Bidding goodbye?

There’s no question that the market is changing. One thing we have noticed–we haven’t seen a single bidding war on a home in more than a month! That’s a big shift from the previous quarter where we saw 20-30 offers on a home with a $10,000,000 listing price.

As we start heading into a buyers’ market, use this as an opportunity to educate your clients about the shifting landscape. In our first story today, we discuss a report from the NAR that highlights key trends to monitor in the months to come. We found it insightful, and we think you will too.

- James and David

Expert advice for your buyers

The NAR’s Chief Economist Dr. Lawrence Yun wants your clients to find (and afford) the homes of their dreams. In his latest address to potential homebuyers, he outlined several key trends to keep an eye on. Here are the biggest takeaways:

1. Have your buyers rerun the numbers every week. With rates changing on a daily basis, the home they could afford last week may now be just beyond their budget today.

2. Expect inventory to keep lagging demand. According to Freddie Mac, we’re still short about 3,000,000 homes. Only about 1,200,000 are expected to be built next year, so it’s going to take a while to catch up.

3. Prices aren’t coming down. Between high inflation and low inventory, there’s little room for prices to fall this year. If your buyers are waiting to snag a good deal, they will likely be waiting a while.

4. Suburban homes come with the highest price tags. Home price growth outside major metro areas has outpaced downtown home price growth throughout the pandemic.

5. Some buyers may want to consider a 5-year ARM. The average rate for a 5-year adjustable-rate mortgage is around 3.9%, considerably less than the average rate for a 30-year fixed mortgage, which is nearly 6%.

Our take

We absolutely agree with every single one of these. This advice is fantastic because it helps you set realistic expectations with your buyers. You can show them that this isn’t just your suggestion, but advice directly from the NAR itself.

Are the next luxury apartments… offices?

Hines, a global real estate investment and development firm, has big plans for one of Salt Lake City’s downtown landmarks. The firm intends to convert the South Temple Tower, a 24-story office building, into 255 luxury apartments. While this project is Hines’ first venture into office-to-residence conversions, projects like this have been popping up across the country for months.

• Nationwide, offices haven’t been this empty since 1994

• With rental rates breaking records in many cities, investors see multi-family properties as better income sources than office buildings

• Office conversions come with their fair share of zoning challenges, but in places like New York City, the critical need for housing has encouraged city officials to allow more of these conversion projects

Our take

People are always going to look for creative ways to make money. In times like these when the market is shifting, they get even more creative. You can bet every city in the world will have their eyes on this project. If it goes well, we could be seeing a huge wave of new downtown converted residences hitting the market in the coming years.

Deep in the heart (and pockets) of Texas

A new NAR report shows that Texas was a 2021 investor favorite. Affordable prices, a favorable population mix, fast-growing households, and a host of job opportunities made Texas a particularly popular (and profitable) choice among big investors.

• 28% of homes sold in Texas in 2021 went to cash-paying institutional investors, more than double the nationwide average of 13%

• Travis County, where Austin is located, leads all Texas counties with 41% of single-family homes owned by investors

Our take

Investors are always looking for a strong return. Once they find an area of opportunity, they rush to capitalize on it. That’s exactly what happened in Texas last year. This is why it’s so crucial to stay up-to-date on what’s going on in your local market. There are areas of fantastic opportunity in every single metro, and if you can find that niche, you’ll have a whole list of clients wanting to work with you.

Schematics

The news that just missed the cut

• Emma Stone’s breezy Malibu residence sold over asking in under a week

• One columnist’s colorful analysis of San Francisco’s housing market  

• How a group of 20-somethings are using social media to close $100M in sales

• This Manalapan mansion could set a staggering price record in Florida

• Hate paying property tax? You’ll love this list

• Advice from a real estate investor who owns 100 units

Foundation Plans

Advice from James and David to win the day

Ready to growth-hack your real estate business this summer? Use these effective lead-building strategies:

1. Start circle-prospecting. Circle-prospecting means looking for potential clients right around the home you just sold. Call up all the neighbors (better yet, knock on their doors!) and let them know you just sold the property down the road. Tell them this neighborhood is in high demand and you want to help them capitalize on it. This strategy works like a charm.

2. Farm the areas you know best. Pick a specific area that you know like the back of your hand, whether it’s your neighborhood or another across town, and then focus on becoming the #1 go-to agent in that area.

3. Go the extra mile with Current Market Analysis videos. Wondering how to keep your leads list warm? Send every homeowner on your list a CMA video at least once a quarter. Record yourself talking about local trends, price changes, and the best features of your properties. This is a fantastic way to keep your name in their minds and provide exceptional value!

For more business growth tips like these, check out this video.

Just in Case

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

What did you think of today’s Blueprint? We want to know! Hit reply and tell us what you think. Then hit forward and send this to your 10 best friends.

- James and David

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