Special Event for our SoCal friends

This message is for all our friends and readers in Southern California. We want to invite you to join us tomorrow, Wednesday 9/25, for a special live podcast recording at the REImagine Expo, one of the great annual events in our industry.

We are going to put ourselves on the “Hot Seat” and give you a chance to fire away with any question you want to ask, whether you’re a new agent looking to learn more about our business or an established agent with a burning question on your mind. It’s going to be a lot of fun and a great way for us to connect in person!

You can find all the info about the event here. We will be set up right outside Homes.com’s lounge 1107. 

We hope to see you there!

– James and David

Existing home sales pace predicted to be slowest in 19 years

Fannie Mae is now forecasting 2024 total home sales to reach 4.7 million nationwide, down from its earlier forecast of 4.8 million and down 0.3% decline from the 2023 total. This is predicted to be the slowest annual existing homes sales pace since 1995. Here’s what else the mortgage financier forecasts:  

• Sales are expected to rise 9.8% in 2025, reaching a pace of 5.1 million units.

• The majority of those sales are predicted to come in the second half of 2025, if mortgage rates fall significantly and end the year at 5.7%.

• The Sun Belt and some Mountain West states will see the biggest jump in homes for sale

• Mortgage originations for 2024 are projected to equal $1.68 trillion (down from the previous $1.70 trillion projection). However, that number is expected to reach $2.16 trillion (up from the previous $2.15 trillion projection) in 2025 due to an increase in refinance volumes.

• The economy will grow by 1.8% in 2025

• The unemployment rate will gradually increase to 4.6% by the end of 2025

Our take

These downward adjustments are due to the lock-in effect, affordability issues, and the slow return of buyers to the market. In many areas, new home supply is also competing with existing homes for buyer attention, especially in Sun Belt and Mountain metros. As a result, even though inventory is up nearly 20% from a year ago, many regions are still seeing sluggish existing home sales.

Metros with the biggest savings since the rate cut

The recent rate cut by the Fed has dramatically improved the purchasing power of home buyers across the country. Based on its analysis, Realtor.com determined that homebuyers are saving a nationwide average of $363 per month, or $4,356 per year, compared to when rates peaked in October 2023.

The amount of savings varies widely across markets. Here are the top 10 cities that have seen the biggest savings on monthly mortgage payments:

1. San Francisco, CA – $1,691.59

2. Bridgeport, CT – $1,296.11

3. San Jose, CA – $1,252.90

4. Honolulu, HI – $1,133.26

5. Oxnard, CA – $1,020.23

6. Los Angeles, CA – $976.02

7. San Diego, CA – $970.68

8. Seattle, WA – $853.33

9. Boston, MA – $827.55

10. New York, NY – $609.22

Our take

As a general rule, savings will be bigger where home prices are higher. Additionally, many of these expensive markets have also experienced price cuts since October 2023, which increases the buyer’s bottom line. We anticipate that the purchasing power of buyers will only rise as the Fed continues to cut rates. On top of that, with builders offering incredible buyer concessions, it’s an excellent time for agents to encourage buyers to get off the sidelines and capitalize.

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Markets with the highest share of remote workers

The percentage of U.S. workers who are fully remote fell to 13.8% in 2023, down from 15.2% in 2022 and 17.9% in 2021, according to research from Resiclub. While that’s still significantly larger than the 5.7% of workers who were fully remote in 2019, it does mark a steady pullback from the pandemic peak.

In terms of raw numbers, at its peak, the number of fully remote workers totaled 27.6 million in 2021, based on the U.S. Census data. In 2023, the number equaled 22.5 million. 

Here are the top 10 markets with the highest share of remote workers:

1. Austin, TX – 24.9%

2. Raleigh, NC – 24.5%

3. Denver, CO – 22.3%

4. Washington, CA – 22.0%

5. Charlotte, NC – 21.5%

6. Portland, OR – 21.2%

7. San Francisco, CA – 20.5%

8. Seattle, WA – 20.3%

9. Tampa, FL – 19.6%

10. Phoenix, AZ – 19.4%

Our take

During the pandemic-fueled housing boom, many individuals with high-paying remote jobs in expensive markets bought homes in more affordable areas. However, as companies scale back on full-time remote work, and the cooling labor market gives employers more leverage to bring employees back to the office, these trends are shifting. It’s now less common to see remote workers relocate from New York City to places like Austin. Instead, many are opting for exurban areas in New Jersey or Connecticut—locations where commuting five days a week would be impractical, but making the trip once or twice weekly is feasible.

The news that just missed the cut

• Bargain hunter’s guide to buying a new-construction home

• Profit margins are up for home flips

• Why the rate cut is good news for buyers 

• Blackstone sells Motel 6 to Oyo making $1B in profit

• Jim Carrey’s LA mansion sees its fifth price cut

Foundation Plans

Advice from James and David to win the day

In today’s edition, we complete our three-part series on how to price your listing. Part 1 covered understanding the property details of your listing. Part 2 covered what you need to know when gathering the relevant sale comps. And today, Part 3 covers how to develop an optimal pricing strategy. Let’s get into it!

3. Develop a Pricing Strategy

Once you have gathered comparable sales data, it's time to create a pricing strategy. Follow these steps:

• Monitor feedback. Use the NAR script. If there’s no offer after two weeks or 10 showings, adjust the price based on market expectations.

• Consider a pre-inspection. Identifying and addressing potential issues before listing can prevent complications later.

• Prepare net sheets. Give the seller three net sheets based on low, medium, and high pricing scenarios.

• Consult experts if needed. If the property is too far outside your expertise, ask an appraiser or broker for help.

• Double-check competition. Compare the final price to active listings, ensuring it aligns with similar homes in the area. Adjust for unique features or drawbacks, such as proximity to a freeway or lack of a garage.

Remember, pricing is an ongoing conversation. Factors like interest rates, inventory, and local economic changes all play a role in determining the best price for your property. Every Comparable Market Analysis (CMA) you conduct will help you refine your skills. Follow these steps consistently to price homes effectively.

If you’re an agent, tell us what you think. What steps do you use to price your listings? What do you think of our advice? Do you agree or disagree with it? Drop us a line. We love reading your feedback.

To learn more about Estate Media, visit their website.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“The distance between dreams and reality is called discipline.” — Paulo Coelho

Strive to make your dreams come true friends. We are just days away from starting Q4. Don’t wait to take action. Be intentional about it. You can do it! Thanks for reading. We’ll see you back here on Friday!

– James and David