It’s like deja vu!

We’re having flashbacks to 2019 because our biggest sale ever came on a home that just went back on the market. Three years ago, we represented the seller on the iconic Spelling Manor that sold for a whopping $120,000,000, the most ever for a Los Angeles home. Now it’s priced at an even-more-whopping $165,000,000!

Originally built for famed TV producer (…and, equally notably, Tori’s dad) Aaron Spelling, it’s LA’s largest home at 56,000 square feet. That’s bigger than the White House, and sits on 4.65 acres with a swimming pool, tennis court, and parking for 100 cars. It’s a masterpiece in architecture.

It was a milestone moment in our career, and one we’ll never forget. When we came to LA, we could never have imagined being a part of such real estate history. We didn’t know anybody, and just started knocking on doors. We want to take this moment to remind you that even if you start small, you can always think BIG.

– James and David

Proof that it’s a seller’s market

January marks the fourth month in a row where the number of active listings has decreased. Here’s a quick look at the freshest market data from Realtor.com:

• Inventory in the 50 largest metros is down 27.6% YoY

• The number of new listings to hit the market in January declined by 9.1% YoY

• Homes sold 29 days faster in January 2021 than they did between January 2017 and January 2020

• The median price per square foot is up 13.5% YoY for a median home price of $375,000

Our take

This data shows that it’s a seller’s market. The supply is so low that real buyers are willing to go above and beyond to get their hands on property. Drop everything you’re doing and go get listings. Sit open houses, go door-knock, and do everything you can to show those buyers you can get them top dollar. 

Homebuyers are feeling less than sentimental

Home-buying sentiment is at its lowest level since May 2020. According to Fannie Mae’s survey:

• Only 25% of all respondents agreed now is a good time to buy

• Only 15% of surveyees 18-34 years old are optimistic about buying in this market

• Only 17% of young people think now is a good time to buy

Our take

If the market is so “bad”, why are buyers jumping on listings the moment they hit the MLS? Because loans are still easy and cheap. It’s a much better value for your money to get a loan on a property, even if the market is high, just to lock in the historically low interest rate. Time is running out on these rates, so move fast! 

Keep your eye on Proptech

Venture capital firms poured a staggering $32B into proptech last year. 49% percent of those VC investment dollars went straight into residential real estate. And there are now more than 8,000 proptech companies supporting agents, buyers, and sellers. 

BTW, what even is proptech? Think all things digital: virtual home showings, e-signing capabilities, databases, and any kind of tech or software involved in real estate.

Our take

Tech will always be evolving and progressing. Look at agents now—we’re on email and cell phones all day long, and we didn’t even have these things a couple decades ago! Every few years, the entire industry shifts and becomes more efficient. And you should shift with it. Always chase efficiency. It sets you apart and makes you an even better agent. 

Schematics

The news that just missed the cut

• Why you shouldn’t overlook modular homes

• The Twitter thread explaining real home prices in six handy charts

• Wander is like AirBnB for remote workers, but with Teslas!

• Ryan Seacrest’s stunning Beverly Hills estate is now only $70M

• This trick made one broker $10K in 24 hours

Foundation Plans

Advice from James and David to win the day

In this market, sellers expect top dollar when they list their homes. Here’s how you can help your seller have more realistic expectations:

• Explain the optimal listing price. Sometimes listing a home on the lower end of pricing creates an instant buying frenzy, driving up the sale price by 25-30% by the time the dust settles. 

• Avoid overpricing. You’ll have to reduce, reduce, reduce. Then your eventual buyer will use the lengthy time on market as a bargaining chip to negotiate an even lower price. It’s just never worth it!

• Come with comps. If you’re bringing your buyer a number below what they’re expecting, be prepared to prove your strategy. Bring comps, statistics, and any evidence you have to prove why that’s truly the best price. 

If your seller just won’t accept your proposed price, they’re not the seller for you. Move on! It’s better to lose a potential client now than to waste months on an overpriced property.

Q&A

You asked, we answered!

Q: If I’m door-knocking and someone says they do want to move in three or four months, what material should I bring to the follow-up? 

– Chad T., Los Angeles

A: Treat that follow-up like it’s a listing meeting! Bring comps, your agent bio, and your portfolio of wins. Run the numbers and know their area like the back of your hand. Have comps ready and a marketing strategy on paper. Do everything you can to blow their socks off!

Guessing means stressing. Whatever you’re wondering, just ask it here!

Just in Case

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

The numbers you read today don’t lie! You’re in the best career on the planet during the absolute best time for this industry. There’s never been more technology, more market interest, or more opportunity for all of us. What a great time to be alive.

Have a great weekend and forward this to one person who you think would enjoy this edition 😉

– James and David