March 27 - Integrating Learnings and The Financial Tug of War Continues.
Updated: Apr 23
A NOTE ON THE WEEK
Integrating Learnings and The Financial Tug of War Continues.
I was thrilled to see many of you at Built How in Palm Springs. I have pages of notes I will process over the next few months. My main focus coming off the conference high is to focus on one thing. It is worth it if I can operationalize one idea while the adrenaline is pumping. For us, that one thing is to obsess over this hospitality discussion. Such an amazing perspective shift from service to hospitality. I love it. More soon.
We loved the positive feedback on our weekly updates at the conference. I appreciated the feedback even more. We are making a few adjustments this week.
Since 70% of our audience is high D and won’t read past the first sentence, we add summary bullets and bring back the video. (Thanks Chad and Jordan)
In our “Forward to your Buyer” section, I often make a “talk to your agent reference.” That is a tactical error that prevents many of you from forwarding those emails directly. Consider it fixed.
We look forward to a great week preparing buyers to win this spring.
Jesse Passafiume
SCRIPT OF THE WEEK
Are You Ready To Buy?
“This is a unique spring buying season because there are fewer homes for sale than normal. With lower interest rates, we are seeing a lot of buyer activity. The good news is that most markets will likely see price increases over the next 6 months. We are encouraging our buyers to get fully pre-approved and be ready to make a competitive offer to take advantage of equity gains in 2023.”
MORTGAGE MARKET
The Flight to Safety and Inflation Tug-Of-War Continues
Reminder: Bad for the economy = Good for rates
This week is likely to feel like groundhogs day. Deutchabank is the latest big bank to get into trouble, like Credit Suisse last week, we will see them dominate the news cycle. There is still uncertainty around the US banking system. Janet Yellen had a closed-door meeting with regulators last week and told us everything is in good shape. The market was lukewarm on her announcement. The reality is that there are too many variables to determine if there is systemic risk to our economy from the banking challenges. We'll wait and see.
What about the tug of war? This week we have the Fed’s favorite inflation indicator, the Personal Consumption Expenditures (PCE), and the initial jobless claims. Both are very significant market movers under normal circumstances. They will likely put counter-pressure on rates.
No one knows what will happen next. There is a good chance we will see rates inch lower early in the week. However, as fear around the banking market diminishes, strong economic data could push them back up. When things get this unpredictable, avoiding guessing is the best thing to do. Taking a position on where rates are going is always dangerous. This week, it is impossible.
Now is the time to be THE EXPERT THAT DOESN’T GUESS. Share the facts and focus on your market dynamics. Rates may go up or down. Either way, inventory is tight, new listings are down, and it will be a competitive spring for buyers. One thing we can share is that waiting could be expensive.
FOR YOUR BUYERS
You can copy and paste this note and send it directly to your buyers. You will also see this on social and as a forward-able email on Thursday so you can engage your buyers before the weekend!
What to Expect From The Spring Buying Season
As the sun comes out across the country, so do the real estate signs. This year feels a little different. The number of new listings is lagging behind traditional spring markets. That translates into fewer homes to choose from. So, here are a couple of things you can expect to see this spring in your market.
A limited number of homes are for sale
While the number of new homes for sale is slowly increasing, we don’t expect the large influx we see normally. A combination of current homeowners with low-interest rates and economic uncertainty decreases the number of sellers.
Competitive market
With fewer homes, buyers will be competing. To win, you must be fully pre-approved and ready to make a great offer.
Increased Values
Real estate is a supply-and-demand game. The lower the supply, the higher the price. We will likely see home values increase in most major markets this spring. The good news is that you could see an instant equity position if you get in early.
A prepared buyer that is pre-approved and ready to make an offer can win in this market. We rarely see such a clear short-term bottom for home values, and savvy buyers can take advantage and start building equity.
Happy Househunting!