Real Estate Agent Podcast Episode 57: Planning for 2021
So for starters, home prices are expected to once again reach new heights, with early 2020 numbers growing a substantial 7%.
About This Episode
As we leave 2020 behind, we take a moment to take stock. It was a brutal year for millions of people, but the real estate market in many areas had record numbers. Heading into 2021, much of that momentum will continue thanks to low interest rates and hungry buyers.
We also discuss the importance of social media and the place that it has in your marketing arsenal. Learning how to grow your social media presence can have huge impacts in your real estate business.
Ready to Get Started With The CE Shop?
Whether you’re a new agent looking to start award-winning Pre-Licensing education or an experienced veteran wanting to finish your Continuing Education, we’ve got a 100% online curriculum that’s one of the most diverse and groundbreaking in the industry. And if you want to network with your peers, join our Facebook group and get connected!
Subscribe to our podcast and listen every monthView All Episodes »
JON: I don’t need to tell you that 2020 has been a crazy year, an unprecedented year in so many ways. It’s not a year any of us will ever forget, and a lot of people have been looking forward to 2021 for a majority of 2020. And while it might be nice to put the year of the global pandemic behind us and put to rest all the politics that came along with it, a new year doesn’t immediately bring change. The stroke of midnight on New Years Eve won’t just wash all the bad away, though there are certainly signs of big changes on the horizon.
JON: Hello and welcome to Shop Talk: The Real Estate Show. On this episode, we’ll take a look at the year we’re leaving and will examine some predictions for the one we’re headed toward. We’ll also offer up some tips on using social media to its full potential for your business.
JON: Joining me first is McKenna Keller, Regional Content and Social Media Specialist at The CE Shop.
JON: Okay. Well McKenna, thanks for joining me.
MCKENNA: Thanks for having me.
JON: So looking ahead to 2021, now that we're finally leaving 2020 behind us what kinds of predictions do you have for what the real estate market's going to look like?
MCKENNA: Great question, Jon. So it's safe to say that the 2020 market did not go the way anybody really planned. The COVID-19 pandemic really shook up the entire economy and well, it wasn't necessarily in anyone's market projections around this time last year. Luckily real estate really did come out on top. So with that being said with the economy, looking a bit more stable realtor.com recently released some really exciting real estate projections for the next year with numbers that can benefit both buyers and sellers. So for starters, home prices are expected to once again, reach new heights with early 2020 numbers growing a substantial 7%. We will likely lose some of that momentum toward the end of the year, rounding out 2021 with a still impressive 5.7% higher than our current 2021 numbers. And that's primarily due to the limited inventory we've seen this year.
MCKENNA: Of course, thanks to COVID as well as the large pool of first-time buyers that are now shopping around with those historic low interest rates in mind. After those historic lows mortgage rates are also expected to increase next year with that projected figure sitting right around 3.4% around this time next year. So coupled with that rise in home prices, we are likely going to see some issues with affordability for certain buyers out there. That being said, home sales are projected to rise 7% in the next year. And that's mostly due to that strong demand. We're still seeing across the country as well as the projected growing inventory as more and more sellers kind of gain confidence and choose to list their homes. So between continued remote work, more interest in those nearby and often much more affordable suburban neighborhoods, and then an increase in the prevalence of VR and other digital home selling tools. The 2021 market is actually looking a lot more hospitable for buyers on the whole, especially new ones who, you know, just may not be accustomed to making an important financial decision in such a fast-paced environment. So just ensuring that buyers are prepared with a list of their needs versus wants some in-depth information on their preference of neighborhood in, you know, of course a pre-approval can really give your buyers an edge next year and potentially win them that sale now more than ever.
JON: Awesome. So with everybody, not everybody with so many more people working remotely now, are we seeing any shift in the kinds of houses or the places that people want to move to?
MCKENNA: We are seeing an exodus from bigger kind of hard hit cities where people are realizing that they just need, you know, a spare bedroom for a home office or, you know, maybe they want to kick back on their patio and get online and do some work from there. So we are seeing people kind of exit cities and move more into suburban and even more rural neighborhoods looking for bigger square footage, but then also a smaller price tag. So kind of more bang for their buck as we continue working remotely.
JON: Cool. Cool. And you mentioned VR. How can agents use VR?
MCKENNA: That's a great question. I think VR is a pretty powerful tool in home selling right now because obviously we're all home and we're on our phones so much more often than we were before. So a lot of buyers are looking to see listings do a virtual open house, even potentially buy online. So I think setting up a virtual tour, anything VR related is going to appeal to a lot of buyers who are sitting at home right now, particularly younger buyers like millennials and gen Z buyers who are projected to enter the market at a much higher rate this coming year. A lot of them will be first-time buyers. So I think digital home selling tools is a great way to kind of market directly to them and snag some of the other sales.
