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Run toward the housing market in 2024

November 21, 2023 By Ryan Lundquist 13 Comments

It’s time to run toward the housing market. Today, I have some quick thoughts of encouragement for the real estate community as we look to 2024. I know it’s a holiday week, but I really want to share this message. And I have some cool stats too. Scroll quickly or digest slowly.

NOTE: This post is not about predictions or advice for buyers or sellers. We’ll have plenty of time to talk about 2024, but not today.

UPCOMING (PUBLIC) SPEAKING GIGS:
11/30/23 Safe CU “Preparing for a Successful New Year”
12/08/23 Free Q&A event for appraisers only (on private work)
11am PST one hour – click link here (see pass code)
Meeting ID: 832 2414 3890 Passcode: 007
01/30/24 Joel Wright & Mike Gobbi Event 9am (on Zoom here)
3/11/24 Yolo Association of Realtors (details TBA)

RUNNING TOWARD THE HOUSING MARKET IN 2024

The real estate business has been brutal this year for so many people. It was easy in 2021 when business was flying off the shelves, but the volume floodgates have turned into a trickle, and that’s made all the difference today.

Anyway, here’s what I want to say. It’s easy to contract and let fear and uncertainty dominate the mind and heart in moments like this. But today it’s key to run toward the market. I realize that sounds super cheesy and ambiguous, but it’s something I’m going to be emphasizing ahead. In short, it’s time to face the challenge of whatever comes in the future, know the stats, be a resource to clients, find ways to increase the size of your network, figure out how to be hopeful, and pour time and money into your business. In other words, discover ways to stand out while others contract. In Sacramento, we’re missing about 9,000 sales this year from the pre-2020 normal, but over 15,000 sales have happened. Which one of those stats will you focus on most?

Mindset is one of the most important things about today’s market, and the good news is that’s what we can control. So, however you need to do it, cultivate a mindset to win, serve, and be present for the people around you. Surround yourself with forward-thinking colleagues. Learn new skills. Change your focus. Diversify what you’re doing. Find things that bring you joy in life (and do them). Stop listening to housing doom voices that promote fear and use you for clicks. Oh, and if you’re doomscrolling constantly, maybe it’s time to step back to regain control of your life. One of the blessings of the internet is having so much instant information at our fingertips, and that’s also one of the curses.

Some questions to brainstorm for 2024:

– How do you plan to increase the size of your network this year?
– Who do you need to get to know?
– Who are the gatekeepers to the types of work you want to do?
– Who do you need to get in front of this week?
– How do you need to diversify?
– What do people need from you right now?
– What laws are changing that might create more work?
– What trends are we poised to see in 2024 based on current stats?
– How are you going to build good relationships with people today?
– How are people going to remember you during this housing downturn?
– If you’ve lost hope, how are you going to find it again?
– If you’ve become a negative person, how are you going to find optimism?

Okay, now some topics.

ARE SELLERS FINALLY STARTING TO LIST MORE?

I put out this video a few days ago to explain how housing supply can grow even without more new sellers. That’s basically what seems to have happened when looking at stats from September and October. I previously tried to explain this with graphs, but I’m not sure the concept landed. Anyway, here’s a word picture to help. Keep in mind, it’s possible we could be in the mist of slightly more new listings too. Only time will tell. No matter what, let’s be thinking about how these piles can change. Watch on Instagram, YouTube, Facebook, or LinkedIn.

APPRAISER PRIVATE WORK Q&A

Appraiser friends, I’m going to do a private work Q&A thingy on December 8th at 11am PST. My goal is to encourage and give some ideas for putting yourself out there to get private work. I’ll go through a presentation, and then we’ll do Q&A. One hour or more if needed. This is free. I’m not selling anything. Here is the link to the Zoom (Meeting ID: 832 2414 3890 Passcode: 007). ONLY for appraisers. This will not be recorded, so be there live if you’re interested.

8 COUNTIES SIDE-BY-SIDE

As I said last week, I’m taking a few more counties for a test drive with stats, so I thought it might be cool to see side-by-side comparisons. The one thing I don’t like here is some smaller counties have erratic monthly stats.

NEW: THE STORY OF FINANCING SINCE 2009

Here are some new visuals to show financing over time in Sacramento. I’m actually going to post a reel on my Instagram next week to talk about what more cash means and doesn’t mean. I wasn’t sure if these visuals would resonate, but people seemed to like the colors. One loan officer said Oregon Trail vibes (if you know, you know).

