Market Update Feb 13, 2024: Rate update, Amazon Home Builder & 7 Must Have Tools

MIke Mills (00:00:08) - Hey there. All you Super Bowl Swifties out there. Mike Mills here you are, a friendly neighborhood mortgage expert with Geneva Financial. And this is the Texas Real Estate and Finance Podcast market update for the week of January the 13th. Whether you're a realtor, mortgage banker, or just love all things real estate and finance, you are in the right spot. I apologize right away that my voice is shot. Um, been sick for the last week trying to get over a few things, but gotta power through this. The show must go on. I hope you can make it through it. I know I can. We'll get through it together. So hopefully the voice isn't too much of a distraction this week. So real quick. Super Bowl was last night. Great game. Okay, it's only the second time in Super Bowl history that a game has gone to overtime, which is awesome. The last time is when Tom Brady faced off against the Atlanta Falcons. And I believe that was I don't even know Super Bowl L1 whatever that is.

MIke Mills (00:00:49) - And no Roman numerals. So Pat Mahomes got his third Super Bowl and the guy's only 28 years old. I want to know who else was 28 years old when they got their third Super Bowl. Tom Brady Tom Brady was 45 when he retired, so that means O'Mahony has at least probably ten more years left in him, and maybe even longer. In order to catch Brady. He's only got to get four more. Sounds like a lot, but he's got three already. And as for all the Kelsey Swift haters out there, look, it's just another storyline in the theater of the NFL, so you need to kind of get over it. She seems like a great person and so does he. Regardless of who they're tied to or who they endorse, they seem like nice people. So cut him a little slack. I love me some football and that was a great Super Bowl, and I'm glad I got to see it all the way through. But enough of that. What do we have on tap for today's episode? So as always in our market update, we're going to take a peek into some of the hottest topics in real estate and finance that have been in the news lately.

MIke Mills (00:01:34) - We're gonna kick things off with the latest on the interest rates and recent housing trends, and we'll dive into some recent stories impacting the real estate market. From names, billion dollar rental homebuying fund to the surprising fact that 38.7% of American homeowners own their home free and clear. If you heard about Amazon selling tiny cabins, we're going to cover that, too, along with the Keller Williams $70 million lawsuit settlement and Costar's big Super Bowl marketing splash. But our main topic today that you'll want to stick around to the end for is the seven must have tools for your real estate marketing in 2024. But before we jump into it, do an old bald guy a solid please hit that like and subscribe button. It's a small action for you, but it means the world to us. It keeps you in the know and it helps our community grow, bringing more valuable insights to people just like yourself. So where do we start? Well, of course, the answer to the question I get every day of my life and I hear in my sleep is, where are the rates right now? Well, good news and bad news.

MIke Mills (00:02:25) - Earlier this month, in February of 2024, the 30 year fixed rate mortgage climbed past 7% for the first time since the middle of December. So we're looking at 7.04, according to the Mortgage News Daily, and a closed 6.91% on housing wires. More mortgage rates. So after a steady month and a half decline in rates, why did they all of a sudden spike back up? Well, it's like watching a game of tug of war between strong economic signals and the Federal Reserve's hold your horses approach to slashing the rates back. You see, this uptick follows a period of time where rates took a bit of a breather, dipping below the 7% mark as the fed nearly closed the chapter on its rate hike saga back in December. But that was before the jobs report came out swinging with about 350,000 jobs added in January. Now, when you dig into that report, it isn't quite as rosy as it may seem on the surface. I went into depth about this in my last podcast with Conrad Jackson last week, but in economic terms, headlines matter and the headline shows that jobs are aplenty, primarily because of this seemingly positive economic data that Chair Jerome Powell put the spotlight on a cautious approach toward rate cuts going forward.

MIke Mills (00:03:19) - See, he's playing the long game here looking for consistent signs of inflation cooling down to that 2% target in the midst of a robust economy and strong job market. You see right now the Fed's message is clear don't bet on rate cuts. In March, they will continue taking a step by step data driven approach. So if you're expecting massive rate cuts this year to boost your business, I wouldn't bank on that. At least not while we're in such a positive economic cycle. Look, things can turn on a dime, but until they do, rates are going to remain elevated. All right. Next up on our real estate roundup here. We're talking about some local market trends. Now this is where we get a taste of what's really happening in our own backyard. So in the last quarter of 2023, we saw Dallas Fort Worth home prices nudge up just a bit 0.3% year over year. The median price for homes sold by realtors, sitting at about $376,000. And that's a little bit shy of the national median, which stood at about 391.

