You don’t have to be Sherlock Holmes to know that smoke is generally a key indicator that fire is near. Just as you don’t have to spread your time, attention and efforts equally among potential borrowers when some are likely to yield better results – and in shorter time – than others. Instead, you do the logical thing: you follow your most viable leads and invest your efforts in the people you believe are most likely to pull the trigger on a home-financing decision. You should still focus on second- and third-tier leads – absolutely – but the pyramid approach is almost always the most effective.
The newest data analysis by Attom Data Solutions should help you narrow this scope a bit, particularly as we creep into the notoriously slow holiday season. The multi-sourced property database recently released its Pre-Mover Housing Index, which pinpoints the markets with the highest pre-mover indices (meaning people are likely to move within or to these areas) during the second quarter of 2017. This information is extremely valuable, as it usually predicts where the strongest sales activity will occur the following quarter.
According to Attom, the top 10 markets where residents are mostly likely to be on the move are:
- Colorado Springs, Colo.
- Washington, D.C.
- Reno, Nev.
- Lexington, Ky.
- Tampa-St. Petersburg, Fla.
- Kingsport-Bristol, Tenn.
- Lancaster, Pa.
- Jacksonville, Fla.
- Charleston, S.C.
Daren Blomquist, senior vice president at Attom, notes there are a few reasons these areas are attracting interest from home seekers.
“Markets with a healthy mix of access to good jobs and relatively affordable housing attracted the most interest from pre-movers in the second quarter, a harbinger of strong home sales activity in the third quarter,” he says.
Counties where residents are seemingly staying put include:
- San Francisco,
- Rochester, N.Y.
- Providence, R.I.
- Grand Rapids, Mich.
Blomquist says this is easy to explain as well.
“In some of the nation’s hottest housing markets, there was more pre-mover interest in outlying counties further away from jobs but with more affordable homes to purchase.”
The average percentage of wages needed to buy a median-priced home was 38 percent in the 189 counties Attom surveyed with an above-average pre-mover index. This is compared to 42 percent in the 120 counties with a pre-mover index below the national average.
The average home value of homes pursued by pre-movers was $279,863 in the 189 counties surveyed with an above-average pre-mover index. This is compared to an average home value of $306,802 in the 120 counties with a pre-mover index below the national average.
PEOPLE AND THE PRODUCTS THEY LIKE
These stats have led Michael Mahon, president at First Team Real Estate, to draw out an additional trend our industry should note.
“We have noticed an increasing phenomena of the use of reverse mortgages, as well as increasing inventory of single family home rentals, indicating that more homeowners are holding on to their current homes rather than moving up or downsizing,” he says. “Consumers are leveraging home equity into cash for retirement, as well as into purchases of single family home rentals — often in other parts of the state or country where home prices are less expensive and the investment returns are better.”
Now that Attom has laid out what potential homebuyers want for Christmas, it’s our job to play Santa. Those in high-activity areas should pound the pavement, dial pads, keyboards and touchscreens even more as they capitalize on an enthusiastic investment pool. Others in markets where popularity may have peaked should begin examining their given core’s suburbs – both in terms of inventory and potential investors. Everyone should also realize the value of reverse mortgages, as well as the upside of additional income-producing properties, as these products have clearly drawn interest from buyers all over the nation.