Getting back to normal?

It’s no secret that the market has been rather abnormal in these past few years, but it seems–fingers crossed–that we are finally getting back to some version of normal.

For example, we’ve seen a rise in home inventory all year, but we haven’t seen a rise in home sales. That is, until now. As you’ll see in our first story today, that trend is finally changing. This could be another sign that we’re getting back to more regular days.

But if you’re looking for even more regularity in your business, scroll down to today’s Foundation Plans. We discuss some quick tips on how to create a plan of action every single day. We truly think that’s the best way to find some sense of normalcy in this industry, even when things are not that normal.

And on the subject of normal… as we normally say… it’s time to get into this edition of The Blueprint!

– James and David

Home sales spike

Sales of existing homes surged 9.5% in February from January to 4.38 million units, on a seasonally adjusted annualized basis. That is the largest monthly gain since February 2023, according to NAR’s latest update. Here’s what else NAR reports: 

• Total sales were still down 3.3% YOY

• Sales surged the most in the West (+19.4%) and the South (+16.4%)

• Inventory rose 5.9% month-over-month and 10.3% YOY

• The median home price ($384,500) is up 5.7% YOY, the 8th-straight month of annual gains.

Our take

As we said up top, we’ve seen inventory rising all year, but we hadn’t yet seen a similar rise in home sales. That is finally changing. We now have concrete evidence that home sales are rising along with inventory. Now we’re not going to get carried away. We know we still have aways to go, but with inventory continuing to rise, and mortgage rates slated to come down through the year, we expect to see the number of sales keep rising as the year progresses.

America’s fastest growing counties

8 of the 10 fastest-growing counties in the country are in Florida and Texas, according to the latest Census Bureau report on population trends. Americans are migrating to these locales for the warmer weather, and the bigger and more affordable homes.

Here are the counties that saw the most population growth:

1. Polk County, FL

2. Montgomery County, TX

3. Pasco County, FL

4. Collin County, TX

5. Denton County, TX

6. Williamson County, TX

7. Pinal County, AZ

8. Fort Bend County, TX

9. Marion County, FL

10. Horry County, SC

Our take

There is no mystery here. People are moving south because homes are more plentiful and affordable. Austin, for example, permitted more housing units than both Los Angeles and San Francisco combined, even though its population is vastly smaller in size. Let that sink in. No wonder Southern metros have better housing affordability. It’s not rocket science! Until coastal locales start building more, this out-migration trend is going to continue indefinitely.

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Home-flipping profits hit 17-year-low

Last year, average gross profits on home flips fell to $66,000, the lowest level since 2007, according to ATTOM’s report. Profits were down from $70,100 in 2022 and $75,000 in 2021. This translated to a 27.5% return on investment, down from 28.1% in 2022 and 35.7% in 2021. 

Here are the counties that saw the highest growth in flipping returns:

1. Scott County, MN

2. Chautauqua County, NY

3. Warren County, K

4. Penobscot County, ME

5. Maui County, HI

6. Lorain County, OH

7. San Francisco County, CA

8. Warren County, OH

9. Washington County, OR

10. Schuylkill County, PA

Our take

Even though profits are down, we still think flipping is a lucrative opportunity. We have to keep in mind that 2023 was one of the most difficult years in real estate. Frankly, averaging $66,000 on a flip last year is not too shabby given all the circumstances! Of course, location matters. Not all locales are well suited for flipping. This report helps us see where people are making the most money. We think every agent should share this kind of info with their clients, and make it part of their monthly market update.

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Schematics

The news that just missed the cut

• The predicted fallout for buyers from commission rule change 

• The easiest way to create vlog-style content for your listings

• Compass agrees to pay $57.5 million to settle Sitzer/Burnett

• Why Texans are moving to New Mexico

• What agents can do to reduce their tax liability

Foundation Plans

Advice from James and David to win the day

We always encourage agents to “automate.” We don’t mean to turn yourself into robots, but create automatic daily routines each day. We believe this will maximize your productivity, enhance client relationships, and achieve your goals in your real estate practice. Here are our best tips for self-automation:

Build momentum in the morning – Start your day with purpose by implementing a morning routine that sets the tone for success. Establish a consistent starting time and prepare a plan the night before. Prioritize three key objectives you aim to accomplish. We suggest emphasizing dollar productivity, such as negotiating a price reduction, meeting with a buyer to deliver your presentation and secure a signed agreement, and, of course, securing a new listing appointment.

Become a student of our craft – Set aside 30 minutes to an hour each day to stay current on the latest trends, comps, and relevant market data. Don’t just be aware of them; develop an opinion that you can share quickly and effectively with others. If there’s an area where you need to sharpen your skills–say marketing, negotiating, or social media–take the time to focus on it. You can’t do it all each day, so spread it out and focus on certain things on certain days. 

Connect with your clients – Maintain consistent communication with your clients by incorporating regular phone calls, handwritten cards, or personalized messages to demonstrate your commitment to their needs. Use social media to enrich your interactions. Schedule meetings with at least two individuals from your database each week for coffee, lunch, or brunch. Take on the role of connector within your community.

Lead Generation – Incorporate proactive lead generation as an essential part of your daily routine. Never let your pipeline go dry; it is the fuel of your real estate practice. Allocate specific time daily for prospecting activities like calling, door knocking, or attending networking events. Engage consistently with potential clients and broaden your sphere of influence. Determine the minimum number of daily contacts required to drive appointments and achieve your objectives. The clearer you are on that number, the easier it will be to set goals

We believe passionately in this and will say more in future editions. Start here if you want to know more and listen to fellow podcasters Tim and Julie Harris as well.

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:

“You’ve got to keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life!” — Warren Buffett

That’s a wrap for today. We’ll see you on Friday!

– James and David