May 2018 Market Update to Inform Your Marketing

With April behind us and the spring selling season well underway, keeping tabs on the national economic picture not only serves to foreshadow potential changes in local markets, it also helps us better understand the mindset of both buyers and sellers and how we market to them.

Primary Drivers:

  • Rising interest rates expected to continue through 2018
  • Homeowners reluctant to move means less inventory for buyers to choose from — forcing prices higher
  • Inflation driving the cost of materials is making new construction for low and middle class buyers more expensive

According to Bloomberg as of May 1:

  • The housing market is on pace for moderate growth, though it faces headwinds from rising home prices and mortgage rates that have climbed to nearly a five-year high
  • Residential housing starts are well below the peak of the previous economic cycle
  • The National Association of Realtors projects 2018 purchases of existing homes may reach the highest level since 2006

CoreLogic’s forecast as of April 1 indicated that:

  • Home prices will increase by 5.2 percent on a year-over-year basis from March 2018 to March 2019
  • Half of the top 50 US markets were overvalued
  • The top 10 US urban markets continue to see year-over-year price increases, with Las Vegas in the lead at 12.6 percent

Other economic factors at work as of May 1:

  • Overall US economic expansion continues its nearly nine-year growth
  • Last week’s less than stellar GDP figures show a modest gain of 2.3 percent equal to last year’s performance overall — but below the 2.9 percent annualized rate of 2017 and President Trump’s projected goal of 3%
  • The stock market continues its pendulum swings fueled by mixed earnings and fears of an impending trade war with China
  • Unemployment numbers, which are due at the end of this week, are expected to pick up after an unexpected decline in March, while wages show a modest increase.
  • This year’s tax cuts and higher government spending continue to add to the country’s debt burden

The Federal Reserve’s March meeting resulted in the sixth interest rate increase since December of 2015, lifting the federal funds rate of 1.5 to 1.75 percent

  • The core rate of inflation was 2.1 percent, surpassing the the Fed’s desired 2 percent goal
  • A third planned rate hike is expected, for a total of four in 2018

Consumer spending peaked in the fourth quarter of 2017

  • Anecdotally, confidence remains high. Rising interest rates mean increased credit card balances and increasing inflation drives costs of goods and services up as well.
  • Early reports suggest the Trump administration’s $1.5 billion tax cut may not be having the desired effect of driving up wages and increasing consumer spending

Bottom Line

Monitoring this information on an ongoing basis should shape your marketing and drive your conversations with both buyers and sellers. When it comes to marketing:

  • Use an urgent call-to-action
  • Illustrate the benefits of your experience and your ability to move fast
  • Promote your ability to work in tandem with your lender to get buyers pre-approved
  • Promote your ability to negotiate price and close quickly

By | 2018-05-02T11:05:52+00:00 May 4th, 2018|Categories: Marketing, Real Estate Agents|Tags: |

About the Author:

A freelance writer and content creator, Tim Coutis has served as a Creative Director and Project Manager for a number of both large and small businesses in the finance space. In addition to creating content on a range of topics, his work includes traditional as well as online marketing, blog posts and social media support. Connect with him at timcoutis.com

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