Laying low

I love the change of pace on a holiday weekend. July 4th was a great chance to catch up with my friends and family and just lay low. I (James) recently purchased a new home and our backyard is finally finished. I love nothing more than spending time swimming with my girls.

I was so grateful to have a couple days to put the phone down, turn off my brain (kind of), and just enjoy what matters most.

Hope you had a great holiday too!

- James

Home prices hit another record

June housing data is already rolling in and we’re watching an interesting trend: inventory rising right alongside prices. Here are some interesting stats from last month.

• The number of active listings jumped 18.7%, the fastest pace since Realtor.com started tracking the metric. This amounts to 98,000 more homes for sale every day compared with the same time last year.

• The cities with the most new listings include the previous hotspots of Austin (+145% YoY), Phoenix (+113%), and Raleigh (+112%).

Our take

It makes sense that as prices go up, so does inventory. Sellers realize now is the time to sell while they can still get a great price for their property and interest rates don’t price out another group of buyers. Take this opportunity to reach back out to your clients who have been hesitant to buy. They have so many more options today.

Time on market increased in May

Buyers can finally catch their breath… well, kind of. As of May, homes spent an average of 31 days on the market nationwide, and while that still doesn’t give your buyers much time, it’s 10 days longer than back in January. 

Realtor.com compiled this list of the top 5 cities among the 250 largest metro areas with the shortest and longest time on market in May: 

Shortest

1. Manchester, NH | 8.5 days

2. Raleigh, NC | 9

3. Rochester, NY | 10

4. Denver, CO | 10

5. Burlington, VT | 11

Longest

1. Houma, LA | 58.5 days

2. Utica, NY | 55

3. Iowa City, IA | 51.5

4. Charleston, WV | 50

5. Salisbury, MD | 49.5

Our take

Interest rate hikes always cause a temporary sticker shock that impacts days on market. Buyers will pull back for a bit right after rates adjust, until they get used to the new number. We’re seeing that happen right now in our own business. Demand has already picked back up as buyers accepted that 5%+ interest rates are the new normal, and actually aren’t even that high.

People just don’t vacation (home) like they used to

During the pandemic, people went wild for second homes, but after two significant demand spikes in spring 2020 and late 2021, demand for vacation homes is on the decline. Here’s what’s happening in the second home market: 

• In March 2021, demand peaked at 90% above pre-pandemic levels as buyers snapped up homes-away-from-home

• This May, demand for second homes dropped below pre-pandemic levels for the first time in two years

• According to Redfin, this sharp drop is partly caused by the government’s new loan fees (which add around $13,500 to the cost of buying a $400,000 vacation home), plus higher interest rates and stock market volatility

Our take

We’re not surprised that second home demand has dropped. Everyone who wanted a vacation home already got one while interest rates were historically low. Second homes are more of a want than a need. Now that rates are going up, people are putting their money towards other wants (or investment properties).

Schematics 

The news that just missed the cut

• Inside LeBron James’ real estate portfolio

• According to this report, the next market trend might be too much inventory

• Should you buy right now? Take this quiz to find out

• Homeowners pulled a record-setting $82B in equity last quarter

• Simple tips to help your clients save $$ on their utility bills 

• 22 YouTube channels agents should subscribe to right now

Foundation Plans

Advice from James and David to win the day

Are you a career changer trying to break into the real estate industry? These tips will help you ramp up your business quickly and effectively, using the skills and knowledge you already have.

1. Be choosy about your brokerage. The first brokerage you work with can make or break your real estate career. Find one that’s supportive, offers lots of resources, encourages continuing education, and has a great local reputation. 

2. Hit the ground running. Your #1 priority as a career changer should be building up your list of prospects. Reach out to your old contacts and networks, talk to your friends and family, and post on social media. Anything you can do to get your name out there quickly!

3. Learn from your team. Anytime you have a free moment, ask to shadow your partner agents. Go to their open houses, help them on listing appointments, and sit in on their negotiations. This follow-by-example training is absolutely invaluable. 

Want more tips like this? This article has great advice from a 42-year-old career changer who now has a successful real estate business. If he can do it, you can too!

Just in Case

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

What do you want to see more of in The Blueprint? We want to know! Hit reply and send in your best ideas. This newsletter is all about helping you be better, stronger, and more successful. So tell us how we can help!

- James and David

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