What the latest mortgage rate hike means for you
Plus, predicting where your clients might move next
Doing follow-ups right
Sometimes a new client can immediately lead to a sale, and sometimes, it takes longer than that… a LOT longer. That’s why follow-ups play an absolutely massive role in our business. We’ll stay on top of someone for three months, eight months, eighteen months, or however long it takes. If we’re in New York and that client is too, we’ll all go to dinner together just to be a part of their lives.
Whatever you do, stay front and center. Even if your connection doesn’t have any plans to buy or sell right now, you never know what’s going to happen! They could get married or divorced, they could buy a business or sell one, they could relocate to a new area, start caring for an aging family member, or start growing their family. And when the need arises, they’re going to call you because they’ve known you for years and trust that you’re not just there to make a sale.
That’s why we spend all day calling people. The minute we have a free moment, we’re doing our follow-ups. It’s a massive part of our business. And guess what? It’s built us a massive business. It can do the same for you.
- James and David
Another month, another rate hike
Source: Unsplash
When it comes to inflation, the Federal Reserve isn’t playing around. On Wednesday, the Fed raised rates by 0.5%, the strongest anti-inflation move it has made in more than 20 years. Fed Chairman Jerome Powell also implied there will be several more similar rate hikes in the months to come. This is due to the expectation that supply chain disruptions and struggling inventory levels will keep prices elevated. However, if inflation does peak and decline this year, the Fed may soften these aggressive anti-inflation measures.
Our take
Everyone predicted this would happen to curb inflation. We got so used to 2-3% rates that we forgot the current number is still historically low. Even with rates increasing, homes are still in demand. Buyers understand the value of owning land. That’s why home prices grew at an unprecedented rate the past 18 months. Homes are going to keep selling. We can’t create more land, so homes are always going to remain valuable.
Redfin shares data on out-of-town buyers
Source: Unsplash
Your next buyer just might be from another metro. According to Redfin’s Q1 property search data, a record-setting 32.3% of Redfin users searched for properties outside their current area. That’s up from 26% back three years ago. Redfin’s report reveals the top 10 cities with the highest outflows, and which cities those homebuyers searched.
The top 10 cities with the highest outflow of homeowners → the top city those buyers searched:
San Francisco, CA → Sacramento, CA
Los Angeles, CA → San Diego, CA
New York, NY → Miami, FL
Washington, DC → Salisbury, MD
Seattle, WA → Phoenix, AZ
Boston, MA → Portland, ME
Chicago, IL → Cape Coral, FL
Denver, CO → Chicago, IL
Minneapolis, MN → Chicago, IL
Portland, OR → Seattle, WA
Our take
This list is an interesting indicator of how buyers think. It tells us about the moves they could potentially make in the near future. If you live near one of these most-searched destinations, you may be able to anticipate where your next buyer may be coming from. If you live in Phoenix, you might want to consider marketing in Seattle. If you live in Seattle, you may want to consider marketing in Portland. This is a great way to think outside the box, and your city.
Great news for some California buyers
Source: Unsplash
In California, qualifying first-time homebuyers can now have their down payment covered by an interest-free loan. The Forgivable Equity Builder Loan will provide these buyers with up to 10% of the home’s value in up-front cash to put towards their cash-to-close. The loan is available to Californians whose income is less than 80% of the Area Median Income in the county where the property is located. Best of all, homebuyers won’t have to repay the loan if they stay in the home for at least five years.
To qualify, buyers must meet these three conditions:
Be first-time homebuyers
Use the property as a primary residence
Complete homebuyer education counseling and get a certificate of completion through an eligible homebuyer counseling organization
Our take
This is absolutely great news for the local market. If you’re in California, share this news with as many first-time buyers as possible. Talk to people, post on your socials, send out an email, and get on the phone. There’s a strong chance they have no clue this option is even available to them. Help them figure out if they qualify and then find them a property!
Schematics
The news that just missed the cut
Source: Wall Street Journal
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These stats show people are ready to travel again
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Use this table to see how real estate activity impacted your local economy
Opendoor crushed their earnings
Foundation Plans
Advice from James and David to win the day
Earlier this week, I (James) had the privilege of sharing some of our best real estate tips and advice with The Broke Agent on Over Ask Podcast. In that conversation, we talked about:
Breaking into the luxury market. Relentlessly pursuing leads for the first two years while we built up our portfolio.
Networking the right way. Keeping detailed notes of every conversation so we could refer back to it next time we ran into that person or reached out for a follow-up.
Partnering with other agents. Early on, we were able to partner with other agents on our team and leverage their experience to get listings.
How to build your business from door-knocking. And why we absolutely still believe in this habit.
If you’ve got a few minutes, give the full podcast a listen here. It’s packed with actionable advice and real stories about our real estate journey.
Q&A
You ask, James and David answer!
Q: What are your plans after leaving “Million Dollar Listing Los Angeles”? Will we see you both on TV again? Are you moving back to the UK?
A: While we can’t say too much ;) we can say this: new opportunities are on the horizon for us. We’ve got lots of fun and interesting things cookin’. In the meantime, we’re focusing on growing our business, building this newsletter, and spending more time with our families. Will you see us on TV again? Stay tuned to find out!
Want to see your own question in next Friday’s newsletter? Submit it here!
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Rocket Mortgage
Had a great chat with one of our readers, Andrew, this week. Thanks for referring The Blueprint to your community. Who wants to hop on a Zoom next? Hit the share link above and let’s chat :)
Have a great weekend.
- James and David
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