Upcoming event!

Hey, James here. I am excited to announce that I will be speaking at Inman Connect in New York on January 24-26. I’m looking forward to such a great opportunity to surround myself with some of the best agents in the business at one of the most premiere events for our industry. 

If you are going to be there, let me know because I’d love to say hello. Respond to this email, and I hope you enjoy today’s Blueprint!

- James

Mortgage giants back $1 million loans

The FHFA announced Tuesday that Fannie Mae and Freddie Mac received a green light to back seven-figure mortgages. Starting in 2023, they will be allowed to buy mortgages up to $1,089,300 in certain high-cost areas such as California, New York, and Virginia, and up to $726,200 in all other markets. This increase is a response to home prices rising 12% in September from the same time last year, and reflects the rise in the average U.S. home price.

Our take

This is great news. It will definitely stimulate the home-buying economy. Having said that, we need to remember what happened in 2008, when many banks offered mortgages to people who had no idea what these loans involved. Banks need to protect buyers from those willing to take advantage of their debt. To do that, they must make sure buyers are qualified and loans are underwritten correctly. We never want banks just lending to anybody. As always, make sure your buyers know exactly what their loan looks like, and make sure they are in a position to take it on.

Housing market predictions for 2023

Realtor.com economists predict that interest rates, rents, and home prices will stay high in 2023 even as inventory rises. While buyers will enjoy advantages such as a growing number of homes for sale, costs will remain high. This unusual market forecast is due to years of underbuilding and post-pandemic demographic shifts.

Check out these market predictions:

• Mortgage rates will average 7.4%, with hikes early in the year followed by a slight retreat to 7.1% by year’s end

• Inventory will increase 22.8% YOY as the changing market dynamics that began last summer accelerate.

• Home prices won’t come down, but home price growth will moderate to single digits (5.4%) for the first time since 2020

Our take

It’s great to see predictions that prove once again that we aren’t anywhere near 2008. Increasing inventory will be good for the market. As long as mortgage rates don’t do something unexpected, there will still be plenty of transactions. We know next year can feel incredibly unpredictable right now, so we are doing what we do best: building our funnel, studying the market, and putting in the work. If your business is slow right now, use this time to make a plan of attack for January 2023!

10 markets with cooling home prices

A new report from Redfin shows that home-price growth has slowed fastest in pandemic boomtowns and tech hubs in the Sun Belt. Factors include high mortgage rates, elevated home prices, and a looming recession.

Here are the 10 markets where home prices have cooled fastest since February:

1. Austin, TX 

2. Phoenix, AZ 

3. San Jose, CA 

4. Las Vegas, NV 

5. Boise, ID 

6. Oakland, CA

7. Sacramento, CA 

8. Riverside, CA

9. Colorado Springs, CO 

10. Seattle, WA

Our take

There are going to be advantages and disadvantages to every market. If you recently became an agent in one of these markets, remember the housing market is cyclical. In the boomtown markets that are normalizing (which we think is a great thing for the market), sellers should be willing to compromise more because buyers now have more leverage. 

Schematics

The news that just missed the cut

• Check out this $90 million Fisher Island penthouse

• Here are the Case-Shiller Index findings from September

• Airbnb is making it easier to find tenants

• How to calculate home value and challenge your tax assessment

• The Fed’s next move is good news

Foundation Plans

Advice from James and David to win the day

This week, James joined the hosts of the Hustling Humbly podcast to talk about how he built a successful real estate career from scratch and how other agents can do the same. Here are three of James's top tips from the episode for leveling up your career despite an uncertain market:

1. Forget about imposter syndrome. I've heard people say that fear is just false evidence appearing real, and I couldn't agree more. Fear and doubt are just things you have to banish before they become an obstacle to your career growth. As a general rule, when I find something that scares me in my career, I tackle it head-on. Fighting self-doubt is how we grow mentally and professionally! 

2. Think outside the box. Remember that you're always learning and growing no matter how long you've been an agent. We're in a tough market, so strategies that brought in plenty of deals in the past might need to be tweaked, and that's okay! The next year or so will be a "sink or swim" situation for a lot of agents, so you've got to give 110%. This means brainstorming new ways to generate leads, knocking on doors, and getting creative in your marketing.

3. Always be open to listening and learning. When you're new at something, whether it's real estate or something else, not having all the answers can be scary. It's a normal human response to want to make up an answer on the spot to show expertise. As an agent working with high-stakes deals, DON'T do this! If you've done your homework and still aren't sure of an answer, there is nothing wrong with telling your clients that you will look into their questions and get back to them.

Want to hear more advice from James? Check out his entire Hustling Humbly episode on Apple and Spotify.

Just in Case

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

That's all for now! Make sure to check out the Hustling Humbly podcast to hear more advice for agents looking to take their careers to the next level. It's hard to believe that it's already December, so take some time this weekend to look ahead to Q1 of 2023 and start setting your goals now for the new year. 

Have a great weekend, and we'll see you on Tuesday!

- James

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