Learning to dance
If you’ve ever taken a dance lesson, you know someone has to lead. It’s the same way in real estate. Our clients are looking to us to lead.
This means we have to be proactive instead of reactive. We need to always stay one step ahead, and provide the direction before they even know they need it.
Scroll down to today’s Foundation Plans where we give you our best tips for how to lead your clients, and make the whole dance as smooth and graceful as possible. Hopefully, the end result will have you dancing all the way to the bank.
Now on with today’s Blueprint!
– James and David
Differing forecasts for 2024
Source: Realtor.com
Realtor.com and Bright MLS just released their forecasts for 2024. Here’s a breakdown of their projections.
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Mortgage rates
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Realtor.com expects rates to average 6.8% and drop to 6.5% by the year’s end.
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Bright expects rates to average between 6-6.5% and fall to 6.2% at the end of 2024.
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Home prices
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Realtor.com expects prices to drop 1.7% on a national basis
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Bright expects prices to rise by 1.5%.
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Inventory
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Realtor.com predicts inventory will fall 14% YOY.
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Bright expects inventory to rise by 7.6% YOY.
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Home sales
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Realtor.com expects home sales to rise by 0.1% to 4.07 million next year.
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Bright expects home sales to rise by 12.6% to 4.6 million next year.
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Our take
Well, this is getting interesting. As you can see, the two forecasts dramatically differ in their expectations regarding inventory and home sales. We hope Bright is right, but suspect Realtor.com’s projections are more probable. If 2023 has taught us anything, it’s to take a “wait and see” approach to all forecasts. Count on us to watch actual data like a hawk throughout 2024 and compare how they match up with all these year-end forecasts.
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The limits on conforming loans increase
The Federal Housing Finance Agency (FHFA) announced new conforming loan limits for 2024. According to HousingWire, the baseline limit for the majority of the United States will be $766,550, with a ceiling loan limit of $1,149,825 in high-cost areas.
By law, the baseline for conforming loan limits, which is calculated based on changes in the average U.S. home price, must change every year. The latest FHFA House Price Index indicates a 5.56% increase in home prices over the last four quarters. In turn, the baseline will increase by the same percentage.
Our take
This is a big deal for a lot of buyers. This means that they will be able to do 5% down on homes up to $806,894, or 3% down for first-time home buyers on a home up to $790,257 with a standard Fannie Mae/Freddie Mac conventional loan. Given our current mortgage rate environment, clients are looking to us agents for guidance. Make sure you’re keeping tabs on all the options that are available to them.
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Fewer homebuyers looking to relocate
Source: Redfin
Nationwide, there are fewer homebuyers looking to relocate than a year ago, due to elevated mortgage rates and high housing costs. That’s according to Redfin’s October migration report. 24.7% of Redfin.com users looked to move to a different metro area in October, down from 25.9% the month before. White that’s the largest month-over-month drop on record, the share remains higher than pre-pandemic levels.
Here are the top 5 metros where homebuyers are moving and leaving:
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Moving Into
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Leaving
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Our take
It’s not hard to understand why the number of people relocating has fallen in recent months. There are many reasons. Moving has become more expensive. We just saw the 30-year-fixed mortgage rate hit its highest level in 23 years. Home prices are up 3.5% from a year ago. But… mortgage rates have fallen in recent weeks, so it’s not unreasonable to expect more people to move in the coming months.
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Schematics
The news that just missed the cut
Myrtle Beach, SC: https://bit.ly/3MvTH5o
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The salary needed to buy a home in different US Cities
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Why Altos Research thinks home sales will increase in 2024
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Guess the percentage of homes institutional investors own
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8 predictions from Million Dollar Listing’s Ryan Serhant
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How to buy a home without a 20% down payment
Foundation Plans
Advice from James and David to win the day
As we said up top, real estate is a dance, and our clients are looking to us to lead. Although every potential buyer is different, you can be consistent in your approach. Here’s some good steps to take:
Really know your client’s needs and wants – Dig deep to investigate exactly what your clients want. Whether you use a pre-qualification questionnaire or not, pinpoint your buyers' specific preferences, their financial qualifications, desired location, and anything else. Talk less and listen more. The better you understand what they want, the better you can help them achieve their goals, real estate and otherwise.
Educate your clients regarding their financing options – More than ever, clients are looking for agents who can help them understand financing options. Make sure you're well-versed in terms like 30-year fixed, 3-2-1 & 2-1 buydown, rate buydown using points, adjustable rates (3, 5, 7, and sometimes 10-year), assumptions, and seller financing. Clarify to your clients the differences between pre-qualification, pre-approval, and loan commitment. Being able to explain the differences matters a lot!
Keep your clients in the loop – Overwhelmingly, the number one complaint that clients have about their agents is the lack of communication. Always be one step ahead of your clients. Be proactive, not reactive. They need to know what’s happening now and what’s happening next. Constant communication lets them know that you’re on the job, and they are your number one priority.
For more excellent tips on how to be a better buyer agent, start here.
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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!
Remember: 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. You can do it!
Thanks for reading, and we’ll see you back here on Tuesday!
– James and David
