New market predictions from Fannie Mae and Zillow

Plus, this trend could solve the housing shortage

Grace Townsley
March 11, 2022

My pre-appointment ritual

Do you have a pre-appointment ritual to get yourself in the zone? I do. Before every showing, I listen to some music and make sure I’m totally focused on the moment and freed from other distractions. And yes, I do have a pre-showing hype-up playlist! My friend P.K. just created this fantastic list I’ve been listening to non-stop for the past two weeks (scroll to the bottom for that link) and the music helps me get into the winning mindset.

The showing I have coming up this weekend is pretty significant for us because it’s a $70,000,000 home. But when you’re at a really expensive house like this one, the mindset and the process truly don’t change. My job is to offer my clients the absolute best service and experience possible, no matter if they’re spending $350,000 or $350,000,000. The only real difference is a few extra 0’s.

- David

Fannie Mae and Zillow raise their expectations

Source: Unsplash

At the beginning of the year, Fannie Mae thought 2022 home prices would rise 7.9%. Zillow expected growth of 11%. But only two months in, both companies are raising those numbers. Now Fannie Mae is predicting growth of 11.2% YoY, while Zillow has upped their estimate to a staggering 17.3% price rise over the next 10 months. 

Fannie Mae believes home prices will keep on slowly rising into 2023. The firm now predicts price growth of 4.2% next year. That’s a sharp deceleration from 2021, but it still represents a painful price increase for buyers already locked out of the market.

Our take

Why are these big industry firms raising their predictions? They all expected higher interest rates and more inventory would slow down demand. But look around! We’ve got even less inventory than ever and a huge rush of millennial buyers trying to lock something down before rates go up. No wonder they upped their predictions. All signs point to a strong 2022 and 2023 for the housing market. 

A staggering stat on home value

Source: Unsplash

We know home values are skyrocketing, but this stat shows just how insane the market has become. Right now, a record 8% of U.S. homes are worth $1M or more. 

You won’t be surprised to learn where a huge portion of those homes are. California is home to 7 of the 10 cities with the most million-dollar houses. 

This is the current top 10:

  1. San Francisco, CA
  2. San Jose, CA
  3. Anaheim, CA
  4. Oakland, CA
  5. San Diego, CA
  6. Los Angeles, CA
  7. Honolulu, HI
  8. Seattle, WA
  9. New York, NY
  10. Oxnard, CA

Our take

This goes to show – the value of real estate will always go up over time. Buyers may get sticker shock, but this is where you can remind them that it’s a sound investment. Buying a home is one of the most important, and potentially lucrative, investments anybody can make. That house often becomes their retirement plan. Yes, buyers may have to pay more upfront this year, but in the long run, the value is absolutely there. 

Is 3D-printing the future of housing?

Source: Austin Inno

House Zero,” a 3D-printed Austin home is set to debut next week at South by Southwest (aka SXSW for the hip crowd). This 2,000-square-foot home and its 350-square-foot guest house took only eight days to print. Yes, you read that right! 

3D printing is becoming a low-cost, low-waste, low-labor way to build a home. This trend is led by ICON, the first 3D ready-to-own home printer in the world. As their technology becomes more widely available, it could be a promising solution to the affordable housing shortage.

Our take 

These 3D homes are such a cool concept. Truly brilliant. Alternative building methods are great for the market, as long as the quality is there. They help ease the inventory shortage and give us agents more opportunities to close deals. And imagine if you became the go-to agent for one of these builders? That could become a hugely profitable niche. They should model the homes that have the most bidding wars in big cities! Always keep an eye on emerging trends like this!

Schematics 

The news that just missed the cut

Source: Studia 54
  • Need design inspo for your next home staging? Start here
  • These top 100 tech companies are changing the real estate game
  • Propy.com’s Adam Brown explains Web 3.0 and real estate in simple terms
  • This might be the biggest real estate Ponzi scheme of all time
  • 75% of NAR survey respondents say this is the most important part of their home
  • New USC Coach Lincoln Riley paid $17.2M for this LA estate

Foundation Plans

Advice from James and David to win the day

Last week I (James) had the opportunity to share a bit of my story and talk all things real estate with Adam Mendler, host of the podcast “Thirty Minute Mentors”. Here’s the short version of that interview:

  • My best sales tips: Sales come from the heart. Be real and authentic in everything you do. People can tell when you’re truly passionate and when you’re just phoning it in. 
  • How to close deals: Be flexible because things can (and probably will) come up between now and closing. Know how to read your client and how to relate to them. 
  • What to do when you’re rejected: Use every “no” as motivation to chase the next yes! Be like a boxer and get up again and again, no matter how hard the punch was. 
  • Developing a winning mindset: Put in the work and be willing to dedicate yourself to this career. It’s not easy, but the personal, professional, and financial rewards are worth it!

Want more? Listen to the full podcast here.

Q&A

You ask, James and David answer!

Q: I just passed the real estate exam a couple of weeks ago. I already have some big potential listings lined up, but I’m struggling to find a brokerage. They just won’t call back! How can I get the attention of the brokerages I’m hoping to work with? 

Jeff, The Blueprint reader (California)

A: Congrats on passing your exam! Here’s how to get noticed by brokerages: 

Be hungryShow them your passion and commitment to this career

Prove your worth. Bring them a portfolio of those leads you already have lined up, proving your value as a new agent 

Tell them why you’re differentIf you’re coming into this job with significant related experience, share it! 

Keep knockingBe persistent in your follow-ups with these brokerages. Don’t take “I’m busy” as an answer. Keep calling, keep stopping by, and keep asking for a chance.

James and David

What do you need to know to make the most of the last two weeks of March? Ask away, here!

Just in Case

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

Source: Rocket Mortgage

We’ve been talking a lot about mentors lately. In this business, it’s so important to have someone you can follow, learn from, brainstorm with, and lean on when you have a tough go of it. If you don’t already have a mentor, we challenge you to find one this weekend. Reach out to a fellow agent and just ask! Remember, us agents are better together. 

- James and David

P.S. Check out P.K.’s pre-appointment hype-up playlist here.

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