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Posted On Tuesday, 25 April 2023 20:16
Posted On Tuesday, 25 April 2023 00:00 Written by

If you were to look up the term “post-mortem” in the dictionary, you would find a medical-based definition first and foremost. 

Medically speaking, it is, as a post-mortem is a way to essentially find out what went wrong with a human being. But as I have discussed in previous blogs, post-mortems are just as commonly applied to failed business ventures, products, services, and corporate processes alike.

Post-mortems are useful in the many different applications they are conducted in because they allow for the identification of a problem and how to better prevent them from occurring in the future. Specific to business, post-mortems allow leaders and managers to identify where a product, system, or service failed, where budget was exceeded, and any other issues that occurred along the way.

Of course, the issue with post-mortems in business is that they occur after the fact, after a product has already failed, or, worst of all, after your business or organization has already been irreversibly disrupted. Yes, post-mortems are useful tools, but they are agile, reactionary, and a wait-and-see approach to problem solving.

The answer to this? A pre-mortem that solves problems before they occur! But before delving into how that is possible, let’s look at a real-world example of where a pre-mortem would have certainly come in handy.

Toying Around with Post-Mortems

A classic company that did in fact conduct a post-mortem following their disbanding was a company that took their tagline quite literally: Toys “R” Us.

In the 80s and 90s, Toys  “R” Us was one of the world’s largest toy retailers. As we all know now, in the early 2000s, e-commerce and shopping online were already on the rise and would only increase exponentially. Instead of developing its own e-commerce platform, Toys “R” Us chose to align with Amazon, signing a 10-year contract to be the exclusive toy supplier. 

Unfortunately, Amazon did not honor this agreement and Toys “R” Us had to involve themselves in legal proceedings around 2004. Finally in 2017, Toys “R” Us formally announced that it would be developing its own e-commerce platform, but by then it was already too late. Toys “R” Us filed for bankruptcy in September 2017, shuttering all remaining stores.

While many children who had grown up with this nostalgic store of their youth mourned the loss of this beloved sanctuary of fun, Toys “R” Us proceeded to conduct a post-mortem. They asked questions like: Why did we need to file for bankruptcy and what truly caused our demise?

Playing the Blame Game

When it comes to post-mortems, most people place the blame on the competition, the market, or the ever-changing spectrum of digital technology. However, the problem with placing blame is that these three areas that many will blame a failure on are always in a constant state of flux. 

Your competition is always innovating to come up with something bigger and better for themselves that may in turn disrupt you, your cash cow, or the very existence of your business in the industry. Likewise, the market is constantly changing, and as I teach frequently in my Anticipatory Leader System, digital disruptions and transformative technologies are constantly advancing whether you leverage them or not.

The issue that Toys “R” Us faced was not any one of these three individual areas. Instead, it was the lack of an Anticipatory Mindset based on my Hard Trend Methodology. Toys “R” Us acted in a reactionary manner to the e-commerce disruption to their industry, and, as such, reacted too late. Their post-mortem can only help any future endeavors and even then, will not save said future endeavors from potential demise again. 

The Pre-Mortem Approach in Business

Could Toys “R” Us have avoided the disruption they faced? Absolutely! Believe it or not, the answer was simple — conducting pre-mortems, which are an extension of an Anticipatory approach that focuses on Hard Trend future certainties; separating those from Soft Trends; and ultimately pre-solving problems with disruptions before they disrupt!

Instead of being reactionary and conducting a post-mortem after a disruption to find where to place blame, you need to focus on conducting pre-mortems to essentially “save the life” of your business or organization! Whereas post-mortems are conducted after the fact, pre-mortems are like a physical checkup for your business and proactive care.

Toys “R” Us, much like many retailers, were staring down a Hard Trend future certainty they could not ignore: the accelerating rise of e-commerce in their heyday of the 90s and the new millennium. Taking action is to be Anticipatory, but formulating a strategy is the pre-mortem itself.

To conduct a pre-mortem, Toys “R” Us executives should have asked themselves and their teammates the following questions:

1. Before we introduce a new product, service, strategy, or imperative, what problems can we expect in implementation and execution?

No idea is perfect. There will always be some struggle or ways to improve. Be sure to thoroughly review the idea prior to implementation to identify any potential bugs you expect to have to update in the future.

2. Are those problems within the organization or outside of it?

This question is key to understanding if the problems you discover from the first question are directly within your control or not. Even if the problem originates outside of your organization, do not fret! You have identified them preemptively, so pre-solve them!

3. What can be done to address said problems before they occur?

If you identify a problem before launching a new product, service, strategy, or imperative, there is always something that you can do. Incorporate your team to develop a strategy around pre-solving those problems.

4. If one aspect or element of a project or product is going to go particularly well, what steps can be taken in advance to further leverage that success?

