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Zillow keeps feasting on lazy realtors!
Any agent could walk around their next listing with their phone’s camera running and comment on what people are seeing and why they should buy the house! The extra audio will be far more effective than any whiz-bang product that comes to market at any price.
Why don’t agents do that?
There is a common belief that it takes longer to sell homes that are more expensive.
The statistics back it up too.
But the belief is a self-fulfilling prophecy that is executed by realtors and sellers every day. It’s hard enough to put an attractive price on a more-expensive custom home, and then sellers and listing agents can’t resist goosing their price by another 5% or so, just to make sure they don’t leave any money on the table.
It looks like Zillow is going to help bring an end to this sloppy practice.
We know that the zestimates are way wronger than they admit, especially with custom homes. Once a home hits the MLS, we also see them adjust the zestimate to within pennies of the list price – so they are unreliable at best, and fraudulent by most common standards.
But I’ve also noticed on this listing that the zestimate has been going down since we went for sale.
After a week on the market, the zestimate was down to $3,419,900 on Jan 22nd:
Then today the zestimate is even lower, and the spread between the views and the saves is getting larger because the highly-motivated buyers see it in the first few days and run up the count of saves:
Buyers have full access to all data now, and the longer a home is on the market, the less they will want to pay. If a recognized authority (in their mind) is also lowering their zestimate on the home publicly, it will fortify the buyers’ belief that they should offer less. Thanks Zillow!
I can’t change that belief – I’m just going to try and sell my listings early on!
It’s a new year and many, including Zillow economists, are optimistic. After a year in which almost half of agents reported selling one home or less, optimism is a valuable tool. To that end, there are a few major macroeconomic tailwinds that might fuel the early months of 2024:
Benchmark rate cuts can mean mortgage rate softening. Mortgage rate softening means more sellers loosen their grip on rate lock. Taken together, these trends drive a healthier housing market.
That’s the glass-half-full picture. Now let’s take a deeper look at a few trends.
Twenty-one percent of homeowners are considering selling within the next three years, according to Zillow research from December. That’s up 15% year over year.
Here are some of the most common reasons why:
A Zillow analysis of United Van Lines data shows that long-distance movers are heading to metro areas that are less expensive and have less competition from other home buyers.
“Housing affordability is reshaping migration trends. Buyers are moving where homes are more affordable and where there’s less competition,” says Zillow Senior Economist Orphe Divounguy. “Affordability remains the biggest challenge for most homebuyers today. Helping them navigate it by pointing them to a loan officer first is key. It’s even more crucial if they’re new to the area.”
Out are states like New Jersey, New York, North Dakota, Illinois, Michigan, and California. Top destinations include Charlotte (Zillow’s hottest market prediction for 2023), Providence, Indianapolis, Orlando, and Raleigh.
Additionally, a recent Brookings report found that tech jobs are spreading out. Traditionally concentrated in hubs like San Francisco, Seattle, and New York, tech employment is branching out to new “rising star” metros. Since 2020, cities like Dallas, Austin, Denver, Miami, Nashville and Salt Lake City are pulling larger shares of tech work.
The study found that this phenomenon was already underway, but that the pandemic, remote work, and high mortgage rates likely accelerated it.
Takeaway: Cities and states gaining workers are almost all more affordable than the traditional tech hubs. Out-of-town leads in these rising star metros may have healthy incomes and be looking to view upper-tier buys.
Rent growth is slowing in many major metros and rents are even falling in a few. Nationally, rents are still up 3.3% from a year ago, but they dipped (0.2% from the previous month). Forty-five of the 50 largest metro areas have seen annual increases.
Rental concessions, like free months of rent or free parking, have surged unexpectedly. In December, 32.7% of rentals on Zillow offered at least one concession. That’s up just 0.7 percentage points from November but 10.1 percentage points from last year. This rise is especially prevalent in cities like Oklahoma City and Memphis, which each saw a 4 percentage point increase from November to December.
Takeaway: Leads may be weighing another lease before a purchase. But equity starts when you buy. Those who plan to live in their new home for long enough can start building that equity now, and most experts agree that significant rate drops won’t happen anytime soon.
https://www.zillow.com/agent-resources/blog/january-market-report-tailwinds/
Here’s how our new listing stacks up.
Nine of the 22 homes for sale in the 92011 are mobile homes, and two are attached homes.
This zip code has a population of ~25,000, but there are only NINE houses for sale, ranging from $1,995,290 to $3,779,000…..and now two are for sale on the same street! We expected that the one down the hill at 7210 Aviara Drive would re-enter the market, because it had been for sale for months at the end of last year and cancelled for the holidays.
