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And Michael as we mentioned before I’m in the middle of writing a book that is entitled “Real Estate’s Future”. And again what it is, is essentially a scoring model, where we have taken hundreds of different factors, enter them all together and what we look at is that this model can actually call the top and bottom of the real estate market. With this model we were actually able to call the top of the real estate market in Phoenix, Arizona six months before it happened.
Now we’re working on creating a national model. What we’re seeing today in the building numbers is that they came out really bad. And there was something on Zillow the other day that said that Americans have lost trillions of dollars in real estate value. And its easy to get all emotional about this especially if you’re one of those people who are losing their homes. And you are one of the people in trouble, but eventually we will get to the bottom market again. Hopefully by then I’ll have my Book complete and we will be able to warn people that we think it’s going to be the bottom of the market.
I always joke about, you know it’s the bottom of the market when something happens called “capitulation”. When essentially everyone has given up, and if you’ll both recall when we were at the top of the market back in 2005-2006 you couldn’t go to a party without having at least 10 people tell you about all the real estate that they were buying, and all the millions of dollars that they were making.
And now my definition of when we’re going to hit the bottom is when you go to a party you tell someone you are going to buy some real estate and they all take you out back and slap you around because the think you’ve gone crazy. And that’s how you are really going to know that we have hit the bottom. Because you are not going to know we have hit the bottom until long after we have.
So I think that right now is the absolute fabulous time, especially for first time home buyers to jump in there. I said my brother went out the other day and picked up a couple of repos for like $30,000 apiece. One of them, he moved tenant in to a week later. It was broom it out, paint and carpet, and put the tenant in the house.
Now, to tie this all back into the economy you mentioned the jobs market. Do you have those numbers? I do and one of the things that still sticks out in my mind from the previous broadcast last week is Dan pointed out some numbers talking about housing sales in Maricopa County as compared to this time a year ago, and what those numbers represent now, that number has actually increased pretty significantly.
And when I looked at and started thinking through the process of what that means in terms of the marketplace, the real estate market specifically, there is a number of positive influences that the media sure is not going to sell any papers with, that’s why it’s become such an important discussion. Dan, do you still have information about this?
Yes I do still have those numbers here and that’s one of the things that we look at in the book that I am working on writing, “Real Estate’s Future”. And actually if you want to get on the list to get a free copy of the book, I am going to give away the first hundred copies for free. You can go to my website, http://realestatesfuture.com and just put in your e-mail address and your name and I’ll make sure you get a copy as soon as were done printing it, which could honestly be more than a few months from now. But I’m guessing before we see the bottom of this market.
But one of the things we look at is year over year home sales. In the last six months we have seen home sales increase from ‘07 to ’08, in some cases, 30 to 40% per month, the home sales have gone up. And at the same time were seeing the median home price come down to the $150,000-$160,000 range. Now we’re definitely in a place where the median income family can go out there and afford to buy that house. When you have 78% of the houses selling for less than $250,000, virtually every family in Maricopa County can afford to buy one of those houses…
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