30-year fixed-rate mortgage (FRM) averaged 4.19 percent with an average 0.8 point for the week ending October 14, 2010, down from last week when it averaged 4.27 percent. Last year at this time, the 30-year FRM averaged 4.92 percent.
15-year FRM this week averaged a record low of 3.62 percent with an average 0.7 point, down from last week when it averaged 3.72 percent. A year ago at this time, the 15-year FRM averaged 4.37 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.47 percent this week, with an average 0.6 point, tied with last week when it also averaged 3.47 percent.
So why aren't houses selling? In a word, jobs. There aren't any. Job losses continue to dog this "recovery" and until we see increases in employment numbers, or even a trend of fewer losses, we are unlikely to see the real estate market improve.
Robert Schiller recently pointed out that he thinks a second recession is possible. The logic goes like this: corporate profits have squeezed out all the gains they can from cost cutting and will begin to tail off. If profits get squeezed, the stock market will tank once again. Unemployment would worsen in this scenario because the only thing left for businesses to do would be to reduce payrolls further. Demand for housing would obviously evaporate if we head into another recession. The shadow inventory of forclosed homes would increase, and the numbers show that they are increasing to record levels at this time.
As depressing as this scenario is we have to face up to the fact that real estate is facing a new reality. To survive in a down market it will require us all to call on our innovative spirits like never before. To survive real estate agents need to do the following:
- Personal Marketing. Now is not the time to ignore personal marketing. There is a flight to quality in hard times as buyers and sellers want to work only with the best agents.
- Use New Media. Having an Internet presence is no longer optional. At the very least you need a good website with information about your expertise and the markets you specialise in. Clients are going online and Googling your name before you ever get to the listing appointment. If you are invisible on the Internet, or worse a client complaint on Yelp is all that appears, you will lose the client before you ever get in the door. Having a presence on Facebook and other social media is also becoming a great way to influence your base and find new clients. A blog can establish you as an expert in your field by giving solid real estate advice online for those surfing the web.
- Stay in Touch with Your Past Clients. It always amazes me how many agents there are that don't do this. As opportunities for transactions diminish, you need to stay top of mind with the people most likely to use your services, namely, those clients you have already worked with. Make it easy on yourself and use one of the many contact management systems available. Most brokers provide these tools at no cost and many sales agents still don't take advantage of them.
- Have an Annual Marketing Plan. Create a plan and budget for all of your marketing efforts and STICK TO IT. Many agents send out a few mailings and when they don't get any results they give up. Frequency and consistency is the hallmark of a good marketing plan. Resources these days are thin for most agents, so planning how you will invest those resources is essential. Postcards to neighbouring homes for every listing can establish name recognition in your farming area. Yes, old media still works too.
- Network. Use every opportunity to get out and meet people. Make sure that everyone you know, knows that your are in real estate. Sit at open houses, go to events, become involved in your community. Make sure you collect and record contact information.