We’re in a sweet spot
What we love about today’s market is that it’s almost a perfectly balanced buyer’s and seller’s market. It’s a seller’s market because supply is still too low and buyers are hungry for more listings. But it’s also becoming a buyer’s market because they don’t have to face 30 competitors for every single property, and they’re able to negotiate a better deal.
A balanced market like this doesn’t happen often, but when it does, it presents an amazing opportunity for us agents. So get out there and make the most of it!
- James and David
Redfin's latest data shows the market cooling
Though home prices are still on the rise, today’s homebuyers are getting a bit of relief in other ways. Over the past four weeks, we’ve seen more price reductions and an increase in inventory. Last week, the average mortgage rate even dropped slightly. Here are some more unusual stats from Redfin’s recent report:
- A record-setting 7% of listings had at least one price drop in the past month, which is the highest monthly percentage since they started tracking the stat back in 2015
- Pending home sales were down 13% YoY, the largest decline since May 2020
- Active listings fell 2% year over year, the smallest decline since October 2019
This data backs up what we know to be true–the tide is turning for today’s buyers. Yes, home prices are still high, but with interest rates historically low and growing inventory, we’re entering into the best buying season we’ve seen in months, maybe even years.
Price dropping in the West
According to data from Redfin, the top 10 fastest-cooling markets in the country are located on the West Coast. Their rankings are based on changes in the past three months in prices, price drops, supply, and several other factors.
Here are the Top 10 cities where the markets are cooling the fastest:
- San Jose, CA
- Sacramento, CA
- Oakland, CA
- Seattle, WA
- Stockton, CA
- Boise, ID
- Denver, CO
- San Diego, CA
- Tacoma, WA
- San Francisco, CA
It’s no surprise that several key California markets are cooling. They were the first to shoot up in price, so naturally they’ll be some of the first areas to come down. Typically, these ultra-hot markets don’t face many cooldowns, so again, this is a huge opportunity for buyers to get a good deal in an in-demand area. Don’t let this unique season pass you by.
Price predictions for 2023
The expected “housing correction” will cause prices to stop rising nationwide, but just how much deceleration should we expect? That depends on who you ask. Here’s what several major industry players see for housing prices in 2023:
- Zillow is the most optimistic about housing price growth, expecting prices to rise another 9.7% between May 2022 and May 2023
- Capital Economics expects a price decline of 5% by July 2023. If true, that would be only the third year-over-year decline in the past 50 years!
- CoreLogic, Fannie Mae, and the Mortgage Bankers Association’s predictions sit somewhere in the middle, forecasting price growth over the coming year of 5.6%, 3.2%, and 3.1%, respectively
- For perspective, since 1987, home prices appreciated annually by 4.4% on average
It’s important to keep an eye on predictions from big firms, but in reality, what happens in your day-to-day business is the best indicator around. We are seeing price growth slowing down, and inventory increasing, but we aren’t sure about anything more than that. It will be interesting to see the way the next 6 months play out.
The news that just missed the cut
- See inside the stunning 21,000-square-foot, $150M Los Angeles mansion
- Why next summer might be the best time to buy
- This incredible six-bedroom Hong Kong mansion just sold for $111M
- The fed's surprising finding about the Pandemic Housing Boom
- Agents: Don't copy social media trends. Do this instead!
This broker's approach to caring for his agents 282% in sales growth.
Advice from James and David to win the day
If you want to stand out as the top agent in your area, watch out for these four common mistakes we see agents make every day:
- Overpromising to your clients. Especially when you’re a new agent, it’s easy to promise your clients the world… only to realize you can’t make that deal happen. Always set clear, realistic expectations up front.
- 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 up front.
- Presenting a poorly written offer. If you skip sections, use confusing language, or come across unclear on what your buyers are offering, that offer has little chance of winning. Do your buyers a favor and don’t rush through this crucial step.
- Presenting a flaky offer. In a competitive market, some buyers will get caught up in the moment and make a highly competitive offer, only to back out the next day. If your buyer is pushing to make an offer you know is outside their budget, make sure they plan to follow through on it.
For more great tips on becoming a top-performing agent, check out this video.
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
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- James and David
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