Monday, November 28, 2022
Rent delinquencies surged in October compared to one month prior as the housing market continues to struggle with high mortgage rates, low inventory, and a lack of interest from buyers. This comes as no surprise then, that the very people who get paid to sell homes are also struggling. According to a recent survey, nearly 37% of Realtors are struggling to pay their rent this past month, up from 27% the month before. Things don't look great, and it will most likely get worse, before it gets better.
You're not alone if you are struggling to make end meat. About 37% of small businesses, which between them employ almost half of all Americans working in the private sector, were unable to pay their rent in full in October. That’s according to a survey from Boston-based Alignable, a network of 7 million small business members. It’s up seven percentage points from last month and is now at the highest pace this year, the survey showed. Chuck Casto, head of research, at Alignable, said that small business owners are resilient but incomes are “basically being eaten away by inflationary pressures.” The survey of 4,789 small business owners was conducted between Oct. 15 and Oct. 27. The findings partly reflect how inflation is affecting small businesses. More than half say their rent is at least 10% higher than it was six months ago, and in seven say rents have increased at least 20%. About 49% of restaurants were unable to pay their rent this month, up from 36% in September, while 37% of real estate agents couldn’t pay their rent, up from 27% last month, reflecting the fallout from a slowdown in home sales as higher mortgage rates chill the housing market. Covid-19 supply chain issues also remain a major obstacle for companies, particularity for small business owners who run car repair shops and auto dealerships. The scarcity of parts their customers need to fix their vehicles is still slowing business. Almost half of car repair shops and auto dealerships were not able to meet their rent this month, the report said. Alignable found that one-third of firms are at risk of closing if revenue does not “ramp up” in the coming months.
If you found last month difficult, things will become worse in the coming months. Realtors know the natural slow down of the December and January markets. With most people focused on the holidays, their house shopping usually gets put on the back burner. So if you struggled in October and November, you may have to wait until February to make your next sale. That would be devastating for most, but here at Young Realty, we strive to bring your revenue to records each and every year. When in real estate, you get to make your own economy, so despite the struggles of the macro economy, in your micro economy, you can still thrive, even without the help of everyone around you. If you are struggling, look up your local real estate board statistics. More than likely, despite all the negativity, there are still sales being made, they just aren't being made by you. You need to change that using our tried and true methods, that become even more popular during slowdowns. You must focus on the major 3, expired, FSBOs, and especially in this market, home evaluations. If it seems like your clients have given up hope, stay engaged with them, by updating them on their home values. If they have gone, how much have they gone down? It isn't always a popular thing to report the bad news, but your clients will appreciate your candid nature. Focus on your clients needs and you will in turn be rewarded. If you aren't actively working with any clients, the best thing you can do is to give a comparative market report to your focus neighbourhood, don't wait to be asked, send out the valuations and watch the calls pour in. If you want some inspiration, check out our simple, yet effective landing page were we provide annual equity reports to our clients each and every year.
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