November 1, 2021 | Market Update

Market News 10-29-21

Today’s Market News:

Bridging the Divide Between Buyers and Builders

While demand for resale homes skyrocketed during the pandemic, the new home market has remained red-hot. As a result, many agents have spent more time collaborating with builders or developers — and they’ve discovered the need for a slightly different approach when working with construction teams vs. buyers.

Here are a few things agents should remember when navigating the new build process:1

  • Builders have a different end goalBuyers often have an emotional tie to their new home, even before they’ve closed on the property. Builders see it as a business transaction: Their goal is to get it built and sold to profit and move on to the next project.
  • You’re an advocate for the buyerYou serve as the bridge between the buyer and builder, and clients expect you to advocate on their behalf. It’s a good idea to document all conversations with the builder and keep buyers apprised of all potential issues, delays, or changes.
  • There may be little room for negotiationBuilders may not be willing (or able) to negotiate due to a tight market, ongoing supply chain issues, and rising material costs. Agents must be up for the challenge of balancing both buyers’ and builders’ needs throughout the process.
  • Insist on inspectionsEvery buyer has the right to an inspection, even on new construction. Always hire a third party to inspect the work when it’s complete. You’ll have more leverage when you bring the builder back to address the punch list before the sale is final.

Diverse Neighborhoods Attract Homebuyers

More homebuyers and renters are seeking out diverse neighborhoods that better reflect the changing U.S. population. Over 10% of Americans identified as multiracial in 2020, up from 2.9% just a decade earlier.

The number of mixed marriages is also rising; 11% of married adults have a spouse of a different race or ethnicity. As a result, an increasing number of people are in search of communities and neighborhoods with a mix of people from all ages, races, income levels, and backgrounds.2

Less Trick, More Treat

Holidays offer great fodder for social media posts — and Halloween is no exception. Here are a few ideas for your All Hallows’ Eve content:3

  • Trick-or-treating tipsKnow a house that gives out full-size candy bars or a neighborhood where all the homes participate in Halloween fun? Tell your followers. You can also provide safety tips or point out places with well-lit crosswalks and sidewalks.
  • Get in the “spirit”Share a few Halloween decorating ideas, both indoors and outdoors. You could even walk around a neighborhood with your camera, taking photos or videos of fun decorations for inspiration.
  • Show off the costumesPost a picture of yourself in your costume. Then ask followers to post their favorite Halloween costume pics of themselves, kids, grandkids ̶ or pets. You could even offer the chance to win a prize, such as a gift card to a local restaurant or shop.

Mortgage Rates Continue to Increase

After a slight dip in early October, mortgage rates resumed their upward climb. Freddie Mac reported the 30-year fixed-rate average was 3.05% on October 14, its highest level since April. The 30-year fixed rate was 2.81% this time last year.4

Boomer Buyers and Millennial Movers

American homebuyers are trending older. A recent study found that people 60 and older are more active in the market than they were 10 years ago, with the number of buyers in that age bracket growing by 47% from 2009 to 2019.

The generational hunt for homes often becomes entangled as many millennials search for their first home and boomers look to downsize. Boomers have an advantage in the event of a bidding war since they’ve had more years to save and build up more equity in their current home.5

Sources: 1inman.com, 2wsj.com, 3rismedia.com, 4washingtonpost.com, 5themreport.com