Eye-opening stats on today’s homebuyers
Plus, where inventory made BIG gains
Back to business
Welcome back! We hope you had a great holiday weekend.
The past two weeks have been undeniably eventful in our industry. A lot of things are up in the air. In the midst of all of this change, keep your focus. Regardless of the changes that are coming, we encourage you to stay on target and try not to let the general anxiety hanging over our industry interrupt your day-to-day. We know that’s easier said than done, but we’ve learned through the years that, in uncertain times, that is truly the best approach.
So while we wait for resolution on those other stories, here’s a look at what else is happening in our industry.
- James and David
Total inventory is climbing nationally
Total inventory climbed 2.6% nationally month-to-month in October, despite few homes newly listed for sale, according to Zillow’s October report on the housing market. Here are the month-to-month trends from September to October:
Inventory rose in 42 of the 50 largest markets, with the biggest gains in Phoenix (+9%), Miami (+8.5%), and Tampa (+8.3%).
Inventory fell the most in Seattle (-6.6%), Portland (-3.1%), and Austin (-2.4%).
Sales activity rose the fastest in Memphis (+9.4%), Atlanta (+5.8%), and the New York City metro area (+5.3%).
Sales slowed the most in New Orleans (-14%), Seattle (-12.1%) and Sacramento (-11.8%).
Newly pending sales fell 3.3%
U.S. home prices fell -0.3%, which was expected and only a little beyond normal seasonality.
It’s not a surprise that fewer new listings are hitting the market. That’s typical for this time of year. However, the climb in total inventory is most likely a consequence of few sales taking homes off the market. But what we find most concerning about this report is the trajectory of home values. Since September, Zillow has been progressively lowering its price expectations. It still expects prices to rise throughout next year, but not as quickly nor by as much as the company once predicted.
Homebuyers by the numbers
Source: Washington Post
The average age for repeat buyers was 58 this year, down just slightly from last year’s record of 59. That’s according to NAR’s latest profile of homebuyers in the current market. Here’s what else they found:
First-time buyers made up 32% of total homebuyers, up from last year's 26%. This increase is still below the typical 38% average tracked since 1981.
The typical first-time buyer was 35 years old this year, slightly down from 36 last year.
59% of recent buyers were married couples, 19% were single females, 10% were single males, and 9% were unmarried couples. This is the lowest share of married couples since 2010.
14% of homebuyers purchased a multigenerational home to take care of aging parents, due to cost-savings and children or relatives over the age of 18 moving back home
Most buyers paid the asking price, but 25% paid more.
The stat about the average homebuyer’s age is key. Older homebuyers have a distinct advantage in our current market. They’ve built up equity in their first home, which allows them to own new homes without having to finance them. They’re making all-cash purchases in record numbers. We recommend agents use reports like this to micro-target your ad campaigns. To get more bang for your buck, target your ad budget on the segment of the population that has the financial capacity to thrive in our current rate environment.
Top destinations for middle-class movers
Phoenix, AZ: https://bit.ly/46PAKTf
H&R Block’s “Outlook on American Life” 2023 lists where middle-class movers are heading. By “middle-class,” H&R Block refers to households with incomes between $45,000 and $145,000.
Here are H&R Block’s top 5 destinations for out-of-state arrivals
Las Vegas, NV
San Antonio, TX
Even though H&R Block’s study is based on 2022 tax data, it coincides with everything we’ve read about the top locations where people are moving. It should come as no surprise by now that middle-class Americans are increasingly heading out of state to achieve an affordable lifestyle. We don’t see this trend declining anytime soon. Agents that capitalize on this trend are going to make a killing, even in our elevated mortgage rate environment.
The news that just missed the cut
Fort Lauderdale, FL: https://bit.ly/3MGr0mv
Tommy Hilfiger puts his Palm Beach mansion back on the market
Options to show clients thinking of using their 401K to buy a home
Pros and cons of forming a real estate LLC
Use this to keep track of all the real estate-related cases
One of the big 4 title firms is selling its mortgage insurance business
Advice from James and David to win the day
Real estate can be extremely lucrative, but it doesn’t come easy. There is a reason why we prospect every day. Generating leads and securing listings is utterly essential to not only achieving success, but maintaining it. Today, we’d like to highlight some sources for leads and listings that agents often overlook.
Probate Court – Mostly because they don’t understand what it is, agents typically don’t use this source to generate leads. But that’s a mistake. Probate is simply the process of selling a home after someone passes away. The court appoints an executor of the estate who can then sell the property. If keeping the home in the family is not an option and the executor wishes to cash it out, that’s a listing. Sometimes, they’ll re-invest the proceeds in real estate; sometimes you’ll just sell that listing. Either way, they need someone to sell the estate.
Lenders and Stagers – When was the last time your lender sent you leads? When have you asked? Who do they know who is getting prequalified to buy right now and has a home to sell? Stagers are also a great source of leads that agents often overlook. Refer business to stagers and ask for leads in exchange.
Property Investors – Join your local investors’ club through meetup.com or private Facebook groups in your town. You’ll know who’s looking for what property and which investors are likely to sell. This also gives you insider information about pocket listings, which can benefit your buyers.
To discover more traditional and non-traditional lead generation sources, start here.
The 1% Blueprint
An on-demand course created by James & David
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For Blueprint subscribers, the course is 30% for a limited time. If you’d like to take our course to learn how to become the top 1% of your market click here!
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!
If you’re new to the Blueprint community, we want to hear what you think! What’s your take on today’s stories and tips? Send us a note with your comments, questions, or suggestions.
Thanks for reading, and we’ll see you back here on Friday!
- James and David