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Why We’re in a Perpetually Undersupplied Market

           

Here's some information that I think is super powerful that really no one talks a lot about. But it absolutely will impact you and I as REALTORS.

From 1968 to 2000, the average building in the country was 1.5 million new units. That's a long history there, 1968 to 2000. From 2000 to 2010, that number dropped to about 1.28 million units. Okay. Then we had a big building boom during the run up to the Great Recession. But then it collapsed and builders stopped building at all.

At the end of the day, when you add all those numbers together, what you find, and what analysts have found is that we are not building enough homes by a mile, right? And in fact, in order for us to just meet the supply demands of the country, we need to add 5.5 million housing units to our current inventory out there. And if we don't do that, we're gonna have perpetual low supply, which leads to higher prices and leads to kind of the market that...

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How to Create Raving Fans (Even as The Market Cools Down)

          

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...

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How Today’s Market Gives You the Best of Both Worlds

            

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...

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4 Bulletproof Reasons Buyers Should Buy A House in Today’s Market

        

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...

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Date The Rate, Marry The House

        

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...

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The “ARM” Secret That Unlocks Massive Savings for Your Buyers

           

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...

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How to Increase Your Client Pool by at Least 30% This Year

            

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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The Safest, Most Stable, and Most Secure Investment You Can Make Today

         

Hey guys, can you think of an investment that is safe, stable, and secure in today's environment?

We know the stock market's crashing.

We know the crypto market crashed.

And we know other market assets are crashing right now.

So is there an investment out there that people can really trust?

The answer is yes.

And Americans already know this:

The most recent study shows that for the last eight years straight Americans trust real estate more than any other asset class.

Here's the question mark I have for you:

Are you out there beating this drum? Are you the evangelist about real estate to your own clients and talking to them about the fact fact that they need to diversify their portfolios, you know, rebalance their assets, and get some of that money over into residential real estate?

One of the safest, most stable, secure investments they could possibly make.

Now, how do we know that?

Well, all markets are based on supply and...

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How to Normalize Price Reductions with Your Sellers

              

How do you normalize a price reduction?

People don't wanna feel like they're the only ones reducing their price. And some sellers may not be in tune with the market like we are. They may be assuming that the market's like it was six months ago. And they're the only person that's not selling right now.

Of course, we know that's not true. We know the market's changing. We know there's more inventory hitting the market than we've seen in a long time. We know interest rates are impacting the marketplace.

So how do we normalize a price reduction?

The way you do it is to show others in your market that are also reducing their price at the same time. So here's how you do it.

When you're talking to a seller, you can say:

"Hey, Mr. And Mrs. Seller, you know, we haven't had a lot of showings and that's probably directly to related to our price. We're seeing more competition. Interest rates are definitely...

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I’ve NEVER Seen This Happen In 30 Years in Real Estate

              

Hey guys, I'm seeing something in the market that I've never seen before, which is really interesting.

We're seeing a mass migration of people moving from one state to the next because of political reasons.

Now, we haven't seen that. In my 33 years in the industry, I've never seen a mass migration because of political reasons. People are moving because they don't agree with the local politics or the state politics. And they're going to where they agree more with the politics of that other state.

So you might say, well, that's interesting, Jim, but how in the world do I capitalize on? How do I use that in my real estate business?

It's interesting because we all know some folks around us—family and friends—that have actually made the move. So isn't like way out there. This is like close to almost all of us.

So I'm gonna give you a simple technique today that you can implement right now.

...

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