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Post-Memorial Day
We know that Memorial Day was yesterday, but we wanted to take a moment to mention it here. The holiday is special to us because it is similar to Remembrance Day, which we celebrated in Britain.
We are extremely grateful for our lives here in America, our adopted home. We’re deeply aware that none of it would be possible without the ultimate sacrifice our fellow compatriots made for us. We are eternally grateful for them.
As we jump into today’s Blueprint, let’s all take some time this week to remember the people who truly gave everything so that we can live in this incredible country.
- James and David
Location, location, location!
Miami: https://bit.ly/3IMxCgS
Location is having an enormous effect on home pricing trends. In fact, according to the latest report from Redfin, it’s having its largest effect since 2009, when the subprime mortgage crisis caused huge fluctuations between cities.
For example, during the past year, home prices fell 10.1% in San Francisco but rose by 10.9% in Miami. This 21 percentage point (ppt) gap is the second highest on record (23 ppt in August 2022). These are the biggest gaps we’ve seen in 14 years.
Our take
This is why we always say that agents should pay close attention to local housing data, and not assume national trends will match those of their area. We are seeing a lot of variation right now between markets. Some markets are red hot, while others are waning. Make sure your clients understand the difference. Otherwise, you could miss out on closing a deal.
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State Farm announces big change in California
San Francisco: Unsplash
State Farm, the largest provider of property insurance in California, announced on Saturday that it will no longer insure new homes in the state. The company said this is due to wildfire risks and construction cost increases. The new policy took effect on May 27, 2023. Homes under an existing policy are still covered.
Our take
It’s too soon to know what the impact of this decision will be. Last year, when insurance rates were soaring, California became the first state to require insurance premium discounts for owners who live in areas prone to wildfire. State Farm’s decision simply might be a reaction to that mandate, and might not have any wider implications for other markets. Regardless, agents should ready themselves to help clients find new home insurance. We suggest starting here.
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The Sun Belt is hotter than ever
Sarasota: https://bit.ly/3qdGSEy
People moving to a new metro make up a bigger piece of the homebuying pie than ever before. That’s according to Redfin’s latest report on relocation trends. Although down 6% from last year, 25.2% of Redfin.com users are planning to relocate this year.
The top destination cities are nearly all in the Sun Belt, with half of the top 10 in Florida:
(tie) Phoenix, AZ
(tie) Miami, FL
Las Vegas, NV
Tampa, FL
Orlando, FL
Sarasota, FL
Cape Coral, FL
Dallas, TX
Sacramento, CA
Houston, TX
Our take
We’re not surprised by this report one bit. So long as coastal cities refuse to build new homes, people are going to flock to warm-weather places where homes are plentiful and affordable. Out-of-town buyers are more likely to pay in cash for their homes, so local buyers will need to be ready to compete. Suffice to say, it’s a great time to be an agent in these markets.
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Schematics
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Source: Unsplash
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Foundation Plans
Advice from James and David to win the day
We know that starting out in this industry can be daunting at times, and it’s easy to make rookie mistakes. If you’re new to the business, make sure to avoid these three common mistakes:
Skimming the MLS listing - Before you show a property, always read the disclosures carefully. If there’s a major issue with the home, your buyers need to know that upfront.
Presenting a poorly written offer - If you skip sections, use confusing language, or come across as unclear on what your buyers are offering, that offer has little chance of winning. Do your buyers and yourself a favor and don’t rush through this crucial step.
Presenting an unreliable offer - In a fierce market, some buyers will get caught up in the moment and make a highly competitive bid, only to backtrack the next day. If your buyer is pushing to make an offer you know is outside their budget, make sure they can back it up. Otherwise, exercise your advisory role and caution them against it.
For more great tips, listen to this.
Q+A
You ask, James and David answer!
Q: Hello from The Netherlands. How do you guys think the fall of the US dollar will impact the real estate market in the US or in particular Los Angeles? Love what you guys are doing with The Blueprint!
A: The macroeconomic climate in the US is tough to predict. We have a lot of things we are trying to solve here – debt ceiling, inflation, interest rates, etc. We are seeing a massive influx of foreign buyers in the Los Angeles market. That’s the biggest effect we are seeing in our day-to-day. The rest of the year will sure be interesting!
We’ll be back next week with another answer to a real reader question. Submit yours here!
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Rocket Mortgage
“The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and starting on the first one.” - Mark Twain
Thanks for reading, and we’ll see you Friday!