MIke Mills (00:04:06) - Remember, meeting is middle, not average. That represents a mix of homes sold, not necessarily average home value. Now, back in 2021, a year that saw median prices in North Texas hitting over 400,000, we were experiencing some of the fastest home price appreciation that we'd seen in decades. But fast forward to today, and we're starting to see a slight shift in the other direction, but only slightly see rising mortgage rates in a slowdown in sales kind of put a pause on appreciation as we closed out 2023 and it started 2024. Now in the national market, the National Association of Realtors tells us that single family home prices went up in 86% of the 189 metro areas that they track. But get this typical monthly mortgage payments have doubled in the past three years. We're talking to jumping from a thousand to more than $2,000 a month. That's a huge leap and stirring up a ton of economic dissatisfaction on the consumer level. Now, the fourth quarter showed us a mixed bag of trends places like Dayton, Ohio, Kingsport, Bristol and Tennessee and Virginia and.

MIke Mills (00:04:59) - Fond du Lac, Wisconsin, saw significant price hikes. But on the flip side, Jackson, Mississippi, Cleveland and Naples, Florida, witnessed notable declines. Right here in Texas, San Antonio and Austin felt the pinch with year over year price drops, while Houston saw a modest decrease. But don't count out Austin and Dallas-Fort worth just yet. The National Association of Realtors is also betting on these cities as the top housing markets for 2024. They're forecasting a rise in single family mortgage origination volumes and a pickup in the pace of existing home sales by year's end. Now, wrapping this all up with the little Ray of hope. Consumer sentiment towards housing is at its highest since March of 2022, thanks to increased job security, confidence and expectations of dipping mortgage rates. Fannie Mae's home purchase sentiment index climbed to 70.7. Interestingly, a record 36% of folks are betting on lower mortgage rates in the next 12 months. But here's the catch only 17% of those people believe it's a good time to buy a home. So home prices seem to be coming down.

MIke Mills (00:05:51) - Interest rates might be coming down. Therefore home buying sentiment is going up. This is good news, especially for the 2024 spring housing market. All right. Now let's shift our trend a little bit to a story that highlights a growing trend in real estate markets all across the country. A company called Premium Partners, led by former Goldman Sachs hotshot Don Mullen, is making big moves in residential housing. They've just raised nearly $1 billion for a new fund. What's this fund all about? It's focused on snapping up built or rent homes or tours. That's right. We're talking about a major play in the rental home market. Premium is not just dipping its toes in the water here. You're diving in headfirst. This billion dollar move boost their BTR sector portfolio to over 2.5 billion with a B. And the scale of this, it's huge. About 7500 new homes across 37 cities in 11 states. It's a lot of front doors intended to generate a lot of income for these guys. So while the big bet on rental homes, well, it's a strategic move in response to what we've been seeing in the housing market, stubbornly high mortgage rates and a housing inventory that's tighter than it's ever been with no real relief on the horizon.

MIke Mills (00:06:50) - So this combo is cranking up the demand for single family rental units, making the BTR market a hot ticket for investors. Like this isn't just about filling a gap in the market. Premium is playing a long game here, aiming to create a substantial new single family rental housing supply over the next decade. Look, it's just another big time investor responding to our current housing challenges and trying to capitalize. All right, now let's turn our attention to a statistic that really puts things into perspective when we talk about the American dream, owning a home is often at the heart of it. And here's the number that may surprise you. Right now, 38.7% of American homeowners own their home free and clear, no mortgage, no monthly payments, just 100% their own. So that's a significant chunk of the population sitting on fully paid off homes and all the equity that comes with it. But on top of that, we also have 28% of homeowners who've got more than 50% equity in their homes. So what does this mean for our market? Well, it means that these folks are in stable or let's say pretty strong equity position.

MIke Mills (00:07:42) - So that means they're less likely to feel the pressure to sell. And they might even use that equity for other investments rather than putting their homes on the market. They can use their homes as a tool to invest in other things. On the other side, we've got about 32.6% of homeowners with less than 50% equity. And for these guys, moving might also not be that appealing, especially if they can't see substantial financial gain from selling. What all this boils down to is a potentially limited supply of preexisting homes on the market, because a good number of homeowners just don't have enough motivation to sell. And that means we could be looking at a tighter housing market for a while. So the key to why all these numbers are important is that home equity doesn't just tell us about the individual financial health, but it gives us clues about the future of the housing market itself. So it's always good to pay attention to those numbers. Now, there is a big player out there that has come up with its own solution to the ever dwindling housing supply, and that's none other than Amazon.

