Millennials lose massive ground in market

March 31, 2023

Use this talking point

Right now, with the banking collapse still all over the news, we’re in a period where many of our clients have concerns about the economy as a whole.

We know there’s no way to spin this news as positive, but it does open up an opportunity for us to have conversations with our clients about the safety of real estate.

If your clients voice the same concerns, we suggest using this talking point:

“With everything going on in the banking system worldwide, this goes to show that real estate is truly a great investment. It’s not backed by the government, and it’s not speculative. It’s brick-and-mortar and creates long-term wealth. You actually own the title.”

Not many things are this reliable, but we’re lucky that the growing value of real estate is one of them.

Oh, and another one: The Blueprint in your inbox every Tuesday and Friday! 🙂

– James and David

Housing inventory grows… finally

Source: Unsplash

Housingwire's Inventory Tracker reported that housing inventory grew by 1,734 units during the week ending March 20th, the first increase since early January. Logan Mohtashami, lead analyst for Housingwire, believes that the unhealthy housing market is a thing of the past.

Another big takeaway: purchase applications rose for the third straight week as rates have fallen. This is a good turnaround from the three weeks of negative data, when we saw rates rise from 5.99% to 7.1%.

Our take

This. Is. Great. News. Inventory is arguably the biggest industry-wide issue we have been facing for years. Each market is going to be different and it’s hard to predict the future, but we will let this data motivate us for the months ahead. As we said earlier, there’s opportunity out there – we just need to get creative and work hard!

Millennials ousted as biggest group of homebuyers

Source: Unsplash

In 2022, baby boomers replaced millennials as the largest generation of homebuyers, as boomers had a 39% share of home purchases while millennials had 28%. This is a massive switch from 2021, when millennials led boomers 43% to 28%.

According to Jessica Lautz, NAR's deputy chief economist, this resulted from two main factors: 1) older buyers having equity in their homes to help them buy another property, and 2) many young first-time homebuyers dealing with affordability issues.

Our take

This is a MAJOR shift which shows how much the pandemic really affected the housing market. Although there are still a lot of millennials buying homes, many were priced out of the market due to the huge spike in home prices. There’s still a big opportunity to help millennials buy homes, and it will take more creative approaches to help them find affordable options. Look for new builds and deals from developers, and work with your lenders to see what options are available.

Where housing markets are cooling fastest

Source: Unsplash

According to a Redfin survey of 100 metros, tech hubs and pandemic boomtowns are cooling faster than other markets. West coast tech markets are slowing due to high mortgage rates, low housing supply, and layoffs. Meanwhile, Connecticut, upstate New York, and parts of the Midwest are holding up best.

Here are February's fastest-cooling markets:

Austin, TX
Seattle, WA
Phoenix, AZ
Tacoma, WA
Denver, CO

Our take

Remember, the market is cyclical. This is an opportunity to be a hyper-local expert. Even if your market is cooling, that means there are opportunities for your buyers. And if a market is holding steady, that equals opportunities for sellers. The pandemic was a once-in-a-generation type moment, and again, we know that this is not 2008!

Schematics

The news that just missed the cut

Source: nypost.com

Check out David’s 41,000 sq. ft $59M Bel Air estate
James & David's 10 must-dos to build a real estate empire
LA’s ‘mansion tax’ takes effect April 1st
The homes.com ad scandal you need to know about
Here’s a great breakdown of projected Airbnb cash flow

Foundation Plans

Advice from James and David to win the day

As agents, we wear a lot of hats! Our clients expect us to be the whole package: researcher, teacher, marketer, negotiator, and more! It's important to work on building a skillset that will help you stand out from the crowd and best serve your clients.

Our friends at BAM put together an amazing list of skills every agent should have, along with great advice on how to hone them. Here are three of those skills:

Communication. This is the number one skill every agent needs to develop because good communication separates good agents from great ones. Actively listen to your clients and respond to their messages quickly. Every minute counts in this industry, so make sure you're an expert in all modes of communication!

Networking. The main way that you can build your real estate career as a new agent is to put yourself out there. Attend conferences, networking events, and even social events that might not seem directly related to lead generation. You never know where these introductions and conversations can lead!

Time management. It's too easy to get bogged down in admin tasks that prevent you from doing the client outreach and networking that will build your career! Focus on income-producing tasks and delegate other work to an office manager or virtual assistant.

Want to hear more about skills that will help level up your career? Click to read the article.