We are in what we might describe as a normalizing market. What does that mean?
We've been in an abnormal market for several years. Our market's been almost a vertical. We've had double digit appreciation for several years. And this has been a run that we've never seen before.
We're about 12 years into a 7-year cycle. So there's an expectation that we're starting to see the markets shift.
A lot of us are seeing a slowdown of showings and energy. And there's some data that backs this up. Here's some of that data:
New listings in the largest 50 metro markets across the country rose 5.1% last month.
And 17.3% of all listings in the country had a price reduction in the last 30 days.
That's in line with pre-pandemic levels, what you would expect in coming into fall. So that's like 2016-2019 levels. Last year, we didn't see that because the market was straight up. It was on a tear.
But right now sellers are starting to say, "Hey, wait a second....
Hey guys, we know the market's changing. And because of that, every single showing you have on a listing is becoming more important.
We don't have unlimited showings anymore. A lot of showings are slowing down. So when we have a showing, you gotta treat a like gold.
So here's a question:
Are you preparing your sellers with checklists, to-dos, and forms that will help them prepare for each showing and really maximize the potential of getting an offer from a buyer?
Really what the client should be doing is making the home inviting, making sure that you're showing that the home has been cared for and maintained well, and third, we want to make sure you have great curb appeal.
Now I'm going to read to you a few things that you might want to include on your to-do list or your checklist or your forms that you could build out.
Now, when you do this, and we talk about these things, I want you to think about the last like 5 or 10 homes that...
Hey guys, you probably saw that the amount of jobs that were added in August to the economy was actually way lower than expected.
A lot of people attribute that to the rise of the Delta virus and people may be slowing down on hiring. But one thing we can be sure of is that there are a lot of jobs available in America.
There's 10 and a half million jobs available right now. One thing that we're starting to see is unemployment benefits being turned off. Or at least not the incentives added by the federal government. So that might bring more people to work.
But right now we've got to deal with what's here now.
So job wage growth in America so far is up about 4.8%. The challenge is that inflation is also a 5.2%. So it's eating up all those gains. When we look at this in terms of what's going to happen in terms of the real estate market, Lawrence Yun — the chief economist for the International Association of REALTORS...
Hey guys, the market is shifting. If you can feel it in your market, you're not alone. One study that's backing this up is a study that's just been done by realtor.com. It shows that of the top 300 Metro markets in the country, 45 are seeing significant price adjustments happening.
I'll give you a couple examples:
Des Moine, Iowa — 32% of the listings have had a price adjustment
Midland, Texas — 28% of listings have had a price adjustment
Toledo, Ohio — 26% of listings have had a price adjustment
Metairie, Louisiana — 24% of listings have had a price adjustment
Where I live, Portland, Oregon — 20% of listings have had a price adjustment.
So not every market's having this yet. But we're certainly seeing sellers starting to be wise to the fact that buyers aren't just going to pay infinity anymore. There is buyer resistance to pricing. We've seen the largest run-up in pricing. Prices have hit an all-time...
Hey guys, a recent report shows that inflation is rising rapidly. It's the highest it's been in 13 years — up to 5.4% right now. When we look at that number, we should look at it from the perspective of: How does that impact us as REALTORS and our clients?
As REALTORS, the one thing we should be concerned with is if we took $100k and we put it in the bank and waited a year, based on this inflation rate, then at the end of the year, our $100k would only buy $94,400 in goods. So that's not a good thing. We need to make sure that we're investing in assets that are rising faster than inflation.
And we need to encourage our clients to do the same thing.
One of the best hedges against inflation is real estate. Which is good news for us.
We need to be talking about this with all of our clients that real estate is one of the best hedges against an inflationary market.
One of those reasons for that is that we can look at appreciation...
There's a new stat from the National Association of REALTORS, which states that 53% of our buyers and sellers now fall into a specific demographic group.
You can probably guess what that is...