MIke Mills (00:08:27) - That's right folks, Mr. Bezos is now offering a range of kit homes and easy to assemble structures trying to appeal to the DIY crowd and younger Gen Z demo. The one example from their lineup is called the Lily Villa Allwood Cabin Kit getaway, priced at 18,800. Now, this is a 292 square foot cabin suitable as a summer house, home office or standalone retail building 292ft². By the way, it's constructed from durable Nordic spruce wood. The cabin features three rooms downstairs and a lofted sleeping area. A kit designed for assembly by two adults in 2 to 3 days includes premium doors, windows and a pre-assembled cables. However, buyers need to provide their own roof shingles and foundation materials, so there is additional cost here. Now, additional modifications like plumbing or extra insulation for cold weather are not included, but can be added so no plumbing. Each cabin is made to order with a 60 day delivery period. Post order. You see, this cabin represents just one of many home options available on Amazon, reflecting a growing trend in the housing market towards accessible alternative living solutions.

MIke Mills (00:09:26) - Now you'll have to own your own land, get your own plumbing, get your own shingles, or you know you can rent your land, I suppose. But whether this becomes a viable, usable option is not the point. The point is, as the problem of affordable housing continues to grow, so will companies trying to offer solutions. It just seems like many of these solutions don't lead to you owning land and a piece of the American dream, but we'll keep looking for solutions until we find one that fits. However the search goes on. Now let's get into an update in the Citrus Burnette Commission case that we've all heard so much about lately. So recently, Keller Williams, one of the main defendants in the case, agreed to settle the lawsuit for a huge amount of $70 million now. A settlement resolves home seller lawsuits nationwide, including related cases like no select and molar, meaning this will keep them from getting sued further in other similar lawsuits that could come in the future. Now, this agreement stipulates that Keller Williams will not require agents to be National Association of Realtor members.

MIke Mills (00:10:15) - Although Na's Code of Ethics or adhere to the MLS handbook practices. Instead, agents will be encouraged to inform their clients that commissions are negotiable and have the freedom to set or negotiate those commissions independently. Now you see, this decision was driven by the need to provide stability and protection to Keller Williams franchisees and agents amid the industry uncertainty following the lawsuit verdict. Now, HomeServices of America and Nar remain defendants in related suits, while home services in MLS Pen are currently negotiating their settlement. You see, the more these groups settle, the less likely we might get a decision handed down from the Department of Justice, meaning the likelihood that things stay similar to how they are now is getting better and better. This is good news, although I do think that as competition for listings gets greater and greater, buyer agent commissions could slowly start to see a decline on their own. But not by ruling. Just something we need to keep an eye on. Now let's shift our focus to the competitive landscape of real estate listing platforms.

MIke Mills (00:11:07) - So since MLS is all over the country are coming under fire, companies like homes.com are looking to fill the national listing. Gap and CoStar Group, which owns homes. Com, is aiming to become the top residential real estate listing platform in the country and they've announced a massive marketing campaign, including airing for advertisements during the Super Bowl. These guys are coming into the market guns blazing, and they're putting their money where their mouth is. See, the strategy is part of their billion dollar marketing expenditure to promote apartments, dot com and homes.com. The ads featured well-known celebrities like Jeff Goldblum, Dan Levy and Heidi Gardner adding star power to their campaign. See Costar's aggressive marketing plan also extends beyond the Super Bowl, with plans to continue advertising throughout 2024, including major TV events like the Oscars and NBA playoffs. This campaign is a significant step in co-star's effort to challenge Zillow's dominance in the residential real estate market. You see big companies see a lot of opportunity in real estate right now, especially with the turmoil and all the latest volatility, because this type of change in markets often leads to opportunity.

MIke Mills (00:12:00) - Co-stars just trying to make the most of it. They're becoming a big player and really need to be paying attention. All right, folks, time to get out the notepad and start paying attention. Because in today's main segment, we're diving into the seven must have tools that every savvy agent should incorporate into their arsenal for 2024. Now, you might be wondering, why the heck should I pay attention to this? Well, these tools aren't just the latest gimmicks. These are the tried and true weapons that top agents are using to stay ahead of the competition, attract more clients, and close more deals in today's dynamic real estate landscape. From crafting stunning visual content to streamlining your client management and dominating social media, these tools have got you covered. And the best part? They're accessible, affordable, and easy to use, even if you're not a tech whiz. So if you're ready to take your real estate marketing to the next level and turbocharger success for 2024, then listen up, take some notes. These tools are going to move the needle for you this year and beyond.

