It’s (almost) go time!

Labor Day weekend is a huge weekend in our minds, because it’s like a turning point in the year. Basically, you have from this coming Tuesday until Thanksgiving to absolutely crush it before sales really slow for the holidays, your buyers head out of town, and nobody wants to leave their cozy fireplace.  

It doesn’t matter what kind of year you’ve had so far, you can make the next three months your biggest record-breaking months if you put your mind to it. Activate sprint mode, and get out there and make some deals!

And we’ll be right there sprinting along with you. We’re taking this holiday weekend off to plan and recharge, so we won’t be publishing a newsletter on Tuesday, but we will be releasing the next episode of Rise Above the Ranks! We’re talking all things luxury market, so keep an eye out for that episode to drop. 

Have a fantastic, fun, safe holiday weekend, and get ready to sprint! 

– James and David

Goldman Sachs predicts the future

The Fed’s fight against inflation, coupled with changing household formation habits, will have long-term consequences for the housing market. At least, according to Goldman Sachs’ latest market prediction for 2022 through 2023. Here are the key takeaways:

• Every major housing market activity metric will decline, including new home sales (-22%), existing home sales (-17%), and housing GDP (-8.9%)

• Next year, Goldman Sachs predicts new home sales to drop another 8%, existing home sales to decline by 14%, and housing GDP to fall 9.2%.

• While prices aren’t likely to drop nationwide, the firm does predict price acceleration will slow to just 1.8% growth in 2023

Our take

If this prediction comes true and we do have 18 months of normalizing, that’s great news for the market. That is a short period of time before the market starts another turnaround. Also, if prices come down and people start finding great deals, we’ll get a bit of a breather from the cutthroat competition. Then, when the market heats up again in 2024, we’ll be positioned to maximize that opportunity too. Remember, every market has cycles. With the right perspective, you can make the most of each one.

How sellers experienced the market shift 

Realtor.com launched a survey to ask how sellers handled the past year, from overheated competition to the early stages of a buyer’s market. Here are three major highlights of that detailed report:

• 95% of sellers sold their property for more than they paid for it. Baby Boomers (who likely held their property for longer) saw the greatest share of equity.

• 92% of sellers who sold in the past three months did accept concessions, reflecting the shift towards a more buyer-friendly market

• 87% of surveyed sellers used an agent. Millennials were the most likely to engage an agent (92%), while Baby Boomers were the least likely (62%).

Our take

That second statistic comes as no surprise. The majority of sellers are accepting concessions these days. They understand that’s what it takes to close the deal! When you prepare your sellers in advance, and help them understand exactly what their property is worth, everyone can leave the negotiation table happy.

Rental rates keep rising 

Rental prices logged a new record in August. The median rent for a one-bedroom unit reached a record-high of $1,486, up 11.8% YoY. More than half of all major US cities have experienced double-digit rental rate growth in the past year. In New York City, rent has skyrocketed 39.9% since last August.

Here are the Top 10 most expensive cities in terms of average monthly rent for a one-bedroom:

1. New York, NY – $3,930

2. San Francisco, CA – $3,040 

3. San Jose, CA – $2,780

4. Boston, MA – $2,730

5. San Diego, CA – $2,580

6. Miami, FL – $2,520

7. Los Angeles, CA – $2,450

8. Washington, DC – $2,370

9. Oakland, CA – $2,200

10. Santa Ana, CA – $2,160

Our take

This just means more people–both current renters and investors–will be looking for properties in these markets. That’s two groups of great potential clients you can target with your marketing and networking. Remind them that in the long term, renting is better than buying. In most cases, it’s also the more economical choice in the short term.

Schematics 

The news that just missed the cut

• This James Bond-style mountainside mansion is listed for a cool $33.5M

• What the spike in HELOCs means for the reverse mortgage industry

• Explaining the Great Drought Migration

• The impact of rising interest rates, as told by The Economist

• Tell your first-time buyers about these 6 homebuying programs

• These characteristics define a luxury home

Foundation Plans

Advice from James and David to win the day

If you want to build a real estate career that lasts long-term, watch out for these early signs that your business may be at risk of decline: 

• You’re skipping follow-ups. If you’re not calling your old clients and prospects, we can promise you another agent is! Keep up with your follow-ups to build a sustainable business. 

• You rely on one lead source. This could be social media, referrals, paid ads, or anywhere you generate leads. If you’re fully reliant on one source and that source dries up, so does your business! 

• You aren’t managing your money properly. None of us look forward to paying taxes or business expenses. But it just comes with the territory. Be sure you’re setting aside cash for these critical costs before you pay yourself.

• You’ve stopped learning. The minute you think you know it all is the minute you’ll lose your reputation, curiosity, and ability to grow as an agent. Stay hungry, keep developing, look for opportunities to stretch yourself, and find a mentor who pushes you to do more. You (and your business) will be better for it. 

For more tell-tale signs that your real estate business is on the edge (and how to save it!), check out this video.

Q&A

You ask, James and David answer!

We’ll be back next week with another answer to a real reader question. Submit yours here!

Just in Case

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

We’ve gotten a ton of great feedback about our new podcast, Rise Above the Ranks. If you’ve taken the time to listen, rate, and review it, THANK YOU! And if you haven’t had the chance, grab your notebook and get ready to learn everything we wish we knew back then. We guarantee you’ll pick up a new tip and be entertained along the way.

Thanks for reading today’s Blueprint, and enjoy the holiday weekend.

-James and David

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