In recent months, buyer demand has been way up, fueled by historically low interest rates. But at the same time, inventory has remained at historic lows.
For buyers, the last few months have been full of competition, bidding wars and higher-than-normal home prices.
But as the weather continues to cool down, so will the competition for home purchases. Buyers who stay in the market into the fall and early winter will have greater leverage for remaining homes.
What does this mean for you as an agent?
Now is the perfect time to convince buyers to work with you.
Using two years of data from Realtor.com, Nerdwallet.com analyzed sales in the 50 most populous U.S. metro areas. The site discovered the following:
While listing prices don’t drop drastically — typically less than half a percent — final sale prices take a noticeable dip. In the 50 metro areas, home sale prices dropped 2.96% on average — $8,300 on the median home — from summer to fall.
If buyers hold off until January or February, homes cost 8.45% less on average than in the summer months. January had the lowest sale prices in 29 of the 50 metro areas, and February had the cheapest prices in 19 areas.
But because most buyers prefer to move into their new homes by the end of the summer, especially if they have school-age children, many miss out on these savings.
What’s really interesting is the number of buyers who are looking for a home in the spring and summer who don’t have kids in school. Oftentimes, their leases expire over the summer because that’s when they moved into their current residences.
You often see this with college kids who move to a new city during the summer, sign a one-year lease and continue renting in yearly increments. When they’re finally ready to buy their first home, they want to close before their lease expires in the summer.
If they haven’t found a home yet, it’s your job to educate them on the advantages of continuing their searches into the fall and winter months.
The buyer’s market is extremely diverse, so there isn’t necessarily a specific demographic you should target. But there are certain groups to focus on with the highest lead potential.
According to NAR, first-time buyers made up 33 percent of all home buyers in 2019. First-time buyers may be your easiest leads to land because:
According to data from Trulia, starter home inventory gets a 7% boost between October and December in the United States.
In 70 of the 100 largest U.S. metros, the number of starter homes on the market reaches its annual peak during this time, meaning those looking to buy their first homes have more to choose from this time of year. This is another great selling point to use with first-time buyer leads.
So how do you find them?
NAR® says the largest share of home buyers fall in the 29 to 38 age group, accounting for 26% of all buyers. It’s safe to assume many buyers in this age group will be purchasing for the first time.
We found two effective ways to track down these leads.
Experian
Experian offers a pre-compiled list of prospects most likely to buy their first homes. You can access it just by clicking this link.
When you click on “Order this Mailing List,” you’ll be taken to a page to narrow down your options.
Under the “List Options” tab, choose the selection that says “Include telephone numbers where available.”
Under “Geography,” enter any desired zip codes in the bottom section, then click “Apply entered ZIP Codes.”
With one zip code, I was able to collect 1,436 leads, for a price of $122.06.
If you want to find more targeted leads, under the “Additional Selections” tab, check both boxes for “Extremely Likely” and “Highly Likely.”
This reduced my list count to 722 leads, for a cost of $100.
Click “Add to Cart,” and continue the checkout process. If you aren’t already an Experian member, you can register during the checkout process.
Melissa Data
I also used a data-collection site called Melissa Data, targeting consumers in the 25-34 age range who currently rent properties.
When you get to the site, click the link on the right of the page that says “Create an account now.” Create a free account, and verify your account with the confirmation email they send you.
Once you’re registered, you can sign in and begin putting together your list.
Under the “Products” tab, select the option that says “Sales Leads & Mailing Lists.”
On the next page, select the option for “Consumers.”
Then, click the box that says “Build List Now.”
As I built my list, I used the following options:
After each of the above selections, click the button that says “Add Count.” This applies your selections to your final list criteria.
For this particular zip code, I was able to collect 196 records. You can also expand your search area by searching for a bigger radius or full county.
Once you’ve made all of your specifications, name your list and click the yellow box that says “Purchase” under the green section to the right that says “Job Summary.”
This will take you to the final confirmation and payment page. This list cost me $50, which is the minimum purchase price.
You can choose to download your list in a number of formats — I chose an Excel spreadsheet.
Once I finalized my transaction, I was immediately given a link to download my data. You’ll also receive an email to download your data within about 20 minutes.
If you want to verify the ages of the property owners you’ve pulled, you can enter their names into Intelius.com.
According to NAR®, 52% of sellers traded up and purchased a home that was larger in size than what they previously owned. The typical buyer was 45 years old this year.
I recently showed you how to find Move-Up Leads. Check out this blog to learn the best ways to find and convert them.
These buyers may push back because they want to wait for a hotter spring market to sell, or because they have children in school and don’t want to move during the school year. But here are a couple of reasons they may be better off selling in the fall or winter.
If these buyers are set on staying in the same area to prevent disrupting their children’s education, come ready to show them a multitude of options available right in their school district.
After living in their family homes for a number of years, many homeowners seek to downsize once their children leave the home and they no longer need all that space.
Like the previous group, these buyers may be harder to convince, especially if they’re on the older end of the spectrum. They may not want to move in the winter months due to the general hassle and difficulty of preparing a home for sale and actually moving.
As we mentioned under first-time buyers, starter home inventory reaches its peak in the fall months. Trulia defines a starter home as any listing priced below $232,751, based on weighted averages from the 100 largest metro areas in the U.S.
The same types of homes appealing to first-time buyers are likely to appeal to downsizing buyers.
I recently showed you how to find Downsizing Leads. Check out this blog to learn the best ways to find and convert them.
To overcome the objection about moving in the colder months, be sure to send these buyers information about local moving companies who can make the transition as hassle-free as possible — for a reasonable cost. You can even offer to pay for any moving expenses if they list with you.
The best way to convince buyer leads to wait for cooler months to search for homes is by using a mailer that shows real-life examples of comparative homes sold in the summer vs. winter.
Find two nearly identical homes, preferably in the same neighborhood, school district, etc. Show what the market value of both of these homes should be in your expert opinion.
Find one home that sold in the summer, along with its final sales price, and one that sold in the winter, along with its sales price. Make sure the properties were sold in the same calendar year, and make sure all of the information you give is accurate. Your leads could easily look up the properties you mentioned.
Include pictures of both homes, putting the final sales prices at the forefront.
The heading of this mailer should be bold and say something along the lines of “NOW IS THE BEST TIME TO BUY!”