Real Clues

[RealClues] #337: Real Estate is Local

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New for August 1-15, www.ListenandLearnRealEstate.com
(See Featured Products for detailed descriptions)
Hot New Search Site--Get Your Real Estate Website Posted Here
Dominate Your Real Estate Market with this Little Known Web Search Secret
An Entirely New Way to Use Rate of Absorption during Listing Appointments
The Greatest Gift of All--You!

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Table of Contents
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1. CoachingClues: All Real Estate Is Local
2. Welcome Notes: Consumer Reports: Two-thirds of Agents Discount Commissions
3. Reprise: Secrets of Powerful Negotiation (Part 2 of 6)
4. Create a Better Life: Forty Tips for a Better Life
5. Positive News for Positive Realtors(reg): Energy prices are down, inventories are shrinking, interest rates hold.
6. Luxury Clues: Search Secrets, Listing Secrets, and Your Greatest Gift
7. Featured Products:
**Stop discounting your commissions now
** New at www.ListenandLearnRealEstate.com
8. Increase Your Production with Personal Coaching
9. Give Us Your Feedback on this Newsletter
10. How to Subscribe/Unsubscribe

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1. CoachingClues: All Real Estate Is Local
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More bad news from the Standard and Poor's Case-Shiller Index: prices were down overall by 15.8 percent for May. How meaningful are the national numbers to your business?

At Real Estate Connect, I had the pleasure of moderating four different foreclosure panels. The last panel had a spirited discussion about the foreclosure numbers and what they mean. When I asked Lauren Guzak, Director of Strategic Relations for Dataquick, about the discrepancies in the numbers and whom we should believe, her emphatic answer was "No one!" This may be an odd response for someone who is in the business of selling market data. The point that Guzak was making, however, is that the national numbers and even the state numbers are essentially meaningless when it comes to your local market. The question is what numbers should you be tracking for your business?

HappyReNews.com
This site is completely biased--they only report on those cities that are having an increase in some aspect of their market statistics. Their approach is granular--in other words, they're drilling down into what is happening in specific towns and even in specific neighborhoods. While the national headlines trumpet price declines, there are several other factors to consider when evaluating your local market conditions.

Too big to be meaningful for local markets
The Case-Shiller index has a complicated statistical formula that they use to report on whether prices have declined or increased. Even if you are in one of the 20 MSAs (Metropolitan Statistical Areas) they cover, the size of the area is so large that the data is not useful for a specific price range in a specific neighborhood. The same is true for other national numbers such as those reported by NAR and OFHEO.

Pricing data lags behind other key predictors
In the fall of 2004, I wrote three columns on what would happen in the next buyer's market. What gave me pause for concern was the decrease or disappearance of multiple offers, the increase in the number days on market, and increasing rates of absorption. While properties located in prime areas continued to experience strong sales and increasing prices, the other three variables indicated the beginning of a market slowdown. When the market shifts from a seller's market to a buyer's market, there is always a transition period where there is stability. Prices stop increasing or decreasing and then stabilize. As I look at the national numbers that report price deflation in many areas, other indicators may be the first signs that the downward spiral is beginning to move towards stability.

Here are the cities that Case-Shiller reports as having price declines that HappyRENews reports that have an increase in at least one other indicator.

1. Cities with increases in unit sales
Charlotte, NC (.05%); Miami (12.1%); Los Angeles (4.8%); Phoenix (16.5 percent); Portland, OR (15.4%), San Diego, (39.2%); San Francisco (12.7%); Seattle (10.1%).

Unit sales are important because they indicate how quickly the inventory is being absorbed. Michi Olson, Vice President of Business Develop and Relocation for Alain Pinel Realtors, told me that banks are now asking for absorption numbers when they sell REOs. In other words, they want to know how many months of inventory are on the market and how quickly the existing inventory will be sold. As a rule of thumb, if there are six months or less of inventory, you are in a seller's market with price appreciation. If there are seven or eight months of inventory, you are in a flat or transitioning market with price stability. If there are nine or more months of inventory, you are in a buyer's market with downward pressure on prices. When unit sales increase, the inventory decreases. This is can be one of the first signs that a market has reached the bottom or is beginning to stabilize.

2. Cities with declines in the number of days on the market
(Atlanta (-2.3%), Charlotte, NC (-7.5%); Dallas (-15.5%); Miami (-14.1%); Los Angeles (-24.4%); Phoenix (-7.2%); Portland, OR (-8.6%); San Diego (-3.4%), San Francisco (-6.2%); Seattle (-13.6%)

Days on market (DOM) is another good barometer for determining if the market is improving or getting worse. A decline in DOM indicates that the market is getting better. As you can see from the numbers above, a number of cities are also experiencing a decline in DOM indicating that these markets may be improving, even though prices may still be declining.

So whose numbers should you believe? National numbers are meaningless to individual sellers and buyers. Instead, track your local rate of absorption, days on market, and the number of unit sales. All that really matters is what is happening in the neighborhood where your clients are selling or purchasing.

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2. Welcome Notes
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Welcome to our new subscribers this week. Each week RealClues provides you with great strategies to improve both your business and your life. If you find this issue of RealClues helpful, take a moment to hit the "forward" button and send it to another friend in the business.

