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Top 10 cities for all-cash deals
Plus, mortgage rates falling faster than expected
Rinku Mathew
January 30, 2024
Cold-Emailing
As the market keeps heating up and mortgage rates keep heading downward, we know agents across the country are doing whatever they can to find clients and generate leads.
We’ve discussed a bunch of different methods in this newsletter, and today, we’re focusing on one that can send shivers down the spines of even the most seasoned agents: cold-emailing.
We know the process can seem strange and downright unpleasant, but there are strategies that can make it a little – how should we say – less weird. Scroll down to today’s Foundation Plans and we’ll give you our best tips for getting started.
With this new year starting off strong, there’s a lot of momentum for all of us to hit the ground running, so let’s stop at nothing to find new business and close some deals!
- James and David
Home price growth starts the year strong
The median U.S. home-sale price rose 5.1% during the four weeks ending January 21, the biggest increase since October 2022. Asking prices rose 6.5%, also the biggest increase in more than a year. That’s according to Redfin’s latest housing market update. Here’s what else it reports.
2% rise in new home listings YOY
-4% decline in total active listings YOY
4.7 months of supply available on the market, up 3% YOY
27% of pending sales under contract within two weeks
23% of homes sold above the final list price
45 days to sell a home (median number of days)
Our take
Home prices are rising for a particular set of reasons, like low inventory. Although the number of new listings is up, the total number of homes for sale is still down 4%. But, interestingly, it’s still a seller’s market. Falling mortgage rates have given buyers more purchasing power. They can bid more for homes without sellers having to come down as much. That’s why 23% of homes are still selling above ask. Don’t miss out on this moment. There are deals to be made here. Get in the game!
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Mortgage rates forecast to fall faster than expected
The rate on a 30-year fixed mortgage is expected to fall to 5.5% at the end of the year, according to Bloomberg’s survey of 236 economists and other real estate professionals. If it pans out, that’d be more than a full percentage point decline from its current level of about 6.69%, and the first annual decline after three straight years of gains.
Fannie Mae, likewise, has just revised its 2024 mortgage forecast. The company now expects that the 30-year fixed mortgage rate will fall to 5.8% by the end of the year.
6.4% in Q1 2024 (previously 7.0%)
6.2% in Q2 2024 (p: 6.8%)
6.0% in Q3 2024 (p: 6.6%)
5.8% in Q4 2024 (p: 6.5%)
Our take
As much as we are excited about these projections, we’re a little more cautious. We think it’s most likely that mortgage rates will remain in the 6’s throughout all of 2024 and then only dip below that barrier in 2025. We know that’s what a lot of people want to hear, but this is all still good news. And if we’re wrong, we couldn’t be happier. Everything is heading in the right direction, and we should all capitalize on this opportunity.
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Top 10 metros for all-cash deals in 2023
On average, 38% of all deals done nationwide were done in cash last year, up from 36.1% in 2022 and 33.5% in 2021. That’s the main takeaway from ATTOM’s latest Year-End Home Sales Report. Here are the top 10 metros with the highest percentage of all cash deals.
Macon, GA – 61.5%
Naples, FL – 58.9%
Myrtle Beach, SC – 56.3%
Youngstown, OH – 55.1%
Salisbury, MD – 54.4%
Lake Havasu City, AZ – 52.9%
Syracuse, NY – 52.8%
Cape Coral, FL – 52.2%
Gainesville, GA – 52.2%
Prescott, AZ – 51.5%
Our take
It doesn’t surprise us that all-cash deals rose last year, given that mortgage rates topped out at 8%. Some of these figures, though, did surprise us. More than 60% of all deals in Macon, GA were all-cash. That’s an amazing stat. Either there is a robust investor presence there, or that metro’s market is extremely competitive. Since mortgage rates are dropping, we believe that the nationwide percentage of all-cash deals might dip to 2022 levels. Even so, that’s still a lot of all-cash deals being done. Enterprising agents should mine the sales data of these transactions to see if these buyers – who are most likely investors – are willing to make purchases in their metros.
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Schematics
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Foundation Plans
Advice from James and David to win the day
Cold-emailing can be scary, strange, and uncomfortable. However, it’s an essential tool that can truly help grow your business. Today we’d like to offer you some tips on how to be more effective when you cold-email. If you follow these steps, and just keep doing it, we think it’ll go a long way to easing that discomfort.
Do your research and personalize it – Research the property and potential seller before reaching out. In your initial communication, include specific details about their home or neighborhood to demonstrate genuine interest. Mention personal experiences, like trying coffee shops or restaurants in the area, to connect on a more personal level. Also, incorporate client interests in the neighborhood to make your emails more engaging and appealing.
Make sure to add value – Demonstrate expertise with insights on the current real estate market, trends, and recent sales in their area. This establishes trust and receptiveness. If you've sold in their neighborhood, share specific successes for a personal touch. Market values fluctuate frequently. So, let them know why you are sharing these market trends with them now to give them a sense of urgency.
Establish trust – Clients want to know that they can trust you with their business. Don’t be timid. Share success stories, testimonials, or case studies that highlight your ability to deliver results. Most of all, if you have former clients who can share their stories about the successes you’ve had together, that will go a long way toward building that foundation of trust.
Offer a No-Pressure Consultation – After expressing your reasons for reaching out and demonstrating personal interest, include a call to action offering a no-pressure consultation. Emphasize your genuine desire to help potential sellers make informed decisions about their property. Assure them of your commitment to guidance, whether they decide to sell now or in the future. Convey a long-term relationship focus, maintaining a casual yet professional tone in proposing a consultation over coffee or lunch in the neighborhood as a potential starting point for a great client relationship.
Start here if you want to learn more and get some templates, and listen to how our fearless teammates Vinny and Kris used cold-emailing to get success. Don’t overthink it; just do it!
The 1% Blueprint
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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
We know that both cold calling and cold emailing put agents off. But we can’t urge you enough to stop limiting yourself. 80% of your time as an agent should be spent generating new business. Your life as an agent should be about lead generation, presenting, negotiating, and closing. Send us a note with your comments, questions, or suggestions whether you agree or not. We love hearing from you.
That’s it for this edition of the Blueprint. We’ll see you on Friday!
- James and David
