The Off Market - April 4, 24 Edition

Welcome to Off Market by Goliath Data

The insider's guide to off-market properties.

If you’re new here and wondering why you’re receiving this, it’s probably because you interacted with one of our posts on Facebook or Bigger Pockets. If you’ve returned for another edition, welcome back! As a reminder, we break down the latest real estate data, give commentary (and hot takes) on trending topics, and provide resources to help you close more deals. Let’s dive in.

General Update

We’ve made some major improvements to the product over the past week. Goliath skip tracing is now officially live and turned on for all customers, eviction notices and tax delinquencies are now ingested and processed, and our first enterprise CRM integration (Zapier to Salesforce) is tested and live. Over the next week, we plan to launch the GA version of our automated skip tracing, and we’ll ingest code violations from across the country.

For those of you who have teams making custom lead lists (e.g. not pulling lists from Batchleads, Propstream, Propwire…etc.) – listen up.

In three weeks, we’re going to launch a beta version of Goliath BYOD (Bring Your Own Data). It’ll be the first-of-its-kind data parsing, cleaning, and enrichment tool in the market. You upload CSVs, XLS, TXT documents, and even PDFs to the virtual portal. We’ll ingest all of the data you provide, enrich it with missing information (owner names, mailing addresses, zoning classifications…etc.), and automatically prepare it for processing in skip tracing software. There are only a couple of open slots left in the beta, so if this is of interest to you, reply to this email.

Real Estate Data

Highlights

• 30 YR Fixed-Rate Mortgage: 7.06% vs 6.91% last week (source)
• Mortgage Applications - Purchase: -0.21% WoW, -15.63% YoY (source)
• Mortgage Applications - Refinance: -1.60% WoW, -8.62% YoY (source)

Real Estate Commentary

One of the major sticking points in this market is supply. We are at a 50-year low and in 2022 we had a housing supply/sales recession. One indication to watch is housing sales and new listings, these will show if the liquidity is going back to the market. Home sales increased significantly last month, 9.5% year on year. The inventory of available existing homes also increased by 5.8%. Both are positive for the market. But one month doesn’t make a trend. Keep an eye on this. And by the way, prices went up. Wild.

Real Estate Commentary (courtesy of Andreas Mueller)

Economic Checkup

The economy is looking strong, and we want to have the strongest economy we can get right? Well, sort of. There is this weird scenario, just past Goldilocks, and closer to Alice in Wonderland, where the economy keeps chugging along…. slowly, household incomes crawl ahead, corporate earnings play duck duck goose, unemployment (usually) rises and inflation stagnates. Economists call this Stagflation. You may hear folks also say the phrase “no landing,” referring to the Federal Reserve being able to avoid a recession but inflation remains. Enter Stagflation.

Stagflation, Are We There…Yet?

A year ago economists, Wall Street’s smart money, and pretty much everyone who calls themselves an investor was predicting a recession. Screaming high/fast interest rates employed by the Fed, $10 Trillion in Federal spending, extremely low home sales, corporate earnings revised lower and lower, inverted yield curve for Treasury Bonds, etc…, all indicated a recession on the horizon. Fast forward to today, and these same folks have reversed. The US economy plowed through those storms and avoided negative GDP growth. The main factor: unemployment didn’t plummet along with everything else. We are still under 4%.

The consensus (my skeptical ears perk up when I hear that word) amongst the finance community then became a “soft landing.” Here we expect inflation to slowly fizzle and GDP to remain positive, but slow. This is still the predominant thinking.

We have had several months of steady everything. Inflation is not dropping as the Fed hopes. In fact PPI, the Fed’s preferred measure of inflation, popped up last month, and both CPI and PPI have been resilient in the face of the fastest interest rate increases in history and Quantitative Tightening, where the Fed stops buying corporate and government debt to reduce liquidity in the economy and slow financial markets. Again the US Economy is remaining quite resilient.

All things being equal, this would be good. But again, inflation is not abiding and unemployment, layoffs, job switching, and job quitting (JOLTS) are all showing signs of worsening. Now, 45% of investors believe the economy could head toward stagflation.

The Impact of Stagflation on Real Estate

For us real estate investors, a stagflation environment means that the Fed will keep interest rates at the current elevated levels for the foreseeable future. Or they may slowly cut rates throughout 2024/2025. The main thing to keep an eye out for is inflation and unemployment. If we see inflation flatline/rise and unemployment rise as well, that would be no bueno.

Performance: Stocks vs Real Estate

Stocks have had a fantastic run this year, up 10% YTD and up 23% over the last 6 months. If the Fed cuts rates in June, it may be seen as bearish for stocks; but, bullish for real estate. Speaking of stocks, those who own them feel rich. This may be one reason folks are willing to get back into crypto in a major way. And not just Bitcoin, but the “meme coins” too, it’s getting 2020/21 wild!

Watch out. Bull markets create bullsh%t.

Partner Spotlight

Admittedly this is a new section we’re testing out. We plan to highlight one of our partners biweekly: real estate agents, title companies, investors/funding providers, and so on. For the inaugural edition, we’ve decided to highlight Andreas Mueller, who has been helping co-create this newsletter for the past few weeks. Andreas is an investor-friendly real estate agent in the Nashville area. He has a portfolio of properties and is always looking for more. If you are interested in buying (or selling) in Nashville, he is your guy. Happy to make an intro, just drop us a line!

Resources

Off Market Podcast: Steve Koleno, #3 Real Estate Agent in USA (Tune in Here)

This week we dropped the first episode of the Off Market Podcast, featuring Steve Koleno the #3rd ranked real estate agent in the USA (2022 & 2023). Since 2016, Steve has closed 4,800+ MLS rental and sales listings and is the only known Realtor in history to close over 1,200+ MLS listings in a calendar year for both Rentals (1,253 in 2016) and sales (1,643 in 2021). Sit back, buckle up, and get ready to hear firsthand what happens when someone is bold and brave enough to pursue their personal legend.

The Closing Bell

As always, thanks for reading! If you need introductions to investors, wholesalers, cash buyers, or financing (EMD, double closes, rehab…etc.) you know where to reach us.

- Austin & Max