How the Inflation Reduction Act affects homeowners
Plus, the most (and least!) competitive markets
How’d you like the podcast?
Earlier this week we launched a brand new real estate podcast called Rise Above the Ranks (available on Apple and Spotify). In the first episode, we talked about how to pick the right brokerage and help you supercharge your real estate career from the get-go.
Over the past few days, we’ve gotten a ton of questions about what’s coming up next.
The next one is, How To Run a Successful Open House…and a quote you will hear from this episode, from me (David), is “you can build your entire business from just sitting open houses.”
I promise! Want to know how? Subscribe and check it out on Monday.
- James and David
Understanding the Inflation Reduction Act
Source: Tree Hugger
The recently passed Inflation Reduction Act comes with a handful of tax incentives aimed to help homeowners make eco-friendly renovations. The incentives stand to provide up to $1.6B in credits and rebates to green homeowners. Here are a few home improvements and eco-friendly purchases that qualify:
Solar panels or heat pumps
Energy-efficient electric stoves, heat-pump dryers, and electrical panels
Efficiency-improving upgrades like new windows, doors, appliances, and insulation
This is an amazing incentive to help homeowners. Anything that stimulates the economy, improves housing, and helps the environment is a win-win-win. Take time to learn the best incentives and credits, and think about how you can use the info to your benefit when working with clients. Whether it’s a talking point in your follow-up calls, a bit of data to use when you’re door-knocking, or the extra benefit that gets your buyer on board, you can use this to help someone and land a great deal!
Buyers are facing less competition
Across the country, homebuying competition is slowing. Nationwide, the percentage of home sales that spur a bidding war has dropped to just 44.3%, down from over 50% in June. This marks the sixth straight month of decline.
Here are the top 5 markets with the highest percentage of home bidding wars:
Raleigh, NC - 63.8% of offers faced competition
Honolulu, HI - 63.0%
Providence, RI - 60.5%
Philadelphia, PA - 60.4%
Worcester, MA - 54.8%
Here are the bottom 5:
Phoenix, AZ - 26.6%
Riverside, CA - 31.0%
Seattle, WA - 31.5%
Austin, TX - 31.7%
Nashville, TN - 33.3%
No matter which side of the data your city is on, embrace it, accept it, and use it. If you’re in a market that’s still very competitive, focus on the selling side. That’s where your opportunity lies. If your market is slowing a bit, that’s still an incredible opportunity to find willing buyers. Show them how houses are essentially “on sale” right now with prices leveling and sellers open to negotiating. Explain to them how this is the perfect time because sellers are flexible and interest rates will rise even further.
Home builder confidence is on the decline
Home builders are losing confidence in their ability to sell their new builds for a profit in the next few months. According to the National Association of Home Builders/Wells Fargo Housing Market Index, here are some key
Home builder sentiment dropped for the eighth straight month in August, marking the longest stretch of declining confidence since the ‘08 subprime mortgage crisis
Sentiment now sits at just 49 points out of 100— anything under 50 is considered negative
There’s no question that the cost of construction has gone through the roof. There’s a major supply issue for these builders right now. What does that mean for you? Your local builders are looking for a good deal that will allow them to maximize their margins. Look for teardown opportunities in your area. Door-knock the neighborhoods your local builders want to develop. Be the go-to agent who can provide these builders with the good deals they need! And if you’re lucky, you just might represent both ends of the deal.
The news that just missed the cut
Source: Business Insider
Billionaire Larry Ellison just listed this incredible beachside estate for $145M
How to make millions with real estate— and pay $0 taxes
Check out Bill Gates’ impressive real estate portfolio
The latest luxury market boom is in the rustic West
How SpaceX created a fantastic real estate investment opportunity
Rent is surging in these unexpected California cities
Advice from James and David to win the day
It’s been at least two years since a lowball offer even stood a chance of winning the bidding war. But now that we’re looking at a buyer’s market, there are a handful of situations in which a lowball offer might actually get you to the negotiating table:
If the property has sat on the market. If it’s been two or three months and the listing hasn’t moved, there’s no harm in pitching a lowball offer to get the conversation started.
If the listing is clearly overpriced. In this case, “lowball” might mean more like true market value. You may not get a positive response, but it’s worth a try!
If significant repairs are needed. Sellers who have a property with foundation issues, an old roof, or other major repairs are likely to be more open to a lowball offer.
If the sellers are eager and need to move now. A lowball offer stands an even better chance if the sellers are motivated and the listing just had a price reduction, so keep your eye out for this opportunity!
You ask, James and David answer!
Q: What do you think of Wall Street providing bridge loans to homebuyers to make cash offers?
A: Wall Street offering bridge loans is a strong sign that they believe the market is still healthy. They don’t believe real estate is going to fold, and they see the upside of this investment. We think it’s good news! When Wall Street is confident in the future of any sector, and when there’s positivity in the market, that’s great for agents.
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
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Have a great weekend!
- James and David
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