Those of you who have read one of my newsletters before will know that I normally use this as a space to analyze the current real estate environment. I’ll get to that. However, for the moment, I thought that I would ask your indulgence and talk about something that’s more global and more important than our local real estate market. Stick with me... As the year 2016 comes to an end, I’ve begun to reflect on societal zeitgeist and, as we all know, it’s a bit dismal. I won’t bore you with a recitation of all that plagues us individually and collectively- you can surf the internet or open today’s newspaper for that. Instead, I will admit to overdosing on pessimism and falling prey to what Spiro Agnew referred to as the “nattering nabobs of negativism” for a couple of months this past fall. Actually, in retrospect, I probably was a nabob myself. However, with the passing of some time and distance, I’ve collected myself and have reclaimed the optimism that I like to think helps to define my character. There’s not much that I can do to impact things at the national level but when I think about my life and our community, there’s cause for great celebration. Personally, I enjoy the love of family and friends and the privilege of health and education. I’m grateful for an inquisitive mind that fuels my enjoyment of travel and reading and crossword puzzles. Communally, we live in a city that remains kind. Yes, we have our problems, but I love Rochester and am incredibly proud to live here. I may be maligned for saying this, but it’s a larger version of Mayberry. Despite our differences, people in Rochester genuinely care about each other. We remain one of the most philanthropic cities in the United States. When a racist disseminated hateful literature in and around Brighton and Pittsford this past fall, he failed in his attempts to secure like-minded bigots and, instead, incurred the indignation of concerned neighbors. We continue to redefine both our economy and our downtown landscape. We have Wegmans. And the Jazz Fest. The RPO and the George Eastman House. Great health care and easy commutes. You don’t like winter? Then focus on how gorgeous this past summer and fall were. In short, life here in Rochester is pretty damn good. As we say goodbye to 2016 and begin to focus on the possibilities associated with a new year, let’s collectively encourage each other to remain positive, optimistic, and grateful!!
The Upcoming Year
So, what does the new year have in store for the local real estate community? Let’s look back at this past year to have a better understanding of what’s in the forecast. Remarkably, at the end of May, my team and I were up 20% over our sales from the same period in the previous year. Unfortunately, I had forgotten that, quadrenially, the real estate market slows in the months leading up to a presidential election. This past year, for many of the reasons cited above, the market declined even more than tradition would dictate. We concluded the summer with sales that were down slightly from August of 2015. In other words, we completely lost our 20% gain as both buyers and sellers sat on the side line waiting to see how the uncertainty of the election was going to play out. Remarkably, as autumn pushed forward, the market suddenly began to swing, yet again, this time upward. Regardless of one’s political persuasion, so much of the anxiety and uncertainty that had existed throughout the year had finally come to an end, and the pent up demand that had grown was finally being released. Our team concluded the year with a slight increase in sales totaling nearly $61,000,000 in residential real estate closed.
The first quarter of 2017 should see the release of pent up demand continuing apace. Both buyers and sellers have already begun to contact our office in numbers in excess of that which we’re used to seeing in the month of December. Here’s my advice for homeowners who are looking to enjoy an advantage over the competition: List Early. Traditionally, the spring market begins on or about the first of March every year. Well, there have been seven occasions in the past ten years when the market has begun much earlier. So much of the vibrancy of the real estate market is tied to weather conditions. As a result of warmer winters, March 1st became February 21st which, eventually, transitioned into a spring market that was, oftentimes, beginning on or about the third week of January. Over the past decade, buyers have increasingly begun looking for homes to purchase in the first month of the year. Unfortunately, because sellers were still abiding by the old rules of real estate, they were coached to list their home for sale six weeks after buyers had entered the market. Those sellers who decided to buck tradition and behave in a manner contrarian to common practice had little competition and plenty of demand. As a result, they enjoyed quick sales, at top dollar and, as hard as it is to imagine, our sellers have experienced quite a number bidding wars when they decided to list early.
In addition to temporal and climatic factors, the actions of the Federal Reserve should also help spur on market activity. Nine years after the onset of the Great Recession, the US economy seems to be doing well enough that Janet Yellen and company decided to raise interest rates again several weeks ago. Sure, the increase was small and the federal funds rate doesn’t necessarily impact long term rates like mortgages. Nevertheless, it is a sign that future increases could be in store. Today, the average 30-year rate can be secured for 4.36%, an increase of a quarter of a point over last year’s rate. Fifteen year rates are currently pegged at 3.55% which is also an increase over last year’s rate. Obviously, these are still great rates and there’s no need to panic. Nevertheless, the thought of looming increases could be another reason that buyers enter the market early this year. In short, so long as Boreas, the Greek god of winter, smiles warmly upon us this year as he did last, Sale Pending signs should be sprouting throughout the region far in advance of the first daffodils.
In and around our office, things continue to change and improve. A few items:
I’m incredibly proud to announce that, after acting as our Transaction Coordinator for the past six years, Erin Lewis is going to change careers and will begin selling real estate with our team starting immediately. Since her arrival, we’ve more than doubled our sales. I couldn’t be more grateful to her for helping us to do so while maintaining a remarkable sense of order and calm while also providing our customers a sense that everything was going to be ok! Thanks, Erin!
Twelve or thirteen years ago, I received a call from a friend asking if I would allow his daughter to spend the day shadowing me so that she could get an understanding of what it’s like to sell real estate. I couldn’t understand why a 16 year old girl would want to follow around a middle-aged real estate agent for the day, but I immediately agreed. I’m so glad that I did because, now that she’s a grown and accomplished woman, Erin Duffy is moving back from Chicago to join our team as a sales agent. Welcome home, Erin, and welcome to the team!
For the past four years, at the conclusion of the selling season, I’ve spent 6-8 weeks working with my executive coach, Jim Mahan. Once again, I’m grateful for the insight that he’s provided as we continue to grow our business. The great nugget that I took away and that which the team has fully embraced as part of our culture has to do with a specific goal. We honestly believe that, over the course of the next few years, we’re going to be able to increase our annual sales to $100 million. However, the promise that we’ve made to ourselves is the following: If, at any point in time, we feel that we’ve lost our focus on providing great customer service or if we ever feel as though we’re not having a ton of fun coming into work every day, we’re going to temporarily terminate our ascent. Only at that point in time that we can establish what it is that’s gone wrong will we begin our upward trajectory.