JON: Awesome. Okay. Well, thank you McKenna.
MCKENNA: Thanks Jon.
JON: After the break, we dive into how you can use social media to grow your real estate business.
JON: 2020 will go down as a tumultuous year that really shined the light on the importance of change. Wherever you’re at in your career, change can be a good thing so long as you’re in charge and steering the ship. If you’re considering changing to a career in real estate, or just looking for a convenient way to complete your CE, The CE Shop has what you need. Use promo code SHOPTALK for 25% off The CE Shop’s self-paced and state-approved online courses.
JON: Next up is Zach Levine, Content Specialist at The CE Shop.
JON: Hey, Zach. Thanks for joining me.
ZACH: Thanks for having me.
JON: Okay. So what were real estate analysts predicting at the end of last year? And how did all of that turn out with 2020 being what it was?
ZACH: It's funny because many of their predictions did come to pass, but like more than they expected during that time, the fed, it was already dropping rates and housing inventory was tightening up in many markets. This was later exacerbated by the pandemic. So we actually saw rates go even lower. And I think right now it's below 3%, like 2.7 and then obviously supply got even tighter because there was less transactions going on during those few months. So it was you had to, you know, it just made it, increased it even more and you actually saw some housing prices actually go up at that time.
JON: Yeah. Yeah. A lot of markets are having record numbers right now. So how were home sales throughout 2020?
ZACH: Like a roller coaster. Obviously March, April pandemic happens. Economy slows down as a whole residential real estate slows down, but as the spring turned to summer and the pandemic was less intrusive in our lives, home sales jumped dramatically and stay pretty hot. A strong indicator of this was actually a listed home saw a 13 day quicker turnaround from transaction to sale. So however, as we close out the year, the market's probably gonna slow down. It's pretty normal around this time, but you know, observing how quickly these go, these homes go off the market will be a real strong indicator to see how we're doing as we go into 2021.
JON: Yeah. So are we in full recovery mode or is it still too soon to say?
ZACH: Yes and no. Realtor.com came out with this fantastic housing recovery index a few months ago that we talked about on the blog. It pretty much measures how we're recovering from what the market was pre COVID. So the index starts at a hundred, which was pretty much what it was in February. And then either it goes up or down depending on the market. So March, April, May, we saw it dipped down to about 85, meaning very slow recovery and things are becoming stagnant and worse, but then we rebounded to about 108, which is what we are right now. So yes, we're doing better with slow winter months coming and then certainty regarding new COVID-19 restrictions. It could be too soon to say we're out of the woods just yet.
JON: Yeah. As with everything else this year nobody knows and it's impossible to tell the future. So which markets have we seen rebounding the fastest?
ZACH: If you break up the country by South, Northeast, Midwest, and the West, it would truly be the West as rebounding the best. Right now the, the index has it around 114 while everything else is tracking about eight points lower.
JON: Wow. So they're saying that those Western markets are actually doing better now than before COVID.
ZACH: Yeah. And I think part of it has to do with the fact that they look like cities like San Francisco, who actually are seeing an influx of people with specialist runners. So that was part of it. I think in the now you're seeing that rebound cause people are somewhat returning. People are buying homes for, so it was, it was definitely happening more on the West. And I wonder if that's a political thing too as well, but I'm not going to get into that.
JON: Yeah, yeah. Probably safe to steer away from that. So are housing prices increasing?
ZACH: Yeah, so around 64% of the 50 largest markets are seeing pricing growth. I think about like 10 of the largest ones are seeing pricing growth. And in general, we should expect that going forward with rates being so low, as well as home inventory being low.
JON: Hmm. And what about rent prices in major cities?
ZACH: It's interesting. A big decrease in cities like San Fran, New York, Denver it's all over it's, you know, big thriving cities that have been growing and growing tremendously. They're actually the first time in a long time, you're actually seeing a rent decrease. So this also includes like San Jose and Oakland. This is due to pandemic and external factors like climate change and changes in lifestyle people don't, you know, people are kind of fed up with the big city life and when you throw in a pandemic and then you have like the burning woodlands and you consider that tech companies are going to full-time remote, it's not surprising to see people actually leaving these areas.
JON: Yeah, true. So, I mean, do you think this is going to lead to middle America suddenly becoming the hot place to be?
