Economist: Home sales totals aren’t just influenced by market forces, sales efforts also play a role
In “numbers-crunching” mode, Joey Von Nessen pored over charts that among other things predict local home sales climbing 3-5 percent from 2013’s peak.
He acknowledged Tuesday that the home-sales growth rate would slow this year, a respite from the Charleston area’s year-to-year surge of 21.5 percent last year,13.5 percent jump in 2012, 5.9 percent rise in 2011 and 5.1 percent increase in 2010, according to the Charleston Trident Association of Realtors.
Then, eschewing figures for a moment, the research economist “talked shop” with the 400 Realtors on hand at the Montague Terrace conference hall in North Charleston.
“How do you motivate buyers?” he opined at the association’s Residential Real Estate Market Update and 2013 Year in Review.
For one, “create a sense of urgency,” says Von Nessen, flanking a projector screen displaying his findings.
“There is a good reason. Mortgage rates are rising, and home prices are up. Buyers need to act now,” says Von Nessen, research economist at the University of South Carolina’s Moore School of Business.” Shoppers can’t get a better deal a year from now, he says.
Another piece of advice: “Provide useful options to consumers. People tend to make decisions only when you make a clear difference in options. Give customers choices.”
To illustrate the point, he displayed a series of photos that had been used in a social experiment.
At the start of the study, prospective “buyers” were shown pictures of new ranch and split level homes and asked which would they prefer. Most buyers chose the larger split level. When a less stylish split level was added to the mix, they still picked the nicer split level. But when an older ranch home was switched in, buyers tended to choose the newer ranch, not the new split level. The reasoning? Buyers were more comfortable with the apples-to-apples comparison between ranches, Von Nessen explains.
His tips-oriented comments were in studied contrast to the economic remarks, something that pleased at least one agent at the forum.
“I appreciate (the advice) and how to apply it,” says John Grisillo, agent with Carolina One Real Estate.
Another speaker didn’t directly address the issue of motivating buyers. But he did present some news that should rev up most any agent.
“No recession for at least another four years,” says Steve Slifer, economist with
NumberNomics in Charleston. “That ain’t too bad.”
Slifer and Von Nessen served up complementary presentations at the annual update; the former Lehman Brothers chief economist focusing on national numbers and the Columbia-based financial whiz drilling down to state and local levels.
Among Slifer’s prognostications:
- Gross Domestic Product will increase to a 3.3 percent growth rate this year after a 2.7 percent upward pace in 2013.
- Don’t expect the federal government to default on its debt payments. “Politicians are not going to let it happen. They are not stupid people.”
- The government isn’t as efficient as the private sector, which hampers the Affordable Care Act and could slow down overall economic growth. At the same time, “I don’t think Obamacare is going to be the thing that does us in.”
- Consumer confidence has been picking up in Europe and Japan.
- The U.S will be the world’s largest oil producer by the end of the decade, passing Saudi Arabia and Russia and reducing reliance on foreign crude.
Separately, Von Nessen’s forecasts include:
- In the past two years, South Carolina has topped all states in leading economic indicator growth. “Then why doesn’t it feel like it?” He says it’s like someone on a building’s 10th floor who gets knocked in a hole — the national recession — and has taken two steps at a time to recover but is just now returning to where he started.
- Ten South Carolina counties including Berkeley, Dorchester and Charleston are expanding beyond pre-recession rates and six more are expected to within a year. “We are moving from a recovery economy to an expanding economy.”
- Metro Charleston has led the state in growth over the past three years.
The yearly event Tuesday proved an auspicious start for Corwyn Melette in his term as association president. The update drew a standing-room-only ensemble to the North Charleston Coliseum-based conference hall.
Meghan Weinreich, the association’s marketing and communications director, says 340 people registered for the program. Considering the SRO crowd, “400 is about right (for the actual count),” she says.
For more information, visit www.charlestonrealtors.com.
Reach Jim Parker at 937-5542 or email@example.com.