Top 10 cities with most price reductions
Plus, insight into mortgage rate changes
July 19, 2022
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- James and David
Where prices are plummeting fast
During the pandemic, several cities saw almost unbelievable price increases. However, Redfin reports that as mortgage rates and inventory rise, that historic price growth has become unsustainable. In many previously booming cities, sellers are readjusting their list prices.
Here are the 10 cities that saw the most price reductions in June:
- Boise, ID - 61.5%
- Denver, CO - 55.1%
- Salt Lake City, UT - 51.6%
- Tacoma, WA - 49.5%
- Grand Rapids, MI - 49.3%
- Sacramento, CA - 48.7%
- Seattle, WA - 46.3%
- Portland, OR - 45.7%
- Tampa, FL - 44.5%
- Indianapolis, IN - 44.1%
In these cities particularly, the market was way too one-sided. It just wasn’t healthy for the local economy to experience such a drastic price swing in that short of a time. Now that these buyers don’t have to compete with 30 other bidders, they can actually find a property that fits their needs. We believe that, while these adjustments are uncomfortable, they are necessary for a strong local housing market.
Inventory is trending upwards
Today’s buyers may be facing high prices, but they’ve also got more options. With inventory rising and price growth slowing, buyers are getting some much-needed negotiating room.
- In June, the number of homes on the market jumped 2%, the most since July 2019
- At the same time, home sales fell almost 16% YoY
- The median sale price dropped 0.4% in June to $428,400
The best thing you can do for your buyers is to get them pre-qualified so they know their exact spending power. Run the numbers for them at least twice a week so there aren’t any surprises when they’re ready to make an offer. Even though it’s becoming a more balanced market, remind your buyers to be patient. There’s still a shortage of inventory, so they may not get the first property they want.
Why mortgage rates change day-to-day
In the past month, interest rates have fluctuated between the low-to-mid 5% range and 6% or more. These major swings mean some buyers may be able to afford their dream home on Monday, but be priced out by Tuesday, at least until rates swing back down again. What’s behind these wild rate changes?
- Mortgage rates tend to spike right after the Fed raises interest rates. While the two aren’t directly linked, higher interest rates do have an indirect impact on mortgage rates.
- Two other factors also put upward pressure on mortgage rates:
- The Fed winding down its mortgage bond purchasing activity
- Lenders raising their fees to make up for the drop in refinances
- An increasing number of investors are buying up mortgage bonds to hedge against stock market volatility, which tends to push mortgage rates back down and adds to the volatility
The Fed has already signaled that it is going to raise rates again later this month. Encourage your buyers to lock in their interest rate NOW. If they go into escrow in the next few days, they’ll be protected when rates respond to the Fed announcement. Tell your buyers–if there’s a home they like, the best thing they can do is lock in their rate fast.
The news that just missed the cut
- This Scottsdale mansion comes with a custom Wiffle Ball court
- Not to point fingers, but millennials might be causing inflation
- The late Rush Limbaugh’s estate comes with a $175M price tag
- How to make passive income renting out garages
- Rental rates in NY set another sky-high record
- 9 ways to invest in real estate for retirement
Advice from James and David to win the day
Want to make real estate social content that actually stands out? The kind of content that brings in new leads, expands your local reach, and builds your referral network? Check out these three tips:
- Tailor your content to your dream client. Don’t market yourself to everyone. Just think about who you want to work with most and make the kind of content that audience likes.
- Deliver your content the right way. Once you know the audience you want to reach, do some research to figure out the best way to deliver your content. Is it through social media? YouTube videos and blogs? Weekly emails? Or even text and phone calls? Nailing your delivery method is just as important as making valuable content!
- Add eye-catching visuals. You could have the best content delivered in just the right way, but without great visuals that capture your audience’s attention, they’ll scroll right past it. Invest in bold graphic designs, use high-quality filming, and look for attention-grabbing backdrops.
For four more high-impact real estate content tips, check out this short video.
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Need an extra dose of motivation to get out there and get it done this week?
Remember that real estate isn’t just a job that pays the bills. It’s your opportunity to help someone find the home in which they’ll make a decade’s worth of memories. It’s your chance to help an investor reach their biggest financial goals and support their family along the way. You’re positioned to help your sellers move closer to their dream job, their grandkids, or the next phase of their lives.
This is so much more than a job. It’s a lifestyle that has lifelong impact. So be proud of your position and get to work!
- James and David
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