- Keys
- Posts
- How to survive housing in 2024 ⚔️
Today’s top stories…
Navigating 2024: tips and tricks for investors
Maverick investor Kyle Bass reveals his top three states for real estate gold
Fed economists propose slashing $30 billion from real estate commissions
🔥 Deal of the Day! 🔥: 3 bd | 2 ba | Bethel, ME
Today’s mortgage rate (30 Yr. Fixed): 6.97% 🥳 Below 7%!!!
Surviving the 2024 housing market
Homes for sale have nosedived by a staggering 42% since 2019, making the market tighter than your favorite pair of skinny jeans. Mortgage rates have skyrocketed to an average of 6.73% for a 30-year fixed, a mind-boggling 137% jump from January 2022.
Low supply means sellers are running the show. Prepare for bidding battles and prices that keep climbing, with a 3-5% increase expected. Time to put on your negotiating hat! Many homeowners are locked into their low-rate mortgages, making them hesitant to sell.
Harness the power of digital tools to stay one step ahead. Think property analysis platforms (like Mashvisor and others) and virtual tours. Eco-friendly properties are hot. Green renovations can lure in eco-conscious tenants and increase profits.
It's time to buckle up and ride this wild market like a pro. With the right strategies, you can still find deals and continue to build your portfolio. Check out the next story for more tips on the top locations to get started.
Investor Kyle Bass Unveils Real Estate Goldmines: Texas, Florida, and Tennessee
Maverick investor Kyle Bass, the mastermind who predicted the 2008 housing crash, is back with his latest real estate revelations. In a recent podcast, Bass spilled the beans on his top picks for property investments, and it's time to take note…
Bass is betting big on Texas, Florida, and Tennessee, stating, "You have to move real companies where there's affordability, where there's expansive activity, where there are natural resources to accommodate those movements."
While the West Coast and Northeast face challenges with high costs and taxes, Bass champions the "pro-business, lower cost, lower or no tax jurisdictions" of his chosen states.
The numbers don't lie: Florida saw a population boom of 365,000 from 2022 to 2023, Texas welcomed over 473,000 new residents, and Tennessee's population swelled by 77,513. Meanwhile, New York and California are grappling with a mass exodus, losing a jaw-dropping $1 trillion in assets over the past three years!
But Bass isn't just sticking to traditional real estate plays. His latest venture, Conservation Equity Management, is all about environmental sustainability, selling federal credits for conservation services like wetland restoration.
What markets are you excited about? Shoot me a note and let me know.
Fed Economists Propose Slashing $30 Billion from Real Estate Commissions
In a recent working paper, Richmond Federal Reserve Bank economists Borys Grochulski and Zhu Wang have taken aim at the "puzzling" and "anomalous" U.S. model for real estate commissions. With Americans shelling out a whopping $100 billion in commissions annually, the duo argues that a new "à la carte" compensation model could slash roughly $30 billion from the total.
The numbers speak for themselves: while home sellers in countries like the U.K., Ireland, and Singapore pay less than 2% in commissions, their U.S. counterparts are forking over a staggering 5.5%. And despite half of all buyers finding their own homes online, 87% of American homebuyers still use an agent.
According to Wang and Grochulski, this flawed system contributes to "elevated home prices, overused agent services, and prolonged home searches." Their proposed solution? An à la carte model that requires buyers and sellers to pay their own agents separately, with buyers paying for each individual service rendered.
This shift, they argue, would foster competition among agents, align compensation with cost, and prevent "steering" - the practice of agents directing clients away from low-commission properties. The result? A potential $30 billion in annual consumer welfare gains, primarily from the redistribution of buyer agents' profits.
The paper comes at a tumultuous time for the real estate industry, with the National Association of Realtors and several brokerage firms facing lawsuits alleging commission collusion. Even short-sellers are taking notice, with Spruce Point Capital warning of a potential 60% drop in Zillow's stock price due to the potential impact of these lawsuits on buyer-agent commissions.
Despite the potential negative impact on the industry, Wang and Grochulski maintain that their à la carte approach is necessary for the greater good of the economy. From eliminating steering incentives to enabling buyers to use multiple agents throughout the process, the economists believe their model's benefits are too significant to ignore, urging policymakers to consider making the switch.
🔥 Deal of the Day! 🔥
Price: $699,000
Beautiful setting (if you’re willing to take a major hit on cashflow). This chalet makes an ideal vacation rental due to its harmonious blend of tranquility and accessibility; nestled in natural beauty with year-round access, it offers proximity to Sunday River and downtown Bethel, alongside a lucrative rental history and professional management, ensuring a seamless experience for both owners and visitors seeking serenity or investment opportunities.
Airdna data:
Estimated monthly payment: $7,066/month (if financed)
Estimated monthly revenue: $4,435/month
Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.
See you tomorrow!
✍️ Brett