A rare historic event

Yesterday was truly incredible. The solar eclipse had everyone we know buzzing, and it’s not hard to see why. It’s an event that only happens in this country a few times in a lifetime.

Now, if you’re wondering why we’re bringing up the eclipse in a real estate newsletter, well… you know what’s also an event that only happens a few times in someone’s life? You guessed it. Buying a home. (We’re trying to stay topical here, people!)

But seriously. For many of our clients, buying a home is just as rare and exciting an event. This is why it’s so key that we do our best for our clients, and that usually means negotiating for the best deal.

In today’s Foundation Plans below, we give some quick tips for honing your negotiating skills. In this post-NAR settlement world, they are going to be even more valuable than ever!

– James and David

How the hot jobs report could affect the real estate market

According to the BLS, the U.S. added 303,000 jobs in March, outpacing February’s rate of 270,000 jobs, and coming in higher than the average 231,000 monthly job additions over the previous 12 months.

March’s job gains came from health care (+72,000), government (+71,000), and construction (+39,000) sectors. The unemployment rate fell slightly to 3.8%, continuing to hover between 3.7% and 3.9%. 

Average hourly earnings increased by 4.1% year over year, well above the inflation rate of 3.2%, signaling a strong labor market.

Our take

We are thrilled by these numbers, especially the ones from the labor market. We’ve not seen unemployment numbers this low for so long since the Nixon administration! At the same time, we know this could cause the Fed to delay its first interest rate cut, keeping mortgage rates higher for longer. Already a consensus is building that the Fed might only cut twice or even just once this year. It’s crunch time now. Keep an eye on these dates: 

• April 10th – CPI Inflation stats are released

• April 25th – GDP numbers are released

• April 16th – PCE inflation stats are released

• April 30th – May 1st – Fed’s next meeting

Those reports will give us a strong sense of where the market and the Fed are headed next.

10 Best Markets For First-Time Homebuyers

Zillow has come out with its list of the best markets for first-time buyers, based on four criteria: rent affordability, the ratio of adorable for-sale inventory to renter households, the percentage of households age 29-43, and the share of available inventory on Zillow that the median household can comfortably afford. By “comfortably afford,” it means spending no more than 30% of income on the estimated monthly mortgage cost. 

Here’s their list.

1. St. Louis, MO

2. Detroit, MI

3. Minneapolis, MN

4. Indianapolis, IN

5. Austin, TX

6. Pittsburgh, PA

7. San Antonio, TX

8. Birmingham, AL

9. Kansas City, MO

10. Baltimore, MD

Our take

With all the doom and gloom you read about real estate, it may surprise you that first-time homebuyers are a growing share of the market. Zillow says that first-time buyers accounted for half the buyers last year, while conservative estimates have them making up nearly a third. We know that a lot of this comes down to location, and that’s why this list is so helpful.

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Markets with the highest property taxes

ATTOM reports that property taxes on single-family homes surged by 6.9% in 2023, totaling $363.3 billion. That is nearly double the 3.6% growth rate of 2022 and represents the largest increase in the past five years. The Northeast and Midwest regions had the highest effective property rates, while the South and the West had the lowest effective property taxes. 

Here are the top 10 counties with the highest effective property taxes:

1. Summit County, OH – 3.17%

2. Saint Lawrence County, NY – 2.59%

3. DeKalb County, IL – 2.51%

4. Fairfield County, OH – 2.45%

5. Monroe County, NY – 2.34%

6. Camden County, NJ – 2.19%

7. Kane County, IL – 2.15%

8. Lake County, IL – 2.15%

9. Kankakee County, IL – 2.15%

10. Macon County, IL – 2.13%

Our take

We encourage you to read this report because it’s packed with so much good info that we couldn’t cram in this summary. We also suggest sharing it with your clients, because buyers often aren’t aware of all the costs that go into buying a home. On top of the down payment and mortgage, there are closing costs, maintenance fees, property taxes, and other costs that can crop up. We want to close deals, but we want to make sure our clients know exactly what they need to afford.

Schematics

The news that just missed the cut

• Appeals court to allow DOJ to reopen its investigation into NAR 

• This is how MLSs outside of the U.S. and Canada work

• Blackstone makes its largest transaction in the multifamily market

• The weird real estate of movie theaters and how it’s saving them

• How the NAR settlement may shift luxury market practices

Foundation Plans

Advice from James and David to win the day

While negotiating has always been important in real estate, it’s even more important now due to the NAR settlement. Today we’d like to offer you some tips and considerations to keep in mind to help boost your negotiating power:

If you’re a buyer agent, know all you can about the property and seller – Many times the listing agent will state exactly what it will take for the seller to consider an offer. If not, call the agent and ask to know the seller’s priorities (not just the price). Notice if there are any details listed, such as ‘not FHA approved’, ‘seller financing may be available’, ‘seller to contribute up to $5,000 toward buyer’s closing costs’, ‘as-is only’, ‘contingent on seller finding suitable housing’, etc. The goal is to get in the mind of the seller and determine their priorities, wants, and needs.

Run the history of the property – Explore Zillow, Google, and even YouTube to check if the property might have been a For Sale By Owner before being listed. This quick search should consume no more than 5 minutes but could be crucial in determining your success. Look for the days on market. Is this a new listing? Has it been listed and delisted previously? Have there been price adjustments? Was it under contract before and then relisted? If so, what was the reason? Were there any inspection or appraisal problems? Don't hesitate to contact the listing agent to gather this information!

If you’re a seller’s agent, determine your buyer’s alternatives – Consider the buyer's options: are there none, a few, or many? Assess if there is new construction nearby and how the property in question stacks up against it. When there are very few comparable homes on the market, expect to pay more unless the home has been listed for an unusually long time. If that's the case, investigate the reason. In short, know the competition.

This is just the tip of the iceberg. There are a lot more considerations to think about before you enter into a negotiation. Never go in blind, always prepare. To learn more, 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:

“The best way to achieve wisdom is to learn the big ideas that underlie reality…. Even people who aren’t geniuses can outthink the rest of mankind if they develop certain thinking habits.” — Charlie Munger

That’s it for today’s edition. We’ll be back in your box on Friday! 

– James and David

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