We’re off with a bang!

2024 is truly starting off on a strong note. As you’ll see in our first story, we’re already seeing some very solid numbers in the housing market. 

While people are hungry to buy homes, we all know clients don’t want just any home, they want their dream home. That’s what makes our job so special. It is literally our role to help make dreams come true.

Unfortunately, we don’t have a magic lamp and a genie, so we have to really dig into the details and work to make that dream a reality.

In today’s Foundation Plans down below, we offer a few helpful steps on what you can do to play dreammaker for your clients. We’ve had many sales in this business, and we can honestly say–when you can help a client find the home they’ve been dreaming about their entire lives, it’s one of the most rewarding experiences in the world.

So, let’s keep rolling into 2024 and rolling into today’s Blueprint..

– James and David

Hot start for the housing market in 2024

At the start of 2024, there is an uptick in demand as mortgage payments fall and more homes hit the market. That’s the main conclusion from Redfin’s first market update for the year. Here are the other key points:

  • New listings rose 9% year-over-year

  • The total number of active listings is down 2.9% YoY but that’s the smallest decline since June.

  • Total mortgage application volume rose 9.9% week-to-week

  • Total mortgage applications rose 3% month-to-month

  • Applications to refinance a home loan jumped 19% from the previous week and were 30% higher than the same week one year ago.

Our take

Honestly, in the middle of 2023, we weren’t expecting this year to start with a bang, but it truly has! We can’t encourage agents enough to capitalize on this hot start. The mortgage rates have motivated both buyers and sellers. Even though rates are significantly higher than a year ago, they’ve dropped from 8% in October to about 6.7%, and that has motivated people to buy and, even more astonishingly, to list. Clearly, we don’t need mortgage rates to plummet to the extraordinarily low levels we saw during the pandemic to get off the sidelines. Take advantage of this while you can because it MIGHT not last if the CPI and job numbers don’t come in as expected throughout the first quarter.

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Rental costs drop for the third straight month

Source: Redfin

Redfin’s latest rental update shows a reprieve for renters, continuing a trend we’ve seen over the past few months. Here are the major takeaways from December:

  • The median asking rent is now $1,964, down 0.8% from last December, the third consecutive annual decline (-0.3% YoY in October and -2.1% YoY in November, the largest drop since 2020).

  • Rental vacancies have increased to 6.6% as the supply of apartments has increased

  • Rent concessions rose with 33% of rentals now advertising incentives on listing services such as Zillow

  • Rents in the Midwest are rising faster than anywhere else

    • Midwest: $1,434 up 3.7%

    • Northeast: $2,439 up 1.7%

    • South: $1,632 down 1%

    • West: $2,346 down 0.6%

Our take

Since we’re agents who sell homes, you might be wondering why we’re talking about rental rates. We’ve got a simple answer: Inflation! The metrics we use to measure inflation – the CPI report, e.g. – heavily weights rental prices in their calculation. The more rental prices go down, the faster our inflation measurements go down. And the faster they go down, the faster mortgage rates will fall and the faster home sales will rise, so – suffice to say – we’re gonna keep a watchful eye on this.

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The top states where most people moved in 2023

Sponsored by Homes.com

Recently, U-Haul released its latest study highlighting the top states where people moved into and out of 2023, based on the numbers of movers using one-way U-Haul equipment rentals. Unsurprisingly, California topped the outbound list as Americans moved to less expensive metros with comparable amenities. Here’s the list:

Top Ten Move-In States

  1. Texas

  2. Florida

  3. North Carolina

  4. South Carolina

  5. Tennessee

  6. Idaho

  7. Washington

  8. Arizona

  9. Colorado

  10. Virginia

Top Ten Move-Out States

  1. California

  2. Massachusetts

  3. Illinois

  4. New Jersey

  5. Michigan

  6. Louisiana

  7. Maryland

  8. New York

  9. Connecticut

  10. Oklahoma

Our take

This is such helpful info. It tells us where our clients are heading, and where our next clients could be coming from. We’ve only given you the top 10 here, but the full study ranks 50 markets in total. We encourage you to check it out. As for agents in those Top 10 states, we believe these patterns are going to hold for a while, so organize and structure your brokerage businesses accordingly. Think of these states as possible markets you might want to expand into.

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The news that just missed the cut

Source: Bespoke Real Estate http://tinyurl.com/44cmzmdj

Foundation Plans

Advice from James and David to win the day

Whether you're a new agent or a seasoned veteran, it’s important to fully understand your client's expectations. Today, we’re going to focus on four common and important expectations from your buyer clients. This will help you come in prepared to handle (almost) any question they throw your way.

Know every listing in your market cold – Clients expect you to be well-versed in the local market, beyond just new listings. Familiarize yourself with square footage, room counts, and property details for every home in the area. Your clients are likely looking at listings daily. Don’t let them know more than you. Whether you work with buyers or sellers, analyze the MLS hot sheet daily to stay current on new listings, properties sold, price points, and reductions. By dedicating 10-15 minutes a day to this process, you'll be well-prepared to answer clients' inquiries about the market.

Know how much your client can afford – Even if they don’t go into detail about their finances, buyers will expect you to know exactly what’s in their price range. Make sure they are working with a reputable lender and that they understand how changing mortgage rates affect their monthly payments. Above all, make sure they have a realistic outlook on all the costs that come with homeownership. 

Know your client’s dream home – Buyers have must-haves, needs, and wants. As agents, we want to deliver on as many of those desires as possible. Ask specific questions to understand their preferences and motivations, and see where they can bend a little. For instance, if they need four bedrooms for a home office, would a three-bedroom option work? Would another type of room work for an office? Do they really need to work at home? Addressing their 'whys' narrows down their options and brings them closer to their dream home.

Know how to negotiate –  While your clients might not be aware of all the behind-the-scenes work, they know negotiating is a crucial part of your role. Whether it's the sale price or home inspection, ensure you have the skills to benefit your client. Stay connected with fellow agents to learn effective strategies in the current market. Continuously educate yourself, practice negotiation skills, and watch your business thrive. We strongly recommend that you role-play with your mentors and trusted agent-confidantes. 

This is just the tip of the iceberg. We’ll be sharing much more throughout the year, but reach out to us if you have any specific questions.

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An on-demand course created by James & David

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For Blueprint subscribers, the course is 30% for a limited time. If you’d like to take our course to learn how to become the top 1% of your market click here!

Just in Case

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

Source: Mortgage News Daily

That’s a wrap on this edition of The Blueprint and our first week in 2024!

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.

We say this to you at the end of every week because we firmly believe it. We hope you internalize it and apply it to your life. You can do it!

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

– James and David