MIke Mills (00:12:47) - So first off, let's start with Canva. Everyone's favorite. So Canva is a graphic design platform that allows users to create a wide range of visual content, including flyers, social media, graphics, postcards, and more. It offers an intuitive drag and drop interface and a vast library of templates, images, and fonts. As a realtor, you can use Canva to design eye-catching property flyers, social media posts showcasing listings, virtual tours, graphics, email newsletters, and branded marketing material. The great thing is Canva has both free and paid plans. The free version provides basic features that allow you to kind of dip your toe into the product and get familiar with how to use it. And when you're ready to take the big step, the paid plan offer additional customization options and access to premium elements like creating brand templates that can easily be updated to existing templates inside Canva. So as an agent, you could use Canva to create a series of Instagram graphics featuring your most recent listings, including engaging captions, highlighting features and benefits, and even using canvas new AI feature to generate the captions, saving even more time.

MIke Mills (00:13:46) - If you aren't already using Canva, you absolutely should be. And speaking of AI, let's talk a little ChatGPT. So ChatGPT is an AI powered chatbot that can assist with content creation, including generating social media captions, drafting email marketing campaigns, brainstorming blog post ideas, and enhancing property descriptions, and more things that you can't even imagine yet. So as a real estate agent, you can do all those marketing activities in a fraction of the time because ChatGPT will help generate all that information in your voice. I don't mean voice in your sound, like my voice sounds terrible today, but I mean your voice, your tone, how you speak so you can generate content in a tone and a voice that you would normally write or speak in. So right now you can get ChatGPT for free. You're limited on the availability and how often you can use it, and it's missing a few features, but you can try it out for free. Just like Canva, you don't have to pay, but the paid plans offer advanced features and customization options that really take your marketing game and your time of time management to a whole nother level.

MIke Mills (00:14:39) - So, for example, an agent could use ChatGPT to generate a series of personalized email newsletters for their clients, providing updates on new listings, market trends, and local community events. But in their own words, in tone, this is a tool that I personally am using more and more in my work in daily life, and it's changing how I do everything. I cannot emphasize learning about this one enough. It's going to be the future of our industry. Next up, customer relationship management software or CRM. Not one specifically, but just the CRM in general. So CRM software helps agents manage their contacts, leads and sales pipelines in one centralized platform. It usually includes features such as contact management, lead scoring, task automation, email marketing, and reporting. Agents can use the CRM software to organize client information, track communication history, automate follow up tasks. Nature leads through the targeted email campaigns, and analyze performance metrics. Now, the cost of these is going to vary in pricing. Some options, offering free plans and other charging monthly fees per user, and the cost can range from a few dollars a month for basic plans to hundreds of dollars per month for more advanced features.

MIke Mills (00:15:39) - But in many cases, your brokerage will already have one that they use and provide to you. You're just barely taking advantage of it, most likely so you could use a CRM software to segment your contact list based on criteria such as location, budget, and buying timeline, allowing them to send personalized email campaigns to different target audiences. Your database is the lifeblood of your business, and if you aren't using your CRM often or effectively, you're losing out on deals, I promise. You talk about Squarespace, you need a website, and Squarespace is a great tool to build you a website. Now, Squarespace is a website builder that allows users to create professional looking websites without any coding knowledge. It offers a range of customizable templates, drag and drop editing, and features like blogging, e-commerce, and SEO tools. Agents can use Squarespace to build a branded website showcasing their listings, agent, bio, client testimonials, and blog content. They can also integrate MLS listings using IDX integration for seamless property searches that stay within your site.

MIke Mills (00:16:33) - Now, Squarespace offers monthly subscription plans starting from $12 a month for the personal plan and $18 a month for the business plan. Annual plans are also available at discounted rates. An agent could use Squarespace to create a visually stunning website featuring high quality photos and virtual tours of their listings, along with informative blog posts about the local real estate markets. Your website isn't just a business card anymore. This is part of your SEO toolkit that makes sure that when prospective buyers and sellers start their search for an agent or even just validate, you after a referral, they can find you online and see that you're the professional that you say you are. You can't just have a basic disclaimer site like we did in the last three years. You need a site that stands out and represents who you are. All right. Now. This is for the next level marketing agents out there. Let's talk about Hootsuite. So Hootsuite is one of many, but a social media management tool that allows users to schedule, publish and analyze content across multiple social media platforms from a single dashboard.

