Three big trends

In today’s edition, we see the continuation of trends we’ve been seeing in the market: 1) Home price growth 2) the difference in new home sales vs. existing home sales 3) buyers continuing to seek out areas where their dollar stretches further. We give you the latest data on all these trends, and explain some of the context behind them.

Also, in today’s Foundation Plans, we continue our two-part series on building the best business plan for next year. We’ve got some great tips to help you succeed, and also, to help you avoid some of the mistakes we see agents make all-too-often.

With that, let’s get into today’s Blueprint!

– James and David

Home prices grew at fastest pace since April

In September, home prices grew 0.5% on a seasonally adjusted basis, marking the fastest pace since April, according to Redfin. This was the third consecutive month where the growth rate increased. However, on a year-over-year basis, home prices rose 6%, the lowest annual increase since December. Here are some other key data points from September:

• 37 of the 50 most populous metro areas recorded a seasonally adjusted month-over-month gain in home prices

• The markets with the biggest price gains:

  • Nassau County, NY: +1.7%

  • Philadelphia, PA: +1.6%

  • Virginia Beach, VA: +1.4%

• The markets with the biggest price drops:

  • San Antonio, TX: -1%

  • Fort Lauderdale, FL: -0.9%

  • Fort Worth, TX: -0.5%

Our take

Overall, this is a basic case of supply and demand. Home prices continue to rise due to demand consistently outpacing supply. With mortgage rates near 7%, and likely to stay above 6% through the end of the year, home prices should keep climbing. This trend may only start to ease when additional inventory becomes available in Spring 2025 and beyond.

New home sales beat estimates

In September, new home sales reached a seasonally adjusted annual rate of 738,000. This was 4.1% above the revised August rate of 709,000 and 6.3% above the September 2023 estimate of 694,000, according to the U.S. Census Bureau. The Midwest saw particularly strong growth, with sales up 19.2% year-to-date. However, it’s a different story for existing home sales nationwide, which hit a 14-year low last month.

The report also shows that 258,000 homes are currently under construction, providing about 4.2 months of supply, a historically high level. Additionally, there are 104,000 homes yet to break ground, representing 1.7 months of supply and nearing record highs.

Our take

New and existing home sales are clearly moving in opposite directions, largely due to differing dynamics. Homebuilders have more tools to attract buyers, including flexible financing options and various incentives, which give new homes a competitive edge. Timing also plays a role. New home sales are counted at the time of contract, while existing home sales are recorded at closing. Unless mortgage rates drop significantly, this divergence is likely to persist, as new homes currently provide the best value for buyers.

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The most affordable markets

The Wall Street Journal and Realtor.com ranked 200 U.S. housing markets based on their housing affordability and whether their local economies offered a low cost of living without sacrificing amenities. Using a variety of “buyer-friendly” metrics, their goal was to find markets attractive for both cost-conscious homebuyers and rental property investors.

Here are the top 10 metros for the fall of 2024:

1. Canton, OH

2. Akron, OH

3. Milwaukee, WI

4. Manchester, NH

5. Kalamazoo, MI

6. Springfield, MA

7. Rockford, IL

8. Worcester, MA

9. Ann Arbor, MI

10. Lancaster, PA

Our take

This falls in line with trends we’re seeing. Only four of the top 20 markets had home prices above the U.S. median in September, as buyers increasingly seek out areas where their dollar stretches further. This explains why Canton tops the list. It remains highly affordable, with median prices over $150,000 below the national average. While this list is helpful for cost-conscious buyers, it also serves as a valuable guide for property investors, offering strong potential for high returns on investment. We suggest sharing it with clients who invest in out-of-state rentals.

The news that just missed the cut

• How Detroit became a real estate boomtown

• Learn how to handle objections from clients like a pro

• Why mortgage rates are back up to nearly 7%

• Buying a foreclosed home: how a foreclosure sale works

• Both Amazon and Walmart sell tiny homes now

Foundation Plans

Advice from James and David to win the day

Today, we’re concluding our two-part series on tips for formulating a business plan for next year. The series aims to help you hit the ground running when January comes around. In your real estate practice, you always want to be at least a quarter ahead. 

You can read part one here with Tips #1-3. Now let’s get into #4-7.

4. Narrow your list of changes – One of the mistakes we see agents make when constructing a business plan: they create a laundry list of changes they want to make to their practice. It’s simply not possible to effectively implement 15 or 20 changes in the forthcoming year. We suggest identifying a maximum of three changes. For example, maybe last year, you had 10 buyer sales and sold five listings, and you want to increase the number of listings while keeping the buyer number the same. That’s one change. Perhaps you want to reduce the number of days you’re working. That’s another change. Don’t try to fix too much at once.

5. Write down your plan – If you don’t have a written plan, then you really don’t have a plan. Don’t just talk about it or keep it in your head. Hang it up so you can see it every day. Implementing changes to your business isn’t easy, especially when you start. That’s why it’s key to have your goals in front of you. Until your new routine becomes a habit, you have to drill it into you. 

6. Focus on becoming a listing agent – Listings are the lifeblood of a successful real estate business, driving essential leads and opportunities. While buyers may explore without committing, sellers are ready to move forward. Developing the mindset and skills to specialize in listings can set you apart from agents who primarily rely on repeat or referral clients. To thrive, focus on connecting with new sellers who aren’t yet familiar with you. With more listings expected to hit the market next year, now is the perfect time to start strategizing and preparing. 

7. Keep yourself accountable – It’s easy to make grandiose plans and then let them fall by the wayside. Keep yourself on track, and hold yourself accountable to your goals. That’s how we operate with our team. Every Monday, we meet to discuss how we’re doing. We tell each other how many sales we’ve made, what’s in our pipeline, who we’ve called, what’s pending, what’s about to close, etc. This way we know if we’re on track and if we need to make any adjustments. 

For more advice and tips on how to set yourself up for success next year, use these resources.

To learn more about Estate Media, visit their website.

Just in Case

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

Success in life comes from first taking ownership of your life and choices. Take action to become who you want to be. Nobody else can do it for you. 

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

– James and David