The city with the hottest luxury market in the country

Plus, how to pick up new leads at every holiday party

Grace Townsley
December 10, 2021

Good morning!

Welcome back to The Blueprint. If you like what you read here, would you share this with your real estate friends? Call it an early Christmas present for the agent who has everything 😉

Source: Orange County Register

There’s a new real estate record in Orange County, California. An 18,000-square-foot oceanfront property on Laguna Beach’s ultra-ritzy Abalone Point just sold for a whopping $70M. The property was last purchased in 2018 for just $32.7M, so that’s an investment that really paid off. Plus, the property wasn’t even for sale when this incredibly lucrative deal was drawn up. That shows it pays (big time) to know local buyers who would be willing to sell… for the right price.

- James and David

Today's Blueprint:

  • Austin’s prices are outpacing NYC and LA
  • MLS consolidation is #trending
  • Consider this before you pocket list 
  • How to make every holiday party a fruitful networking event

Affluent buyers are boot scootin’ over to Austin

Source: Austin Luxury Realty

They say everything's bigger in Texas. Add high-end home prices to that list. The booming local tech industry has attracted a rush of buyers looking for homes in the luxury market, which is the top 5% of homes by price. The cheapest luxury homes in Austin are now going for a minimum of $2.34M. That’s a market jump of nearly 33% since last year. 

Even buyers relocating from California and New York are facing sticker shock. In the first three quarters of 2021, the price per square foot of fancy Austin homes increased faster than the hottest sectors of NY and CA. While buyers may not save much on housing costs by moving to the area, that premium is offset by the significantly lower cost of living and lack of income tax.

Our take

If you want to break into this growing luxury market, here’s how to do it: 

  • Have phenomenal energy and focus
  • Dress the part. No jeans. Get yourself a tailored suit or professional dress.
  • Find a mentor who’s already killing it in your local upscale market
  • Study the comps morning, noon, and night
  • Drop by every high-end open house you can. Network with every agent and available client there.

And our absolute #1 tip for creating opportunity in the luxury market is to become a door-knocking machine. Every day hit the neighborhoods with $3M+ homes and really put yourself out there as a local expert. Here’s how we got our start, door-knocking high-end homes.

California sets trends for fashion, music, and now MLS adjustments

Source: Hilton Head Luxury Properties

In California, it just got a little bit easier to service your buyers and sellers. The California Regional MLS (CRMLS) just added the Coastal Mendocino Association of Realtors (CMAR) as a member association. That means CMAR agents no longer have to pay extra or switch between multiple portals for CRMLS access. 

The CRMLS is already the largest MLS in the nation, with 40 member associations and over 110,000 subscribers. With this consolidation, California is now one step closer to its goal of one statewide MLS to rule them all. If all goes well, expect states across the country to follow California’s example in the coming months.

Our take

Just yesterday a client called to ask us about a penthouse in New York. We can’t even research the property for them without access to the NYC MLS. The current siloed system creates a lot of unnecessary (and inconvenient) barriers for agents, so a unified MLS would be a huge benefit for this industry. With more information at our fingertips, every agent has more room to succeed.

Digging deeper into pocket listings

Source: Money

We all know pocket listings are on the rise this year. By some estimates, the number of homes sold without officially hitting the market has increased by 67% just since November 2019. But there are pros and cons to private selling in today’s ultra-competitive market. 

Pros: 

  • Selling a property without publicly marketing it protects the privacy of the seller. For luxury properties, privacy is highly valuable.
  • In some pocket listing scenarios, the same agent is able to represent both sides of the deal
  • In many cases, the private sale is quicker and more straightforward than a traditional sale with full marketing and multiple showings

Cons: 

  • The seller may be leaving cash on the table by not exposing the property to the full market. Without local, out-of-state, and international buyers seeing the property, the chances of a lucrative bidding war are slim. 
  • If one agent is representing the buyer and the seller, they may be expected to negotiate a reduced commission rate. This is especially true if the home sells for below market value.

Our take

While NAR guidelines do allow you to talk about a potential listing before you have a signed contract, it’s a risky move. You could line up a great buyer just in time for the seller to sign with another agent. If you do take a pocket listing, the best way to find a buyer is to start phoning other brokerages to see what their clients are looking for. It’s a great excuse to network and get on their radar as a hot and happening agent. 

Reminder: if you go against the NAR rules and market a pocket listing improperly, you can get slapped with a major penalty. Always follow the NAR guidelines.

Schematics 

The news that just missed the cut

Source: Business Insider
  • These tiny prefab homes are helping fight the homelessness crisis
  • Leo’s Titanic home just sold for $10.3M
  • Vacasa, the popular vacation rental management company, just went public
  • The dream scenario for metaverse real estate agents
  • This stunning Hamptons mega-home just sold for $45M

Foundation Plans

Advice from James and David to win the day

The holidays are full of major networking opportunities. Every party and event is a chance to meet new people. Here are three tips to help you make the most of every outing:

Keep your networking organic. We don’t carry business cards because we’re not on a mission to sell. Plus, people at parties don’t want to be sold to. Just be yourself and work the room. When people ask what you do, have your quick, two-sentence elevator pitch ready. Don’t be afraid to share. People are always looking for a quality agent. Remember, you’re a hot commodity! 

Be memorable. If you do make a great connection with a potential client, follow up with a thoughtful text or a small gift sent to their office. So few agents go the extra mile like this, so you’ll really stand out.

Host your own event. Plan a Christmas party or happy hour and invite your clients and connections. Encourage them to bring a friend. You’ll grow your network and continue strengthening those existing relationships.

Just in Case

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

What did you think of today’s stories? Have you put any of our real estate tips to use yet? Hit reply and tell us how it’s going so far. We’d love to hear from you! 

Have a great weekend. See you Tuesday.

- James and David

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