December Market Update

Greetings and Merry Christmas! 

I thought I would do something a little different for property reports this month.

We are at the end of a challenging year for real estate.  It has been challenging for a number of reasons but I am hopeful that 2025 will be a turn around year.   

Let me show you what I mean - 

The chart above is a graph of all internet traffic on my listings for the last 12 months on KCREA.

It is important to note that back in December of 2024, I was at an all time high in terms of internet traffic.  Still, as you can see, there was a tremendous drop.  Current activity is less than 10% of what it was a year ago.

Looking at the chart, you can see there were really 2 distinct times when there was a drop.  The first was in February and then a second one in September. 

As you can imagine, I was super concerned when I saw this data.  I think that as the year unfolded, it became obvious that the first drop reflected an overall decrease in activity in the commercial real estate market.  In the US overall, 2024 was the lowest number of total real estate transactions in at least 25 years.  In some areas, (I am told Louisville was one of those areas although I have not seen this firsthand), it is the lowest number in 35 years. 

The second drop at the end of September was when our local Commercial Real Estate platform was replaced with a new platform.  With the retirement of the previous platform, we also lost several marketing tools, which I was using to try to boost the on-line activity. 

As disheartening as all of this was, intuitively, it appears that I was doing better than most.  In a year, where some of our largest companies were having their worst year in at least 20 years, my average number and size of transactions actually increased in spite of the decrease in on-line traffic.

With the decrease in overall on-line activity, we have been redeveloping our overall marketing strategy. Some things are new and some things are things we were already doing but with a new emphasis.  Here are some of the things we are doing -

• We launched a new website. 
• New Landing Pages - The new website also has landing pages for all of our property listings.   We are working on the SEO of these pages, so that if someone tries to search for the property on-line, our page will show up in their search.  Also, if we are running ads, the ad will link to the landing page for the property.
• We added Mailchimp email marketing - This was done primarily to replace the ability to send listings to the other local Commercial Real Estate brokers.  That function was retired with the previous on-line commercial platform.  This also opens up the possibility of additional email marketing efforts in the future. 
• We have some new social media marketing.  We have been doing this for a while and like the email options, the new on-line commercial platform handles social media posts differently.  We are currently experimenting with both options through the new platform and options created separately via Canva for the most effective social media impact. This is a bit of a work in progress. 
• YouTube - We have had a YouTube channel for a while but we are trying to improve and expand on it.  We have been adding short videos for every listing. In general, these are added to our on-line listing platforms and also sent out with email inquiries about properties.   
• Virtual Tours - where it makes sense, we have done virtual tours for a while. But like the YouTube videos, we are trying to improve and expand on this process.  These tours are usually either provided by link in the on-line listing platforms or sent with emails to prospects. 
• Floorplans - For some time, we have been providing floorplans where they make sense. This is one of the most commonly requested items by prospects looking at buildings. We normally include them on our listings.  If we generate a flyer or brochure, we typically feature it prominently.  And we often email them to prospects.  Surprisingly, many people have quit offering these. 
• Aerials - While we sometimes use drones for aerials, we have discovered that sometimes we can get even better aerials using Google Earth Studio.  These are generally done in a video type format.  They can be useful for most properties but are especially useful for vacant land.   
• Use of AI - We are expanding our use of AI in many ways.  We use it to help draft marketing descriptions, plan marketing campaigns, generate images to stimulate interest for properties, and to optimize ad copy for on-line searches. 
• Google Ads and Facebook Ads - We are working to enhance our on-line marketing. We have been occasionally doing ads on Google and FaceBook for a while. In general, just by boosting a post where it seemed like a good idea.   But we are investigating expanding these efforts.  This is currently something in trial and error. Our initial evaluation is that there might be a lot of benefit from Google Ads but less so from Facebook ads. Facebook has a lot of rules that don't really make sense for commercial real estate and the results aren't that impressive. 

Why I am Optimistic about 2025 - 

• The Federal Reserve has finally started reducing their interest rates
• Pending real estate closings in the 4th Quarter are up for the first time in one or two years.
• There is increased inventory levels in the residential markets
• Multifamily, which had decreased by more than 30% this year, has increasing construction starts
• After years of dreadful figures for office properties, office absorption is up.
• Consumer confidence polls indicate that confidence has been increasing for 5 straight months.

There are a lot of things changing rapidly right now and it looks like most of them are moving in a positive direction.

Anyway, that about wraps things up for this month.  I hope you have a fantastic Christmas and New Year.  I have a great feeling about 2025. 

Thanks for your trust in me.  I really appreciate working with you. 

--
David 

David W McCoy

Otimo Properties

Managing Broker

NATIONAL ASSOCIATION OF REALTORS

Global Coordinator for North America, Central America and the Caribbean

9804 Pictor Ct

Louisville, KY 40241

cell: (502) 905-5274

e-mail: David@OtimoProperties.com

Schedule a call or appointment: https://calendly.com/Otimo