Thursday, February 9, 2012 | Edited by Daniel Moores
||It May Be Time to Buy a Home, But Is It Time to Sell Yet?
Many Americans say now is a good time to buy a home, thanks to record-low mortgage interest rates and bargain home prices that are boosting affordability. But is it a good time to sell a house? That's a different story.
Seventy-one percent of 1,000 people surveyed in a December Fannie Mae housing survey said they think it's a good time to buy a house. But only 11% think it's a good time to sell.
That's because sellers sense that even if the housing market and the economy continue to show signs of improvement in 2012, the good news likely won't be good enough for buyers to return to the market in droves — even if they can buy a home for a steal.
"For people to start buying in larger volume, they need to see home prices go up a bit," said Ingo Winzer, president of Local Market Monitor, a firm that analyzes housing markets for bankers.
Many potential buyers also are waiting to see the jobs picture improve, which will give them confidence in the stability of their own employment, Winzer said.
Still, various forecasts and surveys suggest better times for the housing market this year:
Nationwide, home prices are expected to be relatively flat in 2012, said Alex Villacorta, director of research and analytics at Clear Capital, a provider of real-estate asset-valuation data for financial-services companies. Indeed, 2012 seems to be a turning point before a healthier and sustained recovery in 2013, he said.
- Sales of existing homes are expected to grow between 2% and 5% in 2012, compared with last year, according a recent forecast from Freddie Mac.
- A recent survey of about 1,000 Re/Max real-estate agents found that 39% of agents think prices have hit bottom in their market, while almost three-fourths of agents think home prices in their markets will have stopped declining by the end of 2012.
- The number of improving housing markets rose to 76 in January, from 41 in December, according to the Improving Markets Index, from First American Financial Corp. and the National Association of Home Builders.
If you can hold out
While now still may not be the perfect time to sell a home, it may be time for home sellers to get their places ready for a sale next year.
Of course, markets vary. Prices already are on the rise in some places, including parts of Florida, Washington, D.C., and Dayton, Ohio, Villacorta said. But other markets -- including Chicago, Atlanta, Detroit and Las Vegas -- continue to be on a "downward slide," according to a December report from Realtor.com.
Either way, holding out until next year could mean a quicker and more profitable sale.
"From a seller's point of view, it's still a little early, though tempting, to put the house up for sale and expect a lot of demand," Villacorta said. "Unless there are circumstances that dictate they have to sell now, certainly waiting and tracking the markets a little bit more would be a more prudent thing to do."
Still, some sellers have delayed their moving decisions for years now. For those champing at the bit to make a sale and move on with their lives, 2012 may offer glimmers of hope.
"There are a lot of people over the past few years that decided to put their life on hold," said Budge Huskey, president of Coldwell Banker, a national, full-service real estate franchise brokerage. Some now are saying, 'I've waited long enough. I can't put life on hold forever,'" Huskey said.
The market is finally nearing the point where people who don't need to sell for financial reasons are starting to consider a move for lifestyle-related reasons, he said, such as a growing family that would be more comfortable in a larger home.
The good news for them: Inventory plunged to a 6.2-month supply in December, from a 12.4 month supply in July 2010, according to the National Association of Realtors. That means there are fewer sellers competing for buyers. (The month-supply figure is how long it would take to sell all the homes on the market now based on the current rate of sales per month. The higher the number, the more sellers there are looking for buyers.)
If you can't wait
If you plan to sell a home this year, get the house in the best possible condition and price it to sell before it hits the market, Huskey said.
An appealing online listing, complete with quality photographs, is also crucial to bring traffic to your home.
"The buyer has the opportunity to prescreen all the homes online and see only the few that really shine online," Huskey said, so a seller should do everything he or she can to get on a buyer's short list of homes to physically visit.
(Source: MarketWatch, 02/03/12)
||What (Jewelry) a Bride Wants
Budget-conscious self-expression: That's the mindset of today's bridal jewelry shopper.
In the increasingly diverse post-recession bridal landscape, there's still plenty of room for individuality within the lower price points many jewelers are reporting and, for some customers, a departure from tradition in their choice of adornment.
Today's bridal customers are different in other ways, too. First-time brides and grooms are older, but that's just scratching the surface of what makes today's bridal business different than ever before. Retailers say more boomers and couples moving on to second, or third, marriages are walking through their doors, not to mention same-sex couples, who can now get married legally in six states.