I didn’t advertise on Zillow that we are doing the broker preview today because the HOA is tough and I don’t want to stir it up. But the competition went ahead with publicizing their open house today so both of us should benefit. If you’re interested, come on by – we’re having breakfast burritos!
The specialized Zillow listing kit that they started selling this year for $529 includes prominent placement of the listing for the first seven days, but when there are only 22 for sale, it means that everyone is up front. But I don’t mind the #1 spot – here’s how our listing has scored so far:
The saves-divided-by-views = 8%, which is better than my rule-of-thumb of at least 5% for hot listings, and then Zillow adjusting their zestimate to within 0.4% of my list price doesn’t hurt either. It was just slightly different last week:
The Zillow listing kit includes photos, 30-second video (too short for big homes), drone shots, 3D tour, and floor plan. They require that agents use their 3D tour and floor plans in the MLS to receive the 7-day prominent placement, and it makes you wonder what else they will require once they gain more traction.
Here is the pro video we did with our usual guy (not Zillow). It’s the best one yet:
Come by 10:30am-1pm today, or on Saturday, 12-3pm!
Santa’s House is featured with Listing Showcase, the elevated listing experience available only on Zillow. Showcase listings are powered by artificial intelligence and feature immersive media and an entirely new design to help give you richer insights into the home’s layout and features. Sellers interested in showcasing their home can ask their agent about Listing Showcase.
Check it out here:
https://www.zillow.com/house/santas-house/
The gradual phasing out of buyer-agents is underway, and it shouldn’t be long now.
Zillow’s new format features the listing agent’s phone number under the main photo!
The three-headed agent display was removed and now when a reader clicks on the right side for Request a tour or Contact agent, they are linked to the Zillow call center instead. There they get processed/qualified on the phone by Zillow employees, sent to Zillow Mortgage, and then get assigned to an agent who is paying big money to Zillow for the privledge.
Buyers will figure it out pretty quick. By clicking on the right side, you get a 3rd party agent who isn’t the listing agent and has never been to the home. With the listing agent’s phone number now prominently displayed, it is inevitable that buyers will call the listing agent next time.
If they need a prompt, they will get one when they start clicking on the photos – which every viewer does immediately. This is what they will see now:
Yep – the listing agent is in the upper-left corner of every photo!
https://www.zillow.com/homedetails/2533-Camulos-St-San-Diego-CA-92107/16966353_zpid/
With the threat of buyers having to pay a buyer-agent a hefty commission out of pocket, it will be irresistible for them to contact the listing agent to see what they have to offer – in hopes of avoiding a separate payment due to a buyer-agent. The listing agents will be happy to oblige because they will already have their full fee packed into the listing side.
By the time the realtor lawsuits get resolved, it will be too late – there won’t be any need for a buyer-agent.
Zillow is offering a full marketing package to listing agents too.
Package Includes:
The Listing Placement Boost on Zillow?
Listing agents who purchase a marketing package will have their new listings displayed first in the home’s area for seven days – a very nice feature for agents looking to capture buyers for their listings.
While the rest of the industry was grumbling about lawsuits over the last few months, Zillow created a new format that will solve everything. But nobody knows what fee the listing agent charges because it is never disclosed to anyone but the seller – the person who just wants to hurry up and get their money.
What is the best thing a consumer can do to prepare for the 2024 selling season?
Get Good Help!
To check an agent’s qualifications, go to Zillow and click on the Agent Finder at the top of their page. Zillow wants you to use one of the agents they display prominently, but all you know about them is that those agents pay the most money to be featured there.
If you have a realtor you are investigating, you’ve probably checked their business website – and noticed how they all tend to look the same. It’s why Zillow is the reliable go-to website, because they are pulling the sales data directly from the MLS so agents can’t manipulate it.
What are you looking for?
You want to hire an experienced agent who has a well-honed set of sales skills. An agent who has proven history of getting a variety of people to the finish line. An agent who can handle anything that happens, and still deliver a smooth and easy experience for you.
Things to Consider:
Everyone is in a hurry and wants to grab and go. But if there was ever a time to patiently investigate the choices, it’s when you’re making one of the most critical decisions of your life.
Get Good Help!
In 2024, Zillow economists predict home buyers will have more options and a bit more affordability breathing room — but only a bit — after the inventory crunch and mortgage rates rising to 20-year highs were this year’s headline news items.
