Hey guys, some new interesting information from NAR regarding how far people move when they buy a new home.
For decades, the number was about 10 to 15 miles from where they were moving to where they were going to.
Now that shot up dramatically last year to 50 miles—an unheard of number. And where are people heading?
1. Small towns: up 9% from last year.
2. Rural areas: up 7% from last year.
So people are wanting to exit urban areas, kind of that urban exodus we've talked about for a long time. And why are they doing it? Well, they have remote working, they have a remote school, and they want to get out of the urban jungle. And affordability is a big issue. They can buy a much bigger house, much nicer house by going out to these rural and small town areas.
So what about your market? Are you starting to see this in your market?
Maybe you're on the flip side where you live in a rural market like I do and you're benefiting from people coming to you. And on the other side, maybe...
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...
Here's an interesting question I get a lot as a supervising principal broker, and that is this:
Can I, as an agent, talk to an appraiser? Lot of misinformation about this and some appraisers, it's true, just won't talk to you. But you are okay and it's totally ethical for you to talk to an appraiser.
In fact, NAR has a FAQ on this. You can go look it up, but in their FAQ, they specifically state that people that have an interest in the transaction are completely okay in talking to the appraiser. Now, why would we talk to the appraiser? Or what would be the reason?
Well, there's a lot of reasons. One of 'em, we might be just communicating information about the houseless condition. Improvements that have been done. If there was multiple offers on the home, if the comp sets you used are totally appropriate, you can give them a copy of your comps. If the appraiser wants to accept them, they don't have to. New pending transactions that have...
A number that we should be concerned with right now in the market is 16.1%.
So what does 16.1% represent?
It represents the number of transactions that were canceled last month. The last time we saw a number that high was at the beginning of COVID when buyers really didn't know what was gonna happen. March, April, when COVID really went into full effect in our country in 2020. That's when you saw this same level of cancellations. And that's what we're seeing again right now.
So how do we tighten down offers so that sellers have some clarity that they know they're gonna get to closing?
I'm gonna give you several things to think about. You might have a few more. But one of the things is getting the disclosure statement signed as quickly as you can.
Most states require a disclosure statement. This is where we're the seller's gonna disclose everything they know about the house to a buyer. But not waiting around, not delaying getting that...
One of my good friends told me about this incredible strategy that she's using with her buyers.
One thing that happens with buyers is when they come in, we tend to walk them through a conversation that has to deal with criteria. We qualify 'em of course, and we start talking about criteria.
And for instance, when we talk about criteria, here's an example of what we might say, "Well, what are you looking for? Are you looking for a three bedroom, two bath? How much square feet, what area of town?" And then ultimately we get to, "and what price range are you in?" And how did you arrive at that price range?"
We always come down to the price range.
Then they got prequalified with the lender, whatever, and then we try to fit round pegs and square holes.
So we look into the market and start telling the client about why they can't afford to be where they want or why they're gonna have to adjust their budget.
That's a hard conversation to have. And...
Here is a crazy stat that will be interesting for your sellers when you're sitting down to talk about a listing:
84% of the properties coming on the market are selling in less than 30 days across the country.
Now I would encourage you to dive deeper into your own local MLS and see what the number is for your local MLS. But it's probably gonna be somewhere in that neighborhood.
Now, another inverse number to that is what percentage of properties are staying on the market longer than six months? When you go back to 2011, that number would've been about 35%. Today, it’s 2%.
2% listings coming in the market are staying on for longer than six months.
You can just see how the market is so strong right now for sellers and how it's such an advantage to put your home on the market today as a seller.
Another great number to pair with these numbers is the fact that on average sellers are receiving 4.8 offers per listing. That's coming on the...
Part of what we should be doing with our clients, especially our buyer clients, is educating them about the reality of the market.
Here's one example of that:
Did you know that right now in America, 48% of buyers are offering above list price by about 2.9%? So when we look at that on the average purchase price in America, which is about $357,000, it's roughly $10,000.
So 48% of the buyers in the market are offering over full price. That number being an average of $10,000.
Now that's an interesting bit of education we can share with buyers to help them understand what they're dealing with when they're out there in the marketplace.
Then you can pair that with another important piece of data, which is:
On average, buyers are gonna compete on a listing 68% of the time.
68% of the time buyers are gonna be competing with another buyer in the marketplace. Because of that, they've gotta be super competitive when they're bringing that offer in. And...
Here's a shocking number:
For every listing in America right now, on average, those sellers, when the listing goes live, are getting 4.8 offers. Let's call it five offers per listing.
It's truly one of the best times in history to put a home on the market, but will this be changing soon?
The answer is yes.
What will change this dynamic is a buyer's ability to afford the house. And what's impacting that right now is interest rates.
Interest rates are rising rapidly, approaching 5% in a lot of markets. And with that, it's pricing a lot of buyers out of the market. And if they're not priced out of the market, it's for them to readjust what they can afford downward. They can't afford that high price because the interest rate won't allow it.
So when we're looking at working with sellers, we need to tell them there's a five alarm fire going on in the real estate industry right now.
And it's interest rates. They're rising so rapidly that...
I'm gonna give you two techniques today that can really transform what you're doing on social media.
Because a lot of agents on social media are doing the same old, boring posts. They're not getting a lot of engagement. Nobody really cares. Nobody's really watching. And so they wonder why they're struggling and other agents are doing so well.
There's a few reasons.
Now one is that people are seeing repetitive posts. They're seeing the same posts from the same REALTORS over and over and over again. And they get boring. They just become noise. So how can you break through?
I'm gonna give you two strategies right now:
1. Educational marketing
Educational marketing means you're teaching somebody. So you're the teacher, they're the student. We're experts in this industry. And we could come up with a list of a hundred things we could talk about about the real estate market easily that other people outside the industry don't know.
Here's a number that we should be talking about with our spheres of influence, our friends, our social media audiences:
And this is 15.9.
Now what's 15.9 represent?
15.9% is the amount that the average renter had as an increase in the rent last year.
And it's likely that this is gonna have again this year or some similar high number, and probably the year after that.
It's supply and demand. There is high demand and low supply. So it's the same thing that's happening to us in the real estate industry, right? We have low supply, high demand causes prices to rise.
So if renters aren't careful what can happen is if rents continue to rise, they could have rent that's increasing by 10%, a year or more over the next 2, 3, 4, 5 years. They could easily be paying 30, 40, 50% more for rent in a few years.
And they think their rent's high now. Wait another couple years, it's gonna get higher.
So what can they do? What's the...
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