January 3, 2022

A Look Back at 2021 & Advice for 2022

Written by: Peter Prudden

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We started our firm four years ago with an idea to transform how residential real estate is marketed in the Twin Cities. At the time, we called it, “Disrupting real estate with integrity.” This tag line struck a chord with competing agents and the community at large. Whether you deliver good, bad or indifferent news, what matters most is that you are doing something that delivers information in a different way. I remember one of our first phone calls when we began. After viewing our social media brand presence, a question, “Who are you and what do you do?”. I knew at that moment we had something special. After all, as Cruella de Vil would say, normal is the cruelest insult of them all. It has been a whirlwind effort since that encounter. In four years of operating as a full-service real estate brokerage, we have doubled our sales volume every year, but what matters more than money is how you make people feel; because quality is remembered long after price is forgotten. 

Community Support: 

We installed a flower flash this spring in the heart of the North Loop, as a sign of support and appreciation for our community. 2020 and the first half of 2021 were challenging on multiple levels for the city of Minneapolis. Through tough times, we always seem to come together, and this was one of our ways to bring gratitude back to the forefront.  

Growth of The Firm:

As we head into 2022, a key initiative we are focused on is expansion of the brand, the business and what we can do to help deliver to our clients and agents. Our agents are highlighting their own unique qualities and are taking ownership of their business in a way that is new to our market. By launching an in-house production service, we are now offering a value proposition no one else in this market is currently doing. Our doors are open to agents and teams who want to incubate their brand, their business, and sell through a different lense. The modern-day real estate brokerage is no longer about providing a cubicle and a name. We are now focused on disrupting this model to put the agent first by providing all aspects at their disposal so they in turn can focus on growth and sales. 

We launched our Concierge initiative to help the properties we represent stand-out from the crowd. Our Concierge service is a stress-free way to sell your home faster and for the highest price. From cosmetic improvements to staging and even down to styling your existing furniture, we bring out the best in your property. 

Interest Rates, The Economy and Real Estate Market:

Since the year high in 10-year Treasuries occurred nearly two months ago, GDP and CPI (inflation) have accelerated, and the Fed has rapidly increased its tapering plan. The reaction in the Bond market since the December Fed meeting suggests bond traders suspect the Federal Reserve will quickly discover it’s being too ambitious with its newly hawkish stance. Long-term yields have dropped, suggesting a quick-yet-shallow hike; signaling Investors are wary the U.S. economy will falter if rates get too high. But in a higher rate, inflation and taxation environment, what do you want to own? Real Assets.

Signs point to a continuation of the current trend in real estate housing inventory. The end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace. The median existing-home price for all housing types in November was $353,900, up 13.9% from November 2020 ($310,800), with price increases in each region. This marks 117 straight months of year-over-year increases: the longest-running streak on record. 

U.S. Home prices are at record highs and have risen nearly 20% over the last year, the highest rate of increase ever. Rents in the U.S. are up 18%, also the highest increase we’ve seen. Fed Funds Rates are still at 0%, with the Fed still buying assets and the government is deficit spending. By March, changes will occur. The Fed will stop buying bonds, paving the way for rate hikes and additional borrowing/spending will be tougher. The chart attached is why many are wondering once the medicine is pulled from the patient, how will the system react? 

Perspective:

My three takeaways for 2021, in no particular order: 

1. Be proud of how far you have come 

2. The people you surround yourself with should view your growth as inspiration and not competition 

3. Time is your most precious resource; spend it on whatever brings you meaning and value. Just remember, by the time we get to where we are going, the journey will have ended. 

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Sincerely,

Peter Prudden

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