February 25, 2022
Welcome new subscribers!
For those of you new to The Blueprint Community, we thought we’d break down why we started doing this newsletter in the first place.
Now we’re learning this whole newsletter thing as we go. So if you think we’re missing important info, or you just plain don’t like what you’re reading, reply to any of these and tell us! We have thick skin. We’re Brits. We can take it.
- James and David
Rising mortgage rates will pose a challenge for some buyers, likely leading to less demand. That’s why we’re paying close attention to the latest report from The Mortgage Bankers Association, which just released some surprising numbers:
Our gut says mortgage applications are slowing down because there’s just nothing available for people to buy right now. Low inventory plus higher interest rates are creating a perfect storm. Many people desperate to buy either can’t find a property or can’t afford the rising mortgage costs. Despite this report, it’s still a good time to buy. Rates are still historically low.
The competition isn’t just heating up, it’s boiling over. Last month, a record-breaking 70% of offers submitted by Redfin agents faced at least one competing bid. Since many buyers found themselves priced out of the single-family home market, the competition for lower-priced townhomes was through the roof.
Here are the five most competitive cities in January (the percentage references how many offers faced at least one competing offer):
As home prices keep rising and it’s quickly becoming harder to get a loan, people are flooding the market right now. The market was already incredibly tight, but January was just on another level. We’re expecting bidding wars to be the norm for a while, especially with the Fed’s interest rate hike looming.
The biggest competition for local buyers isn’t coming from anyone in their neck of the woods, it’s coming from out-of-towners. According to Bloomberg, non-resident homebuyers have nearly 30% more money to put on a property than locals. In fact, of the 49 markets surveyed, only seven had residents with bigger budgets than newcomers.
These are the top three markets where non-locals have significantly higher budgets than residents:
These numbers show you should make way for out-of-town buyers. While they may have extra cash, they are going to need more hand-holding and education on the local market. That’s such an important role you play as their agent! Everything’s going to be unfamiliar to them, so you can earn their trust (and calm their nerves) by showing them how you understand the area better than anybody. It may not be their home yet, but you can make them feel at home.
The news that just missed the cut
Advice from James and David to win the day
Earlier this week we talked about how your relationships with other agents can absolutely make or break your business— and your bidding wars. How do you build and maintain the key relationships you need to succeed?
You asked, we answered!
Q: I’m currently studying for the real estate state exam. What advice do you have for a new real estate agent who doesn’t yet have a mentor?
- Nikki D., Los Angeles
A: Get a mentor as soon as you can. Find another agent whose style you like. If you can’t find a mentor, study your local market in and out. Go find areas you like, go learn about the recent homes that sold. Study Redfin & Zillow and use all the free resources you can. And, of course, keep reading The Blueprint! We’re here for you.
What are you wrestling with in your RE career? Please, let us help! Drop your questions here.
Keep the latest industry data in your back pocket with today’s mortgage rates:
Thanks for reading today’s Blueprint! We’ll be back here on Tuesday rounding up the top stories and tips of the week. Enjoy your weekend!
- James and David
The Blueprint is the free newsletter that keeps you up-to-date on the world of residential real estate. Powered by James Harris & David Parnes