The English Beat
The English Beat was one of two bands that played the US Festival both years (1982 &1983), with the other band being Oingo Boingo. They are playing at the Belly Up on February 10th:
Here Comes Homes.com
Homes.com is making a run at Zillow and all other search portals. They are advertising 100 million users already, and they are displaying the listing agent’s phone number prominently on their properties for sale:
Zillow must have felt the pressure, and they are doing it too, although in a more subtle way because they still want you to contact their call center so they can control – and get paid from – the agent they desire:
This is will probably have more to do with the extinction of the buyer-agent than the lawsuits.
All anybody has to do is spend $100 million per year on advertisng to become a major player like like Zillow did, and homes.com is in a position to do it. Look for the homes.com ads during the Super Bowl!
Replacing NAR
Kayla works for Mauricio at the Agency, and she sent this in! If listing agents recognize the value of buyer-agents and convince their sellers to pay them a decent commission, then the current model might survive. Or will they take the lazy way out and just hope buyers come to them directly without an agent? It is also possible that the courts will outlaw sellers paying a buyer-agent commission, which will force the issue – I hope we get some notice on that!
Two prominent real estate agents have started a new trade association in a direct swipe at the embattled National Association of Realtors.
Founded more than 100 years ago, the group known as N.A.R. has long held sway over the American real estate industry, collecting hundreds of millions of dollars in annual dues from its 1.5 million members. It owns the trademark to the word “Realtor.” But in recent years, the organization has been saddled with a barrage of antitrust lawsuits and sexual harassment allegations. Over the past several months, multiple top leaders have stepped down, stoking concerns in the industry that the organization is on the edge of implosion.
Jason Haber, a New York agent with Compass, and Mauricio Umansky, the Los Angeles-based celebrity agent and founder of the luxury brokerage the Agency, told The New York Times that their new group, the American Real Estate Association, could be an alternative.
Mr. Umansky said that A.R.E.A. will offer its members a nationwide database of home listings as an alternative, built from the technology he acquired for his own private listings service. That platform, which they’re calling the National Listing Service, is currently live with limited listings at theNLS.com.
“A centralized database with access to the full scope of listings across the country is better for everyone in the industry, and someone just had to do it,” Mr. Umansky said.
In addition, A.R.E.A. will allow agents to set their own commission rates and will not require any cooperation between buyer and seller agents.
Organizationally, A.R.E.A. will not have a president and vice president, Mr. Haber said. He emphasized that rather than seeking to replace the 100-year-old association, his goal was to offer something new.
“N.A.R. was too big to fail, until it failed,” he said. “People want something different. We’re setting ourselves up for failure if we try to replicate the N.A.R. model.”
https://www.nytimes.com/2024/01/23/realestate/american-real-estate-association-nar.html
(‘cooperation’ = sellers paying a buyer-agent commission).
Get Good Help
I try not to double up the content here, and this was only linked in a previous blog post so I’m not sure how many readers saw this previously. But it is noteworthy!
This third report on a surfeit of agents focuses on the role of real estate companies in the creation of the glut and related incompetence of many agents.
Our analysis of the sales experience of 2000 representative agents from large companies in five different areas revealed that there is an even greater surfeit than we and many others had imagined. Nearly one-half (49%) of these agents had none or only one sale in the previous year while nearly three-quarters (70%) had five sales or fewer. Almost all of these agents hold another steadier job or are retired. For most agents, the residential real estate industry is truly a part-time business. Yet despite this agent glut, many large companies keep recruiting new agents, often regardless of agent qualifications. They do so largely because of four factors – high agent turnover rate, new agent sales to friends and family members, fees paid by these agents, and limited liability for these agents since they are independent contractors. For these same reasons, many companies continue an association with agents even when the agents routinely sell only one or no properties a year.
The surfeit of agents ensures that many will not be able to receive adequate personal training and mentorship. One agent reported that a managing agent had been assigned responsibility for more than 100 agents. Large companies do make available on-line training but many agents report that what new agents really need is experience working with a veteran agent and close supervision by a broker while they are selling properties. That close supervision is not required by most states. Of the 50 states (and DC) we examined, only seven require closer supervision of new agents than more experienced ones. Furthermore, that close supervision is often not clearly defined, and we have seen little evidence that state regulators have focused on the issue.
Consequently, some companies and agencies feel permitted to adopt a “sink or swim” approach to their new agents that certainly is not to the benefit of their consumer clients. There are roles for states, the National Association of Realtors, and individual companies and agencies in addressing this issue. State legislatures should require close broker supervision of inexperienced agents beyond checking paperwork. Colorado, Illinois, and Montana not only require closer supervision but define what this supervision entails. States should also follow the lead of those states, a small minority, that require agents to receive post-licensing education on the practicalities of selling property. Moreover, regulators should intervene when the complaints they receive show evidence of inadequate training and supervision.
