This bold program could change real estate
Plus, terrific (and unexpected) news on inflation!
Busting the myths of real estate TV
We have a very special guest on the new episode of our podcast, Rise Above the Ranks. Our longtime friend, co-star, and legendary realtor Tracy Tutor!
We discuss our behind-the-scenes experiences on Bravo's "Million Dollar Listing Los Angeles" and – not a big shocker here – why our day-to-day as realtors isn’t quite like what you see on the show.
It’s a fun listen, so we hope you enjoy it. Feel free to leave us a review and tell us what you think.
Now, let’s jump into today’s Blueprint!
- James and David
Excellent news on inflation
San Francisco: https://tinyurl.com/573r6k7v
The Consumer Price Index (CPI) rose by 3% year-over-year in June and 0.2% for the month. Core inflation, which excludes food and energy prices, rose by 4.8% YoY and 0.2% for the month. That’s according to the latest inflation report from the BLS.
Here are other key takeaways:
Both the annual and monthly CPI number were BELOW the consensus estimates of 3.1% and 0.3%, respectively.
The annual CPI number was the lowest rate of inflation since March 2021.
The annual core inflation level was the lowest since October 2021, and its monthly gain was the smallest gain since August 2021
We couldn’t be more thrilled. Not even the most enthusiastic optimists were expecting numbers this good. We're not out of the woods just yet. The Fed is likely to increase rates by a quarter point at its next meeting. But, if news like this continues, we can definitely expect mortgage rates to come to around 6% by the end of the year.
Boston offers tax breaks for office-to-residential conversions
On Monday, Boston Mayor Michelle Wu announced a program that will offer owners of downtown commercial office buildings a tax break if they “immediately convert” their properties to residential homes. The tax break will be up to 75% of the standard residential tax rate for up to 29 years.
Here are the details of the program:
Applications for the program will be accepted only through June 2024
Conversion projects must comply with the proposed zoning and energy efficiency standards
Construction must begin by October 2025
The city will get 2% of the sale price if/when the property sells
This is a bold and forward-thinking move by the mayor. We applaud her. While we’re hopeful this works, it will be hard to pull off due to issues with zoning, architectural engineering, and prohibitively high redevelopment costs. Nonetheless, programs like this one in Boston have the best shot at success. We hope it’s a smashing success and leads to similar changes in other cities.
Foreclosure activity ticks upwards
ATTOM reports that foreclosures have increased 13% year-over-year, and 185% from 2 years ago. In the first six months of 2023, there were a total of 185,580 U.S. properties with foreclosure filings. That’s according to ATTOM’s Midyear 2023 U.S. Foreclosure Market Report. Here are the states with the highest foreclosure rates:
Illinois (0.25% of all housing units)
New Jersey (0.24%)
South Carolina (0.19%)
This is an excellent and insightful report. It’s good to remember that, even with these increases, the number of foreclosures is still radically below the historical norm. The two-year percentage increase is so high because we’re starting at such a low level. We’re just in a much better place than we were during the previous housing cycle. As always though, while foreclosures are a harsh reality of our business, they are prime targets for investment.
The news that just missed the cut
Advice from James and David to win the day
As we mentioned in the intro, we had a fantastic conversation with our friend Tracy Tutor in the latest episode of our podcast, Rise Above the Ranks. It’s a fun and wide-ranging discussion. For now, we’d like to highlight just three of the many takeaways from our conversation:
Luxury real estate isn’t all glamour - People watch real estate TV shows like “Million Dollar Listing” and “Selling Sunset” and get hooked on the allure of the “glamorous” real estate lifestyle. Trust us, it isn’t all glamour. There are many humdrum parts that get left on the cutting room floor. While the rewards are enticing, it takes a ton of work to get there.
This year is a tough test - As Tracy mentions in the episode, more than 60,000 agents have left the business over the last six months. We don’t begrudge them at all. This is a tough business, and right now, it’s tougher than ever. But their departure means there’s an opportunity for realtors who are in it for the long haul.
Working with strangers is easier than working with family - It’s an easy mistake to make, but working with family and friends is not always advisable. If you have a stable relationship where you can separate the personal from business, then go for it. If not, it’s best to keep the two worlds separate.
It’s a fabulous episode and we encourage you to listen. You’ll be inspired and learn a lot. Watch, listen, like, and share it!
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Rocket Mortgage
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