Let’s talk about boundaries…

Do you set real boundaries or do you let your clients run your life?

It took us a while to learn how to set good boundaries. We used to feel this constant pressure to always be available, 24/7, no matter what we were doing. We’d pick up every call, even if we were in the middle of family dinner. We’d answer every text and email the moment it came in. Clients got our best, and everyone else got the rest. 

But later in our careers we learned that, really, our clients respect us more when we set realistic, healthy boundaries. You can still offer excellent service, even if you don’t pick up the phone during dinner!

– James & David

Housing market predictions for the next 5 years

Forbes asked several housing market experts how they think the market will change over the next five years. Between now and 2027, they expect the market to be impacted by these key factors:

• Strong demand from Millenials/Gen Z. First-time buyers in these age brackets represent an estimated 31% of the homebuying market, meaning demand is likely to stay strong for a while. 

• Short housing supply. We’re short about 1.8 million homes. Even with new starts climbing, the market will remain unbalanced for years to come.

• Tighter lending standards. Today’s stricter borrowing standards – including higher down payments, better credit, and proof of income – will make it less likely that we’ll see a repeat of 2008’s widespread default.

• Higher prices and less spending. With interest rates on the rise, inflation is likely to cool. That will slow down both consumer spending and home price growth. 

Our take

Overall, we agree with these predictions. Another factor that we’d add to this list: more aggressive buyers. While supply remains low, buyers will keep angling any way they can to get their hands on property, and this will give sellers more leverage. If they can pick from dozens of offers, they’re going to choose the cash buyer, the pre-approved buyer, or the buyer with the strongest offer. 

Lumber takes a tumble

Let’s say “Timberrrr” because lumber prices are dropping fast. Much to the relief of home builders, lumber is down to just $829 per thousand board feet. That’s a 39% drop just since March, and a huge decline from last May when lumber peaked at $1,733 per thousand board feet. Business Insider chalks this sharp decline up to inflation weakening the home improvement market and putting a halt to renovations.

According to The Real Deal, March’s declining lumber prices could spark a new-build frenzy among developers. New housing starts for privately owned homes were already up 22.3% in February.

Our Take

This is great news for developers. Cheaper lumber lowers their cost basis, which means they can afford to pay more for tear-down properties. That’s going to further stimulate demand from developers and builders. While this could increase inventory in the long term, right now, more builders with more cash means that we’ll likely see an increase in the competition for potential development properties.

The rise and fall of second-home demand

During the pandemic, the demand for second homes soared as people wanted to escape crowded cities and explore remote work. But in the past two months, that demand has plummeted. Forbes attributes the drop to these factors:

• Mortgage rates began rising in January, pricing out some buyers 

• By March, the average list price hit $405,000, the highest level in U.S. history

• On April 1st, upfront loan fees for vacation homes increased 1-4%, adding about $13,500 to the cost of buying a typical $400K second home

Our take

We believe the rising lending fee for vacation homes is the biggest reason behind the drop in demand. Unless your buyers are using all cash, this is an expensive fee charged on top of rising rates. But the drop in second-home buyers probably won’t impact prices anytime soon. Primary home demand is still very high, even in neighborhoods where second-home buyers used to look. With such a severe housing shortage, this shouldn’t impact the market at all. 

Schematics 

The news that just missed the cut

• See inside Mark Wahlberg’s recently listed $87M Beverly Park Mansion 

• In Miami, mortgage firms are testing out crypto loans

• Quiz yourself! How well do you know the value of these 10 home improvements?

• The latest inflation report, explained via Twitter thread

• This podcast breaks down the Dallas Fed’s housing bubble report

• Rent is going crazy in Florida right now

• These homeowners in DC claim to have been defrauded for $1.8M

Foundation Plans

Advice from James and David to win the day

Building your business through social media is crucial these days. We try to maximize our time and our reach by using these three strategies:

• Get granular. We watch our social media data to see what kinds of posts get the most engagement and comments. Then we try to replicate that success, and avoid any missteps or pitfalls.

• Build effective ads. Once we know which posts perform the best, we use that data to create social media ads that drive traffic to our website, listings, and contact page. 

• Be human. If you’ve seen our Instagram accounts, you know we mix business and family. Share personal stories, life events, and pictures of your family right alongside your business posts to keep your audience engaged.

Want more social media tips? Check out our in-depth strategy article here. 

Q&A

You ask, James and David answer!

Just in Case

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

If you've made it this far, thanks for reading. We love cultivating these newsletters, sharing our insights, and building this community. We hope you are finding value! If you can take a minute, will you reply to this email and let us know what real estate products/software tools you like to use?

Have a great weekend!

– James and David

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