So far, so… similar

Now that we are more than two months into the post-NAR settlement era, we are starting to see data on how the rule changes have affected our industry.

As you’ll see in our second story, when it comes to commissions, the answer is “not much” so far. Commissions are basically on par with where they were when these changes went into effect in August.

This is something we will surely be keeping an eye on moving forward, as one of our main goals with this newsletter is to help us all adjust to the new reality… which might not be so different after all.

– James and David

Pending home sales smash expectations

In September, pending home sales of existing homes smashed expectations, jumping 7.4% month-over-month while analysts had predicted about a 1% gain, according to NAR’s latest update. 

Regionally, pending sales saw the biggest year-over-year gains in the West (12.3% YOY) where home prices are the highest and buyers benefited most from the small drop in mortgage rates. The North East saw a 3.3% rise YOY, while the Midwest and South remained unchanged.

Our take

This is great info. Pending sales numbers are the most current indicator of buyer demand, since they are based on signed contracts and represent people out shopping during the month. They also show how sensitive today’s buyers are to mortgage rates. But with mortgage rates now rising to 7%, the rebound in pending activity is likely short-lived. It’s also unlikely that 2024 home sales will exceed 2023 levels. Still, let’s wait and see how things shake out. The housing market has been defying forecasts all year.

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New rules have little impact on commissions

Commissions paid to buyer’s agents have remained essentially unchanged since the new rules on commissions went into effect on August 17th. That’s from Redfin’s analysis of buyer’s agent commissions for October home sales which have already closed or are scheduled to close by the end of the month. Here are the key takeaways from Redfin’s report:

• The average buyer’s agent commission for homes sold in October was 2.34%, down just 0.01 percentage point (pp) from the 2.35% for homes sold in August when the new rules took effect.

• Buyer’s agent commissions have fallen 17 basis points since January 2023, when they averaged 2.51%.

• Interestingly, buyer’s agent commissions for homes listed under $500,000 rose from an average of 2.41% in August to 2.43% in October.

Our take

It is too soon to reach a definite conclusion here. It’s also important to put this report in context. Even BEFORE the rule changes, commissions for buyer agents had been going down. Although the actual dollar amount paid for commissions went up, as the value of real estate rose, commissions paid to buyer agents have been on a downward trend for the past two years in percentage terms. It appears the rule changes haven’t accelerated or stopped that trend, so far.

10 affordable cities poised to become million-dollar markets

With home prices rising in certain parts of the country, several affordable areas are poised to break the six-figure ceiling. According to Realtor.com, most of these markets are in the West and Midwest. Unsurprisingly, they’re close to bigger, more expensive metros.

Based on growth projections of their proprietary data, here are the top 10 affordable cities poised to become million-dollar markets within the next decade:

1. Boise, ID

2. Salt Lake City, UT

3. Portland, OR

4. Colorado Spring, CO

5. Stockton, CA

6. Denver, CO

7. Sacramento, CA

8. Boston, MA

9. Honolulu, HI

10. Seattle, WA

Our take

These types of forecasts are interesting, but it’s important to know their limits. No one can make accurate price projections 10 years out. However, it is important to keep an eye on where prices might be heading. While we might quibble with some of the projections in this report, it makes a reasonable and informed case. These definitely are growth markets, and every agent and real estate investor should be positioning themselves to capitalize. 

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The news that just missed the cut

• The wealthy are overpricing their homes

• You might have heard: We were on the deal of Jeremy Renner’s home

• An update on the debate re: the Clear Cooperation Policy

• How this startup hopes to boost housing inventory

• The benefits of buyer agents when buying a new construction home

Foundation Plans

Advice from James and David to win the day

Today, we’re concluding our two-part series on tips for crafting an effective real estate listing marketing plan for 2025. We believe that agents will face certain headwinds – elevated mortgage rates, lower-than-normal listing levels, longer days on the market, and buyer hesitancy – that will make it difficult to sell a property for the highest price possible. To overcome these challenges, it will require a strategic approach. You can read part one with Tips #1-3. Now let’s get into #4-6.

4. Identify and target your ideal buyers

When marketing a listing, it’s vital to identify and appeal to your ideal buyer or target audience. Understanding your property’s unique features, neighborhood appeal, and target demographics allows agents to craft marketing materials that resonate with the right audience. Use advanced demographic insights and market data to locate potential buyers based on lifestyle preferences, income, and buying behaviors. Once you pinpoint these buyers, use digital and print campaigns tailored to reach them directly, utilizing social media ads, targeted email campaigns, and specialized listings on high-traffic real estate platforms. Engage prospects through high-quality photos, virtual tours, and videos, highlighting features that appeal specifically to the ideal buyer, from high-end finishes to proximity to top-rated schools or vibrant shopping districts.

5. Refresh and relaunch stale listings

If a listing remains on the market longer than anticipated, it may deter potential buyers. To counter this problem, we recommend implementing a strategic refresh and relaunch plan. This includes assessing and updating the listing description, adding new highlights, or rephrasing details to keep the property appealing. Adjustments to the staging and photography can give it a fresh look, appealing to buyers who may have initially overlooked it. Additionally, we recommend leveraging a re-targeted marketing push to re-engage potential buyers and tap into a new wave of interest, ensuring the listing regains visibility and excitement.

6. Create an exclusive experience for serious buyers

To further enhance appeal and secure a high sale price, think about using premium in-person marketing that creates an exclusive experience for serious buyers. From private showings with personalized tours to select invitation-only open houses, cater to buyers looking for a premium personalized special experience. Customized property brochures, high-quality staging, and personalized walkthroughs create an environment where potential buyers can envision their lifestyle within the property. If it’s within your budget, you might want to consider using neighborhood influencers to create buzz around your listing, positioning it as a unique opportunity.

There are many aspects to marketing a listing effectively, so we’ll be sharing more tips throughout the year. But these six tips are an ideal starting place. For more resources on the subject, check these out here and here.

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:

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