Yesterday, Inman published a study conducted by Consumer Reports. Of the 9,141 clients who responded, a whopping 71 percent who asked for a commission reduction received it! RE/MAX lead the pack with 77 percent in reductions, Century 21, Keller Williams, and Prudential were at about 67 percent, and Coldwell Banker as at 64 percent. Yikes! We are in the toughest market probably in 30 years, a market where commissions normally increase, and two-thirds of the agents cannot earn a full commission? If you aren't earning a full commission in this environment, spend the $23.95 plus shipping to order Waging War on Real Estate's Discounters. There's absolutely no reason to cave in to commission reductions, especially when the market is this tough. See Featured Products for our best selling Waging War combo--the book, the 83 scripts on audio CD, plus 83 script cards or click here now:

http://realestatecoach.com/wagingwar.html

and click through to the Table of Contents. Over 30,000 agents have used this book to improve their business and to earn more full commissions. If you're not getting paid what you're worth, don't delay. Take this simple step today to make more dough for many years to come!

Bernice Ross and Byron Van Arsdale, Chief Dough Makers
www.RealEstateCoach.com, www.RealEstateDough.com, www.LuxuryClues.com, www.RossdalePress.com, www.ConferenceCallTraining.com, and www.TeleconferenceLine.com

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3. Reprise: Secrets of Powerful Negotiation (Part 2 of 6)
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Part 1 of this series outlined three strategies to help you to be more effective when negotiating. Today's session identifies some common practices that undermine your negotiations and illustrates how to avoid them.

Part 2:
http://www.realestatecoach.com/articles_archive/art200705-powerful-negotiation-2.html

In case you missed Part 1:
http://www.realestatecoach.com/articles_archive/art200705-powerful-negotiation-1.html

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4. Create a Better Life: Forty Tips for a Better Life
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This is a wonderful series of suggestions from our good friend and fellow coach Philip Humbert's newsletter. Paul Vogel is the author of this amazing list. Philip kindly gave me permission to use these for our readers. The full post is in two parts on LuxuryClues at the links below. Philip's newsletter is one of the best general business coaching newsletters that I have ever seen. His readership is over 50,000. To read Part 1 of the tips (Part 2 will post next week):

http://www.typepad.com/t/trackback/1032275/32039596

If you like his "tips," subscribe to his newsletter as well. : http://www.philiphumbert.com

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5. Positive News for Positive Realtors(reg)
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Economy grows a little, oil and gas prices decline, rates are down, and inventories are shrinking. The new Housing bill has a provision that says, "Buy now" if you need down payment assistance. Click below to learn the positive news about today's real estate market.
http://listenandlearnrealestate.com/news.html

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6. LuxuryClues.com
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Forty Tips for a Happier Life (Part 1 of 2 includes the first 20).
What to Look for in Chianti Wines
New Luxury Destination Magazine from UniqueGlobalEstates.com
Secret Closing Strategy for all Price Ranges: The A- Comparison

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7. Featured Products: Our Hottest Selling Package only $99.00 & New at ListenandLearnRealEstate.com
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Up to 71 percent of agents are discounting their commissions--don't get caught in the same trap. If you're ready to be part of the 29 percent who get paid what they're worth (read a full commission), learn why our Waging War package has been our very best seller. It includes a copy of Waging War on Real Estate's Discounters ($23.95), our Waging War Script cards ($39.95) and our Waging War Scripts on audio CD ($69.95) for only $99.00 plus shipping and handling. Learn why our many of our raving fans are saying, "Waging War on Real Estate's Discounters" is the best real estate book ever written. To order, click on the link below.

http://www.profcs.com/app/netcart.asp?setCookie=TRUE&MerchantID=35347&ProductID=2571887

**New at www.ListenandLearnRealEstate.com
Eight new audio broadcast training modules EVERY month for only $29.97 per month or $147.00 for six months. Here's what's new for August 1-15, 2008:

*Hot New Site--Get Your Real Estate Website Posted Here
Learn about the hottest new tool that will revolutionize how you search the web. Best of all, this session tells you how to get great placement on the newest search engine that is poised to make Google's present search format obsolete.

*Dominate Your Real Estate Market with this Little Known Web Search Secret
This session reveals a little known secret that can help your real estate website climb to the top of the search engines with a very simple change in your URLs.

An Entirely New Way to Use Rate of Absorption when Listing Real Estate
If you haven't used rate of absorption as part of your real estate listing materials, this session will show you how to use both the traditional approach that convinces sellers to get real about their price as well as a clever new way to outshine competitors from other real estate companies.

The Greatest Gift of All--You!
Regardless of how old you are, there is always someone who is older or younger who would love to be the center of your attention. With our constant focus on work, many real estate professionals forget the importance of special time spent with those we love. This session shares some poignant illustrations of how powerful it is to give the greatest gift of all--you!

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8. Increase Your Production with Personal Coaching
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Looking for a well-trained coach who knows the real estate business? Our coaching team can help you increase your production and make your dreams come true. Send an e-mail to Shane@RealEstateCoach.com and we'll help find the right coach for you.

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9. Give Us Your Feedback On This Newsletter
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We want your feedback-to share your thoughts and suggestions, please e-mail us at Shane@RealEstateCoach.com.

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10. How to Subscribe/Unsubscribe
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Visit our Web site, http://www.RealEstateCoach.com to subscribe/unsubscribe to RealClues.

Copyright (c) 1996-2008, RealEstateCoach.com and Teleclass4U.com, LLC. All rights reserved. Permission is granted to reproduce, copy, or distribute RealClues as long as this copyright notice and full information about contacting the contributors to this newsletter is attached.

Contributors to this newsletter:
Bernice Ross, MCC, and Byron Van Arsdale, MCC, Owners, www.RealEstateCoach.com, www.LuxuryClues.com, www.ConferenceCallTraining.com; www.RossdalePress.com; and www.TeleconferenceLine.com
Shane Bowlin, REC General Manager

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