Troubling sign for hottest housing markets?
Plus, Goldman Sachs makes its mortgage predictions
Using your superpower
“With great power comes great responsibility.”
We know that’s advice given to the superhero who fights crime in a spider suit and shoots webs out of his hands, but we think it also applies to real estate agents!
After all, we are our own bosses, and THAT is an awesome power and an awesome responsibility. It means we get to have the freedom to run our own business, but it also means we have to manage all sides of that business, especially the financials.
When we started in this business, we certainly weren’t prepared for that. We got our first paycheck we made in commission and spent the entire $100k without saving a single cent. We were in debt $50k even faster than a speeding bullet.
Scroll down to today’s Foundation Plans for some good tips on how to be your own boss. You may not be able to shoot webs out your hands or scale tall buildings in a single bound, but you will have peace of mind, and that might be the best superpower of them all.
- James and David
Goldman Sachs projects mortgage rates will remain high
Mortgage rates will remain high through 2024, dipping to just under 7% at year’s end. That’s according to the latest forecast released by Goldman Sachs. Here’s what to know:
Goldman Sachs projects high mortgage rates will keep homeowners on the sidelines, causing the housing turnover rate to fall to its lowest level since the 1990s.
This is why we say 2024 is going to be a challenging year for us agents. There isn’t going to be a home-price crash, but high mortgage rates are going to make deals hard to come by. Just like this year, it won’t be all doom and gloom. Deals will get done, and some markets will actually expand. But agents will need to be savvy, proactive, and work like crazy to cash in on those opportunities.
Rent prices fall for fifth straight month
Rent prices in the 50 largest U.S. metros dipped in September, continuing a five-month trend. That’s according to Realtor.com’s latest rent report. Here’s what happened last month:
The median rent in the metros analyzed was $1,757, down $29 from the peak in July 2022
Units of all sizes saw small declines, but two-bedroom units experienced the biggest dip.
The median rent for a two-bedroom unit was $1,934 a month, down 0.7% year-over-year, but still 26.3% higher than in July 2019
Regionally, the West Coast saw the biggest price drops
This is very good news. Rental prices are a big part of how the Fed calculates inflation. The more they fall, the faster inflation will continue its downward trend. Everything we know so far indicates that inflation is going down. We hope that it will fall below the 3% threshold by the end of 2024. It can’t come soon enough. Needless to say, we’ll be keeping a close eye on this for you.
Top metros with the highest sale cancellations
Home purchases fell through at the highest rate in nearly a year, as high rates gave buyers cold feet. That’s according to Redfin’s latest market update. But it wasn’t all bad news. Many homeowners opted to cash out, as they feared that elevated mortgage rates would reduce home prices. That caused the number of listings and sales to rise slightly.
Here are the metros that saw the highest percentage of cancellations:
Atlanta, GA – 24.4%
Jacksonville, FL – 24.0%
Orlando, FL – 23.6%
Tampa, FL – 22.7%
Fort Lauderdale, FL – 22.0%
San Antonio, TX – 21.2%
Las Vegas, NV – 21.1%
Fort Worth, TX – 21.0%
Miami, FL – 20.5%
Riverside, CA – 20.3%
It’s too soon to tell whether this is a trend, but it’s a troubling sign. It’s especially concerning that these cancellations are happening in some of the fastest-growing markets. In one sense, that’s expected since more cancellations will occur where homes are selling in big numbers. Still, if people are getting cold feet even in expanding markets, that’s not a good sign for the overall health of the market. We’ll be keeping a watchful eye on this.
The news that just missed the cut
How to turn Zillow landlords into listings
Mortgage News Daily’s Matt Graham explains why a housing crash is unlikely
The 10-year Treasury tops 5%: Here’s what that means for you
Use this to explain why having an agent is best when selling a home
The cities where homebuyers are making the largest—and smallest—down payments
Advice from James and David to win the day
As we said up top, we love this business because we get to be our own bosses, but that comes with great responsibility. Today, we’d like to offer you some tips on how to be your own boss and avoid the mistakes we made when we were starting out.
Create a monthly budget – The most important tip. Keep a monthly budget and set aside money for taxes. Your budget should include ALL of your expenses and income. Set aside roughly 50% for taxes, 20% for savings and investments, and 30% to live on. Do not skip setting aside money for taxes because the IRS will come for them eventually!
Prepare for retirement – Diversifying your investment portfolio is key to building a financial nest egg. We know so many agents who never save for retirement. It’s a terrible mistake. Invest your commissions to provide for yourself. If you need some advice on how to do that, we highly recommend looking up the work of Remit Sethi.
Find a good accountant – A lot of new agents avoid using an accountant to cut expenses. Don't do this! Think of your accountant as an investment in your business. You're paying for services that will help make you more money. Plus, accountants can be a great source of client referrals. You might even make more money back in the referrals they give you than you spend on their services!
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 a wrap on this edition of The Blueprint!
If you’re new to the Blueprint community, we want to hear what you think! What’s your take on today’s stories and tips? Send us a note with your comments, questions, or suggestions.
Thanks for reading, and we’ll see you back here on Friday!
- James and David