A numbers game

You’ve probably heard this one before: “real estate is a people business.” While that is certainly true, it is also a numbers business. 

Our loyal Blueprint readers know we are always tracking the latest data to try to keep you informed, and one step ahead of the competition. But there are so many numbers in our business that it can sometimes be difficult to know which ones are more important than others, especially when it comes to managing the day-to-day of your business.

In today’s Foundation Plans, we highlight a few of those key data points to monitor closely. They will really give you a strong sense of how your business is doing, and where you might need to improve.

We’re now only about six weeks away from the new year, so now is the time to take a good look at how you’re doing, and more importantly, how you want to be doing!

– James and David

Home prices growing, but at slower pace

Home prices nationwide are growing at a rate of 2.4% year-over-year, down from 3.6% as measured in January 2024. That’s according to the latest update to Zillow’s Home Value Index via ResiClub. All the major indices show a deceleration in price growth. 

• Freddie Mac: +3.6% (decelerated from +6.7% in January 2024)

• FHFA: +4.2% (decelerated from +6.7% in January 2024)

• Case-Shiller: +4.3% (decelerated from +6.2% in January 2024)

Here’s other key data from Zillow that offers more perspective on home price growth:

• Year-to-date: +3.4% 

• Month-over-month: -0.3%

• Since the 2022 peak: +2.6% 

• Since March 2020: +44.6%

Our take

This gives us a good overview of the past few years. In early 2023, home prices stabilized following the downturn in late 2022, as inventory remained far below pre-pandemic levels. By 2024, Sun Belt markets began to soften due to affordability pressures and slowed migration, leading to a year-over-year increase in resale inventory as builders offered incentives to sustain sales. Heading into 2025, inventory and months of supply will be key indicators. If inventory rises faster than usual by spring, that could signal further market softening.

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Inflation comes in as expected

Headline inflation fell in line with expectations, increasing by 0.24% MoM and 2.6% YoY, according to the latest CPI inflation report from the Bureau of Labor Statistics. Here are some of the key takeaways from the report:

• Core CPI, which excludes volatile food and energy prices, increased by 0.28% MoM and 3.3% YoY, matching market expectations. 

• Overall shelter inflation rose from 0.2% to 0.4% MoM, with primary rent and owners' equivalent rent together increasing slightly to 0.38% from 0.36% MoM.

• Market indicators of shelter inflation, like Redfin’s rent data, show that asking rents have stayed mostly flat over the past two years with minimal signs of acceleration.

• When making policy, the Fed has indicated that it looks to market measures of shelter inflation since the BLS’s measurement is a lagging indicator.

Our take

Recent remarks by the Fed signal that it might skip a December rate cut and aim for January instead. Whether in December or January, this cut could be the last one for a while, with the Fed expected to reduce its projected rate cuts for 2025 from four to two (not including the possible January cut). While Fed policy still influences mortgage rate trends, rates may stay volatile due to uncertainty surrounding possible tariffs and tax cuts. If we see elevated mortgage rates in 2025, it shouldn’t come as a surprise. Even before the election, mortgage rates were projected to remain above 6% until the end of next year.

Best metros for Gen-Zers to buy a home

MoneyGeek recently identified the best cities for young adults under 25 based on factors such as young adult income, homeownership rates, population, student loan burden, and access to food and entertainment.

That group is also known as Gen-Z, which includes Americans born between 1997 – 2012. According to Realtor.com, nearly half of the 68 million Gen-Zers want to buy a home in the next five years. 

Here are the top 5 metros (along with their median home price) that MoneyGeek identified for Gen-Zers, out of the 138 cities with at least a population of 100k:

1. Salt Lake City, UT –  $589,900

2. Abilene, TX – $236,900

3. Des Moines, IA – $234,900

4. Boise, ID – $529,900

5. Las Cruces, NM – $315,950

Our take

Even though we read reports like this with a grain of salt, we always keep track of them because they highlight important demographic trends. The profile of potential homebuyers is constantly evolving, whether it’s their financial capacity, age, or lifestyle preferences. We agents have to stay on top of these changing trends; otherwise, we risk getting left behind. Reports like this help us stay current and better understand how to market toward these demographics. 

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The news that just missed the cut

• Cities where mortgage payments are below $1500

• How to handle real estate objections

• Watch out lenders: Zillow’s mortgage business is growing

• Soaring homeowner’s insurance is killing deals 

• New York City bans mandatory broker fees

Foundation Plans

Advice from James and David to win the day

Real estate is definitely a people business, but it’s also a numbers game. This is why it’s crucial to keep track of your stats. Without them, you won’t know whether you’re hitting your targets or what adjustments you need to make. Today, we’re going over some key metrics:

Year-over-year production – Compare your current performance to the previous year. This metric provides invaluable insights into whether your performance is aligned with your goals. It’s concrete data that enables you to make strategic adjustments to ensure continuous growth and success.

Active and future listings – Listings are king in real estate. Understanding current active listings provides insights into market trends, pricing strategies, and property availability. Future listings help in planning and preparing for upcoming opportunities. Being aware of active and future listings allows you to better match client needs with available properties, offer more tailored and timely options, and enhance customer satisfaction.

Conversion rate – It’s vital to know how effective you are in turning inquiries or leads into actual business. Monitoring this conversion rate helps in evaluating the efficiency of sales strategies, identifying areas for improvement in communication or sales techniques, and ultimately optimizing efforts to increase successful deals. This helps maximize your productivity and revenue potential.

Lead flow – We will say this till we’re blue in the face. Never let your pipeline go dry. It’s critical to continuously generate leads, but you also need to know how effectively your marketing tactics are working. To do that, you need to track the number and quality of potential clients, as well as identify which lead sources are most successful. Tracking lead flow helps optimize your time and resources to maximize your chances of securing more deals.

This is just the tip of the iceberg. To learn what other metrics to track, start here.

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:

That’s a wrap on this edition of The Blueprint!

Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!

Thanks for reading, and we’ll see you back here on Tuesday!

– James and David