That’s one for the books!
We don’t want to brag (well, okay, maybe a little…) but our small team, Bond Street Partners, was just ranked #12 in the nation on the Real Trends + Tom Ferry The Thousand 2022 list for collectively closing more than $538,000,000 in transactions last year. This was the result of a monumental effort by every single member of our team. Only 63 real estate teams even made the list, so we’re truly honored to be counted among them.
We wanted to share this success with you because that’s our ultimate goal with this newsletter— to share the tips, tricks and insights that have helped us get to where we are today. We hope that our success leads to your success!
– James and David
The Fed isn’t messing around
Source: Vox
On Wednesday, the Federal Reserve hiked rates another .75%. This tough-on-inflation move is the steepest rate adjustment since 1994. Here’s what to expect next:
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Until the Fed sees inflation receding, it will probably raise rates by at least .5% at every meeting from now through the end of 2023
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These rate adjustments may help curb demand, but they’re not going to directly lower housing prices. Only more supply can do that.
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Expect home prices to continue increasing but at a slower pace than last year, and rental rates to continue their fast rise throughout 2022.
Our take
If you’re working with buyers, use this information to negotiate a better price for them. You can leverage this info in your negotiations because the seller can see their pool of buyers shrinking with every interest rate hike. If you’re working with sellers, this information can help you set realistic expectations for them. They may be more open to accepting a lower offer now because they understand affordability is shrinking.
Prices are dropping fast in these 10 cities
Source: Unsplash
Realtor.com analyzed price trends in the top 100 largest metros to determine where home prices dropped the most between March 2021 and March 2022. Many of the biggest drops came in Rust Belt cities and major metros where prices spiked last year. While these numbers are promising for priced-out buyers, part of the dip in prices is due to growing inventory and fewer luxury homes on the market.
Check out the top 10 cities, ranked by percentages, where median prices dropped the most year-to-year:
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Toledo, OH: $115,000 (-18.7%)
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Rochester, NY: $149,000 (-17%)
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Detroit, MI: $75,000 (-15.4%)
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Pittsburgh, PA: $230,000 (-13.7%)
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Springfield, MA: $239,900 (-5.8%)
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Tulsa, OK: $220,000 (-5%)
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Los Angeles, CA: $985,000 (-5%)
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Memphis, TN: $173,500 (-4.6%)
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Chicago, IL: $399,000 (-3.7%)
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Richmond, VA: $310,000 (-3.4%)
Our take
We’ve been expecting this cool-off, and this is likely just the beginning. Prices will probably continue to level off, and we think that’s a good thing. With rising inflation and mortgage rates, coupled with the volatility in the stock market, this seems like a natural result.
Redfin and Compass announce layoffs
Source: Financial Times
With mortgage filings on the decline, some companies are struggling to keep their staff around. Compass just announced its plan to let go of 10% of its workforce and Redfin announced plans to release 8% of its employees. Some factors contributing to these widespread staffing reductions include the 22-year low demand in mortgages and the climbing interest rates we discussed earlier.
Our take
These companies expanded exceptionally fast while the market was heating up. Now, they’re having to contract just as fast. Unfortunately, that expansion and contraction is painful for the employees caught in the middle. It’s the reality of a cyclical economy. Industries grow and overheat, then cool and shrink. We’re not surprised by this news, but we do feel for the thousands of people who are without a job. However, the good news is, real estate is always hiring!
Schematics
The news that just missed the cut
Source: Point2Homes
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Check out the priciest lux listing in every state
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Why we’re facing market hibernation, not a crash
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In this state, sellers are starting to slash their asking prices
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How one investor used his HELOC to build an AirBnB empire
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“Remotevilles” might be the next big real estate trend
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Should your seller replace their windows first? Consider this
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TikTok explains what your clients get to keep when they sell
Foundation Plans
Advice from James and David to win the day
In honor of our RealTrends + Tom Ferry The Thousand 2022 ranking, it seems like a great time to share our best advice for creating a high-performance real estate team. Here are four steps, in order, to take when starting your own group:
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You’ll need a high volume of transactions to support your team. Remember, you’ll be paying every team member out of your commissions. Make sure you’re bringing in enough to cover your payroll. Around 20 mid-level transactions per year is a good foundation.
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Consider starting with an admin assistant. You’ll immediately multiply your time and streamline your operations. An admin with real estate experience is an added plus!
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Think about a marketer. When you’re ready to go to the next level, an in-house marketer, even part time, can increase your exposure and take a number of tasks (and trips to the print shop) off your hands.
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Add specialized agents. Once you’ve hit your capacity, you can start thinking about adding additional agents to your team. Look for agents who balance out your weakness, like an agent who loves working with buyers or has a great list of builder contacts or works with an older or younger group of clients.
There’s so much to learn about leading a real estate team. These tips barely scratch the surface! For more detailed info, check out this article.
Q&A
You ask, James and David answer!
Q: When you first started door-knocking, what script did you use? What was your response to a “not interested” comment?
A: Here’s our favorite line when we hear that response: “I completely understand you’re not interested, but is there a number, any number, you would be interested in selling at?” And we’ll let you in on a little secret here, Sandy… there’s always a number!
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:
Source: Rocket Mortgage
The Fed’s announcement will have an impact on the market. There’s no doubt about that. But it doesn’t have to impact your personal business. You’re still in the best career on the planet, closing killer deals, and making money moves. The only thing that can stop you is you! So get out there and make something happen!
Have a great, power-packed weekend. We believe in you!
– James and David
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