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Best stat from Zillow’s market update
Plus, the homeowner generation gap
Rinku Mathew
January 19, 2024
Heading in the right direction
We don’t want to jinx it, but as you’ll see in our first story, we are seeing some promising signs that the market is heading in the right direction. It seems that not only are buyers ready to make moves, more sellers are ready to jump into the game.
In today’s Foundation Plans down below, we have a few tips we wanted to share, specifically about how to work with sellers and make sure you both put your best foot forward together. If this market keeps going in the direction we hope it’s heading, you might be using those tips sooner than you think!
And now, on with today’s Blueprint!
- James and David
1 in 5 homeowners considering selling in next three years
21% of homeowners are now considering selling their homes within the next three years due to moderating mortgage rates, according to Zillow’s latest market update. That’s up from 15% a year ago. Here are the other key stats from their December report.
The typical home in the US is now $344,000.
The typical monthly mortgage payment, assuming 20% down, is now $1,790.
New listings have increased by 2.1% YOY
Active listings are up 0.6% YoY
Inventory fell YoY in 33 of 50 major markets, most notably in Las Vegas (-35.2%), Seattle (-26.9%) and Sacramento (-25%).
Our take
It is truly amazing what just a small drop in mortgage rates can do. Already, buyers are getting off the sidelines, and even some homeowners are jumping in too. This seemed like a far-away scenario last year when rates were higher. We’re not saying that market conditions are ideal, or that the lock-in effect has stopped being a factor, but that the conditions are good enough… and we hope they keep getting better.
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Empty-nester boomers own the most large homes
Empty-nester boomers – those with households of 1-2 adults and no minor children – own twice as many large homes as millennials with children. The boomers own 28.2% of large homes while the millennials with children own 14.2%. That’s the main takeaway from Redfin’s analysis of homeownership data from the Census. Here are the other points to know.
Baby boomers with households of 3+ adults (most often adult children living with their boomer parents) own 7.5% of large U.S. homes.
Gen Zers with kids own the smallest share at just 0.3%.
Millennials account for the largest share of the U.S. population (28%), followed by Boomers (27%), Gen Xers (25%), Gen Zers (12%)
For reference:
Gen Z = 19 – 25 years young
Millennials = 26 – 41
Gen X = 42 – 57
Baby Boomers = 58 – 76
Our take
This is an illuminating report and we encourage you to study it carefully. It presents a unique opportunity for real estate agents. Even if boomers don’t have a real financial incentive to move at the moment, they may want to do so sooner rather than later. There are a variety of reasons: a desire to live in a warmer climate, move closer to children/grandchildren, or downsize into a lower-maintenance and (potentially) lower-cost home. During these next five years, this is a tremendous opportunity for agents to bring together boomer empty-nesters with large homes and millennials with households that are outgrowing their current homes. Definitely keep this report in mind as you set your long-term business plans.
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Top 10 zip codes with highest foreclosure rates in 2023
Foreclosure filings were reported on 357,062 properties nationwide in 2023, according to data provider ATTOM’s newly released 2023 Year-End U.S. Foreclosure Market Report. That figure represents an increase of 10% from 2022, but a decrease of 28% from 2019 before the pandemic.
Here is their list of the top 10 U.S. zip codes with the highest foreclosure rates in 2023.
60628 – Chicago, IL
78542 – Edinburg, TX
60620 – Chicago, IL
44120 – Cleveland, OH
29229 – Columbia, SC
60619 – Chicago, IL
60411 – Chicago Heights, IL
32218 – Jacksonville, FL
34746 – Kissimmee, FL
89031 – North Las Vegas, NV
Our take
As we said all last year, a foreclosure crisis was never in the cards for 2023. It is highly unlikely to be in the cards for this year as well. Still, foreclosures are an unfortunate reality. The best we can do is try to find the positive. As a real estate agent, use reports like this to match properties like these with wholesalers, value-add, and other types of investors. Use this market intel to add onto your existing income stream as a real estate deal maker.
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Schematics
The news that just missed the cut
Beverly Hills is legally blocked from issuing new building permits
A mystery buyer is paying more than $100M for this penthouse on Billionaires’ Row
Use this alternative to save thousands on title-insurance fees
New York’s office-to-apartment conversion program is taking off
Use this 12-month touch-point plan to increase your return on your core database
Foundation Plans
Advice from James and David to win the day
We can’t underscore enough how these next three months are a great time to acquire new listings. It’s equally important, though, to not let your new listings go stale. Today we’d like to offer you just a few tips on how to make your next listings sell as quickly as they can.
Prepare your clients first – Your seller clients will likely still be living in the home, and that could cause some issues. You want the home to look like a model home, so you need them on the same page as you. Make sure they understand that they simply can’t have all the same lived-in touches (and messes) as a normal home. Your job is to put the home in its best light, and they should support you in that goal.
Get the home pre-inspected – This is an important step to fix any items that could wreck the deal. HVAC, plumbing, electric, and safety items are the most important. Change all furnace filters, knock the dust off the hot water tank, and check for mold in the basement and crawl spaces. Offer a copy of the inspection along with receipts of any recent repairs when you start showing the home. Mention it in the agent-to-agent comments in the MLS.
Make sure the first sights are all right – Buyers make their decision on a home in two places: from the street and in the home’s entrance. Make sure both places shine. Upgrade landscaping, enhance the front door's appeal with a wreath or paint, and create a welcoming entry with a doormat and plants. In the foyer, aim for a bright, spacious feel—no clutter, coat trees, or excessive furniture. It should welcome all new buyers. This can net your seller thousands, or even tens of thousands, more when you do this right!
Preview the competition – The day before you launch your new listing, check out your competition one more time. Make sure your pricing is still accurate, and what the potential buyer is considering. Your price has to make sense. In some cases, you may want to take your seller client along for these showings so you’re on the same page regarding pricing. Are other listings (especially new construction homes) offering seller incentives? You may need to meet or beat them depending on what you’re up against.
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Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
That’s a wrap on this edition of The Blueprint!
Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!
Thanks for reading, and we’ll see you back here on Tuesday!
- James and David
