Big wrinkle in new homes for sale

Some good news

We all know that the news tends to be–how shall we put it?--a tad sensationalized. We get it. Negativity sells. Panic sells. Doom sells. 

But we’re not in the business of selling news, we’re in the business of selling homes, and we are here to tell you that you shouldn’t always listen to what the national news has to say, especially when it comes to real estate.

As you’ll see in our second story, despite all the doom-and-gloom coverage about high mortgage rates and housing affordability, many buyers–especially younger buyers–are not letting that dampen their interest in buying a home. This is GREAT news.

With that bit of positivity, it’s time to get on with today’s Blueprint.

- James and David

New home sales spike in January

661,000 new single family homes sold nationwide in the month of January, according to the latest report from the Census Bureau. That’s a jump of 1.8% YOY and 1.3% month-over-month. Here are the other key takeaways from January:

• $420,700 was the median sales price of new homes sold

• Total for-sale inventory jumped 7.9% YOY

• New home inventory increased by 3.9% YOY

• New home for-sale availabilities are in different states of construction

  • 23% haven’t started construction

  • 58% are under construction

  • 19% are fully complete and ready to move in

Our take

This report does have a lot of good news. We’re glad to see the spikes in those sales numbers. But this report also shows us some of the complications we still face in the new home market. Only 19% of those new homes are move-in ready? That’s far from a lot. It’s primarily because of the supply chain issues home builders are facing. We recommend that agents encourage buyers to take advantage of all the concessions and rate discounts builders are offering, but make sure your buyers know that they will likely have to wait a while before they can move in.

Buyers haven’t given up on homeownership

40% of potential homebuyers think they could purchase a home if rates were to drop below 6%. Another 32% would jump in if rates fell below 5%. Those are some of the eye-opening numbers revealed by Realtor.com in its latest survey of U.S. homebuying attitudes. 

Here are some of the other surprising stats from the report:

• 47% of millennial respondents and 37% of Gen Z respondents said they would buy a home even if rates were north of 8%

• 55% of millennials and 40% of Gen Zers say now is a good time to buy a home

• 32% of Gen X and 17% of boomers say now is a good time to buy a home

• 43% of millennial respondents say that they’ll be able to buy a home in the next 12 months, while another 32% said that they would be able to buy in the next 5 years

Our take

Honestly, we took a double-take when we initially read this report, especially that first bullet point. It’s so contrary to the doom and gloom we so often hear about younger people and their attitudes toward homebuying. Even rates higher than 8% aren’t stopping a good portion of those buyers. This just shows that you should absolutely be targeting millennials and Gen Zers in your marketing.

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Metros where for sale listings are the strongest during Spring Season

Certain markets see surges in for sale listings earlier than the rest of the country for the spring season. Based on inventory data from over the past few years, Realtor.com has compiled a list of markets where the spring months (March, April, and May) are comparatively the strongest. 

Here’s the list of markets along with their median list price:

1. Tallahassee, FL – $313K

2. San Jose, CA – $1.2M

3. Los Angeles, CA – $1.1M

4. Oxnard, CA – $1.0M

5. Bridgeport, CT – $805K

6. New York, NY – $741K

7. Allentown, PA – $369K

8. Philadelphia, PA – $337K

9. Salisbury, MD – $484K

Our take

This is just another reminder that housing markets can vary widely across the country. Regional and local factors significantly affect every facet of real estate. While most U.S. housing markets are still waiting to see increases in listings, certain parts of the country are already seeing spikes in listings. We recommend agents compile a similar list of micromarkets within their area that see seasonal trends like this one. These spiking spring markets are prime opportunities for homebuyers hoping to beat the summer rush, and sellers looking to reel in an offer before the competition heats up.

Schematics

The news that just missed the cut

• Lead sources with no upfront fees

• Use this to optimize your real estate ads for Google

• 12 things to get rid of in your home, from an interior designer

• One of the world’s most expensive luxury markets is becoming a lot cheaper

• Kawhi Leonard’s beautiful penthouse in Downtown L.A. just listed

Foundation Plans

Advice from James and David to win the day

The Spring season is a great time to make a deal, but it’s also a time when agents need to be extra cautious and protect themselves too. The more you interact with people, the easier it is to find yourself in a legal predicament that you hadn’t even contemplated. Especially after Sitzer/Burnett, people are scrutinizing every little thing agents do. Today, we’d like to give you some tips on how to avoid some legal issues that agents often unwittingly face. 

Misrepresentation and false advertising – This is the number one reason agents get sued, so make sure any information you put out about listings is 100% truthful and accurate. As agents, we're asking clients to trust us with major financial decisions. If nothing else, misrepresenting listings can damage your credibility and reputation.

Breach of contract – This one is common, but easy to avoid! Basically, if an agent signs a contract promising to do something for a client and fails to deliver, the client can sue. Have a lawyer look over your contract language, and avoid making promises that aren't a guarantee. We always say to underpromise and overdeliver!

Data security – We deal with clients' personal information in every transaction, so it's absolutely crucial that agents take steps to safeguard this data. Store sensitive information securely to prevent hackers and identity fraud, and if client data is compromised, let them know right away!

To learn more about legal issues agents need to know, start here and here.

To learn more about Estate Media, visit their website.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

That’s a wrap on this edition of The Blueprint!

If you’re new to the Blueprint community, we want to hear what you think! What’s your take on today’s stories and tips? Send us a note with your comments, questions, or suggestions.

In the meantime, keep closing deals and picking up leads. We’ll see you on Friday.

- James and David