The National Association of Realtors (NAR) could play a role differentiating inexperienced sales agents from full-time professionals by raising the standards of earning Realtor status. Today, few consumers understand or are influenced by this status. If NAR were, for example, to require more experience and competence from Realtors then publicize this difference, consumers would more likely hire these agents. These requirements could include, for instance, selling more than five properties in the previous year and initially passing a new exam on the practicalities of selling property.
Many companies and agencies take seriously the training of new agents, yet many do not. The latter should recognize that heightened consumer awareness of industry practices resulting from class action litigation is likely to encourage more informed selection of agents. The industry should also recognize that increasing the number of agents does not appreciably affect home sales but does reduce the average income of individual agents and brokers. Companies and agencies should value full-time professional agents and brokers more highly than part-time sales agents who are engaged in other occupations.
The glut of agents and the inadequate training and experience of many has an important implication for consumers. Both home sellers and buyers should choose their agents carefully. These consumers should pay particular attention to the number of recent sales and client evaluations of the agents considered. Both Zillow and Realtor.com list this information about many agents, and this information tends to be more objective than that offered by referral agencies. Consumers should be wary of agents without an informative listing on either website. Friends and family members who have recently sold or purchased a home can also be consulted, yet consumers should also use Zillow and Realtor.com to supplement the information these individuals provide.
Click here for the full report:
Robert Reffkin on 2024 Market
Zillow Tailwinds
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:
- The job market remains strong.
- Despite a couple of blips in January, inflation continues to trend toward the 2% target rate.
- The Fed has signaled that benchmark rates were likely at or near their peak while hinting at rate cuts.
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.
More homeowners want to sell
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:
Tech jobs, long-distance movers are spreading out from traditional hubs
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.
While rent growth slows in many markets, concessions are up
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.
- Annual rent increases are highest in Cincinnati (7.1%), Providence (7.1%), Hartford (7.1%), Buffalo (6.3%), and Louisville (6.1%).
- Rents fell month over month in 32 of the 50 largest metro areas. The largest drops are in Jacksonville (-0.8%), San Diego (-0.7%), New York (-0.6%), Denver (-0.6%), and Austin (-0.6%).
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/
Inventory Watch
During the frenzy, the market had waves of new pendings happen in the same week or two, as if there is a home-buying karma that sweeps a bunch of buyers into action at the same time. It’s probably more due to them digesting the new listings, and after a couple of weeks of 2024, it appears buyers are acting!
The NSDCC pendings count rose from 102 to 122 this week, a 20% pop!
In the graph above, you can see that last year the market was cooking by mid-February. When the actives and pending are stable, it means that the deals are closing as fast as the new listings are coming on!
Here is the history from the last few years:
2023:
2022:
2021:
2019/2020:
Open House Report
Michele is on the same program as Kayla was, and after another couple of years, she should see similar results in real estate sales. In the meantime, she should be busy!
California Is Still Attractive
Thomas Kowal knew living expenses in Los Angeles would be steep. But he was surprised at how steep.
Kowal, 25, had lived on the East Coast for most of his life, but he applied to UCLA for a toxicology PhD program because, he said, he wanted a change of pace and scenery, and he hoped to earn the kind of salary after graduation that would let him afford the California lifestyle.
“When I came here for interviews for a couple days, I really didn’t notice things like gas prices, sales prices that you do notice once you’re on the hook for it,” he said. “Certainly you can see some red flags, and I was prompted to ignore that because I knew living here was my main interest.”
Despite California’s high cost of living, the state has continued to attract more educated and well-paid residents. New census data discount the notion that California’s housing and affordability crisis is pushing away educated residents, resulting in a so-called “brain drain.”
The numbers suggest California’s strong economy in such sectors as technology, medicine and entertainment, as well as its admired higher-education network, continues to draw people.
First LCV Listing of 2024
La Costa Valley (1,073 single-family homes) Annual Sales:
The new rule about getting profits tax-free went into effect in 1997, and it motivated people to move! The sales history of this house is an example of how it used to be – make a little money and be on your way:
But over the last 10-12 years, people stopped moving so much. Any of the original LCV homeowners were already empty-nesting, so it wasn’t the kids that kept them from moving. Rates were coming down a bit, and refinancing made it a little more affordable – and there wasn’t anywhere else to move locally that was better than what they had already.
Some may have thought that the 2007 buyer got left holding the bag. But he’s now listed for $2,085,000!
