Will the first-time home tax credit actually help?

Plus, how to set achievable goals for Q2

Grace Townsley
March 29, 2022

How’s your Q1 shaping up?

Ready or not, it’s the last week of Q1! Did you hit your goals?

Every single quarter, we set mini-goals that lead to our big year-end goal. If you haven’t set your 2022 goals yet, that’s okay! But it’s time to start right now. Here are some Q2 and year-end goals you can consider this week: 

  • A sales goal with specific totals or the number of transactions you want to hit
  • A leads goal of how many new people you want to add to your database this year
  • A client ratio goal of how many buyers and sellers you want to close a deal with this year

Once you’ve set your goal, find someone to hold you accountable to those numbers. That’s what we do for each other. Every Monday morning, we get together to review our in-progress deals, talk about our follow-ups, and make sure we’re on track to finish strong. This habit is a huge reason we’ve been able to build our real estate business so quickly. 

- James and David

The real story about the first-time homebuyer tax credit

Source: Unsplash

Last spring, President Joe Biden proposed a $15,000 first-time homebuyer tax credit paid up front, instead of reimbursed at tax time like other kinds of credits. This was designed to help buyers afford rising down-payment costs. While the bill is still making its way through Congress, the industry is beginning to doubt how effective this credit will be. 

With inventory already historically low, flooding the market with another group of buyers could create another problem. It could push prices out of reach for the very people who need this tax credit the most. The better solution, according to NAR’s Chief Economist Lawrence Yun, is to keep the 1031 exchange. This policy gives builders a tax break for reinvesting their profits in the housing market, incentivizing them to continue developing.  

Our take

A credit anywhere is better than no credit at all. Will it change the market? We don’t think so. Will it help people and encourage them to go out and buy? Probably not. But if this bill passes, and your clients qualify for assistance, they shouldn’t pass it up. Something is always better than nothing. 

Where institutional investors are putting their money

Source: Apartment List

Before the Great Recession of ‘08, institutional investors mainly bought multi-family residences and commercial properties. But over the past decade, and especially the past two years, their sights have shifted. In Q3, 74.4% of real estate investor purchases were single-family homes. In Q4, 18.4% of homes were sold to investors. For individual investors and potential homebuyers, this shift has made home ownership and building wealth through real estate more difficult.

Our take 

Yes, it’s true that it’s becoming harder for the average buyer to purchase a home, but there are some positives here. The fact that institutional investors are pouring millions of dollars into the single-family home market shows their confidence in this sector. If investors are targeting this area, that means they see major potential growth, and you should too. 

Where is everyone going?

Source: Unsplash

It’s no secret that a historic number of people have relocated over the past couple years. If you want to know where they’ve been heading, check out these migration stats:

  • 4 of the top 10 fastest-growing metro areas between 2020 and 2021 were in Texas
  • The top three metro areas with the biggest population growth were Phoenix, Dallas, and Tampa
  • Maricopa County (which includes Phoenix) grew the most of any U.S. county, adding over 58,000 new residents
  • The three counties that saw the sharpest population decline last year were Los Angeles County, New York County, and Cook County (home to Chicago)

Our take

Take advantage of this movement. If you live near a burgeoning metropolitan city, take the opportunity to meet the new city-dwellers. Go to some cool restaurants, concerts, go make a name for yourself at the local spot, because now you know there are new buyers eager to learn more about your city. And if you live in one of those shrinking counties, don’t let the news get you down. These local markets are still incredibly strong because inventory is so low, so get out there and keep doing what you're doing.

Schematics 

The news that just missed the cut

Source: Dirt
  • Billionaire Marc Andreessen dropped $44.5M on this seaside Malibu home
  • What it’s like to live in a $65.8M residence in New York’s Central Park Tower
  • The unbelievable incentive Maine might offer to out-of-state buyers
  • Flock, a new startup, offers landlords more of the profits with none of the hassle
  • Simple tax tips for selling an investment property with a 1031 exchange
  • Why Shark Tank’s Barbara Corcoran loves today’s housing market

Foundation Plans

Advice from James and David to win the day

If you’re a brand-new agent, there are a few things you should do right after you pass the real estate exam and join a brokerage. We recommend taking these steps:

  • Make sure everyone and their mother knows you’re a serious agent. Update your social media handles, put it on your LinkedIn, get business cards, or even put a bumper sticker on your car if you want to! 
  • Meet the agents in your area and find a mentor as soon as possible
  • Start sitting open houses every single weekend
  • Find your target area. Figure out who you want to work with and where you’ll find them.
  • Hit the books! You want to have an answer for every question that comes your way, especially when you’re new and you don’t have a lot of experience to lean on yet. 

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

Source: Rocket Mortgage

We love reading and responding to your questions each week. Keep sharing here and we’ll keep answering, every Friday! 

And just in case you need a little extra motivation to end this quarter on a strong note, we’ll leave you with this thought:

“Successful people do what unsuccessful people are not willing to do. Don’t wish it were easier; wish you were better.” - Jim Rohn

See you on Friday.

- James and David

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