Welcome to the Pocket List, investors 👋

Let’s make some money today, shall we?

First, let’s check in on mortgage rates…

The 411 on rates… Rates continue to inch up, despite any real catalysts in the bond market.

THE LEAD

Brokers? More like broke.

Brokers, you might want to sit down for this…

By now you’ve probably come to terms with the the NAR settlement. And what it means for commissions (spoiler: they are going to be lower).

Well, now it’s starting to become clear just how bleak the situation is…

Assuming the typical agent commission drops to 2%, one accounting software company predicts that nearly 80% of brokerages will become unprofitable.

But wait, the data gets worse…

• 86% of brokerages with a storefront will be unprofitable

• 88% of large brokerages (100 to 5,000 agents) will be unprofitable

💭 Mr. Pocket Listing says… The good news is there is still time to adapt and overcome. The NAR settlement is still working its way through the courts. And it will take even longer to impact the industry. In the meantime, brokers need to be reassessing their entire biz.

One of the major takeaways from the study above is the impact storefronts have on profitability. It’s 2024 and the internet exists, why do you need to be paying rent?

Take advantage of higher rates

Do high mortgage rates suck for investors? Yes. But do those high rates create a different type of investment opportunity? Also yes.

A few weeks back we talked about alternative real estate investments. But, one thing we didn’t deep dive into was mortgage-backed securities.

They get a bad rap because of the whole 2008 financial crisis. Deservedly so…

But it turns out higher mortgage rates could make MBSs an interesting investment opportunity opportunity.

Hear me out…

The easiest way for the Average Joe (so you and I) to get our hands on what are pretty complex financial instruments is through ETFs.

But not all MBS ETFs are created equal…

• The iShares MBS ETF currently has a distribution yield of 3.7%

• Simplify MBS ETT is at 5.9%

The difference? The portfolio of mortgages that comprise the securities. You have to do your homework here and have a good understanding of what sorts of debt you’re buying.

WHAT ELSE?

More headlines I’m keeping an eye on…

• Housing market won’t come ‘unstuck’ until 2026, economists predict — here’s why (Read)

• Pandemic rent hikes still working through economy, keeping inflation high (Read)

• Housing in pandemic boom towns up to 40% overvalued, says Reventure CEO Nick Gerli (Read)

• KKR acquires $2.1 billion portfolio of residential real estate assets from Quarterra (Read)

• Homebuilding sags to four-year low, stifled by higher-for-longer rates (Read)

• U.S. Home Prices Set New Record High, but Growth Is Slowing, Case-Shiller Says (Read)

• More single-family built-for-rent homes are under construction in the U.S. (Read)

• Housing June 24th Weekly Update: Inventory up 2.2% Week-over-week, Up 37.7% Year-over-year (Read)

Let’s get tactical…

• "Housing Cartel" Investigated by the DOJ Puts Landlords on Alert (Read)

• Most Americans think it’s a great time to sell a house. But watch out for the unexpected costs. (Read)

• How to price a condo correctly (Read)

• 6 Property Tax Strategies for Long-Term Real Estate Investment Holding (Read)

• Here’s How Much Your Home Could Be Worth in 5 Years—and 10 Years (Read)

• Real Estate Experts: Why You Don’t Want To Wait To Invest In Rental Properties (Read)

• The typical new home in the U.S. is shrinking. Here’s what that means for buyers (Read)

Mr. Pocket Listing’s favorite property of the week (a guy can dream, can’t he?)…

PROPERTY TOUR

It’s time to get a pulse on markets around the country…

(1) These Are 8 Cities Homebuyers Should Be Buying In Post-Pandemic (Read)

(2) Million Dollar Listing’ Star Josh Altman: Buy in These 5 Cities Before Homes Become Unaffordable (Read)

(3) Why you should avoid buying property in these states over the next five years, according to real estate agents (Read)

SURVEYING

Last week, I asked, “What’s the best way to find deals?”

Your top 3 answers:

1) Networking

2) Wholesalers

3) Tech platforms

Here’s today’s question…

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One last thing…