Market News July 25

Market Updates

Consumers Conflicted about Tariffs' Effect on Housing


This year's news has often featured stories about the effect of tariffs and immigration on the U.S. economy. Some consumers are especially concerned about the effect on home prices and availability. A survey carried out earlier this year by Ipsos found:

Over 50% of respondents (both homeowners and renters) think less immigration could make homes more expensive, as deportation of construction workers will result in fewer new homes.

Almost 40% think it could make homes more affordable, stating that reduced immigration numbers would also reduce housing demand.

68% of respondents were concerned that tariffs could result in continued inflation and high interest rates, while 43% are concerned that tariffs could have a negative effect on property values.

Only 35% thought that tariffs could make homes more affordable. Their opinion: "Tariffs will help boost the U.S. economy so more people can afford homes."1

Builders Continue to Reduce Sticker Prices


Many consumers who were planning to buy a new home have postponed their plans, concerned about the overall state of the economy. This has caused homebuilders to take action, cutting prices at the highest rate in three years.

38% of builders said they reduced their prices this month, which is the highest percentage reported since the National Association of Home Builders (NAHB) began tracking the metric in 2022. Just 29% were cutting prices in April. The average price reduction was 5% in July, where it has been every month since November.

While builder confidence in July rose 1 point on the NAHB Index, the overall index is still below 50, which is considered negative territory. The index has been below 50 for a total of 15 months.

The one-point boost is a result of the recently passed H.R. 1 budget act, which provided some tax relief for households, home builders and small businesses.

If you're working with prospects who may be interested in buying a new property, you may want to check out NAR's article Helping Buyers with New Construction.2

More June Buyers Walk Away from Purchases


A Redfin report published July 21st told a depressing tale: more than 57,000 pending home sales fell through last month. June's 14.9% cancellation rate was the highest for the month of June since 2017.

A Phoenix agent commented: "Sellers are willing to make deals because in today's buyer's market, they don't want to lose out on a sale once they have a buyer under contract." These sellers realize that the seller's market created by the COVID pandemic has evolved into tougher times.

However, agents are seeing more picky buyers balking at the results of an inspection or walking away after finding a better property.

Sun Belt metro areas saw some of the highest lost sales. Jacksonville, Florida topped the list at 21.4%, followed by Las Vegas, Nevada at 19.7% and Atlanta, Georgia at 19.6%.3

Write Sellers An Offer They Can't Refuse


If the previous article made you nervous, you may want to look at ways to improve the finer points of an offer. One way to do that is to concentrate on composing a comprehensive offer letter.

After you're finished drafting an offer (or asking AI to draft it for you), carefully read through it to make sure that the following details are included.

  1. Introduce yourself as the buyer's agent before introducing the buyer or buyers by name. Follow this with a description of their enthusiasm for the home. Sellers are often emotionally invested in their home and prefer buyers who share these feelings.
  2. Provide a clear offer price, with a CMA that supports the offer.
  3. Describe contingency requests in detail. If possible, describe your buyer's willingness to work with the seller; this helps eliminate any adversarial feelings.
  4. Propose a closing date that best serves both parties. If flexibility is an option, describe this as the buyer's willingness to ensure a smooth transaction. If the buyer cannot be flexible, simply state why.
  5. Include details of mandatory steps such as a title search, completion of an appraisal, and the buyer's home inspection plans. If the buyer needs to sell a home before closing, be sure to mention this.
  6. Send your buyer to me for pre-approval, so you can provide details to the seller. This strengthens your offer considerably.
Your closing paragraph should encourage open communications, and your promise to address questions quickly. Be sure to include your preferred telephone number and email address in your contact details, so you're easy to locate.4

Get More AutoPlays for Your Facebook Video Ads

If your next marketing campaign includes one or more Facebook video ads, here's an interesting fact: the shorter ads (30 seconds or less) may perform better than longer ones. This is because Meta has set up algorithms that focus on auto-playing shorter videos instead of longer ones.

As Meta explains:

"In most cases, video ads on Facebook that are 30 seconds or less loop for approximately 90 seconds. Looping means that your video replays after it ends."

This means that the shorter your ad, the more times it will loop, if left unchecked. But videos longer than 30 seconds don't loop. Instead, viewers will see a thumbnail with a play button.

Meta also notes that sometimes, the number of times your video loops on Facebook dynamically adjusts to achieve better results for your ad.

"In these cases, your video may loop for less than the standard 90 seconds or up to 180 seconds."

Your assignment? Compose some ideas or scripts for Facebook video ads that carry plenty of punch within 30 seconds. For example, you can use your elevator pitch for an intro video or talk about a community event you're sponsoring. You may even be able to draw interest to a slow-moving listing by shooting a 30-second video of its best features.5

Sources: 1redfin.com, 2cnbc.com, 3realestatenews.com, 4theclose.com, 5socialmediatoday.com