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Market forecasts we're thankful for
Plus, the latest updates on the Sitzer case
Rinku Mathew
November 21, 2023
Happy Thanksgiving
Quick word to you here. We’ll be taking off for the holiday. Since there will be no newsletter this Friday, we want to take this moment here to wish you Happy Thanksgiving.
We know that in our business, it can sometimes be very hard to take a vacation, so we hope you can take this time to relax, unwind, spend time with family, and enjoy everything this holiday is about.
We have tremendous gratitude for all of you, and for the community we have created here, so please know that of all the many things we are grateful for this holiday season, a big one is you.
- James and David
Unexpected good news on pending home sales
Source: Redfin
Pending home sales rose 1% nationwide from September to October, reaching the highest level in a year on a seasonally adjusted basis. That’s according to Redfin’s latest market update. Here are some of the other key takeaways from October:
Pending home sales fell 4.8% year-over-year, but that’s the smallest annual decline in almost two years.
Active listings, the total number of homes for sale, rose 1.4% month-over-month to the highest level since May. They were down 12.5% year-over-year, but that is the smallest YoY decline in four months.
20.8% of homes sold in October had a price drop, just shy of the 21.6% record-high a year ago.
Home purchases fell through at 17%, the highest rate on record in October
The median U.S. home sale price rose 3.5% year-over-year to $413,874, up slightly (0.5%) from September
Our take
We know sometimes it seems as if we’re grasping at straws looking for some positive signs in the market, and while we’re not seeing the massive change we want, we are inching back toward where we want to be. Even a 1% month-to-month rise in home sales, and a 1.4% jump in active listings, is something we can celebrate. And yes, pending home sales fell 4.8%, but that’s the smallest annual decline in almost two years. To steal a baseball analogy, this may not be the home run we’re hoping to see, but it’s a solid single, and hopefully some momentum in the right direction.
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The latest housing market forecasts
Source: Keeping Current Matters
When we average out the latest forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and NAR, prices will end this year up about 2.8% overall, and increase by another 1.5% by the end of 2024. Even more interesting, each forecast projects that total home sales will INCREASE next year.
Here’s a quick breakdown of each prediction for home sales growth in 2024:
NAR: 5.5%
MBA: 5.2%
Fannie Mae: 4.8%
Average: 5.2%
Our take
Forecasts, of course, aren’t infallible, but they’re useful guides for agents and clients. These forecasts tell us that the same supply and demand forces that prevented a price crash in 2023 are still going to be around next year too. The inventory crunch is still very real, and it continues to put upward pressure on prices as we move into the new year. Likewise, total sales activity is forecast to be about 0.4% higher than 2023. Not much different from this year but a slight improvement nonetheless.
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Status update on Sitzer/Burnett
We’d like to give you a status update on the Sitzer/Burnett commission lawsuit and a rough timeline of things to come.
The jury rendered its verdict on October 31st of this year, but the judge did not deliver his legal injunction at that time.
The court now indicates the injunction is not expected until Spring 2024, allowing time for post-trial motions and a final judgment.
Per the court order filed on Tuesday, any post-trial motions on behalf of the defendants must be submitted by January 8, 2024. From there, the plaintiffs have about six weeks to file oppositions, which are due by March 18th.
After all the post-trial motions are resolved, another 30-day waiting period will pass before a judgment is executed. So, the industry may be waiting until April or even May of 2024 before we know the extent of the injunctive relief for Sitzer/Burnett.
After that judgment is made, the defendants will make their move to appeal.
Both Keller Williams and NAR have hired high-powered attorneys to represent them. KW has hired Paul Clement of Clement & Murphy and NAR has hired Gregory Garre at Latham & Watkins.
Our take
As we said when this jury verdict dropped about a month ago, keep calm and carry on. Nothing that has happened in the case is going to affect how your commissions are going to work this year. The legal wrangling and the appeals process is going to take time to work through the system. While there is a genuine chance that NAR, KW, and the other brokerage firms will win, don’t bank on it. Protect yourself by implementing best practices now should the commission system change in the future. In the meantime, prepare yourself. The legal battles have only begun.
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Schematics
The news that just missed the cut
Sacramento: https://bit.ly/3EM9M2y
Rents are rising, but landlords are offering more concessions to entice tenants
Ivy Zelman lays out what’s needed to reignite the real estate market
8 content ideas for Thanksgiving
Department of Veterans Affairs pauses VA loan foreclosures for 6 months
How realtors can show their gratitude this Thanksgiving to their clients
Foundation Plans
Advice from James and David to win the day
Our number one job as agents is to generate leads. That’s how we make deals happen. As a rule of thumb, a minimum 10% of your database should be buying or selling with you every year. These kinds of results only happen IF your communication with your clients is regular and systematic. Today, we’d like to offer you some advice on how to set up your database for success:
Put ALL your contacts in your database – Purchase a good CRM, and take the time to gather phone numbers, email addresses, and social media information for each entry. Enter your past clients, people from your sphere of influence, and buyers who bought your listings. Many times, they worked with another agent, but you are adopting them. You may also add your professional sphere of influence, like home inspectors and mortgage lenders. Add details to each person to help you remember them.
Commit to adding at least five new people per week – Get into the habit of exchanging information on the spot when you make new connections. You don’t need to be pushy or salesy, but don’t be shy to share who you are and what you do. Genuinely believe in what you do because we agents actually add value to people’s lives.
Update your database weekly as part of your daily minimum standards – Commit to never letting it get out of date, become neglected, out of control, or unwieldy. Simply put, if it’s hard to use, then you won’t be able to use it!
Change your mindset about your database – Don’t think of updating your database as a chore. When done right, not only will it pay dividends in deals, you’ll actually build an asset you can sell later in your career. A well-kept book of business is a valuable thing. Never forget that.
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Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
It’s been a tough and eventful year, but you know what, our hearts are genuinely filled with gratitude. We live in an amazing country and work in an industry that enables so many of us to lead the life of our dreams. Have a wonderful Thanksgiving, and we’ll see you next Tuesday!
- James and David
