On this week’s episode of The Real Word, Byron Lazine and Nicole White discuss the surge in mortgage interest rates past 6%, the backing off of deep-pocketed property buyers, and the continued reign of email as king of communication platforms.
Mortgage rates now above 6%
First up is yesterday’s Inman article by Matt Carter: “Mortgage rates surge past 6% on fears of Fed tightening.”
Back in December of 2021, even a predicted rise to 5% seemed unlikely with the overall consensus being at 4.5%. Byron predicted then that if mortgage rates went to 6% and beyond, we’d see some problems in the housing market.
Byron predicts that by the end of 2022, that demand will likely be far less than it is today. And demand today is far less than it was in December of ‘21 and this past January. Every day, there are fewer people who can afford homes or who are actively shopping for them. Buyers are actually bailing on deals because of the rising costs. On the flipside, some buyers are in a hurry to buy because they’re expecting mortgage rates to continue on their upward trend.
Numbers going into the first quarter of 2023 are not going to be good for the real estate industry.
“Stop telling people that the market is safe. It might be safe if you’re one of those average homeowners right now that’s locked into a 3% mortgage interest rate and you have $200K in equity and you’re not in fear of losing your job… All of this stuff adds up, and eventually, real estate numbers will reflect that.”
Deep-pocketed buyers backing off the US Housing Market
Next up is E.B. Solomont’s article on the Wall Street Journal: “Even Deep-Pocketed Buyers Are Starting to Back Away From the U.S. Housing Market.”
After a hot and heavy two-year run in major cities across the country, the luxury real estate market is cooling.
“2023 is gonna be a bad year, folks… And the wealthy know this. So, they’re holding back.”
Byron and Nicole also discussed Nicole’s masterful renovation of Byron’s Connecticut home and whether Byron is planning to sell the place.
Email is still king
Finally, we’re back to Inman for an article on agent tactics, specifically when it comes to communicating with clients and prospective leads.
If you want to cover your tracks, email is the best way to do it.
That said, Byron took issue with part of a quote from Berkshire Hathaway HomeServices Chicago broker Andrea Geller:
“Email is the most streamlined communication that everyone uses and we are in an industry we need to document our conversations.”
First of all, email is not something everyone uses. Secondly, calls and texts are going to be the best way for agents to get somebody’s attention – to actually generate and motivate leads.
“If you actually want to improve in your industry, especially if you’re new [and] you’re trying to generate a lot of leads and keep them organized… grab a CRM and do all your calls, texts, and emails in the same place. Because then you can delineate who’s hot, who’s warm, who’s cold.”
“Or if something does come up, and you need to cover your tail, it’s all documented, as well.”
So, while email may not be number one in all respects, it’s still our racketeer of the week, with our BAM twist to emphasize the importance of having all your communication in one place.
The lively discussion on different communication methods provides a nice segue to the Great Debate airing this evening – live on the Broke Agent Media YouTube channel at 5:00 PM EST.
Byron Lazine and Ricky Carruth will finally meet to debate on the merits and downsides of free vs. paid coaching. If you have any questions or opinions on the subject, this is one conversation you won’t want to miss.
The Real Word is brought to you every week by Tomo. Help your clients close their purchase loans on time. Tomo closes 98% of their loans on time, while the industry average is 40%.
