4 revealing stats about homebuyers

March 24, 2023

Fed Update

We‘re sure you’ve heard the news. On Wednesday, the Fed raised rates another 0.25%. Most of us saw this coming, and it looks like the bank collapse didn’t affect this round of hikes.

There is a feeling from Powell’s announcement that maybe we don’t need any more rate hikes. It’s hard to know what’s going to happen next and, to be perfectly honest, we don’t really care. Of course we’ll pay attention to it, but we aren’t letting it affect our day-to-day.

In this industry, it’s all about focusing on what you can control. So keep focusing on closing deals, following up with potential leads, and building your network.

Remember, we’re only as valuable as the information at our fingertips. On that note… enjoy the latest edition of The Blueprint!

– James and David

Existing home sales finally increase

Source: unsplash

According to the NAR, sales of existing homes rose 14.5% month-over-month in February, breaking a 12-month streak of declines. This is the largest increase since July 2020.

Here are the main takeaways:

The median existing home price fell to $363,000, down 0.2% year over year. That drop ended a 131-month streak of consecutive YoY increases, the longest streak on record.
Properties are spending an average of 34 days on market
Sales could have been higher, but inventory still remains a problem. Data shows only 980,000 homes for sale, which is about a two-to-three month supply of homes.

Our take

We definitely feel like we are in a full buyer’s market, but more or less, it’s a stand off between buyers & sellers. With homeowners locked in with low rates, and buyers knowing they have negotiation power, it’s getting harder to make a deal. We have to really focus on the clients that are motivated on both sides, and not waste our time if a deal can’t be done.

How homebuying is changing

Redfin released a report analyzing down payments and home purchases through the month of January. The typical homebuyer made a $42,000 down payment, the lowest level in nearly two years.

Here are other homebuying stats from January:

Nearly one in three home purchases were paid for with all cash, up 29.7% year-over-year. This is the highest share in nine years.
16% of home sales used an FHA loan, up 13.3% year-over-year. This is the highest share since April 2020.
The share of sales using VA loans climbed to 7.5%, their highest level in more than two years.

Our take

Macroeconomic conditions have caused homebuyers to get creative. It’s our responsibility as agents to help our clients understand what they can and can’t afford. This is a great opportunity to make relationships with lenders to understand all the options that are available for your clients. We know several lenders and rely heavily on them for advice.

Top 10 cities for new-home construction

Since the 2008 housing crash and the pandemic, inventory has been a major concern for the housing market. Realtor.com estimates the U.S. is short 6 million homes. With that being said, there are certain cities where builders are quite busy.

Here are the 10 metros with the most new-construction homes planned:

Myrtle Beach, SC
Ocala, FL
Salisbury, MD
Fayettville, AK
Austin, TX
Raleigh, NC
Boise, ID
Provo, UT
Nashville, TN
Gulfport, MS

Our take

We need more homes. That’s the bottom line. These are definitely ideal cities to be a realtor in right now because with more inventory, you have more opportunities to close deals. If you’re in these markets, try to get ahead of the game. Network with developers now so you’ll have opportunities for your clients when the homes are finished.

Schematics

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Foundation Plans

In this market, it’s crucial to nail a listing meeting. Without listings, you have no business! The competition out there is fierce, and you want to make sure you give yourself the best shot at success.

Here are three tips for giving a great pitch:

Do your research. Don't walk into a listing appointment without doing your homework on the house and the neighborhood. Develop a Competitive Market Analysis (CMA) and spend some time driving the neighborhood.
Don't lie. Even the best agents sometimes don’t know the answers to their clients’ questions. It happens to all of us! Don't be afraid to say "I don't know." Instead of guessing, tell your client that you’ll do some research and get back to them with an answer.
Put together a marketing strategy. Before your first meeting, you should create a marketing timeline for the listing that covers everything you plan to do, from photos to staging to open houses. Sellers want to hear the details of how you plan to get them a great deal. Having this timeline ready at your first meeting shows that you're confident and excited about the listing.