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- Alarming news for home-flippers
Feeling stuck? You’re not the only one!
It’s a very strange time that feels like a little bit of a stalemate. You want to be selling when everyone is buying, and you want to be buying when everyone is selling. We’re in a position where both sides aren’t really doing either. But that’s okay!
As agents, it’s our job to have a half-glass-full mentality. That doesn’t mean feeding our clients a bunch of BS, but letting them know that whatever they buy today will be worth more in 10 years.
There are still great homes in each market. Go find those opportunities and deliver value. If you find yourself stuck, then pull up The Blueprint for your motivation and LFG!
- James and David
Home flippers get good and bad news
Source: Unsplash
Attom released its annual Home Flipping Report for 2022, and it had both good and not-so-good news.
On the bright side:
407,417 single-family homes and condos in the U.S. were flipped last year.
This number is up 14% in 2021 and up 58% from 2020.
Right now, home-flipping is at its highest point since 2005.
On the downside:
Total home-flipping profits fell to their lowest level since 2008.
The typical gross profit for a flipped home in 2022 was $67,900, 3% less than the average last year.
The share of flipped homes purchased with financing decreased to 35.2% in 2022, down from 35.9% in 2021 and from 41% in 2020.
Our take
We’re a fan of numbers like this because it means more transactions are happening, and that means there is opportunity out there. But it is important to be careful. We’ve all heard the stories about the money that has been made flipping homes, but what you don’t usually hear are the other stories. It’s crucial that if you are going to take on this risk, you make sure to work with a great contractor. Know your expenses and know your timeline! While profits are never guaranteed, start with the odds in your favor.
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Fast gainer in online home searches
Source: Similarweb.com
According to Similarweb, Zillow accounts for 43.5% of online home search traffic. But there is a surprising competitor rising quickly. Homes.com had the biggest gain in traffic at 86% YoY, far surpassing any other site. Although they are still very far behind, it shows there’s an opportunity to take market share from Zillow.
Another big takeaway: realtor.com lost substantial ground in the number 2 spot, falling 3% YoY.
Our take
As agents, it’s important for us to know the players in the consumer space. This is where buyers are going to look for homes, so we want to stay on top of this data. We also know that a lot of these companies are offering broker services, so they are also our competition.
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Top 10 cities where the super-rich own property
Source: Unsplash
New York is the world’s most popular place for the mega-rich to own property. A total of 21,714 ultra-high-net-worth individuals — those worth over $30M — own a residence in the city. Six of the top 10 cities where the super-rich own property are in the U.S.
Here are the top cities where the ultra-wealthy own property:
New York, NY
London, UK
Hong Kong, CN
Los Angeles, CA
Miami, FL
San Francisco, CA
Beijing, CN
Singapore, SG
Chicago, IL
Washington, DC
Our take
Let’s repeat that stat: 6 out of the 10 on this list are in the U.S.! That is just another great reminder that we are working in the best industry. If the wealthiest people in the world are deciding to buy property here, then we know there’s money to be made.
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Schematics
The news that just missed the cut
Source: mansionglobal.com
Repo King asks $39M for waterfront Florida estate
The Real Brokerage to raise agent fees
Fannie Mae is updating its home valuation process
Gen Z is turning on to real estate investing
Check out this week's bad real estate pics
🎧 Rise Above the Ranks
In this week’s Rise Above the Ranks podcast, we're joined by our colleague Zach Goldsmith to chat about how to deal with one of the most unique markets in the last 10 years. We're sharing our thoughts on concessions sellers should be making, how to attract foreign buyers, and the best tips to maintain your reputation with other agents.
Here's what we dig into in this episode:
Seller concessions are back. As agents, it's our job to make sure our buyers and sellers have realistic expectations. Concessions are happening in 44.5% of deals right now, so the market has definitely shifted. We dig into the different kinds of concessions that buyers are requesting, and how to make sure those work for your sellers.
How to attract foreign buyers. There has been an uptick in the number of foreign buyers since the pandemic restrictions have lifted. We go over how to pivot your approach with domestic buyers to help draw in foreign buyers.
Maintaining your reputation with other agents. This is the single most important thing you can do in your business. Clients come and go, but agents stay and will work with reputable colleagues again and again. We share how to maintain your reputation with other agents so you can keep closing deals.
Q&A
You ask, James and David answer!
Q: How should we follow up with a seller who doesn’t respond to texts or answer calls? We thought we had the listing, but now they’ve gone cold.
A: Send them a video message! Make it personable, relatable, and add value! At some point you will have to move on, but we think this is a great way to connect with a lead!
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
That’s it for this edition of The Blueprint!
Thank you so much for reading, and we’ll see you on Friday!
- James and David
