The higher rates have caused the housing market to cool - with July new home sales at their slowest rate in over six years.
Buyers are now starting to see some relief.
The good news is buyers are beginning to face less competition, and sellers are offering more concessions to secure contracts with buyers according to a new survey from Realtor.com. In fact, 92% of home sellers who sold within the last 12 months accepted some of the buyer's terms, with 41% accepting contingencies such as an appraisal, home inspection, financing, etc. At the same time, buyers requesting repairs based on inspection results had more than doubled in recent months while the number of sellers refusing to make repairs fell to zero.
Approximately 1/3 of sellers reduced the price because the home didn't appraise, 1/3 paid for "some or all" of the closing costs, 30% met the buyer's needs in terms of the requested closing timeline, and 29% paid for repairs.
Another important statistic: Sellers who sold their homes below asking price increased to 31% within the last month, up from 18% in February and March.
Nevertheless, most home sellers were still quite content with the sale of their home. And homes are still selling quickly - with 22% of homes going under contract in under a week.
Other Economic Factors
The Consumer Price Index rose by 8.5% over the last year. The Federal Reserve is trying to get inflation under control and intends to raise the federal funds target rate at least three more times before year end.
Although mortgage rates are not directly tied to the federal funds rate, they can increase after Fed rate hikes and are sometimes influenced by investor expectations regarding the impact of those hikes.
Inflation continues but has begun to slow, which is a good sign for mortgage rates and the broader economy.
Top Markets are Seeing a Shift
The Knock Buyer-Seller Market Index revealed that in July, the U.S. housing market moved toward buyers for the first time since 2017. In fact, almost all the 100 largest housing markets shifted toward favoring buyers in July.
San Diego, San Francisco and San Jose became buyers’ markets as home prices fell by more than 60%. Days on market also increased significantly over the same period last year.
Boise, Phoenix and Colorado Springs, three of the hottest seller locations since 2020, stand poised to favor buyers by mid-2023. And Austin, Texas is set to become one of the most favorable buyers’ markets after a 71% run-up in home prices during the pandemic.
Let’s Chat: 3 Ways to Use Emails to Launch Client Conversations
One of our strategies for long-term success is to cultivate clients for life. It's how we do business, and it's how we counsel our agents to do business. To that end, we're a big fan of email as a way to begin and develop relationships.
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In our experience, those agents who don't use email just aren't as successful as those who do.
Here are three simple best practices for using emails to launch conversations with the goal of creating clients for life:
1. A Personalized Message
In a time of spam, bots and auto replies, a deeply personalized email can really stand out in the inbox. It can also differentiate you from other real estate professionals because it demonstrates that you pay attention to each person's needs and preferences.
2. A Call to Action
The second thing we include in every email is a call to action - something for the recipient to do or respond to. That starts as early as the subject line. We like to ask questions that relate to the body of the email. Each request allows us to develop a deeper relationship with the client by getting to know them better.
3. Something of Value
One of the ways we cultivate client relationships is to give them something useful for free. This aligns with a consumer's "What's in it for me?" positioning. We are proud to have a variety of ways to add value to our clients. The strategy here is to demonstrate that we have access to information or offers they don't and that they can get more value from us than from another brokerage.
Here's to your success in leveraging email marketing to build your business!
In real estate, the market can turn on a dime, which is why agents need to be smart about saving money where they can in their business.
From not spending money at all to investing some strategically, here's how industry experts say agents can save their pennies:
Grow Your Knowledge Base First
Instead of turning to products or technology to fix a problem in one's business, Lindsay Reishman of Pareto in Washington, D.C., says that agents should first consider working on their knowledge base in their field. Having a deeper understanding of the market is typically what helps set an agent apart, Reishman argued.
Invest Deliberately and Make a Plan
After doing everything agents can to address pain points in their business without spending money, only then can they gain a better understanding of what they need specifically, and be more deliberate about their spending, Reishman said.
Scrutinize P&L Statements
There are so many subscription services today that it's possible some agents are subscribing to services that may have been relevant to them years ago but are no longer - without even realizing it. To weed out the unnecessary ones, Reishman said agents should regularly review their P&L statements (profit and loss statements) for services they're no longer using. Even small recurring expenses can add up over time - a monthly fee of $20 could save an agent $240 over the course of a year if eliminated.
Take Advantage of Your Brokerage's Services
See what your brokerage can provide you. They are there as a stopgap to help you with any issues for contracts or IT support. What can they help you with, either on the marketing side or on the transaction coordination side? Maybe there's a redundancy you didn't realize.
Work With a Mentor
Particularly for new agents who are trying to save money while they get their business established, Elena Licari of Coldwell Banker in Los Gatos, California, recommends finding a mentor who can help guide you through decisions. There's no need to "reinvent the wheel," she said, when there are agents who have been through the same thing before and are willing to share their knowledge.
Shift Your Mindset
Maintaining a flexible mindset is another strategy that Licari's employed in order to save money in her business - a strategy that proved instrumental during the uncertainty of the pandemic.
"A lot of it is mindset," she said. "Mindset is what will determine if you survive - or not. It is what allowed me to thrive in COVID. Personally, my business expanded more than I ever imagined during COVID because I was able to pivot and shift and I think that's an extremely important quality for an agent - not to get stuck in one way - to constantly reevaluate your systems and pivot …"
Dennis Bowers of The Bowers Group at Compass in Naples, Florida, said that the adage "You have to spend money to make money" is one that actually can hold true when it comes to adding members to your team. A few years ago he hired an assistant to help take care of the tasks in his business that slowed him down, and hasn't looked back since.
After growing with an assistant for some time, agents should consider creating a team with more agents in order to grow their business even further, Bowers said.
Become A Visible Presence in Your Sphere
Bowers said that working one's sphere typically helps agents bring in more money at the end of the day than buying leads. Instead of turning to Zillow or other sources for leads, Bowers said, focus on your sphere.
"You're going to get more bang for your buck if you focus on those people over a buyers lead generation system. It's one thing that definitely saves money and will prevent your from falling into the trap of, 'Oh, I can generate 300 leads for you this month. You're going to pay me X thousands of dollars.' With that number, you might get one or two actual buyers or leads, and then you have to convert them. That's a big trap that people fall into."
Lean Into Digital and Virtual
Marketing online through social media and other outlets is much more affordable than print marketing, and arguably more effective for today's audiences of homebuyers and sellers.
Talk To Your Accountant
Since most Realtors work for their brokerages as independent contractors, many have the ability to write off a number of expenses when it comes time to file their taxes. Therefore, in order to make the most of tax season, agents should stay up-to-date on the current tax code and speak with an accountant about their options.