Buying a home will remain expensive, keeping pressure on the rental market to cater to families that will be renting longer than previous generations typically were. Many of those who do buy will turn to homes that need some work, and do-it-yourself upgrades and repairs will keep new homeowners busy.
Here are Zillow’s predictions for the housing market in 2024:
“Higher for longer” is the key refrain regarding mortgage rates looking ahead to the next year in housing. It’s becoming clear that high mortgage rates have some staying power. Expect more homeowners who locked in long-term payments when rates were near all-time lows to list their homes for sale, as they grow weary of waiting for the historically low rates of 2021 to return.
A stubbornly small pool of homes for sale has kept competition fairly high for most of this year, even with high costs limiting the number of active buyers. With mortgage rates rising over the past two years, homeowners have been reluctant to sell, opting instead to hold onto the ultralow interest rate on their current mortgage. Many of those homeowners will have their eye on a home with a bigger (or no) backyard, an extra (or fewer) bedroom, or in their preferred neighborhood across town, and Zillow predicts more of these homeowners will end their holdout for lower rates and go ahead with those moves.
More homes on the market — even the gradual increase Zillow economists expect — would be good news for home buyers, spreading demand and easing upward pressure on prices.
A typical home buyer in October would have spent more than 40% of their earnings on their mortgage payment — an all-time high in Zillow data, which stretches back to the 1990s. While affordability will undoubtedly remain the top concern for potential home buyers in 2024, there is reason to expect those challenges to ease just a bit.
Zillow’s latest forecast calls for home values to hold steady in 2024, falling 0.2%. Predicting how mortgage rates will move is a nearly impossible task, but recent inflation news gives the impression that rates are likely to hold fairly steady as well in the coming months. Taken together, the cost of buying a home looks to be on track to level off next year, with the possibility of costs falling if mortgage rates do.
That would give time for wages and buyers’ savings to catch back up — welcome news after the rapid rise in housing costs over the past two years. Wage growth has held strong, meaning the share of income spent on a mortgage will fall next year even if costs remain the same.
Though some improvement for home buying affordability is expected in 2024, many households will continue to be priced out. Demand — and prices — for single-family rentals will continue to increase next year as families look for a more affordable option to enjoy amenities like a private backyard or a home that doesn’t share walls with neighbors.
One possible path to more single-family rental inventory is homeowners deciding to turn their home into an investment property and rent it out rather than selling it when they move. The ultralow mortgage rates held by many existing homeowners make it more likely that this option would pencil out.
Throughout much of the pandemic, and even before, suburban rent prices were growing faster than rents in urban neighborhoods. [1] While the gap has narrowed, suburban rents continue to outpace urban rents in most major markets, specifically, 33 of the 50 largest metro areas. [2]
In New York City, data from StreetEasy, Zillow Group’s New York City real estate marketplace, shows demand is surging for rentals in commutable areas with easy access to Downtown or Midtown Manhattan, while areas farther from these office-laden neighborhoods are seeing relatively less demand. StreetEasy experts predict a strong year for Manhattan demand in 2024, and Zillow foresees more markets following suit, with rental demand surging near downtown centers.
Renters looking for a place near downtown will likely have more options with this year’s multi-family-construction boom, which means a huge number of new homes have hit the market. More options for renters looking for a new place means landlords who are trying to attract tenants have more reason to compete with each other on price. That’s a key reason more rental listings are offering concessions.
Typically the target of home flippers, homes that need a little work before they qualify for “dream home” status will have increased interest from buyers shopping for their primary residence.
Inventory has been far below normal for a while, and though Zillow predicts more homes will hit the market in 2024, inventory will remain much lower than pre-pandemic norms. Faced with limited choices, buyers will be willing to overlook small flaws, such as an outdated bathroom or kitchen.
The higher cost of buying a home today makes a flip harder to pencil out, so buyers may face less competition from flippers than they might have in previous years. Even with less chance of being subject to a bidding war, these homes won’t come cheap, so expect buyers to frequent their local hardware stores as they work on DIY home improvements. If Zillow’s 2024 home trends to watch are any indication, expect brutalist-inspired features and sensory gardens to be on home improvement to-do lists, but not “cloffices” or Tuscan kitchen designs.
Generative AI made waves this year, and Zillow expects AI advancements to streamline the home-shopping and home-selling journey in 2024, improving the experience of buyers, sellers and their agents.
Zillow tech experts expect a variety of new tools and technologies designed for real estate agents next year, allowing them more time to connect with more clients and prioritize face-to-face interactions. Agents have been using AI to assist with writing listing descriptions and to create 3D content for their listings. Next year’s advancements are expected to have an emphasis on visual and multimodal capabilities, including more rich media content.