While pre-mortems are mostly about pre-solving problems, they are also about taking advantage of future opportunities in pre-solving those problems. If you identify some aspect that is going to work well, do not be afraid to leverage it for your organization’s benefit. Essentially, expand upon your Anticipatory power!

Remember that any new business decision is likely to come with problems, and it is up to you to identify and solve those problems before they result in disaster. Truth be told, a post-mortem in business should largely be treated like a collection of afterthoughts, and a pre-mortem should always come first!

Ready to learn more about the power of pre-mortems and how you can use my Anticipatory approach to avoid disruptions? Explore my Anticipatory Organization® Model today and start to position your business or organization to be one that can act on opportunity before it passes you by!

Posted On Tuesday, 25 April 2023 00:00 Written by
Posted On Tuesday, 25 April 2023 00:00 Written by
Posted On Monday, 24 April 2023 13:13 Written by
Posted On Monday, 24 April 2023 11:47 Written by
Posted On Monday, 24 April 2023 08:44 Written by

The Mortgage Bankers Association said that purchase loan applications were down 10% last week. While I don’t contest that those are the numbers reported back to them, the numbers reporting back to me from my clients around the country, is that applications, along with contracts, and requests for preapprovals continues to climb. In some cases, dramatically!

Granted I have a much smaller sample size, companies and branches in Florida, Texas, Arizona, Washington. Indiana, and Colorado are my only contributors, however, ALL are showing growth in activity. So maybe it’s just a fluke, or maybe it’s too small a sample? Could be those are just really active areas, sure, but all I know is that people who are committed to working are seeing solid results!

Either way, there is business out there to be done and you need to get out and get in front of it. Even if that means you have to help create the opportunities along with your referral partners! Get out and engage the public! Covid is over! Winter is over! You have to pick your strategies, share them with people, and get out and make it happen!

This market ISN’T going to come and find you! You have to get out and make the case as to WHY now is the time to sell that house and buy the one they really want! Now is the time to convert renters into homeowners! Now is the time to talk about WHY they SHOULD move forward and not to stay put just HOPING that things will get better.

I don’t believe we will see rates back down to 2%. But if they do, you can refinance them. I don’t believe that there will be a housing bubble because we have far more families forming than homes being brought to market!

Now is the time to act and work your plan. That plan must include TALKING to people! They aren’t going to call you if they don’t know WHY they should!

Questions or comments: This email address is being protected from spambots. You need JavaScript enabled to view it.

Posted On Monday, 24 April 2023 00:00 Written by
Posted On Monday, 24 April 2023 00:00 Written by

Redfin reports 30% of 25-year olds owned their home in 2022, higher than the 27% rate for Gen Xers when they were the same age

Nearly one-third (30%) of 25-year-olds owned their home in 2022, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s slightly higher than homeownership rates for millennials (28%) and Gen Xers (27%) when they were 25, and slightly lower than the rate for baby boomers (32%) when they were 25.

Some Gen Zers were able to take advantage of record-low mortgage rates in 2020 and 2021 to buy homes, putting the generation on a slightly better homeownership trajectory than their parents. But those who didn’t buy homes during that period may struggle to break into the market now that housing costs have shot up, and the economy is showing signs of slowing.

Gen Zers tracking along with their parents’ homeownership rate is counter to the common narrative that it’s more difficult for today’s 20-somethings to buy homes than in generations past. In fact, Gen Z homeowners spent the same portion of their income on housing in 2021 (the most recent year for which income data is available) as they did three decades earlier.

A 25-year-old’s median monthly mortgage payment was $1,013 in 2021, 16% of their $74,900 median income. That’s compared with a median $904 monthly payment for a 25-year-old in 1990, 16% of their $69,419 median income (adjusted for inflation). It’s worth noting that 25-year-olds buying a home now likely spend a higher portion of their income on monthly payments than those who bought in 2021, as mortgage rates have increased.

Young adults rode the rising tide of low mortgage rates and a strong job market to buy homes during the pandemic

Many Gen Zers took advantage of 3% mortgage rates to become homeowners in 2020 and 2021. The typical mortgage rate for homebuyers under 25 using a conventional loan was 3.3% in 2020 and 3.1% in 2021. They have also benefited from a strong job market and double-digit wage growth. For 16-24 year olds, wages rose 12% from a year earlier in January, roughly double the increase for the overall population. Young adults’ incomes have risen quickly largely thanks to the tight pandemic-era labor market.

“The rising tide lifted Gen Z homebuyers in 2020 and 2021; they were part of the pandemic-driven homebuying frenzy,” said Redfin Chief Economist Daryl Fairweather. “Record-low mortgage rates, remote work providing freedom to move somewhere more affordable and skyrocketing rental costs motivated some Gen Zers to break into the housing market. While the oldest of their generation had just graduated college when the pandemic started and hadn’t started building up their bank accounts, they had some financial advantages. The unemployment rate was near record lows in late 2021 and 2022, with pandemic-related labor shortages in industries that attract young workers like hospitality and retail prompting those employers to boost pay. Government stimulus payments, the pause on student loan repayments and the fact that many young adults lived with family during the lockdowns also helped Gen Zers save money.”

