Category: Professional

GET REAL – Lead Generation

Let’s Get Real about Lead Generation. Finding new customers is an important piece of any business, but in real estate there is an usually high emphasis put on it. Case in point, a very prominent broker and coach that many in our industry try to emulate says that as real estate agents we have only 1 job – to generate leads. Really?

I’m currently at a property in Folsom that I’m listing for sale this weekend; you can check it out at 105strouse.com. In my time working with the seller and her family over the months leading up to today I’ve worn many hats, and my most valuable jobs for her are in the days & weeks ahead as we market the home for sale, review offers from buyers, and navigate the escrow process. If I was solely focused on generating leads, I would be on to the next prospect and not caring for her when she needs me most.

I get it; in sales you need to always be prospecting, but I think the REALTORs that are really good at generating leads are really good at getting your attention, but are they any good at actually giving you value? Before you hire your next real estate professional, make sure you know if they are more focused on operating a marketing system for their business, or guiding and caring for you through your real estate transaction.

“Spreads” Revisited

The difference between mortgage rates & U.S. treasury rates (aka-The Spread) is the story to watch in 2024

For the past 6 months I’ve been pointing out how many interest rate markets are out of whack. While technical in nature, these topics are SUPER IMPORTANT to watch if you are even remotely interested in the future direction of mortgage rates. Since most of my readers either own a home or hope to own one in the near future, this content is critical to cover and keep you informed.

Typically, most interest rates trend in generally the same direction (up or down). Here is a chart showing how both mortgage rates and treasury rates have been in sync with one another over the years.

But these normal relationships have severed as of late. Mortgage rates have risen at a faster pace than treasury rates, and remained at these inflated levels for nearly two years. These oddities have occurred before in prior decades, but generally when things get out of whack they snap back in order fairly quickly. Presently, the difference, or “spread”, between rates on 10-yr treasury rates and 30-yr mortgage rates stands at 2.78%, over 1% higher than the 40-year average!

As you can see in the historical chart, there have been only two prior instances when this spread has flirted near 3%. In both cases, things returned fairly quickly back and even bottomed out well below the long-term average. This time around, however, the spread has lingered at nearly 3% for over a year and a half!!! I shaded in red the duration the spread lingered over the average of 1.75% to easily illustrate how odd the current episode looks.

What gives? My prior post on this topic explained the two distinctive risks investors face when purchasing mortgages versus treasury bonds (in short, foreclosure risk & pre-payment risk). Market experts are stumped as to why investors continue to see such high risks in mortgages. The Mortgage Bankers Association president forecasted just last week that they anticipate this spread to reduce as we proceed through 2024. Falling inflation & The Fed’s pivot on their approach to fighting inflation are the cited reasons why investors will see lower risk in mortgages, which will lower the spread and will ultimately lower mortgage rates.

The next test of this theory is coming up at the end of the month when The Fed meets next. At their last meeting on December 13th, we saw this spread drop severely as investor’s recalculated their perceived risks of holding mortgage bonds. Let’s hope January’s meeting has a similar result!

GET REAL – Teams

Let’s Get Real about Teams! I hope your favorite NFL squad is playing this coming playoff weekend…GO NINERS! But the ones I want to Get Real about right now are Real Estate Teams.

They have become all the rage in the past decade in our industry, but I wonder how many of them are truly teams if it’s called the John Doe Team or the Jane Smith Team. Truthfully many real estate teams are more about image, ego, or revenue sharing; an actual team may not even exist beyond the name. 

Not all of you know that in 2018 I took a nine-month sabbatical to live abroad on a sail boat with my family. I spent the six years prior to casting off building and teaching a team to operate without me. While I was away, I did not run my business or interact with clients, and our firm did great without me! It was a testament to the systems we’ve built to not be dependent on any one person, even the leader of the company.

I’ve been back for five years now and am very active and involved again in our operations and serving our clients, but I can’t do what I do at the level I do it without the entire Blue Waters Group! Our clients are better served by us as a team than by me trying to be a one-man-show. The next time you need a REALTOR or Mortgage Broker, give me a call and put the experience of our entire team to work for you.

