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Why a housing market crash seems unlikely

There was a fear that with growing inventory and slowing demand, a crash was looming. However, data gathered by Altos Research shows that we are heading for a soft landing in the housing market.

• There are 32% more homes on the market than last year at this time

• Home prices held firm for the past month at around $449,900

• 37.6% of homes on the market this year have had price reductions

Our take

This data really backs what we’ve been saying: this isn’t a subprime mortgage crisis and it’s not like the ‘08 recession. The market is in a really great spot. Here in Los Angeles, we’re seeing at least 20-30% inventory growth in the last several weeks. As we get into the fall buying season and inflation cools off, we’re going to be looking at a really exciting market!

Good news on inflation

On Wednesday, the Bureau of Labor Statistics published the latest inflation report based on July’s price activity. That report suggests the worst of it might actually be behind us.

They reported that inflation is at 8.5% YoY, lower than the forecasted 8.7%, and lower than the 9.1% heading into June. There was also a 0% change in inflation from June to July. The drops in gas and energy prices helped keep inflation in check.

Our take

This is great news. We’re expecting to see a ton of new buying activity following this report. Until now, many buyers were sitting on the sidelines and taking that “watch and see'' approach, but we think they’ll start to dip their toes in the water. In fact, we expect people to really start buying again in the coming months, so get ready for the rush!

American buyers turn their eyes to Europe

According to a report by Berkshire Hathaway, American demand for European properties is skyrocketing. What’s behind the trend? The rising value of the dollar, record-setting prices in the US, and the ability to work from anywhere. According to Sotheby’s data:

• In Q1, 12% of the brokerage’s sales in Italy went to American buyers, up from just 5% in 2021

• American interest in properties within Greece rose a full 40% YoY in Q2

• In France, property searches from American buyers went up 37% YoY

Our take

We’ve been hearing a lot about this trend from our fellow agents, mainly because of the parity between the euro and the dollar. Since the dollar is so strong, buyers are able to get a really amazing deal on some incredible properties right now. Plus, these properties are a strong investment in the long run, both for their rental potential and the resale potential if the euro does regain its strength.

Schematics

The news that just missed the cut

• This home listed on Zillow is nuts

• How to help your clients bring down their mortgage rate

• What you need to know about due diligence before your client buys a condo

• The best properties in Brad Pitt’s impressive portfolio

• Mark Cuban has some strong opinions about metaverse real estate

Foundation Plans

Advice from James and David to win the day

If you’re a new agent, getting up to speed can feel daunting. Take this process one step at a time, and start with these key basics:

1. Share the news with your entire sphere of influence. These are likely to be your first (and most supportive) clients. You can send out an email, personalized messages, or even invite them to an event to share the news and start generating leads.

2. Sharpen your image. If you don’t have a go-to professional look, update your wardrobe. Refresh your haircut, shine your shoes, and wash your car while you’re at it! Presentation is key in this business.

3. Build your toolkit. When you’re just starting out, you don’t need a ton of tech, but you do need a CRM, a basic website, and a schedule. Ask your fellow agents what they use, or do a little online research to find the best basic tools that can save you time and keep you organized.

Q&A

You ask, James and David answer!

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:

Friendly reminder to fill out our survey 🙂

Have a great weekend and we’ll see you back here on Tuesday!

– James and David

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