Guess what?

Millennials, who were the dominant force in the housing market a year ago, have taken a step back. It's been a significant drop.

Now, why are millennials pulling away from the real estate scene?

The primary reason is interest rates.

The real question is, who has taken their place as the leading group of homebuyers? Who's currently driving the market?

Well, it might surprise you, but it's the baby boomer generation, and they're making a strong comeback in the housing market. In fact, cash buyers account for 27% of the recent transactions, and many of them are likely baby boomers with disposable income, not overly concerned about interest rates.

They see opportunities in the market now that they didn't have a year ago when they were competing with numerous other buyers.

So, as you adapt your marketing strategies to changing market dynamics, consider focusing on baby boomers within your sphere of influence and in your overall marketing efforts.

Baby bo...

I've got three pieces of great data for sellers:

First off, the number of offers per listing sold has rebounded to three and a half, moving up from the previous high of five and a half offers last year.

This drop was influenced by rising interest rates, but recently, we've seen a resurgence in the number of offers.

Next, let's talk about pending home sales, which have been steadily increasing over the past three months.

These numbers have been consistently on the rise.

And then there's the excellent news about sales prices.

They've not only recovered to where they were in June of last year, which marked an all-time high for U.S. home prices, but they've actually surpassed that level by a considerable margin. It seems like this upward trajectory in prices will persist.

So, if you're considering selling your home, this might be the optimal time to do so. Looking back at the past decade, it's quite promising.

However, there's a lingering question: How can we sourc...

Hey guys, in real estate, we often hear the word "affordability". What does it mean and how can we break it down for our clients? Affordability has three components.

The first one is how much people are making. In the last year, on average, wages have gone up a little over 7%. So people are making a little bit more, which means they can afford a little bit more in their house.

The second leg of this is housing prices. Housing prices have flattened out compared to what we were seeing in 2019 and 2020, and in some markets, we're seeing some declines. Last quarter, home prices decreased by about 4%, which is significantly less than the double-digit gains we have seen in previous years.

The last component is interest rates. Interest rates are having the biggest impact on affordability. But it is important to remember that when buying a home, home prices are permanent, but interest rates and wages are temporary. As wages generally increase year after year, two of the compone...

Hey guys, we've got some good news regarding the real estate market, and that is Fannie Mae does a study, it's a purchase sentiment study. They do it every single month. And finally it's broken the downward trend.

All the way since back in February of 2022, there's just been this downward trend with sentiment among buyers and sellers about the market, about buying, about selling. And it really hit a low point here in the last couple months, but it's broken. Now it's starting to come back up.

Buyers and sellers are now seeing a little bit of a rainbow at the end of the tunnel here. They're saying the worst is behind us, and it's starting to look a little bit better.

So this is good news for us. We're gonna combine that with another piece of good news, which is affordability.

So affordability over the last couple of months has gotten way better. We had an interest rate peak, and now it's come down, down, down, down, down, and it's continuing to come down.

Over the last ...

Only 16% of buyers believe it's a good time to buy a home today. That's according to a new study from Fannie Mae. So when we hear that number, it's kind of a shocking number and it's a record low. Let's not put any sugar on this. It's not good.

So when we're talking to our clients that may have thought about buying but are on the fence right now, how can we have just an honest conversation about the market today?

Well, I like this idea of a "then versus now" conversation. The "then versus now" conversation is dealing with real world numbers. And so let's assume you have a situation where you say, "Hey listen, I know you're kind of on the fence about buying right now, but I just wanna walk you through something to think about. If you were back in time six months ago when we started talking about buying, and you bought a house back then, let's just run through some numbers. I'm gonna compare that to where we're at today.

So back then, let's assume you were at $450,000....

News from NAR (National Association Realtors) came out recently and they said that home sales are down 23.8%. But strangely, home prices are up 8.4%. So where's the conflict there? How are we having these crazy numbers?

Well, here's the reality — there's two reasons for it:

One is that we are still benefiting from appreciation that happened at the beginning of the year when interest rates were close to 3%.

And the second reason?

We're benefiting from low supply. We still are at a historically low supply, about 3.3 months of supply. Meaning if every REALTOR stopped working today, it would take 3.3 months of time for us to sell out that inventory.

So what's a healthy balance market? A healthy balance market is about six months of supply.

By the way, I want you to get this in your mind. It's completely different than the Great Recession. We entered the great recession with 11 months of supply. Strong buyer's market. We are in a strong seller's market coming into this re...

Would it be crazy to buy a house now?

This is a question that people are gonna ask you. I've heard this question come up a few times just in my social circles.

I'm gonna tell you there's two key reasons why it's a great time to buy a house. Not just a good time, but a great time to buy a house.

1. You have more buying power than you've ever had in the last 10 years.

Think about the last year. Just last year, if you were gonna go buy a house, you're competing with 10 other buyers, you're always gonna be in a multiple opera situation. You're gonna have to come in with non-refundable more money, go over full price, have an appraisal gap language, remove inspections before you've even done an inspection. You were at such a disadvantage as a buyer.

Let's contrast that with today:

When you come in as a buyer, first of all, sellers are reducing their prices en masse. Plus, they're gonna reduce their price again, when you make an offer because you're not competing. And you'...

Hey guys, when we're talking to a seller and we're having this conversation about price—because price is the ultimate marketing tool that we have—sometimes it's hard for sellers to understand the relationship between the price and interest rates.

So I wanna give you some scripting and some dialogues along these lines, which is really important. And it's focusing on the difference in affordability for buyers and really how most buyers are payment focused.

So if I'm sitting with a seller, I might say:

"Now you've probably been hearing that the interest rates have been rising. But I wanna relate that to what that means to a buyer for your home. So the beginning of the year, interest rates were pretty much at 60-year lows or around 3% level. And since the beginning of the year, we've really more than doubled. We're now pushing 7% and we're probably gonna be over 7% very soon.

And so here's what that means:

A buyer that had a 20% down payment and had a $2,500 budget at...

Now, this is happening a lot:

Buyers are getting skittish about interest rates, especially when they're in the middle of a transaction and their interest rates floated up because they didn't lock in the beginning.

See, a lot of buyers are gamblers. And they're optimists. So when they come into the transaction, they don't necessarily lock right out of the gate and they're gambling that the interest rates will come back down or float back down. But that gamble has not been a good gamble for the last several months.

And so interest has climbed, climbed, climbed. But if you do have that situation where you have a buyer that's had an interest rate that went beyond what they were expecting, it can create a mid-transaction negotiation.

So what you can do is you can come back to the other side and say, "Hey, we have a buyer that was completely excited about buying your house. Unfortunately, interest rates have kind of gone through the roof and they've kind of been priced out....

Hey guys, I've got another tool for you:

When you are going out to take a listing and the seller is asking you about getting top dollar for their home, one question you can ask which relates to them getting top dollar is, can I ask you how much do you owe on your current home?

This is gonna reveal how much equity they have and how much they have left to pay off.

Some—about 30% of the people you're talking to—will own their home outright. And the vast majority will have some kind of loan. But a lot of those people have paid down their loans dramatically and they have a very small balance. What if you said something like this to them?

"I got something to ask you guys based on what you just told me:

We're in a high interest rate environment. So it's making affordability a really big issue. And because of that, when people are paying more in interest, they can't afford to pay at a higher price. But if we were able to offer an owner carry situation where somebody gave you a...