GET REAL – Big Banks

Let’s Get Real about BIG BANKS! They have big-time overhead expenses, so they have to earn big-time interest on their loans. For the best rates, skip the big banks use the services of a mortgage broker like me.

This is not about supporting local or shopping small. This is about getting the best deal possible on your next home loan!

Click on this link to read about how the rates I offer my clients tend to be nearly 1/4% lower than the average national mortgage rates!

Winter Is For Home SELLING

You read that right! If you’ve considered selling your home, you better get a move on!

I’ve insatiably tracked statistical trends in the real estate market over my 20-year career. It’s one of my favorite, and most under-appreciated, parts of the job. Back in September, I wrote about how Fall has been the best season for home buyers over the past decade. Is it perhaps a coincidence that I had more clients buy homes this past Fall season than any other time of 2023? Or perhaps my readers are listening to my insights!

Mining from that same data I used last year, its clear to see that the Winter season (what I consider Jan 1st-March 31st) has consistently seen the largest seasonal median price appreciation for Sacramento County homes than any other time of year.  From 2013-2023, home prices have appreciated on average $24,000 during the Winter season, outpacing even the assumed “prime” Spring selling season.

Its often believed that the real estate market “hibernates” during winter. Its true that fewer transactions take place during the winter, but this is the very reason why winter is a seller’s market! There are fewer homes for sale to compete with, but buyers have consistently shown up in our mild California winter seasons prepared to buy, driving up prices.

Presently, there are fewer than 900 homes for sale in Sacramento County, a historically low number by normal comparisons. In my hometown of Folsom, with a growing population of over 80,000 people, there are only 64 homes currently for sale. Overall, this is very unhealthy for our market, but for would-be sellers, it doesn’t get any better than this!

The statistics are again in your favor if you are contemplating selling your home. Maybe health concerns are prompting a sale, or a relocation for work or family. Whatever the reason, if you’ve been thinking about selling your home in the greater Sacramento area, give me a call so we can do some localized analysis on your market, competition, and ultimately potential selling power of your home. With mortgage rates dropping it is sparking renewed interest for buyers to re-enter the market as we head into winter. Don’t think waiting till spring is your best bet. As I hope I just showed you, history would suggest otherwise.

GET REAL – Zillow

Let’s Get Real about Zillow. It is not a public information service nor is it a real estate firm. Zillow is a for-profit advertising company.

Much like Google, when you get search results, the first items or people aren’t necessarily the best ones. They’re simply the ones that paid the most to be at the top of the list.

If you want unbiased and unfiltered information about listings or service professionals in real estate, use the website of a REALTOR. Search all listings in the greater Sacramento area using the link in my bio. No advertising or sponsoring will alter the results of your search.

GET REAL – Attending Inspections

Let’s Get Real…Did your REALTOR attend the home inspection on your last transaction? Why the heck not??!!

It’s such an important step in the buying process; I make a point of being at every one. It may be a big time investment, but it’s one of the best ways to advocate for my buyer clients.

GET REAL – IMAGE

Let’s Get Real about IMAGE in Real Estate. Make sure you don’t fall for flashy marketing and false self-promotion that makes a REALTOR’s image suggest they’re more successful and valuable to you than they truly are. Look for EXPERIENCE and AUTHENTICITY!!!

GET REAL…Slowing Real Estate Market

Let’s GET REAL about a slower real estate market. A REALTOR shows their true value when a home doesn’t sell right away. Should they just tell a seller to have patience or say “just trust me?” 🤦‍♂️

NO WAY!!! A good REALTOR should systematically track the vital signs of their listings regularly to gauge marketing activity levels. Not many do it, but for me it’s a critical way to keep sellers informed and to counsel them when considering price reductions.

GET REAL – Revenue

Let’s GET REAL about whether REALTORs are more focused on the revenue FROM YOU or the relationship WITH YOU. When I work with new clients I don’t always get a commission, but I always try to earn their trust. I know a genuine relationship will always lead to referrals and other business opportunities in the future.