MIke Mills (00:17:23) - It also offers features like social listening, analytics and team collaboration. As a realtor, you can use Hootsuite to schedule posts showcasing your listings. You can share market updates and industry news, engage with followers, and monitor social media conversations related to your brand, and also track how the post performs to ensure effective, engaging posting. So Hootsuite offers subscription plans starting from $49 a month for the professional plan, which covers about ten social media profiles, to customize plans with additional features that are also available for larger organizations. As an agent, you could use Hootsuite to schedule a series of Facebook posts promoting upcoming open houses, complete with engaging visuals, property details, and links to schedule showings all in one place and at one time saving time, which allows you to go make more deals. So Hootsuite will help you post. But what do you post? Well, that's where a company like Coffee and Contracts comes into play. Coffee and contracts is a marketing platform specifically designed for real estate agents. It offers customizable templates for social media and print materials.

MIke Mills (00:18:15) - It includes pre-written captions, video scripts, and a variety of templates for Instagram Stories and reels. As an agent, you could use coffee and contracts to create social media posts showcasing your listings. You can share client testimonials and engage with followers. The platform also provides resources for video marketing and storytelling. Right now, Coffee and Contracts offers monthly subscription plans starting at $54 a month, with discounts for semiannual and annual payments. The subscription includes access to all templates and all resources, so you could use this to create an Instagram story featuring a virtual tour of a new listing that you just put up, complete with captions highlighting key features and benefits, and a call to action to schedule a showing. So Coffee and Contracts gives you the content to post. Now for the last one. This is what I call the granddaddy of all platforms that gets everything done in one spot. Guess what? You all know what it is. It's called Google Now. Google offers a suite of services including Google Calendar, Google My Business and Google Drive, which, if used right, can be invaluable tools for any real estate agent.

MIke Mills (00:19:10) - Google calendar helps in organizing daily activities and client meeting, while Google My Business solidifies, your online presence at Google Drive, facilitates easy access and sharing of documents and presentations across all platforms. As a realtor, you can use Google Calendar to schedule property showings, client meetings, and marketing events. You can use Google My Business to help manage your online profile, engage with clients, and gather insights to your traffic on your website. Google drive will provide a centralized platform for storing and sharing all your important documents, spreadsheets, presentations, whatever you have all in one place. The best part about this is most Google services are all free. They do have optional paid upgrades for additional features like for example, Google Workspace, formerly called Google G suite, offers subscription plans starting from like $6 a month per user for enhanced. Storage option. You see, as an agent, you could use Google Calendar to schedule a series of open houses, invite clients and prospects to attend, and set reminders for follow up tasks. And then you could use Google My Business to update your business listing with details about upcoming events, and engage with clients who leave reviews or questions.

MIke Mills (00:20:13) - C having everything in one place and accessible via laptop, mobile, Mac, or PC makes using Google a real must for anyone trying to streamline all of their business processes. Just the calendar and task process alone can organize your life in ways you've never even considered. But again, this opens up more time for you to make more relationships and sell. Which of course is what your job truly is. Well guys, we covered a ton of ground today. From dissecting the latest recent market trends to unveiling all the must have tools you need for your real estate marketing in 2024. And I'm almost out of voice. But before we go, I want to leave you with a few key takeaways. First and foremost, don't underestimate the power of staying informed and leveraging cutting edge tools to elevate your business every chance that you get. Because in today's fast paced world, knowledge is power. Those who adapt and innovate are the ones who are going to come out on top. So whether you're a seasoned agent or you're just starting out, remember, stay curious, stay hungry, and always be on the lookout for new opportunities to grow and succeed.

MIke Mills (00:21:05) - And if you enjoyed today's episode and found value in the insights I shared, I encourage you to hit that subscribe button and leave us a review. Your support helps us continue to deliver high quality content, maybe not high quality audio every week. Thanks a lot voice and grow our community of real estate agent professionals. And coming up on Thursday, we're going to talk with Nathan Ross of Site Garden Inspections about what to watch out for on home inspections and how to talk to your clients about that, and also why inspections on new homes are even more important these days than they have been in the past, so be sure to tune in for that one. But before we part ways, I want to express my heartfelt gratitude for you tuning in today and fighting through all this with me. Your support means the world to me, and we're truly grateful to have you as part of our community. So as always, be great humans and keep grinding because the world is what you make of it. So make it great.

MIke Mills (00:21:45) - See you next week.