Now here's another question that a lot of us are getting:
Is the market turning into a buyer's market?
This is really a market-by-market conversation. But I will tell you that we could easily have a situation in a lot of markets where you actually have a couple different markets within the larger market.
Here's what that means:
Markets aren't just one thing. They are a whole list of price bands, right? So you have lower tier price bands, mid tier price bands, and higher price bands. And in your market, as the market is transitioning, it's not all one thing. So you could have a lower tier price band that's still a strong sellers market. Lots of demand because that's where first time home buyers go, right?
But then as you move up the ladder, you might see that at the higher tiers—the luxury housing, for instance—that it is a buyer's market.
So what's the defining factor here?
You gotta ask yourself, how do I...
Here's an interesting question that we often get:
If I buy a house and sell a house in the same market, am I gonna give up some equity? Am I gonna make a mistake by doing that?
Well, generally when you're buying and selling a house in the same market, you're not gonna have any equity loss because you're just moving money from one house to the other. And actually in our current market, we have something kind of unique happening in a lot of areas of the country. Really it's a tale of two markets or maybe three markets.
But when you look at your market, it's not just one big market, right? It's broken down by price bands. And there's some price categories that are much hotter. They're much more active. People are much more engaged and that would typically be the lower price categories, right?
The first time home buyer categories. But as you move up that ladder to the second per home purchase, so maybe the starter luxury and the real...
What is the meaning of measuring market intensity and why does it matter?
Market intensity is an interesting way to look at the market. I was given this idea by my friend, Lennox Scott. So when we look at market intensity, the way we measure it is by how fast listings are going pending the first 30 days they hit the market. So if we go back in time and look a year ago in a lot of markets across the country, when you look at how many listings were going pending in the first 30 days, it was like 80%, 85%, 90% of listings were going pending at that point.
Fast forward to today: What's that market intensity reading? I'll tell you what mine is. For the last two weeks, in my local market that number is 60%. 60% of listings are going pending in the first 30 days.
It's still a high number. It's a lot, but it's not 80%. It's not 85%.
So that market intensity comes down a few notches, and that's the conversation we need to be...
After 15 years of being a part of the legal industry and working for several national and local non-profits Susana Medrano decided to make a change in her career path. She decided the best way to impact people's lives was to help families with their housing needs. In her first full year in the industry she closed 45 transactions, in her second year she led her firm in closed transactions, and in her third year she formed a team. She has since gone on to lead her team to nearly a 1000 transactions closed a year and is continuing to impact agents through her training and coaching skills.
Why should a buyer buy a home in today's market?
If we don't know the answer to that, then it's gonna be a struggle to talk to buyers about why they should buy. Because everybody thinks they should wait:
"Shouldn't I wait for prices to come down? Shouldn't I wait for interest rates to come down? Shouldn't I wait for the recession to kind of come and go?"
There's gonna be a lot of those mindsets. And we have to be able to answer the question: "Why should I buy now?"
And really we have to sell ourselves first before we sell anyone else. So I'm gonna give you four reasons here that someone should consider buying now as opposed to waiting or not buying at all.
1. Some sellers are panicking.
Why are they panicking? Because they put their home on the market yesterday and they expected just to get overrun with buyers. Then maybe two or 3, 4, 5 days goes by and they still don't have multiple offers. They don't even have very many...
There's a new survey that was done by the National Housing Survey, which was just done in June. So it's fresh data. And it shows a divergence that we haven't seen probably in the last 10 years or more.
It shows how many people think that the economy is on the wrong track:
81% of Americans believe the economy's on the wrong track.
So when you look at that number and we put it in perspective of people that are buying and selling real estate, how do we have that conversation? Where people think, oh my gosh, we're on the wrong track. I don't know that I should be buying.
We call that consumer sentiment. Or I don't know if I should be entering this real estate marketplace.
What can we say?
How can we address that concern where people think it's the wrong time to enter this market?
Well, a good lesson for us is to model successful people. People that are more successful than us, right?
One of the most successful people in our...
Date the rate. Marry the house.
Now, what does that mean? That means that if we went back in time to a year ago, the market was a completely different animal. Right?
A year ago, buyers that were in the marketplace were experiencing multiple offers on every listing. They were being asked to sign escalation clauses that would maybe sometimes mean they were paying 10, 20, 30, 40, 50, a hundred thousand dollars more than the list price. People are being asked to do appraisal waivers, inspection waivers, appraisal gap language, non-refundable earnest money.
It was an incredible time to be a buyer in what we might call a frenzy market.
Now, fast forward to today:
The market's undergoing a complete shift, right? And what that means is there's a lot more to choose from. There's a lot more listings on the market. List prices are coming down in a lot of price categories. We're seeing a lot fewer buyers in the market. So that means that the...
With over 8 years of experience, 450+ homes sold, over 100 million dollars in real estate negotiated and a ranking in the top 1% in the area for 6 years in a row all by referral, Garrett brings substantial experience and expertise to his team and their clients. Come listen to this amazing podcast as Garret breaks down his Perfect 36 strategy in detail and how it delivers over 50 closed transactions a year consistently with a database of only 300 clients. Learn how he manages his team including his ‘Lead’ agent strategy and how he hands off clients seamlessly to his team members while staying close to them throughout the transaction.
New study out from the Mortgage Bankers Association shows that ARM demand has reached a 14-year high.
And now what's an ARM?
An ARM is an adjustable rate mortgage.
A lot of you that have entered the business over the last 10 years may have never used an ARM.
They became almost invisible for many, many years. Why? Because we've had the lowest interest rates in history. No one would bother doing an ARM. But over the last quarter, just to here in 2022 ARMs have gone up to a 14-year high.
So an ARM is an adjustable rate mortgage. Generally, it's set interest rate for the first 3, 5, 7 years. And then it resets based on the current rates of that time. There's a cap on it. Every loan's a little bit different, but here's some examples of what that looks like:
Right now, as I'm talking to you today...
The current interest rates are about 5.5% while the ARM rate is about 4.5%. So people are getting about a 1% discount for going into an ARM...
A stat from a Zillow study that came out shows that 30% of Americans have cited climate change as a reason to move in 2022.
Now, I think about that and I reflect on my own market where I live here in Southern Oregon. And I think, well, a lot of people wouldn't consider this being a climate change issue here, but it is.
You see, we've had, and we've been surrounded by fires for the last four or five years in our community. And those fires create smoke. And it creates a situation where people don't love going outside during the summer, one of the best times to be outside. Coupled with the fact that last year we had a fire rage through the entire city and burned down 2,700 homes. I had three duplexes burned down myself.
So when people have that experience, it's very detrimental. They are in fear of it. Of course they might think about moving. And a lot of people did move away because of that.
Or think about your...
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