Who’s On Top?
My mentor is fond of saying, “those who control the listings control the market.”
Looking at inventory stats across most markets would lead you to the conclusion that inventory is at an all-time low. However, that assumption is not completely accurate because the velocity of the market has new listings going off the market just as rapidly as they’re coming on.
The listings are controlled in the market by those companies who are actually “winning the war at the kitchen table” and getting those listings that are turning so quickly. Generally, these are the brokers who are the market drivers even in highly-competitive markets. Brokers who control the listings have much more predictability, they complete more sides, and they attract and retain the best agents.
When I meet with brokers, one of the first data points I check is their listings volume and listing/sales ratios. It tells a lot about the health of the brokerage and where they need help.
For your agents, if they must spend the first 15-minutes of a listing call educating the prospect about their firm, they are at an immediate competitive disadvantage almost at “hello.” By comparison, the agent whose company is well-known and recognized has the decided upper hand.
This is especially true today when so many of the buyers are coming from out of town.
Brokers love to say that everyone puts their listings in the MLS so there’s no need to list with a bigger company. Not true… so many listings today don’t even make it to the open market. The buyers are already lined up and waiting, especially with the larger firms who have strong synergies between their agents. That’s why the better listings are won buy top companies that buyers and sellers know and trust. This is especially true at the higher-end of the market where there is good volume and velocity.
One of my personal favorite sayings? “When you have the listing, the entire market works for you.”
What a difference a year makes
Two months into the new year and what’s ahead? In many markets, the industry is projected to have the strongest year for brokers since 2006. The National Association of Realtors just increased their prediction of volume for 2021 to a 22% gain over last year. The increase breaks down as follows:
- 16% on the unit side
- 6% on the price side*
*I personally feel prices could surpass the 6% overall increase which will mean for many brokers 2021 is shaping up to be their best year out of the past fifteen.
One of the big differences from 2006 is the recent migration factor in the U.S. which primarily impacts two fronts:
- Employees are able to relocate farther away from their jobs for lifestyle & convenience
- Many remote employees are moving to different areas of the country
These are just two of the drivers of strong P&L’s which are documenting record profits and increasing the value of brokerages.
Many owners are having conversations about taking advantage of the opportunity to cash out at record highs. Equally exciting is that top-acquiring companies have amassed cash to buy good brokerages. Few would have predicted last year the M&A opportunities that this market now makes possible.
Are you curious about opportunities in the market? Let’s start a confidential conversation- text/call me at 678-516-0995 or email me at Rick.Ellis@Realogy.com.
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