There is a housing shortage, but I bet you knew that. But have you ever wondered why?
- The inventory challenge is not an economic issue.
- The real estate industry needs to learn how to explain itself better.
- Zestimates changed how consumers gained information, but few have been able to replicate the simplicity of it as a communications vehicle.
There is a housing shortage, but I bet you knew that.
But have you ever wondered why?
Sure, the Great Recession had its impact. Builders have been slow to recover and the population is growing — but there could be another reason for the shortage: simple communication.
A missed opportunity
A double-sided postcard recently arrived in the mail from a noted real estate agent in town. It included a typical community picture, details about the agent’s skills and a chart addressing recent neighborhood home sales.
But how many of those on the receiving end were real estate junkies fascinated by the list-to-sales price ratio or the time-on-market column?
What might homeowners care about more than recent sales?
One of the great stats of 2016 came when CoreLogic pointed out that 93.7 percent of all mortgaged homes in the U.S. had positive equity in the third quarter, with only 6.3 percent in the red. These are astounding numbers considering how far we fell after the boom.
Remember those good ol’ days, when just about every conversation in America eventually came to real estate and home appreciation? Homes increased in value seemingly every day as homeowners rushed to Zillow’s Zestimates to see how rich they were.
Our industry criticized Zillow, and its famed tool was routinely vilified. But we missed something very important: The Zestimate changed the way consumers gained real estate information. It spawned an entire industry of data and information, yet very few have been able to replicate the simplicity of the Zestimate as a communications vehicle.
Where the mark was missed
The mailer may have worked in raising the agent’s profile, but the chart and acronyms were ineffective as a communication tool.
The mailer could have told an amazing story. It could have explained that home values in the area had returned or even exceeded the “go-go” years.
It could have explained that active buyers are fueling great sales prices. It could even have compared home prices in places where neighbors have recently moved. It could have calmed fears that locked-in, record-low mortgage rates are an anchor.
It could have explained the town remains a destination in an consumable way that would have gotten an empty-nester, expanding family or retiree to pause and make a call to learn if now might be the right time to make a move.
Go back to CoreLogic’s 93.7 percent number: The inventory challenge is not a dollars and cents issue. It is not because people are underwater.
The inventory problem just might because the real estate industry simply is not explaining itself very well.
David Siroty is the former vice president of North American public relations for Coldwell Banker and the founder of Imagine Productions, a communications, coaching and training firm. You can follow him on Twitter.