BAY AREA VISUALS

I spoke in San Francisco last month, so now I have some spreadsheets itching to be updated. Not sure I’ll do this every month, but I do like the idea of putting out some chaotic median price visuals here and there. I also have some volume visuals, but we’ll see on those.

NO TURKEY FOR ME

Thanks for being here. And Happy Thanksgiving to you. My family will be laying low for a few days, playing some pool, and hopefully connecting with friends since we no longer have local family in the area. We are not preparing turkey because we honestly just don’t like it. Last year we got Indian food takeout, and this year we might do something even more unconventional.

Questions: What are you doing for Thanksgiving? And what stood out to you most above? I’d love to hear.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

The housing market feels like leftovers

November 15, 2023 By Ryan Lundquist 16 Comments

The housing market feels like leftovers right now. It’s that time of year where we see less new listings due to sellers hibernating for the holidays, and some of the existing inventory just feels as stale as Aunt Tina’s green bean casserole that nobody wants to see during Thanksgiving. Wait, did I say that out loud? Anyway, today let’s talk about credit card debt, the current market, and some NEW COUNTIES I’m starting to cover for stats.

UPCOMING (PUBLIC) SPEAKING GIGS:
11/16/23 Mega Agent Panel (register here)
11/30/23 Safe CU “Preparing for a Successful New Year”
12/08/23 Free Appraiser Q&A on Private Work (one hour here)
(Meeting ID: 832 2414 3890 Passcode: 007)
01/30/24 Joel Wright & Mike Gobbi Event 9am (on Zoom here)
3/11/24 Yolo Association of Realtors (details TBA)

FEELING THE STING OF INFLATION

I don’t know about you, but everything has felt so expensive lately in my household. Can you relate? Consumers are definitely feeling the sting of inflation, but they’re still buying stuff (just not real estate so much).

GETTING INTO CREDIT CARD TROUBLE

Credit card debt has been rising lately. It’s nowhere near 2007 levels, but let’s not ignore that people are starting to get into trouble (especially younger people). Source: NY Fed (PDF).

HOW I’M DESCRIBING THE MARKET

We’ve had a pretty normal fall dynamic in many ways, and it’s been very different from the sharp change last year. Prices have softened, it’s taking longer to sell, and we’re seeing less sales, which is all typical. But one thing that isn’t normal is active listings have increased over the past couple of months. At this time of year, we almost always see actives shrink, but not this year. What’s the cause? There have been fewer pending contracts lately, and that’s made the pile of active listings grow larger since properties are staying on the market (not caused by sellers rushing to list more). We’re only talking about a few hundred extra listings in the region, so let’s not sensationalize this, but obviously more listings can affect the real estate temperature. Oh, and let me clarify. We are nowhere close to a normal number of sales. It’s still been such a strange market with low volume and still low supply. By the way, here’s a thread I wrote about actives on Twitter in case there is interest.

THE RATE NARRATIVE CHANGED QUICKLY

Rates have dropped in the past two weeks, and the narrative has shifted. Many were preaching, “Rates at 8% for longer,” but now it’s, “Bro, 6% rates soon.” I get the logic of rates dropping ahead, but we also need to see what actually happens. I think it’s important to talk through all potential scenarios while remaining objective since there is still so much uncertainty.

NEW COUNTIES COVERED:

I’m taking some new counties for a test drive. If you want to see these on a consistent basis, please let me know. Also, smaller areas are in 60-day chunks since stats can be erratic with only 30 days (is that a good idea or not?).

NEW COLORS FOR THESE COUNTIES

I’m going through many visuals to update colors so there is consistency in branding. So, the colors below correspond to the colors in the stats above.

AND NOW DAYS ON MARKET WITH COLORS:

OTHER VISUALS:

I have many other visuals, but that’s it for now (besides these). Catch me on my socials every day for lots of perspective and stats that never make it here.

Thanks for being here.

Questions: How would you describe the market right now? What do you think about the new visuals? What would you like to see more of? I’d love to hear.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

A Gut Punch to Housing Demand (8% Rates)

October 18, 2023 By Ryan Lundquist 17 Comments

It feels like a gut punch to housing demand to have 8% rates. So many predictions said we’d be at 6% or below by now, yet here we are. I think it’s really important to stay grounded and realistic, so let’s talk about this. I also have some market recap visuals (and a few insane graphs). I hope this helps.

room interior vintage with white brick wall and wood floor. A black rectangle has white font stating, "A gut punch to housing demand."

