New: 🧠 Market Minds Issue #046

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The Brutal Truths: Thrive in Today’s Market

1. Either Get in the Game, or Get Out of the Way

The real estate industry is facing monumental challenges—rising interest rates, declining transactions, affordability pressures, and the recent NAR settlement have fundamentally altered the way agents work. This has led to widespread agent burnout, apathy, and declining motivation, a trend not seen in two decades.

For agents feeling stuck in this rut, here’s the tough love: If you’re not committed to pushing through, it might be time to rethink your career. If, however, this is the business you want to thrive in, it’s time to take massive action. David Childers of Keeping Current Matters likens it to sailing—you need to power through the "doldrums" of your career by turning on your engine and finding the wind again.

2. Hard Work Beats Talent Every Time

Top agents aren’t thriving because they’re the most talented—they’re thriving because they outwork everyone else. Experience is a teacher, but discipline and work ethic are a choice. You need to stop playing small and start showing up with fire, especially if you’re battling through tough market conditions.

3. What Got You Here Won’t Get You There

Success in the current market requires doing things differently. Agents must evolve their strategies, attitudes, and effort levels. Stop sticking to what's familiar just because it worked in the past. This market rewards innovation, boldness, and the willingness to do what makes you uncomfortable.

4. The Market Exposes Your Weaknesses

Boom markets make everyone look good, but challenging times reveal who’s been coasting. Focus on the fundamentals—improve your skills, enhance your client communications, and create consistent, high-quality content. You can’t control the market, but you can control how you respond to it.

5. The Problem Might Be You

Here’s the brutal truth: If your business is struggling, the issue might not be external factors, but your own decisions. Are you avoiding the tough calls, skipping marketing, or slacking on client outreach? Owning your responsibility in your current situation is the first step to changing it.

6. Step Up—Your Clients and Colleagues Need You

The NAR settlement has left many buyers and sellers confused, but it’s your job to bring clarity and confidence. Your clients and fellow agents need leadership and direction more than ever. Real estate pros must be beacons of professionalism in this uncertain market.

7. It’s Not About You

The sooner you realize that real estate isn’t about you, the faster your business will grow. Focus on serving your client's needs, doubling down on value, and staying relentlessly client-centric. This market will define the agents who can step up and those who won’t make it. Choose wisely.

Is Rate Cut Likely After CPI Surprise?

Hotter CPI Sparks Fed Speculation: A 25 or 50 bps Cut?

The latest August CPI report came in slightly hotter than expected, pushing the Fed toward a probable 25 basis points (bps) rate cut. However, inflation hasn't risen enough to rule out a bolder 50 bps cut to stay ahead of potential labor market weakness. Real estate professionals should keep a close eye on mortgage rates, which are expected to stay stable for now, but could react to any unexpected Fed moves.

Housing Inflation Surges—But Is It Real?

Housing inflation, including rent and owners’ equivalent rent, saw a bump in August's CPI numbers, but don’t be misled. These figures are backward-looking and don’t reflect current market conditions. According to Redfin, rents have essentially plateaued compared to two years ago, meaning this "inflation" might not align with the reality agents and investors are seeing on the ground. The uptick is unlikely to drive long-term shifts in rent projections, but could affect short-term sentiment.

Fed's Dilemma: How to Satisfy the Market Without Spooking It

With only three Fed meetings left in 2024, the central bank faces a tricky balancing act. The market is expecting more than 75 bps of cuts by year-end, and a modest 25 bps cut next week may not be enough. Real estate investors should be prepared for volatility, as the Fed might signal more aggressive cuts in the near future, either through official projections or Powell’s commentary.

What’s Next for Mortgage Rates?

Mortgage rates have already priced in a full cutting cycle into 2025, meaning any immediate reaction to the Fed’s upcoming move will likely be muted. However, a surprise 50 bps cut could alter this dynamic, bringing rates lower and potentially reigniting demand in key housing markets. Agents and investors should stay alert, as this could open windows of opportunity for refinancing or entering deals in the coming months.

Best Week To Buy in 2024: How To Capitalize

Unlock $14,000 in Savings by Buying This Fall

According to a new Realtor.com report, the week of September 29 through October 5, 2024, presents the optimal time to buy a home, with potential savings of over $14,000 compared to the summer peak price of $445,000. Buyers will find a more balanced market with less competition, making it a prime opportunity for investors and homebuyers alike. If you've been advising clients to hold off, this may be the week to act.

Inventory Spike: More Listings Than We’ve Seen in Years

Active inventory during this period could reach pre-pandemic levels, with 37% more listings than the beginning of the year and 14% more than the average week. This means more choices for buyers and a greater likelihood of price reductions, giving investors a rare window to find properties without the usual bidding wars.

Price Reductions Will Hit a New High

Expect 50,000 homes to see price reductions during this week, with a projected monthly price-reduction share exceeding 22%. If you’re looking to score deals, this is the time to pounce. For agents, this offers a golden opportunity to help clients buy at lower prices and lock in properties before year-end.

Mortgage Rates and Buyer Demand Align in Your Favor

Mortgage rates dipped below 6.5% in August, with projections indicating a steady decline throughout 2024 and into 2025. Combine this with a 29.5% drop in buyer demand compared to peak times, and it's clear that buyers who move now will face less competition and better financing options than they would in the typically hotter spring market.

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TL;DR (Too Long; Didn’t Read)

The real estate market is grappling with rising interest rates, affordability challenges, and the impact of the recent NAR settlement, which has led to agent burnout and declining motivation. Agents must either adapt with hard work, innovation, and client-centric strategies or reconsider their place in the industry. Meanwhile, the Fed's moves on interest rates, including potential cuts, could create new opportunities for buyers and investors, especially with price reductions and favorable mortgage rates expected this fall. For those ready to act, the week of September 29 to October 5, 2024, presents a prime window to secure significant savings and capitalize on increased inventory.

Have a great weekend - we’ll see you next Saturday.

Cheers 🍻

-Market Minds Team