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...
Hey guys, quick stat that can be meaningful for all of us is this:
Luxury home sales are up 81% compared to a year ago.
Now, why would that be? Why are affluent buyer's coming into this market so heavily?
The answer is they're smart. And they understand they can buy an existing luxury home for far less than it would cost for them to buy a piece of raw land, develop that land and build a new property of a similar size.
So they're seeing these as bargains.
Now yes, of course, prices have risen as demand has risen. But still — its way under what it would cost to build new construction.
So this is an opportunity for all of us that work in a market where there's some affluent housing.
Go back and look over the past two or three years of all the expired listings in the luxury market and target those listings. We know there's now a massive demand.
But it's a place where a lot of agents don't feel confident or comfortable. And so they...
Hey guys, interesting stat for you:
Luxury housing is soaring! It's up 81% from the number of transactions from last year to now.
Now why would that be?
The answer is if you look at the luxury housing market in most areas of the country, you could not build that luxury home for what you're paying for it today. Because construction costs and land development costs have gone so high.
When people with money are looking at these listings, they're saying, "Hey, wait a second. This is an opportunity. This is a market opportunity for me to buy, because I know I couldn't build it for the same price."
They're actually buying at a discount in their minds. Even though prices have risen, they haven't outpaced what it would cost to build these luxury houses.
So this is still an opportunity. It's a market space. And a lot of people haven't focused on it. But there's a lot of great, great buys within the luxury market space.
So check it out,...
Join this fast paced interview with rockstar REALTOR Patrick Fossati. After arriving in his market area just a few short years ago Patrick is making a huge impact in the real estate arena. Using a combination of online lead generation, networking, mailings, and sphere of influence strategies he is attracting clients instead of chasing clients. Listen and learn as Patrick shares his reasons for scaling his business by hiring a assistant and a buyers agent, his creative approach to networking, how he rewards cooperating agents, and how his unique branding is allowing him to build a referral based business.
Hey guys, when you set a price on a property, how fast do you pivot if you got the price wrong?
And we all get prices wrong, I've gotten prices wrong. Anybody that's been in the industry for any length of time has gotten the price wrong.
So how fast do you pivot? How fast do you reach out to the seller to try to get that price adjustment?
There's a new study done by ShowingTime, which shows that the average across America, in our current market for there to be a massive drop in activity is five days.
After five days, activity goes straight down.
So we have a five day window to try to generate a lot of showings and hopefully multiple offers. If we get past that five days and we don't do an adjustment, we're probably going to have a hard time meeting the market where it's at.
So we have to lay the groundwork with sellers and have a conversation with them about this five day window. It's not two weeks. It's not three weeks. It's not a...
There are a couple of numbers we need to look at to understand where the market's at and what's happening with the market.
Number one is the pending home sell index, which had a decrease of 1.9% compared to a year ago. And again, a 1.9% decrease compared to last month. Coincidentally, it was the same number.
But when we combine that with an increase in inventory of 4.1% the month before and a decrease in interest rates because they fell back below 3%.
So we have to look at this as the whole and say:
Why would there be a decrease in sales when we've had an increase in listings and a lower interest rate?
Why aren't buyers saying, "Hey, I have more to choose from and my interest rates are going down. Why don't I own the market?"
Buyers aren't doing that. In fact, they're pulling back a little bit from the market.
The reason is...
Buyer price resistance
Buyers are saying, "Hey, it's been 112 straight months of home price increases....
The Wall Street Journal just put out an interesting article about a company called Invesco putting $5 billion into a hedge fund that's purchasing single family homes.
And they're not alone. There's another $6.5 billion dollars targeted with other hedge funds doing exactly the same thing.
Now, why are these hedge funds going after single family homes?
Well, they've identified that they can get a cap rate of as much as 6.8%. That's the target rate that they're comparing to apartment buildings and commercial — which is like the low sixes.
So what they're saying is: we're going to make money on this. And we're going to rent these houses to millennials that are choosing not to become homeowners.
What we need to do as an industry, number one is to recognize that we should be investing in single family homes as well. But also we need to encourage everybody that's not a homeowner today to get into the real estate arena and buy their...
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...