The new retail normal
During and after the Great Recession, even the supposedly downturn-immune bridal sector took a few lumps, with customers scaling back on the size of stones and the overall amount spent. According to the "2011 Engagement & Jewelry Study from The Knot Market Intelligence, bridal customers spent an average of just under $5,200 last year, compared with $5,800 a few years ago. And consider this: In 2010, the wedding jewelry market, including everything from rings to bridesmaids' gifts, totaled roughly $12 billion, according to Ken Gassman, president of the Jewelry Industry Research Institute.
"A lot of retailers, whatever their average size was, saw a drop in size when the economy took a hit," says Sally Furrer, owner of Libby, Mont.–based Sally Furrer Consulting. She adds that this tide is beginning to turn, although she hasn't seen a return to prerecession levels. "I've had some anecdotal responses that they're seeing the average size go up again," she says.
Other retailers report a similar improvement. "The bread and butter of our diamond business is three-quarters to 2 carats, but we've seen increased interest in larger stones," says Matthew Rosenheim, president of Tiny Jewel Box in Washington, D.C. "I would not describe the action as heavy as prerecession, but it's certainly better than it was."
Independent jewelers have another reason to be upbeat: They're the top pick for couples shopping for bridal jewelry, according to The Knot's research. Thirty-nine percent of customers bought engagement rings from local or independent jewelers, beating out the next most prominent category -- chain stores -- by 4 percentage points. Customers also spent nearly $4,000 more at independent retailers and bought larger stones.
The Knot's research shows 31 percent of brides shop for or purchase their engagement rings, while 34 percent give their partners an idea of what they want. Retailers Jewelers' Circular Keystone spoke with say they see even higher numbers of brides scoping out the goods, up to 95 percent. In this more egalitarian era, brides-to-be are equal decision-makers. In addition to shopping together, today's customers are well-armed with facts and online research.
But although consumers know what they want, they also desire the experience of seeing and feeling the actual stone and mounting, and trying on pieces in real life. The Knot's research shows that 43 percent of brides do extensive online research, while 34 percent cited jewelry store salespeople as influential. For retailers, this sends a clear message that they need to invest in both an informative, easy-to-navigate website as well as sales and staff training to turn in-store browsers into buyers.
The right sales training is especially important because shopping for bridal jewelry isn't a sprint -- it's a marathon. Grooms in The Knot survey spent an average of three months searching for the "right" ring, and 16 percent devoted more than six months to the effort. They visited an average of four stores and looked at 27 different rings. The upshot? Sales associates need to cultivate relationships with browsers even if the effort doesn't lead to a sale that day, that week, or even that month.
"We don't plant seeds for all the other purchases," says IAS Training president Brad Huisken. "We need to get better at selling items to go with the engagement ring, like wedding bands."
Color and creativity
A desire for uniqueness is a Generation Y hallmark, and it shows in the choices bridal customers make. According to The Knot's survey, 41 percent of brides received an engagement ring with at least some degree of customization; of these, 14 percent got a ring that was entirely customized.
But today's customers are still budget-minded, if not to the degree they were a year or two ago. "I think they're being more careful," Phyllis Bergman, president of Mercury Ring, an Englewood, N.J.–based manufacturer, says of today's shoppers. Mindful of the still-tenuous economy, they're willing to compromise -- but only up to a point. "Maybe they're going down a bit on the center stone, but they still want the look," she says.
The dwindling size of the center stone -- a trend that's been noted by jewelers and consultants alike for a few years -- is offset by a growing preference for more ornate mountings and a greater use of accent stones.
"They're very much interested in the mounting," says Deborah Finn, owner of Deborah Finn's Rittenhouse Jewelers in Philadelphia. "Especially first-time marriages, they're looking for something antique-looking, with filigree or beading." She says she sometimes has to dissuade customers from picking a setting so over-the-top that it would eclipse the diamond.
Finn's experience supports the research done by The Knot Market Intelligence: The style and setting of the engagement ring was ranked top priority for 2011 brides, beating out stone quality, stone size, and even value. Finn says this trend gives jewelers who have CAD programs or are otherwise capable of creating custom pieces an edge in attracting these couples.
Another mark of individuality is the addition of color to bridal jewelry. Whether inspired by Britain's royal wedding, movie stars' red-carpet gems, or just the lower price point many gemstones offer, the embrace of color is a strong trend, says Michelle Orman, president of Last Word Communications, a New York City–based public relations agency focusing on jewelry and watches. "People aren't afraid to add a little color," she says. "It's such a personal thing."
The skyrocketing price of gold has also led cost-conscious bridal shoppers to search for alternative metals that are both striking and easier on the bank account. "I think men are drawn toward interesting metals," Orman says. The Knot's research confirms this. While women still choose white gold by a wide margin, men are increasingly gravitating toward palladium, titanium, tungsten, and gold in colors beyond white or yellow. "Men aren't afraid of pink gold," Orman says.
