Why many sellers are feeling “locked in”

April 21, 2023

Show clients the REAL you

When we first came into real estate, we thought agents had to look, act, and dress a certain way. We’ve learned that is the furthest from the truth! It’s all about authenticity.

When you try to act like someone you’re not, people can sense it. They’re looking for someone they can trust, not someone who just bought a new pair of loafers.

In our industry, trust is the most important factor. Everyone’s BS meter is on high alert, so it’s crucial to just be yourself and let your potential clients see the real you. That’s how you make a real connection!

Now go ahead and enjoy the latest edition of The Blueprint!

– James and David

Potential sellers feel "locked in"

Source: Unsplash

Realtor.com released a report which found that 82% of home sellers feel "locked in" to their current low mortgage rate. As a result, many potential sellers are planning to wait for today's high mortgage rates to come down, despite having high equity in their homes.

Here are the report's main takeaways:

33% of potential sellers say they want to take advantage of the current market.
43% expect to get their asking price.
37% expect to have an offer within a week, compared to 33% in 2022.
74% of potential sellers estimate that they have more than $100,000 in home equity.

Our Take

This is the stalemate we’re dealing with right now. Buyers know that the market is cooling, and sellers aren’t willing to budge because of their equity and the low mortgage rate. We have to spend our time wisely and only work with real sellers right now. If a seller isn’t going to move, then we have to move on. Set realistic expectations with your clients about the current landscape of the market.

Builder sentiment is improving

Source: Unsplash

Thanks to fewer resale listings this spring, builder sentiment in the market rose in April for the fourth straight month. The National Association of Home Builders/Wells Fargo Housing Market Index climbed to 45 in April, a 1-point gain and the highest reading since September.

Sales incentives by builders have been successful in boosting demand in recent months, and the share of builders reducing home prices is falling.

Our take

This is good news. We have a massive inventory shortage, and we need builders to keep building. If you have a first-time homebuyer who is having affordability issues, a new build with incentives might be a good option. Go gather the data in your market about who the builders are and reach out to them. This is also an opportunity to get new listings if you can provide value for those builders!

Rent prices hit low level

Source: Unsplash

March's median rent prices fell to their lowest levels in over a year, largely due to a surplus of housing resulting from the pandemic homebuilding boom. Rental demand is dropping due to high rental costs, inflation, unemployment, and recession fears.

Here are the metros where asking rents fell the most:

Austin, TX (-11%)
Chicago, IL (-9.2%)
New Orleans, LA (-3%)
Birmingham, AL (-2.9%)
Cincinnati, OH (-2.9%)
Sacramento, CA (-2.8%)
Las Vegas, NV (-2.4%)
Atlanta, GA (-2.3%)
Phoenix, AZ (-2.1%)
Baltimore, MD (-2%)

Our take

Rents have been as chaotic as home prices over the last year. We’re unsure what the Fed is going to do next, but we know that some renters are looking to buy. But without sellers moving, there’s nowhere to go. Agents have to hit the phones and doors hard right now to get sellers to list their homes. There are definitely buyers out there, but they won’t move without the inventory!

Schematics

The news that just missed the cut

Source: The Wall Street Journal

This St. Barts estate sold for a record $136M
Gen Z has different priorities for home searching
Huge staffing cuts coming to Opendoor
How Thach Nguyen makes $800k in real estate revenue a month

Foundation Plans

Advice from James and David to win the day

We are all about working smarter, not harder. We know that it's easy to get bogged down in the aspects of the job that don't grow your career like admin work and accounting.

Here are three tools every agent should be using:

ChatGPT. Use this tool to save time coming up with social media post ideas, listing descriptions, and even client outreach emails. It can even help you write and edit video scripts, so you can get content out quickly and spend more time generating leads and door-knocking.

BombBomb. This is an amazing video recording app that helps agents improve communication with clients. It is a great tool for video recording your screen while going over CMAs, listing information, or offers.

Quickbooks. Keeping accurate records is absolutely essential in real estate! Quickbooks helps realtors keep detailed financial records with the ability to see quick reports and compare their results to previous years.

Want to learn more about helpful tools for agents? Click to watch the video.