I don’t know, but it bears watching. I’m seeing an uptick in the sales of my short sale prospecting letters, so I’m guessing that some agents believe that’s coming.
What are the best things you can do to weather the 2022 economy?
- Stay fully informed, so you always know the state of your market.
- Keep your clients, future clients, past clients, and those in your sphere of influence informed about changes your current market.
- Give your clients the kind of service that turns them into fans who will be happy to refer others to you.