It's the millennial generation.
Millennials aren't kids anymore. They're actually in their mid twenties or early thirties. They are definitely the driving force in the market. And they're far, far bigger than the baby boomer generation ever was.
So when we look at just statistically, the numbers of this, we have to embrace millennial marketing. It's super important.
And there's some things that we can do to do a much better job with them.
1. Social media
You know I was going to say that. That's where they're at. We've got to go where the audience is. That means we're doing 5 to 15 posts a week on different platforms that we know they use.
So some of you might be doing Facebook, Instagram, TikTok, YouTube, you name it. You just got to figure out...
Hey guys, the market's shifting. That's no surprise here — we've been seeing it for a few months. We're starting to see buyers put up some walls and say, "Hey, wait a second. I'm not going to pay infinity for a home."
And so buyers are slowing down their activity and we're seeing that. And it's also causing inventories to rise, which in turn, is causing sellers to try and avoid missing the boat so they're jumping in. This is causing inventories to rise even more.
So the whole market is starting to change. Not radically yet, but it will accelerate over time. And it's natural. It's normal. We're never going to have a straight up market forever. Right now, some people would argue that we're 12 years into a seven-year cycle.
Now for us, I have a question for you because you are either an agent that's market-driven or strategy-driven.
If you're market-driven, then high tide floats all boats. You do well in a great market and you do...
Hey guys, with a Delta variant really starting to surge across America, it's coming back into the real estate conversation.
So I've got a couple of questions that you need to be asking clients. And a question you need to be prepared for if your clients ask.
So the two questions I want you to start asking (or thinking about asking) are these:
1. Would you prefer that I wear a mask?
So when you're working with a buyer, you need to start asking this question. Would you prefer that I wear a mask when we're talking? Some of them will say yes. Okay. Maybe most of them will say yes. It depends on your market area, right? It depends on the demographics. And what's going on in your market area. Remember, this is not a political conversation. You're not getting into a debate. You're just offering a service that if they feel more comfortable, you put a mask on.
If you're taking a listing, you might want to ask this second question:
2. Hey, would you...
Okay guys, you've heard me talk about forbearance. I'm going to give you another opportunity within this market that you're all going to want to take advantage of right now.
So we know right now there's 1.86 million homes that are in forbearance. It's about 3.5% of all the mortgages in America.
So when you look at that number, it sounds like a scary number. But 87% of those folks have 10% or more equity.
Now, here is the kicker behind that:
The 12-month period of time that the CARES Act provided is coming to an end for a lot of people. Hundreds of thousands of these properties are now having their forbearance ending.
And this is starting really at scale in September when 450,000 of these homeowners are now going to be at the end of their forbearance period.
Now here's the good news:
87% of those folks have 10% or more equity because we've had such a massive equity buildup over the past 12 months. So they can actually sell....
Hey guys, did you know that the average rental price for a two bedroom home across the country, believe it or not drum roll is...
Can you imagine that? It's incredible!
But at that level, how much house could you buy? That's an interesting question. And it's a question that we can all answer.
So the $1,700, if you had 20% down with an average mortgage today would buy you a home priced at about $455,000, which is a shocking high number.
You know why that's so high? Because interest rates have dropped again to a 60-year low.
So instead of renting, somebody can actually go out and buy a house for $455,000. Now that's assuming they had 20% down, but let's assume they don't.
Let's assume they only have 3.5% percent down, which is a typical FHA loan. That might cut that number down by another a hundred thousand so maybe they could afford $355,000.
But wouldn't that be far superior to renting?
These are the kinds of conversations we...
Jim would like to talk to you about your real estate business with a complimentary 30 minute coaching session.
During the call be prepared to discuss - Your goals for the next twelve months. Your time management and priority management strategies. Your willingness to change and adapt to a changing market landscape, and your biggest choke points - what's really holding you back
The road to transformation starts with small steps. Take your first towards a better real estate business today...