Mix it up
As for the burgeoning same-sex market, "it's not so simple to generalize," says Rosenheim, but he concedes that there are a few common threads. Like other bridal customers, same-sex couples seek uniqueness and are willing to push further away from tradition to get what they want. "Sometimes they're more design-driven and less traditional," he says. "I think there's an interest in contemporary, clean, architectural design."
This preference for modern designs dovetails with the designer presence that has reshaped the bridal category in recent years, as well-known names like Stephen Webster have debuted bridal lines, and smaller designers have shaken up the traditional aesthetic with edgy elements like raw diamonds or unconventional mountings.
The other demographic that truly breaks with tradition is composed of brides making their second (or more) trip down the aisle. These customers tend to choose -- and sometimes even pay for -- their rings themselves, says Finn.
What they want is often bigger, brighter pieces, eschewing the traditional engagement ring in favor of something bold. "She knows exactly what she wants," Finn says of the quintessential second-marriage customer. "She's interested in an important piece of jewelry with a large center stone."
Nine times out of 10, Finn says, the brides-to-be get a bigger stone than their first ring, and they want to call attention to it with the cut: "The shapes I'm seeing are princess cut, radiant cut -- more the fancy cuts than round."
(Source: Jewelers' Circular Keystone Online, 02/07/12)
||Pet Owners Are Shopping Around
Pet product marketers and retailers might want to rethink their strategies due to an increasingly competitive marketplace, according to Packaged Facts.
Options include competing on price, incorporating premium and natural products into the product mix, improving merchandising, staging events and promotions, playing up pet treats, and becoming destination information sources (especially online), according to the report "Pet Product Retail Channel and Consumer Shopping Trends in the U.S."
Pet owners are shopping around, says David Sprinkle, publisher of Packaged Facts. Data from Packaged Facts' September 2011 Pet Owner Survey data show that nearly half (47%) of pet product buyers shop for these items at a variety of stores.
Additional Experian Simmons data cited in the report show that the percentage of dog or cat owners who are channel-loyal -- shopping for pet products in a single retail channel -- fell to 41% in 2011, down from 53% as recently as 2006.
Over the long term, three factors have greatly intensified competition: The expansion of the two big-box pet specialty chains (PetSmart and Petco); the growth of mass merchandisers and supercenters; and the rise of the Internet.
Budget-conscious consumers demand more value in the products they buy, chart out grocery shopping trips beforehand, and are willing to switch channels and brands to make ends meet or satisfy shifting priorities, according to the report.
There is still a strong upscale element to the pet market. But in the wake of the "premiumization" trend of the early 2000s, many pet owners have already done their trading up, and, with the recession that followed, some have since scaled back on pet spending.
Still, the pet market's strong prospects continue to attract new players, expanding the range of retailers vying for market share, according to the report. The players newly flexing their muscle include private label, further complicating strategies and options for traditional national brand marketers.
Packaged Facts survey data show high levels of "affection" for store brands among pet product buyers, 49% of whom are buying more store-brand food and beverage products for household use these days, and 45% of whom agree that "store-brand pet products are often as good as national brand name products."
(Source: Marketing Daily, 01/26/12)
Daily Sales Tip: Late Night a Good Value for Radio Advertisers
As quick-service chains such as McDonald's and Dunkin' Donuts are starting to reap the benefits of staying open later, and opening for business earlier, a new study conducted by The Media Audit provides a positive glimpse of those adults who are listening to radio between the hours of midnight and 5 AM, proving that for some advertisers, late night advertising inventory can be valuable.
Recently, McDonald's stated that the company's fastest growing business hours are between midnight and 5 AM. According to The Media Audit, more than 8.2 million U.S. consumers across The Media Audit's 80 measured markets regularly listen to radio between the hours of midnight and 5 AM. The figure represents nearly a 10% jump from last year.
Among these listeners, 31.8% are between the ages of 18 and 34 and nearly half are between the ages of 18 and 44. More than one third of these listeners are single, a figure that is 42% higher when compared to the general population. As a result, these consumers typically have greater degree of free time for leisure activities and a higher disposable income for eating out frequently.
Among radio formats that reach the greatest number of late night listeners include Talk, which reaches 2.7 million listeners between the hours of midnight and 5 AM in a typical week, followed by News/Talk (1.7 million), Contemporary Hits Radio (1.5 million), Sports (1.1 million), and Public Radio (1 million).
Source: The Media Audit FYI, 01/31/12