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Yes the market has changed, but this change has created opportunity for the best agents in the business. Sometimes the old can become new again.
David Childers and Keeping Current Matters are known for providing insight on the real estate market that helps agents form an educated opinion they can share with clients. In this article he shares the No. 1 listing opportunity he sees in 2023.
When asked about the current state of the market Childers said,
“This is the professional real estate agent’s market. The change in supply and demand works in the favor of the educated agent. The new year creates new opportunities and I do believe there are opportunities in the current market for the agents that can confidently say I understand what is happening in the market and how to guide my clients effectively going forward.”
He went on to say,
“Our job as professional agents is to look and really understand what is happening so that we can not only give the best advice to our clients, but also where are the opportunities for listings and to grow our businesses. This leads to possibly the biggest opportunity for listings right now being in expired listings. This belief is based on the data that points to this opportunity continuing to grow in the coming year.”
Childers shared that expired listings are a function of simple supply and demand economics. The first graph he shared shows the number of listings for sale representing the supply side of the equation.
As the slide shows, in December of 2021 there were 445,784 active listings nationwide. One year later, in December of 2022, we ended the month with 751,544 active listings. This means we’ve seen the number of active listings increase dramatically year-over-year, or said another way, our supply has gone up substantially.
The second part of the equation is the demand side. This is represented by the number of pending transactions compared year-over-year.
As the slide shows, we’ve seen pending contracts fall nearly every month going back to January of 2022. This speaks to less demand.
So, in the current real estate market environment, we find ourselves with higher supply (active listings) and lower demand (pending contracts). This leads to the realization that the number of expired listings will continue to escalate in 2023.
Expired listings have long been a consistent and opportunistic source of listings for professional agents. These homeowners let everyone know they would like to sell by listing with an agent, but for some reason, the sale of the home did not happen.
This is where great agents come in. Top-producing agents develop plans of action to earn the opportunity to relist the home. They show the homeowner why their home did not sell, and the actions needed to get it sold. This involves a combination of pricing and marketing that leads to a successful sale of the home.
The best position for a listing agent to be in is to be the second listing agent. Typically, the seller is more open to professional advice and guidance since the previous agent either was unable to present the facts in a way the seller was ready to hear, or they simply were not professional enough to know what advice to provide the homeowner to get the home sold.
Either way, a well-thought-out marketing and pricing plan is usually better received by a homeowner who still owns their home after being on the market for an extended period.
Childers went on to say there are four options for a homeowner when their listing expires:
Relist with their current agent.
Take the house off the market.
List the house For Sale by Owner.
List their home with another agent.
The most likely outcome is that the home will be listed with another agent. This is where the opportunity for agents continues to expand as more listings expire. The best thing an agent can do now is to prepare a professional expired listing program that is aimed at adding as much value to these homeowners as possible. The ability to clearly communicate facts about the market and a solution-based strategy will place top agents in a position to reap an abundant harvest of listings.
Childers uses an analogy comparing great race car drivers to great agents. He said every driver looks great in the straightaway, but it is in the turn that the best of the best set themselves apart. Coming into a turn, the best drivers downshift, they choose a line to move through the turn, then they accelerate into and through the turn while others slow down.
This turn in real estate is where the best agents will separate themselves from their competition. They will find opportunities where others find obstacles. They will not only identify opportunities but act on them. They will accelerate through this market turn while others pull back.
This is the market where opportunity abounds for the diligent, professional agent. Homeowners who have been unable to sell their homes need your expertise. They need an agent who can present the market information in a way that helps them make the best decision for their family. They need your marketing prowess and a clear plan of action that gets their home sold.
The agent who develops a successful expired listing program now will be positioned to win in 2023.