How Low Inventory is Affecting the Real Estate Market
Low inventory presents a unique challenge for realtors. Even though you might be nurturing a healthy pool of willing buyers, there are no homes for sale! This can be especially frustrating when you’ve spent years farming prospects and building personal relationships.
The National Association of Realtors recently published a research report that highlights the severity of low inventory for many homebuyers:
- For buyers in the $75,000 - $100,000 range, there are 400,000 fewer homes for sale now than there were in 2019.
- Only 1 in 65 listings will now be affordable to buyers in that same income range.
What’s causing these significant changes? While it’s not an exact science, low inventory in the real estate market can be driven by several trends:
- Lack of new home building. In the current market, new home building has primarily been slowed by supply chain issues stemming from the COVID-19 pandemic.
- Many single-family homes are now being purchased by larger conglomerates. This is artificially lowering inventory because these big companies can make competitive offers (often in cash), which are hard for regular homeowners to compete against.
- Typical demand has also driven supply down as families seek to move and more millennials become homeowners.
It’s clear, then, that the problem of low inventory is affecting potential homebuyers across the country, and realtors are feeling the impact in a big way. It takes more creativity and more focused messaging to resonate with buyers who are likely already feeling uncertain about trying to buy a home.
While this might sound like a challenge, we believe it’s also an opportunity.
By focusing on the right target prospects, developing creative messaging, and using proven tactics like low inventory real estate postcards, you can break through the crowded marketplace and reach the right prospects.
4 Proven Messaging Techniques for Your Low Inventory Real Estate Postcards
1 | Focus on the increased sale price that sellers can receive for their property.
It’s always a good idea to appeal to self-interest, and most homeowners are interested in understanding how their equity may have increased in recent years or months. Perhaps more than any other motivation, the ability to cash out of their current property might be the biggest incentive for a homeowner to list.
Here are a few straightforward and effective ways to appeal to this desire on low inventory real estate postcards:
- Show a few examples of sales that happened recently within your target farming territory.
- Use an average percentage range to demonstrate how much home values have increased (e.g., “Your home value may have risen by up to 20%. Check now!”).
- Speak to a specific neighborhood by referencing exact inventory numbers, or by mentioning how low the current inventory is when mailers are sent. Guide prospects to an automated valuation page for a soft conversion.
2 | Offer tips on how sellers can get the highest sale price for their home.
Every seller is interested in learning how to get the best possible price for their property. By offering a few tips on how to maximize the sellers’ ROI, you will stand out as the preferred resource and go-to agent.
Useful seller tips might include any of the following:
- General home maintenance that will stand out to buyers.
- An example of what another homeowner did to improve their sale price.
- Quick décor or design changes that improve the curb appeal.
- Getting a pre-inspection to identify small areas of improvement that will streamline the sale process and show buyers that you care about the condition of the property.
3 | Create the fear of missing out.
Every agent and homeowner know that the current market won’t last forever. Harness the power of a real estate postcard market update by providing helpful data points on exact inventory levels and overall market trends within a certain zip code. Sellers that were previously on the fence about moving might be convinced to finally take action.
Common trends to look for include:
- Lower transaction rates in a given month.
- Rising interest rates.
- Typical seasonal ebbs and flows.
4 | Develop a sense of urgency based on a limited offer.
Sellers know that low inventory puts them in the strongest bargaining position with agents and buyers. In a highly competitive environment, it might be up to you to come up with a unique angle like:
- Paying for a home cleaning.
- Negotiating on key deal aspects.
- Emphasizing your reputation and recent volume of sales.
- Guaranteeing a sale within a certain period of time.
Remember to include a direct, clear call-to-action, no matter which low inventory real estate postcards you use.
Use Multi-Channel Marketing to Amplify the Effect of Your Low Inventory Real Estate Postcards
Make sure that you employ the same messaging across every channel. Using a platform like Smart Targeting (or a similar real estate marketing tool), you can easily control and precisely distribute specific messaging over email, social media, digital ads, and postcards.
This multi-channel approach is also much more effective when used on a highly-targeted and cultivated audience that might be close to taking action.
Use Predictive Analytics to Target the Right Listings
Predictive analytics are your real competitive advantage for low inventory real estate postcards. No matter how good your messaging is, it can still fall on deaf ears if you have bad data or you’re speaking to uninterested prospects.
You have to be obsessively focused on the right sellers when inventory is low. It simply doesn’t make sense to spend time marketing to those who aren’t likely to act in the near future.
Plus, without specific targeting information, you won’t have a conclusive way of doing targeted messaging. For example, if you want to only target homeowners within a certain income range, you’ll need a way to quickly find and sort these homeowners within your target geography.
With Smart Data you can easily filter prospects based on your exact farming geography. Then, let our predictive analytics automatically sort and filter prospects by their likelihood to list in the near future. Our platform is so good that it accurately predicted over 72% of all listings. We also make postcard marketing a breeze by giving you the option to choose from existing templates and automate multi-channel marketing campaigns in just a few clicks.