ZACH: I hope so. That'd be very interesting. I mean, I know Midwest and you have like places like central Ohio, it's becoming like its own tech bubble. There are some investors right now, actually in Colorado in the mountains trying to do their own little thing in Park City. So it's, it's very it'll be cool to see what's going on and what's going to go in the future.
JON: Yeah. Yeah. So speaking of what does 2021 look like?
ZACH: I'm not Nostradamus. I'll say I think it really depends on a vaccine and if life turns back to somewhat normal the economy could also be a deciding factor is rent, evictions and mortgage foreclosures happen. You know, again, this is going to be correlated with the unemployment rate, like in the people that go and pay their mortgages. So again, the amount of his stimulus and relief the government provides will be a deciding factor. However with rates probably staying low into 2022 and most owners having at least 50% equity in their homes and yes, a vaccine coming the residential real estate market shouldn't expect any sort of a collapse or down here, maybe during the cold months, you know, with COVID restrictions. So there you'll see some slowdown, but as we get into April may, we should have a pretty good idea if this market's going to flourish or show signs of floundering. And all of this depends on consumer confidence, you know, what what's going on with them and what they believe is going to be the future.
JON: Yeah. What about these markets though that have such a low inventory? Do we think there's any hope for inventory eventually evening out?
ZACH: Well, again, it's about building. That's the biggest thing. Part of it is making sure there's more building going on and there's not as much a lot of it has to do with the pandemic. But I do believe if we go into 2021, 2022, you will see that housing supply open up a little bit more people will start selling homes. So I think it will become much more, you'll see prices probably become a little more stagnant, but overall more homes being sold over that time.
JON: Yeah. All right. Well thanks Zach.
ZACH: Thanks for having me.
JON: And now, to round out our show this week, we’ll talk social media with Ian Winship, Senior Social Media Specialist at The CE Shop.
JON: Hey Ian, thanks for joining me.
IAN: I'm happy to be here.
JON: All right. So you manage social media for the CE shop and you've been in social media for a while now. How can real estate agents better use social media?
IAN: Yeah, I think social media is a really important tool for anybody trying to get into business. You know, there's over 2.7 billion active users on Facebook right now. So you can bet that your clients are definitely going to be on there too. Not only do you want to reach your audience where they are by getting onto social media, but crafting a solid social media presence will also help you stay top of mind for all of your clients the next time they're ready to make a big move. I have a couple of different points I want to go over here why really any small business it's important to have social media and different ways that you can social media use social media to help grow your career.
JON: Okay, so what's your first one?
IAN: So as a real estate agent, you're probably pretty social. You love meeting people, talking to everyone and hearing their stories. And this past year has made that a little trickier, but there's still the internet, which is great. Building your community on social media. Isn't going to happen overnight. And the same way you nurture leads elsewhere. You're going to have to play the long game here and investing time into building your brand on social media will help people recognize you. And remember you when it's time to move. Not only can you showcase your personality and knowledge, but if it's a perfect place to showcase your listings done tastefully with a good photographer, showing listens on social media is a great way to get interest. I think it's important to mix it up too. You don't want to share just listings share helpful home tips, funny memes and anecdotal stories. Really anything your clients might like. Take the time to be educational and personal. You're building up your own brand here. You're not just showing listings. If people wanted that they could just look at your Elmo. M L S yeah, go ahead. Go ahead and say it again. If people wanted that they could just look at your MLS. Yeah.
JON: I think a lot of agents think they have to keep it strictly business, strictly listings on social media, but really you're selling yourself. Right?
IAN: Exactly. It's, it's building up that presence and saying, I'm someone that you can trust and I'm someone who will help you make this huge life decision.
IAN: Yeah. And it's going to take time but it'll leave you with a pool of clients who know who you are. They'll trust your knowledge. And most importantly, they'll like, you they'll want to use you as their real estate agent. So in the end, it'll all pay off for you.
JON: All right, cool.
IAN: Jumping into the next section. Your clients already have your email address and phone number, but you could be missing out on potential conversations. If you're not on social media you can reach your existing clients and you can reach a whole bunch of new people that have never even heard of you. And a study a few years ago, one group found that 75% of millennials prefer to text rather than call. I can only imagine that number has grown since then to with messenger applications like Facebook messenger, WhatsApp, and WeChat, people are using social media based tools to talk with one another. Now more than ever before, by creating a space to interact with your clients on social media, you open another valuable window for sharing your wisdom. You can prove your worth by answering a quick question or concern, whether it be a post or a direct message. The best part is that it can all be immediate. You don't have to make time for a call. You don't have to sit down at your desk to check your emails. You can check your phone wherever you are, but also don't do it when you're driving.