Younger homebuyers need less money than their older counterparts because they tend to buy cheaper homes with smaller down payments. That’s partly because people under 25 may be more flexible about home size and location than an older person who’s more likely to have children and places more value on proximity to certain schools and their office.

In 2022, the typical primary residence purchased by someone under 25 cost $235,000 and came with a $10,000 down payment (assuming a conventional loan). That’s compared to $355,000 ($30,000 down payment) for 25-34 year olds, and $405,000 ($50,000 down payment) for 45-54 year olds.

Gen Zers who don’t yet own homes face several obstacles and may fall behind. Low mortgage rates helped some Gen Zers buy homes with relatively low incomes over the last few years, but many are priced out now that rates are above 6% and home prices remain well above pre-pandemic levels.

Additionally, the Fed’s interest-rate hikes may cause a recession, which could set the generation back financially, and the average Gen Zer has even more student debt than millennials (although higher education may lead to higher-paying jobs). And the Gen Zers who can afford a home may not find one, with a limited supply of homes for sale.

Millennials, unlike Gen Zers, are tracking behind older generations’ homeownership rates

Sixty-two percent of 40-year-olds—some of the oldest millennials—owned their home in 2022. That’s compared with 69% of baby boomers when they were 40 and 64% of Gen Xers when they were 40.

Younger millennials are also behind. Just over two in five (43%) 30-year-olds owned their home in 2022, compared with roughly half of baby boomers (52%) and Gen Xers (49%) when they were 30.

“Millennials have been financially unlucky. Their parents had a more straightforward financial journey,” said Fairweather. “The oldest millennials entered the workforce during the 2001 recession. Then came the 2008 financial crisis, with many millennials in their first post-college job. It limited their earnings, overall wealth and ability to buy a home for many years afterward. Millennials started to gain homebuying momentum just before the pandemic, but they were once again dealt a bad hand with pandemic-related job losses in April 2020.”

Older Americans most likely to own their homes; young Americans least likely

Overall, 26% of adult Gen Zers own their home. That’s compared with 79% of baby boomers, the highest share of any generation, followed by Gen X (71%) and millennials (52%).

Millennials make up the biggest piece of the homebuying pie

Millennials, along with the oldest Gen Zers and youngest Gen Xers, made up the lion’s share of home purchasers last year. People aged 25 to 34 bought one in three (33%) of primary homes that sold in the U.S. last year, the highest share of any age group. They’re followed by 35-44 year olds, who bought 27% of them.

Gen Zers are players in the homebuying game, though their share is small. People under 25 bought just over one in 20 (6%) of homes that sold last year. This home-purchase data includes only homes to be used as a primary residence that were purchased with a mortgage; roughly 30% of homes were bought in cash last year.

Younger people move more often and buy more homes than older generations because their life stages beget moving. Roughly half of homeowners under 35 own their home for less than three years, versus 15% of 35-64 year olds and 7% of homeowners 65 and older.

People in their 20s and 30s are entering the workforce, moving to different parts of the country, settling into their careers and turning from renters into homeowners, events that often require or at least encourage a move. Many of them are also getting married and having children, which often prompts a move to a different neighborhood and/or a bigger house.

Gen Z homebuyers are most prevalent in affordable areas; millennials buy in tech hubs

People under the age of 25 bought roughly 9% of the primary homes that sold in Virginia Beach, VA last year, a bigger share than anywhere else in the country. Next come Cincinnati, OH (8.5%), Detroit, MI (7.9%), St. Louis, MO (7.5%) and Indianapolis, IN (7.1%).

Those places are all relatively affordable, making it easier for young homebuyers to break into the market. In each of those metros, the typical home bought by a Gen Zer sold for $255,000 or less in 2022.

Virginia Beach is home to one of the biggest military bases in the U.S., and nearly half of mortgaged home sales there use VA loans, which are available to service members and require very low or no down payments. The ability to put just a small amount down is advantageous for young buyers who haven’t built up a lot of savings.

The oldest Gen Zers and young millennials are buying big chunks of the housing stock in tech hubs. People aged 25-34 bought 41.4% of the primary homes that sold in Seattle last year, the highest share in the U.S. It’s followed by Philadelphia (40.6%), Pittsburgh (39.8%), San Jose, CA (39.7%) and Austin, TX (39.6%).

To view the full report, including charts and metro-level data, please visit: https://www.redfin.com/news/gen-z-millennial-homeownership-rate-home-purchases

Posted On Sunday, 23 April 2023 08:50 Written by
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