A new survey of realtors was released today (see below). Here are my answers:
1. Is Now a Good Time to Buy or Sell in Your Area?
A. It is a great time to sell, as long as you can live with today’s prices. Sure, potential sellers can believe that it’s better to wait until prices go significantly higher, but that may not happen when you want it or need it, and it may never happen.
B. It is a terrible time to be a casual buyer. Only those who buckle down and commit to seeing every new listing within the first day or two, and are willing to pay all the money for the quality buys will succeed. Another big challenge is finding an agent who can win bidding wars.
2. Do You Expect Prices to Generally Rise or Fall in the Next Year?
A. I expect that general pricing will rise 5% statistically, and be hampered by inventory shortages, arrogant listing agents, and short-sale fraud. All three are contributing to a pricing limitations, and only the first has a chance of changing. If a surge of well-priced quality homes were to hit the open market, they would be gobbled up quickly – and the resulting momentum could take prices significantly higher if the flow of new listings continued.
3. What are the Most Common Challenges for Buyers in Your Market?
A. Having a clean shot to purchase a property. The time is ripe to convert to an open auction-type format to sell properties, so buyers can at least see with their own eyes what is happening. The games being played by listing agents are impeding open bidding and market-value pricing.
4. What are the Most Common Challenges for Sellers in Your Market?
A. Shopping for listing agents based on who will quote you the highest price, and ignoring how educated the buyers are about market values.
5. Are Buyers and Sellers are Getting More Confident and Aggressive?
A. Absolutely, and they are more aggressive than the agents, who, as a result, are being left behind.
6. The Real Estate “Profession” Over the Next Five Years?
A. The agent population should decline significantly, but there will always be licensees sitting around with business cards and a facebook account hoping that something will fall in their lap. We are way overdue for a significant game-changer to shake up the industry (public-MLS), and it should set off a commission war.
Wrap-up: Those who play nice will undoubtly feel better next year, as long as rates stay ultra-low, but nicey-nice agents only get the leftovers. For those who are on the streets battling it out every day, the fight will be more competitive than ever.
Here is the general survey:
Real estate agents surveyed by Redfin:
- See now as a good time to buy a home more often than a good time to sell one: 75% of agents surveyed described now as “a good time to buy,” while only 54% described it as “a good time to sell.”
- Mostly expect price gains to be modest: Only 11% of agents expect home prices to “rise a lot” in the next year. The vast majority—76%—expect prices to “rise a little.”
- Are feeling the pinch of low inventory and multiple offers: 90% of agents indicated that low inventory was one of the most common challenges facing buyers, and 91% pointed to multiple offers.
- Are seeing both buyers and sellers gaining confidence in the market: 85% of agents agreed that buyers are becoming more confident about the market, and 84% agreed that sellers are becoming more confident.
- Have hope for future of the real estate profession: 59% of agents believe that the real estate profession will grow in size in the next five years, 30% believe it will remain the same, and just 11% see more declines in the future.
The picture painted by the agents is one of cautious optimism. Most agents we surveyed expect modest price gains, improvements for buyers as well as sellers, and moderate growth in the real estate industry. The results line up nicely with recent gains in overall consumer confidence, which has been rising steadily through the year. No V-shaped recovery appears imminent, but rather a slow and steady trend back toward something resembling a normal market.
“That agents believe both buyers and sellers are becoming increasingly confident bodes well for sales volume in 2013,” said Redfin CEO Glenn Kelman. “Over the past five years, eager sellers have been unable to find a buyer, or more commonly in 2012, eager buyers have been unable to find a seller. But going into 2013, we expect that a jittery market will settle down, and buyers and sellers will more easily come to terms. After years of irrational exuberance, crashes, foreclosure fire-sales, inventory shocks and saw-toothed trends, the cautious, broad-based optimism we’re seeing now is the best kind of recovery we could hope for.”