Sellers unlocked?

This past year, one of the phrases we heard often (…much more than we wanted to) was “rate lock-in effect.” Homeowners didn’t want to sell because they wanted to hold onto their relatively lower rates.

Well, it appears that effect might be starting to—finally!—subside. Scroll down to our second story where we’ve got a report that shows sellers are starting to get back in the game. 

And with that, we get into a new edition of The Blueprint.

– James and David

Home prices grew in 85% of all US metros

85% of U.S. metro markets saw home price increases in Q4 of 2023. That’s according to NAR’’s latest market update. Here’s what else it reports:

  • 15% of the 221 metros studied saw double-digit price gains, up from 11% in Q3

  • Median home price was $391,700 in Q4, up 3.5% YOY

  • The South led all regions with the largest share of single-family existing home sales (45%) in Q4

  • 8 out of the 10 priciest metros in the country were in California

  • YOY home price gains by region:

    • Northeast – 7.3%

    • Midwest – 4.7%

    • West – 4.2%

    • South – 3.2%

Our take

We should all take a step back and marvel at the current state of the U.S. market. Last year was one of the most difficult years in real estate history and yet 85% of all metros saw home prices increases. Don’t ever let anyone tell you homeownership isn’t a good investment! This all bodes well for 2024. Home prices are going to keep rising this year, and we believe we can get a lot more deals done.

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How sellers are acting VERY differently

Source: Zillow

There was a big shift at the end of last year in how mortgages affect whether or not a homeowner wants to sell, according to Zillow

In June 2023, homeowners with mortgages of 5% or higher were almost TWICE as likely to sell compared to those who had mortgages below 5%.

However, by December 2023, there was almost no difference between the two groups. 22% of homeowners with rates below 5% were willing to sell, and 23% of homeowners with rates above 5% were willing to sell.

Our take

This is a huge finding by Zillow. We now have hard data which shows that more than 20% of homeowners are willing to sell. While that’s nowhere near a majority, it’s still great news for us agents. It shows that the opportunity is out there, and it will likely grow. We can expect the number of sellers to go up as mortgage rates come back down. This is very good motivation for all of us to keep pushing ahead!

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How politics are affecting homebuying

New reports from Redfin and Allied Van Lines shed light on the impact that local laws and political divides are having on real estate. 32% of agents surveyed by Redfin said they had at least one client in the past year make a politically-motivated real estate move. 

People’s reasons for moves vary widely, from the general political climate to specific issues such as reproductive rights or guns. Red states are top destinations for movers. However, we should note that interstate moves did drop 12% last year compared to 2022.

Here are the top inbound and outbound states, per AVL:

Top Inbound States

  1. South Carolina

  2. Arizona

  3. Tennessee

  4. North Carolina

  5. Florida

Top Outbound States

  1. Illinois

  2. California

  3. Pennsylvania

  4. Michigan

  5. Washington

Our take

We don’t like talking politics in this newsletter, but we do like knowing what’s motivating buyers and sellers in their real estate decisions. We recommend agents be mindful of how politics might weigh into their clients’ decisions and use this knowledge to best position themselves and help their clients.

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The news that just missed the cut

Foundation Plans

Advice from James and David to win the day

You can’t be all things to all people, especially in real estate. We think that it’s best to focus your skills into a particular niche and become a specialist in that area. That way, you rise above the ranks by setting yourself apart. Today, we’d like to offer you some tips on how to differentiate yourself:

Geographic area   Farming a particular area is the most common way to position yourself in a market. However, it can also make you vulnerable to competition. Other agents can claim to specialize in the same neighborhood as you, so you don’t want this to be your only point of differentiation. Showcase other things that set you apart, such as your ability to get clients to the closing table faster or your passion for matching high-end buyers with homes that reflect their affluent lifestyle, and so forth. 

Customer type – This is often used to target specific clientele, such as first-time home buyers, veterans, tech workers, nurses, or seniors. It can be extremely effective, if you have a strong connection to a particular group of people. Let’s say you decide to focus on seniors who are preparing to downsize. That doesn’t mean you’ll never work with another veteran again. It simply means you don’t spend your time and money marketing to them. The majority of your attention is focused on your clientele group.

Property type – Agents can specialize in a specific type of property, such as manufactured homes, condos, or homes by the waterfront. It can reassure your customers to know that you concentrate on exactly what they are seeking. The downside to this niche is that the market may change; condos may suffer as first-time buyers pull out of the market, or waterfront homes may be in short supply or manufactured homes may go out of vogue. Protect yourself by combining this niche with other ways you can specialize.

Specific expertise — You can showcase knowledge in other areas, such as negotiations, contracts, home staging, lending options, construction, or remodeling. Agents who come into real estate as a second career can use their experience in another closely-tied industry, such as mortgage banking or contracting.  

To learn how to find your niche as an agent, start here.

The 1% Blueprint

An on-demand course created by James & David

Discover our strategies and techniques to attract a stream of high-quality leads, propelling your real estate business to new heights of success.

For Blueprint subscribers, the course is 30% for a limited time. If you’d like to take our course to learn how to become the top 1% of your market click here!

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!

We hope you have a wonderful time this weekend enjoying the Super Bowl with your friends and family, and come back refreshed and ready to crush it next week. Your life is what you make of it, so make it a good one!

Thanks for reading, and we’ll see you back here on Tuesday!

– James and David