UPCOMING (PUBLIC) SPEAKING GIGS:
10/27/23 AI Fall Conference (San Francisco) (register here)
11/16/23 Big Event TBA
11/30/23 Safe CU “Preparing for a Successful New Year”
1/30/24 Joel Wright & Mike Gobbi Event 9am TBD

JUST DATE THE 8% RATE

First off, I want to say that “date the rate, marry the house” is a terrible slogan in my opinion. I’m not a fan of promising the future. Look, it might work out really well for some people. But then again, maybe not. Amy Tremayne told me that dating the rate is like marriage advice she got from her mom. “You need to marry the person for who they are, not who they might become.” Such a solid word picture for buyers being comfortable with the mortgage payment today instead of banking on what it might be in the future.

JUST PLUG IN NEW NUMBERS

“Dating the rate” is a comical narrative though because new numbers just plug into the slogan. “Date the 6% rate.” “No, date the 7% rate.” “Bro, D8 the 8.”

8 THINGS ABOUT 8% RATES

1) Higher rates will take more demand out of the market.

2) We’ve seen an increase in active listings lately due to fewer pendings. This could start to increase more. Time will tell. It’s so important to watch this trend closely.

3) We’ll have to see if 8% is a psychological barrier for buyers causing more pause.

4) There will always be some buyers and sellers in any market. Someone told me there would be 0% demand at 8% rates, but that’s fiction.

5) It seems like mostly everyone got their rate predictions wrong this year, so maybe it’s best to not predict. Even the Mortgage Bankers Association had a 6.3% rate projection for this quarter (they’ve since changed the projection).

6) Sellers, do what the market requires. Reduce the price, give credits to buyers, buy down the rate, negotiate… There is a smaller pool of buyers right now. It is NOT 2021 where you had total control, and buyers are going to need more help to make things work if rates keep ticking up.

7) If you work in real estate, you have to be intentional about increasing the size of your network. This is a housing market where you will hear NO more than YES because supply and demand are so limited. Who are the gatekeepers to the types of work you want to do? Who do you need to get to know? What is your action plan for getting in front of people this week? Who needs your expertise? What types of transactions are happening today, and how can you connect with that target audience? How do you need to diversify your practice?

8) Last but not least, be full of hope in life, but be realistic about the housing market. Expect low volume and low new supply ahead as we are still in a market where many buyers and sellers feel stuck and unable to move.

QUICK MARKET RECAP STATS

Some local stats for those interested.

YEAR-OVER-YEAR:

MONTH TO MONTH:

AND SOME CHAOTIC GRAPHS

I’m starting to add some different counties into the mix. I’m getting requests and speaking gigs in other places, so it’s spurring me to add some new stuff. I know these visuals are a hot mess and likely too chaotic to be meaningful. But I’m intrigued by the juxtaposition of different areas.

Thanks for being here.

APPRAISER PRIVATE WORK FOCUS:

I haven’t forgotten about the free Zoom class I mentioned for appraisers. I’ll get a date together soon. I’m thinking November at some point or very early December. Thanks to Joe Lynch for helping me with this.

Questions: What are you seeing happen with active listings? Are they taking longer to sell? What is open house traffic like? I’d love to hear.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

Are we finally starting to see more listings?

October 9, 2023 By Ryan Lundquist 9 Comments

Are we finally starting to see more listings? Yes and no. Today I want to talk about a change we’re seeing with listings both nationally and locally. This is a really important topic, and some of it feels a bit technical because it’s about understanding new listings vs active listings. Anyway, let’s be on the cutting edge of the market by talking about stuff like this. Any thoughts?

UPCOMING (PUBLIC) SPEAKING GIGS:
10/27/23 AI Fall Conference (San Francisco) (register here)
11/30/23 Safe CU “Preparing for a Successful New Year”

NEW MEME:

It’s been a wild ride to watch mortgage rates basically do the opposite of what so many predicted this year.

TOO LONG DIDN’T READ:

1) No big change with new listings. Sellers are still sitting.
2) There’s been an increase in active listings due to fewer sales happening.
3) 8% rates can create more actives.

1) NEW LISTINGS HAVEN’T BEEN RISING:

Sometimes the narrative is we’re seeing an increase in active listings because there are more sellers, but that’s not what stats are showing.

