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Staggering data on newly-built homes
Plus, the nine-figure home sale boom
Rinku Mathew
February 02, 2024
Real connections
One of the biggest stories of the past year has been the rise of Artificial Intelligence. Experts are predicting that everything we see will have been generated by a computer, from emails to movies to real estate newsletters (...don’t worry… it’s still us humans writing this)!
While these new programs can help us with our day-to-day, there are some things they can’t replace. In fact, they can’t replace our most valuable asset–our ability to form real connections with our clients, and our prospective clients.
In today’s Foundations Plans below, we discuss how to properly use follow-up e-mails to forge these connections. It’s something that A.I. can’t do… at least not yet. We think it’s good advice, especially now, as more people are ready to jump back in the game.
With that, we jump into a fresh edition of The Blueprint!
- James and David
Active listings are up nearly 8%
Source: Realtor.com
Home buyers in the U.S. got a much-needed boost to start 2024, as both new AND active listings increased in January. That’s according to Realtor.com’s latest market update. Here are the key data points from last month:
There was a 7.9% increase in active listings, YOY, the third straight month of annual inventory growth.
There was a 2.8% increase in new listings
The highest increases in new listings were in Denver (+21.3%), Seattle (+20.6%), and Miami (+20.2%)
Homes spent a median of 69 days on the market, a four-day drop from last year and a 13-day drop from January 2019.
Our take
Well, the good news just keeps rolling in this year! This is the first report we’ve seen where both new listings AND active listings have increased year-over-year by a substantial amount. Of course, these increases don’t come close to pre-pandemic norms, but this is still excellent news for buyers. Even with the Fed holding interest rates steady, the 30-year fixed mortgage rate actually fell to 6.63%, the lowest point since December 27th. With buyer purchasing power up, it’s little wonder that houses are selling faster than they were in 2019!
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Nearly one-third of homes for sale are new builds
Source: Redfin
According to Redfin, 31.8% of U.S. single-family homes for sale nationwide were new construction in Q4, comparable to 31.9% last year. For perspective, 34.5% is the highest share of any quarter on record in Q1 2022.
Not only are home builders offering below-market mortgage rates right now, but they’ve also increased the price of starter homes. In 2022, 42% of new single-family homes sold for $500,000 or more, up from 30% in 2021 and 18% in 2020.
Our take
Just look at the graph. Ten years ago, newly-built homes barely accounted for 10% of the homes sold. Even before the Great Recession, during the housing boom peak, they topped out at around 17% or 18%. Now they account for nearly a third of the homes sold in the nation. That’s a staggering amount. This just demonstrates why every agent needs to incorporate a developer and homebuilder component into their overall strategy. Otherwise, they’re leaving massive amounts of commissions on the table.
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Nine-figure home sales are skyrocketing
Luxury home prices nationwide have soared over the past decade. In 2023, the median sale price for a luxury home nationwide—i.e., homes in the top 5% of the market—was $1.14 million, up 75% compared with 2013. That’s according to the Wall Street Journal’s recent update on the luxury and ultra-luxury home market. The Journal reports some amazing facts:
Since 2020, there have been 24 homes nationwide that have sold for $100M and up. By contrast, 19 homes sold for $100M and up between 2011 and 2020 COMBINED.
Megadeals have increased because the number of ultrawealthy individuals has increased. There were 3,194 billionaires in 2023, up from 2,170 billionaires in 2013.
Here’s a breakdown of where all the $100M deals happened and how many:
Los Angeles – 9
Palm Beach – 9
Hamptons – 6
Malibu – 5
New York – 5
Connecticut – 2
Montana – 2
San Francisco – 2
Hawaii – 1
Miami – 1
Our take
The Journal has done us a huge service with this report. Study the report and each of the transactions carefully. Really understand how the deals got done. What was the financing? How did the transaction happen and why? To play in the ultraluxury market, you really need to be keyed into all people who can play at this level, from the sellers to buyers to developers to financiers, etc.. In addition to knowing your stuff and working like crazy, a lot of success in real estate has to do with who you know. That’s especially true in the ultra-luxury market. There is no way around it. There’s only a select number of people in the world who can buy nine-figure homes and up.
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Schematics
The news that just missed the cut
Sarasota: https://bit.ly/3qdGSEy
BAM Pro Bowl 2024 – Get your FREE virtual ticket to attend "The Super Bowl of Real Estate Knowledge"
Keller Williams settles in Sitzer/Burnett
What the Fed’s latest “hold” decision means for the housing market
Google Larry Page’s $32M 300-acre private island
Celebrity homes before and after they got famous – the difference is amazing!
Foundation Plans
Advice from James and David to win the day
In our last edition, we offered you some tips on cold emailing. Today, we’d like to offer you some tips on how to email follow-ups effectively. Both are equally important because your potential clients will likely not be ready to make a deal the instant you reach out to them. The relationship has to be nurtured and built over time. Here are steps you can take:
Follow up with a purpose – When you follow up with potential clients, don’t do so aimlessly. Don’t write vague and non-descript things like, “Hey, thanks for coming in! What can I help you with? Are you still searching? Anything I can do to help you?” Instead, be focused and add value. Share a new listing, a new comp, or information that is either newsworthy or relevant to your client. Real estate is a people business, and the currency is timely and usable information. Be the broker who provides that on a consistent basis.
Follow up without expecting a response – View follow-up emails like newsletters. Don’t approach them with the expectation that you’ll get a response. Obviously, it’s great if you do. But the point of these emails is to stay connected. You want to be the one they think of when your potential client is ready to buy, lease, or sell. But if you’re out of sight, you’re going to be out of mind. So stay in touch with follow-ups. Only quit when the client proactively unsubscribes or tells you that they went with someone else or in a different direction.
Personalize the follow-up – There are a lot of things that can be automated in real estate, but your follow-ups shouldn’t be one of them. They should be tailored to your client’s interests, needs, and wants. Not all your leads will expect, or even want, daily or even weekly emails. Customize follow-up frequency based on where they are in the real estate buying/selling process. Discern how frequently you reach out, and why you’re reaching out. Are they taking steps toward selling their home? Are they actively searching for their next home? Are they willing to meet in the next 6-12 months (or weeks) to discuss strategy? After you’ve sized them up, send personalized emails and provide information tailor-made for them. Trust us, this works!
To learn more about how to follow up with your leads and clients, listen to this.
The 1% Blueprint
An on-demand course created by James & David
Discover our strategies and techniques to attract a stream of high-quality leads, propelling your real estate business to new heights of success.
For Blueprint subscribers, the course is 30% for a limited time. If you’d like to take our course to learn how to become the top 1% of your market click here!
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
That’s it for this edition of the Blueprint!
Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!
Thanks for reading, and we’ll see you back here on Tuesday!
- James and David