JON: Yeah, that's a good point.
IAN: Yeah. We've got to stay safe, but yeah, it's, it's really handy to have the ability to talk to all of your clients and, and attend to their needs from your phone. And some of those needs might be on social media.
JON: Yeah, definitely.
IAN: Another huge part of social media that people get a little scared about is paid social media, running advertisements. And really at the end of the day, it's becoming more and more apparent that social media is a pay-to-play game. You might've had success in the past posting organically without paying for anything, but the way that social media networks work now is they're really pushing people to spend that money to get in front of other people. That said you can still see a really great return on your ad spend or ROAS without investing the big bucks involved in other types of marketing. We've gotten to a point where pretty much every social media platform requires you to spend money with them. Old Zuckerberg is looking for your dollars, but he'll give you a hyper-targeted ad campaign that, done right, will definitely lead you to more leads.
IAN: Jumping into a world of social media. Marketing can seem scary, but with a little bit of research, really anybody can do it. You don't need to invest a whole lot of money. We definitely recommend starting small and seeing how that works and then building on that. Running ads on Facebook is a great way to increase your brand awareness and help you find new leads. You can get very specific with who you want to see your ads. Not only can you target by geographic location and demographics, but beyond that, you can go into very specific interest-based targeting. You know, when you get an ad on Facebook and it seems a little too perfect. Maybe they're all listening to us? Really that's just this hyper-targeted advertising as it turns out, a lot of people act in similar ways. So if you can figure out what one person likes and interacts with online, it's pretty easy to figure out what a whole group of people will want to look for.
JON: Yeah. Have you ever gone on on your Facebook settings and seen which groups Facebook thinks you fall into? Yes. It's creepy. It's really accurate.
IAN: It is very accurate.
JON: These are just things it's learned about you. You didn't necessarily tell it this. So yeah. The algorithm can know a lot about you.
IAN: I can it's it's at this point, that's the algorithm's job to know a lot about you. Yeah. Social media sort of started as a way for people to connect with one another and it's become a way for people to track you which is a little scary. I think it can still be used for good.
JON: Yeah. There's still, there's still good connection that can be made.
IAN: Yeah. Yeah. Actually a recent discussion on the sub Reddit R slash realtors has asked whether or not social media was a good time investment. And there was a general consensus that it was. Most people said that most of the realtors responding in there said that they had good experiences using advertising on social media to find new people. And it's going to be different wherever you are. You might have to spend a little bit more money if you're in a popular, busy metro area where other real estate agents are also advertising. But if you're in a smaller town or community, it might be really easy to own that market share as the person who's running ads for real estate online.
JON: Yeah, definitely.
IAN: The one thing that's cool about this is it's not something that you have to do always, you don't always have to run advertisements. That could be something that you can run once in a while. But the important thing to know is you want to keep it going. You don't want to start and then stop. If you're going to get into building your social media presence online, you want to make sure that you continue working on it and building it and interacting with people. Because if, if you go dark, it doesn't look good. Yeah, for sure. When it's all said and done social media is about people connecting people with one another was always the main point money and politics will always find their way in. But if you can create a safe place for your clients to connect with one another, learn and consider a huge life decision, y'all going to be on the right track. Building a social media presence will take time and effort, but it can be an incredibly helpful marketing tool. Don't let it take the place of all the other tools though. It's, it's easy to say, Oh, social media can do it all. But really you want to make sure that you have a well-rounded marketing strategy that touches people in different ways, sort of across the board. Social media is a great tool, but it's just one of the tools that should be in your arsenal. And that is all I had written down.
JON: So there are a lot of social media platforms out there, you know, TikTok, Instagram, LinkedIn, Facebook for somebody who's not active on social, do you think they should be on all of them and active everywhere?
IAN: I think it sort of depends on where your audience is. Most of the time, your best bet is going to be to start with Facebook. If you're trying to reach a younger audience, go for TikTok. You might have to learn some dances, but that's part of the game, I guess. I think that Instagram is, is becoming more popular with real estate agents because you have the ability to share beautiful, amazing pictures. And people will always resonate with that. But by and large, Facebook is definitely the best tool still. So if you're just starting out, I'd say go Facebook and then you can build from there.
JON: Awesome. All right. Well, thanks so much again.
IAN: Yeah, no problem.
JON: That’s it for this episode, thanks for listening! If you enjoyed the information, you can subscribe to us and leave us a review on your podcast player of choice. Shop Talk is a production of The CE Shop.