There's still a large untapped market of homeowners out there who need nudging to take the next real estate step. You don't need to look far to find that market. All you have to do is pull up the files of your past customers.

Effective professionals are always aware of the need for staying in touch with former clients, but many of those earlier buyers and sellers are now especially good prospects because of the unique state of the housing market. 2001 Housing Market

In spite of the devastating effects of Sept. 11, National Association of Realtors figures indicate that home sales climbed to new highs in 2001. At year's end, 5.25 existing single-family home sales surpassed the former record 5.11 million sales of 1999. And sales of 902,000 new-home units topped 1998's earlier sales record of 885,000 units.

NAR's Housing Affordability Index for the fourth quarter of 2001 reached 146.8, the highest since 1973. This means the typical household had 46.8 percent more income than was needed to purchase the median-priced existing single-family home. Meanwhile, as U.S. Census Bureau has reported, the number of homeowners in the United States rose to an unprecedented 73 million in 2001.

These surprising statistics show that even with the inevitable slump following the terrorist attacks, real estate is stronger than ever. 2001 sales not only extended the longest robust market in our history, but ratcheted it upward as well. The national median price of existing homes for 2001 was also the highest ever: $147,500.

All this is obviously good news for real estate professionals. But what does it mean in terms of supply and demand, customer relations, and future sales?

Another Sales Cycle?

By October of last year, NAR numbers suggested that demand for housing had nearly been satisfied. The 67 percent homeownership rate reached an all-time high. Of the 70,350,000 homeowners, 42,748,000 had purchased properties in the last seven years and 32,233,000 had bought within the last five years.

It would be safe to say that during that unprecedented seven-year period of brisk home sales and rising property values, most people who were going to purchase a home did so.

We can think of the third quarter of 2001 as representing the end of a cycle. Now, housing supply and demand are virtually balanced, creating neither a buyer's nor seller's market, but a "fair" market.

According to an old rule of thumb, homeowners move, on average, every five to seven years. This means that people who purchased homes during the first years of the boom might be considering another move. But since Sept. 11 - with the economy slumping and layoffs and unemployment numbers rising - many potential sellers and buyers are still sitting back, waiting to see what will happen next in terms of global politics and domestic economy.

Counseling the Customer

This is where the real estate professional comes in. If you haven't already done so, go to your files of former customers of the last seven years. You just don't know what they're thinking until you talk to them. So, beginning with the earlier clients, get back in touch with them - in person or by phone, not by blast-fax, e-mail, or mass mailings.

Find out how they have been doing since Sept. 11. Were they considering selling, moving up, before the attacks? If so, discuss local and national housing markets with them. Correct misconceptions they might have due to media coverage of the national economy. Share NAR statistics regarding the surprising sales activity of 2001.

Counter unemployment fears by explaining that despite the effects of headlines less than 6 percent unemployment is still historically low and that 94 percent are still employed. People are still being promoted, raising family, and receiving inheritances. Suggest they think about their neighborhood. Is traffic heavy? Are there lines at supermarkets and at movie theaters? Numbers of cars on the road and retail and entertainment lines are economic indicators. Remind them that interest rates are still exceptionally low.

Now's the time to give that nudge.

Published: February 7, 2002

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