Current Real Estate Trends

90% of homebuyers have historically opted to work with a real estate agent or broker.  Here's why that's unlikely to change, according to the Mational Associations of Realtors.

BYTIM HUR

April 3, 2024 at 4:42 AM MST
 

Last month, the National Association of Realtors announced a settlement that would resolve nationwide litigation over claims from home sellers related to broker commissions.

The $418 million settlement, and the practice changes it will usher in, have led some to speculate that real estate agents are at risk of becoming obsolete.  As someone who has practiced real estate for 15 years, nothing could be further from the truth.

Members of the National Association of Realtors will continue to be the most reliable partner for the millions of Americans striving to realize the American dream through homeownership.

Specifically, the settlement will prohibit offers of compensation from being shared on multiple listing services (MLSs), the databases that show real estate brokers the properties for sale, and it will require MLS participants to enter into written agreements with their buyers.

These changes will go into effect in mid-late July 2024.

It’s important to note that the National Association of Realtors does not set commissions, and nothing in this proposed settlement would change that.  Commissions would continue to be negotiable among buyers, sellers, and their brokers.

The “cooperative compensation” rule that has been subject to litigation says that selling brokers have to specify on each listing an offer of compensation to buyers’ brokers.  That offer could be any amount, even zero.

Consumers continue to have options when it comes to compensating the brokers they work with. Some consumers may opt to pay a fixed fee for their broker’s services.  In other cases, a seller may offer a concession on the sales price, which could be used by the buyer to help compensate their broker.  And in other cases, listing agents may offer a portion of their compensation to buyers’ agents as long as the offer of compensation does not occur on an MLS.

Cooperative compensation, where the compensation a seller pays to their broker is shared, covering the cost of a buyer broker’s services, will continue to be an important option for consumers in all transactions and especially those involving lower and middle-income homebuyers, who may already have a difficult-enough time saving for a down payment.

The bottom line is that consumers will continue to be able to choose what kind of professional real estate advice they’d like–and how much, and how, they will pay for the work of a real estate professional.

Historically, nearly 90% of homebuyers have opted to work with a real estate agent or broker.  That figure is unlikely to change.

Even in an era where seemingly everything can be researched and purchased electronically, the clear value added by realtors remains evident.  Nine in 10 home buyers would use their agent again or recommend their agent to others.

Agents and brokers demystify local markets and neighborhoods and provide access to extensive information about available homes.  We help prospective buyers determine realistic budgets and research varied financing options, including programs that may be able to help buyers with a down payment.

Seasoned agents and brokers also offer insights into property values, taxes, regulations, and zoning laws while overseeing thorough due diligence processes.  And we connect buyers and sellers with other reputable real estate-related professionals such as lawyers, lenders, contractors, and inspectors–any of which can make or break a transaction.

When it comes time to make or evaluate offers, real estate professionals have a decades-long track record as skilled negotiators, ensuring that their clients submit the most competitive bids for their dream home–or hold out for what their home is really worth.  And at the settlement table, we help our clients confidently close on what is likely the most significant financial transaction of their lives.

Even post-sale, real estate agents and brokers are crucial advisors for their clients, providing ongoing support, answering queries, and offering guidance as people confront the challenges and delights of homeownership.

NAR’s proposed settlement agreement and the associated practice changes will not change what makes realtors valuable: specialized knowledge, diligence, and a commitment to our clients’ best interests. And it does not change the fact that millions of people will continue to rely on us to help them fulfill their dream of homeownership.

Tim Hur is NAR’s 2024 REALTOR Party Community Engagement Liaison and a seasoned real estate professional with 15 years of experience.  He is managing broker for Point Honors and Associates, REALTORS, a boutique real estate firm in Metro Atlanta.

By Andy Medici – Senior Reporter, The Playbook, The Business Journals
Mar 26, 2024  

Price trends, buyer demand make one particular week the best time to list a home.

The best time to sell a home is coming up soon, according to an analysis by Realtor.com.  It found the best week to put a house on the market is between April 14-20.  That timeframe combines an optimal mix of high list prices, buyer demand and quicker sales, in addition to fewer price reductions and less competition from other sellers.

"Spring is generally the high season for home sales, and buyers tend to be more plentiful earlier in the year," said Realtor.com Chief Economist Danielle Hale in a news release.  "Because listing a home is a process, sellers should start preparing now so they can list their home at a time when conditions are likely to be most favorable, giving them the best chance of selling their home quickly and at a competitive price."

Realtor.com broke down the data behind why April 14-20 is the best time to list a house:

• Above average prices:  Homes listed during that week in April tend to be listed for more than houses during other times of the year — and are typically 10.4% higher than the start of the year.  If that trend holds, the national median listing could be $7,400 higher than the average week.
• More buyer demand:  There are more buyers looking at homes during that time — there are 22.8% more views on Realtor.com that week compared to the average week the rest of the year.
• Faster time to sell:  Overall, homes during this week sell about 17% faster than the average week during the year, or about nine days quicker.  The average home takes 46 days to sell when listed during that week, or six days faster than other weeks.
• Less competition:  There are fewer homes on the market in April, according to Realtor.com, which found 13.7% fewer sellers during this particular week compared to an average week.  And nationally, inventory is still roughly 40% below pre-pandemic levels, meaning there's more competition for fewer homes.
• Fewer price reductions:  There is a smaller chance of having to cut the price of a home on the market during that week too. Realtor.com found 24.6% fewer homes historically see a price decrease that week compared to the average week of the year.

The summer months aren’t a bad time to list a home either.  Prices tend to go up over the summer, with peak pricing in June — but that time of year also comes with more sellers, which means more competition.

Mortgage rates will also determine buyer interest.  The 30-year fixed-rate mortgage is hovering around 7% as the Federal Reserve continues to weigh when to cut interest rates, which could subsequently lower the cost of homeownership for buyers.

An earlier analysis by Attom Data Solutions found the best time to buy a home was Jan. 9, when prices and demand are lower than the rest of the year, albeit with limited inventory.  Apart from Jan. 9, the best days to buy a home by paying the smallest premium is in the fall, with days in October, November and December topping the list, according to Attom. 

Existing-home sales grew 9.5% in February to about 4.38 million, the largest increase in a year — although sales declined 3.3% over the same time last year.  Median home sales prices rose to $384,500, the eighth consecutive month of year-over-year price gains.

Inventory has started to grow, with about 1.07 unsold units at the end of February, or about 2.9 months of supply, according to the National Association of Realtors.