Welcome to 2022!

What’s even more exciting than a brand new year? A hot new referral rewards program! Call up your real estate friends and share The Blueprint to earn a social media shoutout, one-on-one Zoom call with us, and more! Read to the bottom for the full details and your exclusive referral link…

Happy sharing!

– James and David

Today's Blueprint:

• Five major trends we’re watching in 2022

• Pssst! These five metros are still undervalued

• This tidbit might "inflate" your confidence

• How to help your client craft a winning offer

Strap in! It’s time for some futurecasting… 

We can already tell this year is going to be exciting! So we thought we'd get a little bold with five major market predictions for 2022:  

1. Watch for mortgage rates to hit 3.6% by December

2. Inflation will likely peak at 5% midyear, then taper down to 3%

3. Expect a record number of fresh listings, but still not enough to feed demand

4. Home prices will keep rising, but not as steeply

5. Rental rates will increase 7% by the end of the year

Again, these are predictions. We don’t recommend taking them to Vegas, but if they do come true, you can bet we’ll remind you that you heard it here first 😉

Respond to this email and let us know your predictions for the new year!

Take a look at these hidden gems

The National Association of Realtors just released their Hidden Gems report listing the top undervalued markets poised to explode in 2022. To compile this list, they rank the value of metros based on seven factors, including local wage and job growth, home prices, population age, and internet access. Each metro is given a score. The top 5 scoring metros with a population of 200,000+ are… *drumroll*

1. Dallas-Fort Worth-Arlington, TX

2. Daphne-Fairhope-Foley, AL

3. Fayetteville-Springdale-Rogers, AR-MO

4. Huntsville, AL

5. Knoxville, TN

Our take

If your buyer is looking for an investment in an established market, they’ve got to find a unique home or special feature that will help their property stand out. But in these smaller markets, it’s much easier to create value. If they’re looking for a rental, it doesn’t matter if the local market is over or undervalued. Rental properties create their own profit and are very in-demand. 

The two faces of inflation

Inflation gets a bad wrap, but not all market players are mad about it. For sellers and long-term investors, inflation is consistently pushing up property values. Those with locked-in interest rates benefit the most because the value of their assets rise while their monthly payment stays the same. When they’re ready to cash in, sellers can list high and actually stand a chance at getting their desired price. 

However, buyers and short-term investors should beware of persistently high inflation. If they plan to resell the property quickly, they run the risk of losing to price stagnation. While the market isn’t expected to decline this year, prices will likely level off soon. That makes it hard for quick-flippers to cover their purchase price and expenses in the short-term.

Our take

Real estate is a great bite-and-hold asset because it rises alongside inflation. If your clients are nervous about buying while inflation is high, remind them that rates will be going up very soon. The Federal Reserve will start corrective action and the chance of locking in significant savings is fading quickly. 

Schematics

The news that just missed the cut

• Guess which CEO just bought this minimalist mansion in Bel-Air

• Fool-proof answers to your clients’ most common questions

• If at first WeWork doesn’t succeed, Adam Neumann tries real estate 

• Fast & Furious 10 director Justin Lin races to list his $7M LA penthouse 

• How to help your clients furnish their new digs on a budget

Foundation Plans

Advice from James and David to win the day

In today’s ultra-competitive market, closing on a property often takes more than a “spray and pray” offer approach. Homes are selling in under two weeks, bidding wars are still the norm, and cash will always be king. So how can you give your buyers the best possible chance of winning the bid on the home of their dreams?

1. Get clear on their final budget. Buyers tend to overextend their finances in competitive markets. But if they forget to budget for closing costs, inspection fees, taxes, and other expenses, they can lose their dream home during escrow. Be sure they know every dollar and cent it will take to close on their home before they put in an offer. 

2. Have strong financing in place. If your buyer must use financing, have them get a pre-approval letter before house-hunting. Remind your client to avoid any financial activity that could jeopardize their approval during their home search, like opening a new line of credit or changing jobs. 

3. Make the best possible offer. A high offer with a big down payment and favorable terms has the best chance of winning in a bidding war. A short contingency period and a waived inspection are also possible bargaining chips for your client to consider to sweeten their offer.

Just in Case

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

Referral Program Details

Obligatory legal jargon: Our referral reward program is subject to change. Since The Blueprint community is growing, certain rewards won’t last forever. 1 subscribe = 1 referral. Don't hesitate to respond to this email if you have any questions about one of the referrals. 

Thanks for spreading the word!

– James and David