Grace Townsley | April 30th, 2021
Cloudy, with a chance of Twitter Storms (by Redfin’s CEO)
In a series of 15 tweets, Glenn Kelman proves that even the experts are bewildered by the weirdest housing market in history.
- Realtors now outnumber listings.
- The mass exodus to lower-cost markets and states with lower taxes mean many families can live on one parent’s income while paying less for a bigger home.
- Some lenders now want proof their out-of-town homebuyers won’t lose remote work once the pandemic ends.
We talk about home inventories nationwide being lower than ever, but inventory is actually up 77% in San Francisco as thousands of homeowners move east (and plot twist, San Fran home prices are still rising).
TL;DR nobody saw these market trends coming.
Think rising home prices and rumors of a housing bubble are scaring off potential buyers? Think again.
According to a recent Gallup survey, 71% of Americans expect housing prices to continue increasing in 2021. Interestingly, 71% of Americans also get their news input from social media so do with that what you will. 🤷 Despite the expectation of rising home prices, 53% of Americans still consider it a good time to purchase property. Bottom line, buyers are aware of the rising prices and are buying anyway. 🚀
and speaking of non-bubbles… Today’s borrowers have significantly stronger credit than the buyers of ’08, and over twice as much home equity as mortgage debt. In other words, couch surfing well into our 30’s has finally paid off.
If you ask us, opinion pieces on the Great Housing Market Bubble of 2021 are nothing more than clickbait, and speculation of an imminent crash is the latest small talk go-to. Considering how we just had the most unpredictable year on record, nobody can forecast whether or not we’re at risk of a bubble burst. Worry less and enjoy the ride.
Cryptocurrency increasingly accepted by home sellers and lenders
So your millennial-millionaire crypto-carrying client wants to use their digital currency to buy a home. Can they do that? The answer is yes…and no.
- Fannie Mae, the government-owned enterprise that backs the majority of mortgages, requires digital currencies be converted into cash in order to count them as assets.
- If your client is looking to finance part of their home purchase, their digital currency would need to be converted (remember capital gains tax kicks in) to finish the underwriting process.
- If your client is looking to pay for their new home in full and the seller agrees to accept crypto, you’ve got the green light to go ahead.
Your client’s fears of a market crash are unfounded, here’s the real talk…
“When is the housing market going to crash in 2021” has been trending on Google, followed closely by the search query “did Kim Kardashian pass the baby bar exam”, revealing the pressing questions on everyone’s minds this month.
- There were twice as many houses on the market at this time last year, setting the stage for bidding war brawls in this “auction-style” market.
- Despite the purchasing frenzy and widespread buyer concern, experts doubt a market crash is likely. Mortgage underwriting has greatly improved since the dubious days of 2008, and new home construction is picking up, helping to meet demand.
Show Me the Money
- $10.75M – Tobey Maguire turns a $750K profit by selling an acre of Los Angeles dirt.
- $29M – The Rock just bought a home with 13 bathrooms and a recording studio built by Van Halen.
- $53M – Mark Zuckerberg purchased 600 acres of Hawaii for .04% of his net worth.
Your Daily Freebie
Are you maxing out your referral game? ICYMI, the majority of real estate transactions come from repeat business and referrals. The National Association of Realtors reports that 91% of buyers would use their agent again or recommend them to a friend.
Your Daily Freebie
Need a couple new ideas to boost your target list?
- Organize a memorable event for your past and current clients. Giving away tickets to a local festival or inviting a few clients to a catered Happy Hour at one of your listings is a surefire way to stand out. When their friends and family mention plans to buy or sell, they’ll remember how you always go above and beyond.
- Werk that LinkedIn. Create or join a LinkedIn group to share relevant local market information with people in your area. You’ll stand out as an expert and alllll those new connections are potential referral sources. 👏👏
In the end, doesn’t matter *what* you know, it matters *who* you know (who knows a buyer or seller). So get out there and do the thing!
Until next time…
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