Why trust is #1

When serving clients, it's easy to think that the most important word you can say to your clients is "Yes". But we think it's actually "No". Like “No, you shouldn’t buy this property” or “No, I don’t think that’s a good idea" or “No, I think that’s overpriced.”

Why? Because once our clients see that we are willing to be honest with them, they'll be more willing to give us their trust. In our opinion, trust is the single most important key to success in this business. After all, we're helping your clients make one of the biggest, most expensive decisions in their entire lives. We believe every client deserves our most honest advice, even if, at first, they may not want to hear it.

- James and David

Realtor.com’s recession prediction

Are we in a recession? That’s still up for debate. But unless the economy stages a major turnaround and we avoid a recession, Realtor.com expects three market trends to continue into 2023:

• Home prices are likely to fall 10%-20% nationwide

• The number of new listings will continue to drop (they were down nearly 10% in September) as sellers pull back

• There will not be a big wave of foreclosures, as demand still outweighs supply, lending standards have been tighter, and borrowers have been more qualified.

Our take

This market is nothing like what we saw during the 2008 mortgage crisis. The demand is still there, especially in affordable markets. Until the supply of new houses really starts to catch up, we believe agents who hustle and stay focused can still find more than enough opportunities. This normalization is exactly what the market needed— you just have to stay flexible enough to make the most of every shift. 

Why homes are shrinking 

Redfin determined that the average affordable home on a $3,000 monthly budget has shrunk 142 square feet since last September. This is due to rising interest rates and home prices pushing down what buyers can afford. Here are the stats they compiled after analyzing the Top 50 markets:

• In 29 of the 50 markets, homes at this price level shrunk by at least 100 square feet

• The most significant home size change occurred in San Diego, where these homes have shrunk by 435 square feet

Our take

Buyers will always have to make compromises. If it’s not square footage, it’s location, school district, style, or budget. Before you start looking at listings, help your buyers make a list of potential compromises and non-negotiables. That’s the simplest way to find them a good deal on a property that may not be perfect, but the best possible fit.

Alternative investments are having a moment

Today’s stock market is hard to follow. Meanwhile, inflation is rampant, interest rates are skyrocketing, and it seems like everything else is down.

But did you know farmland is completely unaffected by this market volatility? Or that comic book values are through the roof? And vinyl records prices are 🚀🚀🚀

You’ll know all that (and more) if you read Alts. These guys analyze the heck out of alternative assets, and you reap the rewards— all in one quick-read newsletter.

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Inventory is tight in these 10 markets

Home inventory levels are on the rise nationwide, but in a handful of metro areas, inventory is actually dropping at a double-digit pace. This is due to sellers postponing their listings while homebuyer and investor demand remains strong. This is leading to fierce competition for these properties.

Check out the top 10 markets with the steepest inventory drop YoY in August:

1. Honolulu, HI: -44.7%

2. Hartford, CT: -24.4%

3. Syracuse, NY: -16.2%

4. Milwaukee, WI: -11.8%

5. Chicago, IL: -11.7%

6. Virginia Beach, VA: -10.3%

7. Cincinnati, OH: -7%

8. Minneapolis, MN: -5.1%

9. Scranton, PA: -3.8%

10. Baltimore, MD: -3.2%

Our take

Several of these markets are popular vacation destinations. Others offer great rental opportunities because they’re more affordable areas. That means, in these metros, it will be a while before local buyers get the relief we’ve seen in other bigger markets (like LA, New York, and Austin). If you serve one of these areas, focus on filling your pipeline with potential sellers. With prices and competition up, that’s where the huge opportunity is right now! 

Schematics 

The news that just missed the cut

• Tennis star Roger Federer’s incredible real estate portfolio

• See inside this stunning $38M Boston condo with wrap-around windows

• 4 ways to start investing in real estate (for cheap!)

• Fed Governor's thoughts on the housing market

• These 6 kitchen fixtures rarely pay off

• Next month, L.A. votes on the new “mansion tax”

Foundation Plans

Advice from James and David to win the day

To maintain a steady real estate career, it’s important to diversify your lead flow. We’ve said it here before— if you rely on just one source of leads (like referrals or one key developer relationship), your business is at risk! But when you’ve got leads coming in from multiple sources, you’ve always got something to work with. Here are 6 great lead sources you can tap into: 

1. Farming leads. You can get a list of leads to farm from your title rep

2. Online. This includes your website, social media, and paid ads

3. Referrals. Either from clients, other agents, or through professional connections

4. Expired listings. The MLS is full of these leads

5. Circle prospecting. This involves networking in the area where a home recently sold

6. For sale by owners. You can find them all over Zillow and other platforms

How do you maximize each of these lead flow channels? Check out this video to find out.

The Blueprint Spotlight

Want to connect with Tom? Follow him on Instagram @thestoreyteam

Just in Case

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

ICYMI - We’ve created our own custom real estate toolkit, covering all the most important topics that helped us sell over $3,000,000,000 of real estate.

All you have to do is refer one person to The Blueprint using your unique share link (above) and we'll deliver our toolkit straight to your inbox!

Have a great weekend!

-James and David

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