NATIONAL NEW LISTINGS SHOW SEASONAL DECLINE:

Lance Lambert of Fortune Magazine put out this image a few days ago based on Realtor.com data, and new listings look like they’re following a pretty typical seasonal pattern across the country (see black line).

LOCAL NEW LISTINGS HAVE A SIMILAR VIBE:

Here’s a similar graph for Sacramento to show new listings in 2023 (orange) are showing a downtrend for the fall. In other words, there hasn’t been any notable change with more sellers coming to the market.

FEWER IN SEPTEMBER IS NORMAL:

Here’s a new visual to show what tends to happen with new listings between August and September. There’s only been one year since 2007 when new listings increased, so being down 11% this year is pretty normal.

2) ACTIVE LISTINGS ARE RISING:

Okay, let’s talk about where we are seeing change. There has been an uptick in the number of active listings both nationally and locally. The x-factor looks to be higher rates causing fewer buyers getting into contract.

NATIONAL ACTIVES SHOW A SLIGHT INCREASE:

Stats from Realtor.com show a slight uptick between August and September. This isn’t a massive change, but it’s something to watch. Altos Research has also been reporting an uptick lately, so we have two credible national sources reporting an increase. We need time to see the trend, so let’s keep watching over the next few months.

LOCAL ACTIVES HAVE ALSO INCREASED:

In Sacramento there’s also been a slight uptick in active listings over the past month (orange line). It’s nothing major, but it is noticeable when pulling comps and running stats. When I log into MLS, I’m tending to see 100+ more actives on any given day. This hasn’t been a dramatic change, but if rates persist to rise, we’ll likely see a bigger increase.

5.8% MORE ACTIVES IN SEPTEMBER:

It’s actually not common to see an uptick of active listings between August and September. At least, it hasn’t happened for a decade. When looking at the past sixteen years, there was an increase in active listings only 25% of the time between August and September. With that said, whenever we see a small change, we want to watch closely to see where it goes. No matter what, let’s keep our market antennas up.

BRO, DON’T HYPE THIS SMALL CHANGE:

It’s easy to blow this up and say, “Actives increased by 6% last month. The crash is happening. We’re all going to die.” But this is only 141 extra actives. Let’s remember when we’re dealing with a small number, it’s easy for a modest change to sound huge when talking about a percentage. And remember, it’s quick to spin a narrative, but it takes time to see a trend.

A NOTHING BURGER OR A TREND?

Look, this change has been slight, so we need to be really careful about giving it too much hype. But if rates keep increasing, I wouldn’t be surprised at all to see more actives. What happens with mortgage rates for the rest of the year will be the x-factor in propelling or cooling this trend. Bottom line.

BLAME BUYERS INSTEAD OF SELLERS:

Some people are going to see more listings and conclude sellers are rushing the market, but it’s actually buyers causing the issue (a lack of buyers, that is). Remember, we could have a low number of new listings, but if we see fewer pendings, it means the pile of actives can grow without sellers actually listing more homes. It’s basically an increase in supply due to waning demand. In other words, when pendings don’t happen, that helps the pile of active listings grow higher. And that’s exactly what we’ve seen lately. It’s not a huge change, but it is a change.

LIFE-CHANGING NEW VISUALS:

Okay, maybe these aren’t life-altering, but it’s fascinating to see how the gap between sales and new listings has changed. In 2008, between January and September there were just over 40,000 new listings to date, and today it’s been closer to 17,000. Is it 2007 again? Well, volume feels very similar, but we haven’t seen an explosion of listings today.

Remember, not everything that lists ends up selling. Do you see how this year doesn’t have as much space between the number of sales and new listings? Having fewer new listings has made the market more competitive.

ADVICE FOR SELLERS:

Sellers, my biggest message right now is to respect the pendings. Rates are flirting with 8%, and this makes it more difficult for buyers to afford a home today. Demand is still here, but higher rates will reduce the buyer pool even more. It’s easy to get stuck on sales from the past, but what are buyers willing to pay right now? We see that in current pending contracts. We also see what buyers aren’t willing to pay with overpriced listings (don’t price to those).

LET’S KEEP WATCHING:

Let’s watching by the week and comparing notes. Please keep sharing what you’re seeing in the trenches too.

Thanks for being here. I hope this was helpful.

Questions: What are you seeing happen with active listings? Are they taking longer to sell? What is open house traffic like? I’d love to hear.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

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