The new hottest market in America
Plus, 2022’s international buyer hot spots
July 22, 2022
Before you reduce the price…
If our listing just isn’t selling, the first thing we do is try to figure out why. We rule out every single factor one by one to make sure it’s not because of something we’ve done (or not done!). We audit our marketing and branding to confirm we’ve posted the property on social, sent it out in our email blast, shared the listing with our clients and professional network, and hosted events there.
If we’ve ruled out our own activity as the reason this property isn’t selling, we can be 100% confident that the problem is price. And when we approach our client about a price reduction, we have a full audit to show them that proves we’ve done our absolute best.
So before you talk to your client about changing the price, ask yourself: have I done everything possible to get potential buyers through the door?
- James and David
Why the East Coast might be the new West Coast
You might be surprised by the cities that did (and didn’t!) make Realtor.com’s Top 20 Hottest Markets list in June. The list saw two firsts: 1) Concord, New Hampshire was at the top for the first time and 2) no western region markets made the list for the time in the data’s history.
The rankings are calculated by market demand as measured by unique views per property and the pace of the market as measured by the number of days listings remain active on their website.
Check out June’s Top 10 hottest housing markets and their median list prices:
- Concord, NH - $457,000
- Manchester, NH - $478,000
- Burlington, VT - $484,000
- Portland, ME - $549,000
- Burlington, NC - $380,000
- Rochester, NY - $230,000
- La Crosse, WI - $335,000
- Hartford, CT - $375,000
- Oshkosh, WI - $300,000
- Elkhart, IN - $279,000
This list is so interesting because it shows the emergence of new cities. As culture and people shift, new cities pop up practically overnight. Just look at what happened in Austin years ago. We’re excited to see fresh zip codes on this list because it means greater opportunities for East Coast agents.
Builders are losing their cool… and their confidence
As we face a serious inventory shortage, home builders are losing their confidence in the new build market. The National Association of Home Builders/Wells Fargo Housing Market Index survey uses a metric called “homebuilder sentiment”. It measures the confidence that home builders have in their ability to sell new builds for a profit both today and six months from now. That number is dropping fast.
- Homebuilder sentiment plunged 12 points this month, the second-biggest drop in the survey’s 37-year history (the biggest was the 42-point drop in April 2020 at the start of the pandemic)
- Sentiment now sits at 55 points out of 100, which is still considered positive, but only barely.
Even though sentiment is down, prices are still pretty high because demand is up. People want these new homes, but it’s just becoming so expensive for builders to finish them. This is going to continue putting pressure on builders and, unfortunately, keep inventory low for a while longer. That’s why you’ve got to keep farming for new listings of existing homes, because there just won’t be as many new builds!
Foreign buyers flock to these five states
Since April 2021, international buyer activity has dropped nearly 8%. Now, foreign buyers account for just over 1% of home sales. Reasons for the decline include higher home prices and the appreciation of the dollar. But there are still a few cities where foreign buyers comprise a notable share of the market.
According to a new NAR survey, these are the top 5 states with the highest share of foreign buyers:
- Florida - 24%
- California - 11%
- Texas - 8%
- Arizona - 7%
- New York - 4%
Here are the top 5 regions of origin:
- Latin America - 23%
- Asia - 22%
- Canada - 11%
- Europe - 11%
Coming from overseas ourselves, we can vouch for how important it is to educate your international clients. They’re typically coming in with limited understanding of the market, the buying process, and the paperwork. So this is your time to shine! Go above and beyond to help every international client. And when you do knock it out of the park for one international client, you’ll likely have a stream of referrals to follow.
The news that just missed the cut
- The title for priciest San Francisco condo goes to this stunning double penthouse
- Bidding wars drop to lowest level in 2 years
- Is multigenerational living another solution to the affordability crisis?
- Why some investors have lost confidence in crypto, but love real estate
- How far prices have fallen in Southern California
- Haruvi family sells $139M of its real estate portfolio
Advice from James and David to win the day
In this market, price reductions are becoming a bit more common. There’s really an art to successfully reducing a property's price while still getting the absolute best number for your client.
Here’s how we handle price reductions in our own business:
- If a property just isn’t selling, we make sure it isn’t our fault. As we said up top, we’ll never suggest a reduction until we’ve done everything we can to sell the property. We ask ourselves, did we market it well? Did we hold enough events there? Did we put in the calls, canvas the neighborhood, and tell our network?
- If we’ve done all we can, we suggest a new price. Depending on the comps, we may suggest anywhere from a small reduction of less than 1% to even 7% or more if we really need this listing to move.
- With the new price in place, we start the marketing process over. We repeat the exact same thorough marketing, events, and promotion process, remarketing the property like it’s brand new. We use the “new and improved price” as the reason to resend this listing to everyone in our network.
This article has more great tips for managing price reductions.
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In the meantime, have a great weekend!
- James and David
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