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56% of homebuyers say this baffles them
Plus, the cities where home listings are exploding
Rinku Mathew
June 06, 2023
The home price drop that never happened
As you’ll see in the report below, there’s some good news about home prices. We all remember that at the start of the year, much of the real estate intelligentsia was predicting that home prices would fall between 10-15%. Well, we’re halfway through 2023, and asking home prices are essentially unchanged from last year!
This is amazing! Homeowners are sitting on a hot commodity right now and they can make a pretty penny if they sell.
We’re not Pollyannish about it, but we genuinely believe that there are opportunities out there to make a deal, even in this challenging economy. So let’s get after it!
…but before that, let’s get after this fresh edition of The Blueprint.
- James and David
Current trends in the housing market
Source: Unsplash
Mortgage rates are up, home sales are down, and home prices are strong. Here are numbers from the 50 largest U.S. markets in May, according to Redfin:
The median asking price of newly listed homes was $398,413, essentially unchanged (+0.1%) from a year earlier.
The monthly mortgage payment on the median-asking-price home hit a record high of $2,651 at a 6.79% mortgage rate, the current weekly average. That’s up 15% ($348) from a year earlier
New listings of homes for sale fell -23.4% year over year, adding to a 10-month streak of double-digit declines
Our take
Who would have thought asking prices would be essentially unchanged from last year? Nobody was expecting that when 2023 started. We know… we have the receipts! Sellers can still get a great deal. But let’s not make too much of the fact that homebuyers are on the sidelines at the moment. Mortgage rates are at a seven-month high. We’re going to keep a close eye on them because so many homebuyers are ready to pounce when rates decline and more homes hit the market.
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This is how much buyers rely on agents
Tulsa: https://bit.ly/3qocSpz
58% of first-time buyers and 55% of second-time buyers said their agent was their most important resource in understanding the home financing process. That’s according to Zillow’s important new report on homebuyers.
Here are the top 3 areas of the process where homebuyers needed help:
56% said they needed help understanding all the costs associated with their mortgage payment.
45% said they needed help understanding how much they could afford.
41% said they needed help on how to research mortgage rates.
Our take
This is such a helpful report. We think all agents should carefully study it. It tells us exactly how we can add value to our clients. Take your role as a knowledge broker seriously, especially when it comes to home financing. Build ties with reliable lenders and connect your clients to them, but also make sure to develop your knowledge in this area as well. Your clients will look to you first. If they can lean on you to help guide them, it will be an important tool in your skillset.
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Top 10 cities for home listing growth and decline
Seattle:https://bit.ly/3NdQ3xD
Inventory in the Midwest and Northeast is extremely tight right now, while it has more than doubled in the West and South compared to last May. That’s the central conclusion reached by Realtor.com in its latest analysis of inventory data from the 100 largest metros in the country.
Here are the top 10 cities where sale listings either grew or fell the most, along with their year-over-year changes:
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Our take
This is why we tend to roll our eyes when people try to tell us what “the market” is doing right now. There isn’t just one housing market! There are many markets with their own particular patterns and unique trends. Dig into the data and get hyper-specific about the markets that interest you. That’s what will matter most when advising your clients.
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Schematics
The news that just missed the cut
Source: Unsplash
This is what homebuyers regret the most after their purchase
The hottest (and coldest) new home amenity
The family of Pampered Chef founder paid this much for a home in Nantucket
Homebuying intel buyers should know
How this 34-year-old real-estate investor achieved financial independence and quit his day job
Foundation Plans
Advice from James and David to win the day
We all could use a few tips on how to deal with our most – how do we put this politely – challenging clients? While there’s no magic formula, here are a few tips on how we approach our trickier situations.
Choose wisely - Part of the joy of being an agent is that we get to pick our clients. If you determine that a particular client isn’t worth the hassle, then walk away. But if you choose to accept their business, make sure you are willing to accept everything they throw your way before saying Yes.
Know your worth - Challenging clients will often ask (and sometimes even demand) that you cut your rates, even after you’ve done everything for them. While it’s important to remain professional, it’s also important to stand up to stubborn clients. State your expectations early and hold fast to them. Don’t undermine yourself, or our profession, by caving into unreasonable demands.
Don’t get emotionally attached to the transactions - You’re not the buyer or seller, or the ultimate decision maker. Instead, you’re a real estate advisor and counselor. Your clients can take your advice or leave it. Regardless of what they choose, your professionalism doesn’t depend on them. Remember this motto: "Say what you mean, mean what you say, and say it when you know it."
Not every situation is the same, but you don’t need to fly blind either. Learn as much as you can from the experience of others. Start here.
Q+A
You ask, James and David answer!
Q: What is the best way to get in touch with developers?
A: Go to where they are. Walk onto the sites, introduce yourself. If that is too daunting, do research on who is building in your area. Reach out via email or social. Get creative in how you approach them. Always offer information that can help them. Be the expert in your area.
We’ll be back next week with another answer to a real reader question. Submit yours here!
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Rocket Mortgage
“The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and starting on the first one.” - Mark Twain
Thanks for reading, and we’ll see you Friday!