Expect home shoppers to benefit from generative-AI-powered experiences to glean valuable insights and guidance on home financing.
[1] According to Zillow Observed Rent Index data at the ZIP code level. ZIP codes were classified as urban, suburban or rural, and month-over-month and year-over-year changes were then aggregated nationally and across metro areas for each classification; those changes were then averaged.
[2] Year-over-year changes, as of October 2023.
Brutalist? Here’s what’s in and out:
Do you love to set trends rather than chase them?
You can get ahead of the curve on the hottest new home design trends by checking out our predictions of which features and design elements will be trending in 2024.
We looked at nearly 300 home features and design styles mentioned in for-sale listing descriptions on Zillow and then identified the keywords showing up more frequently than they did a year ago. From post-pandemic pastimes to nostalgic designs from decades past, Zillow identified the emerging trends of 2024:
The copycat lawsuits are pouring in now, with attorneys from across the country looking to get their piece. The latest, called Batton 2 (other versions were filed previously), is for buyers from the last 27 years:
“All persons who, since December 1, 1996 through the present, purchased in the Indirect Purchaser States residential real estate that was listed on an NAR MLS.” For this class, the plaintiffs are asking for damages under “antitrust, unfair competition, consumer protection, and unjust enrichment laws.”
The class will include millions of people! If NAR goes out of business (which is likely), it won’t change much because we’ll still have state and local associations. We’ll have less lobbying, but lower dues!
All plaintiffs have momentum now, and the lead attorney from the first lawsuit doesn’t just want money. “One of our goals in filing the case is to make sure any changes are brought nationwide,” said Ketchmark. “We’re extremely focused on making sure any change that comes from this is real change.”
But the NAR is taking it lightly, just like they have from the beginning:
“We are currently reviewing the new filing, and it appears to be a copycat lawsuit,” Mantill Williams, NAR’s vice president of communications. “We continue to assert that the practice of listing brokers making offers of compensation to buyer brokers is best for consumers. It gives the greatest number of buyers a chance to afford a home and professional representation, while also giving sellers access to the greatest number of buyers.”
Here’s our corporate viewpoint:
Compass spokesperson Devin Daly Huerta said the company doesn’t comment on pending litigation, but provided comments from the company’s earnings call on Monday, saying the company “will respond accordingly to the complaints filed against us at the appropriate time” and that the company feels “confident that Compass is well-positioned.”
Compass pointed to rule changes at Northwest MLS that made listing broker compensation to buyer brokers optional and didn’t result in any decrease of offers of compensation or the amounts offered. “So we have evidence in a major U.S. market of what this change might look like that gives us confidence,” the company said.
“Secondly, we believe we are positioned well because we have the combination of some of the most productive agents and the only end to end technology platform in our industry. Third, we currently have agents that successfully ask their buyers to sign buyer broker agreements in order to work with them. We are in the process of launching trainings to all of our agents to empower them to successfully get buyer broker agreements signed with their buyers.
“Lastly, we operate largely in the luxury segment, where we think buyers will always want the help of an advisor through their home-buying journey.”
Similar statements from other brokerages are downplaying the impact. Yes, we will probably have better presentations of what realtors do and why we are worth the money, but anyone who thinks that will fix everything will be sorely disappointed. Consumers will be empowered to consider other options.
The only people who think that buyer-agents are needed are the agents. Buyers find homes for sale online, and they are proud about finding them before their agent does. They wonder why they need their own agent, when they can just contact the listing agent. The listing agents will be enouraging those thoughts!
Here’s a paragraph from the red team – the first to publicly mimic my prediction:
But if buyers’ agents become less common, Redfin will prosper in that world too. We run the largest brokerage website in America. We’ve built self-service technology for buyers to set up their own tours and to make offers. We’ll use that technology to market the properties listed by our agents directly to consumers, taking market share from other brokerages. We may open that platform to other listing agents who work with us as partners.
This is an opportunity for major changes to be implemented on how homes are sold, and these lawsuits are the disruption device. Realtors will roll out fancier graphics that tout the status quo, leaving it wide open for new ideas. Zillow and Homes.com have surged ahead of what should have been the dominant search portal, realtor.com, which NAR also screwed up when they sold it to an outside company.
Zillow has been amassing the pieces to build a super app, and create one-stop shopping for homes. If they add an auction component, it will be O-V-E-R for realtors.
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
