Confused about the housing market? You’re not alone.
While consumer confidence about the state of real estate continues to poll low, most markets around the country are seeing a steady stream of activity. So why are national headlines constantly highlighting the housing market’s inevitable demise? The short answer is this: because real estate is more local than ever.
National trends, insights and data aren’t always reflective of what’s really happening in most markets around the country. Which brings up the question...what is really happening in the housing market today? We’ve got the scoop for you.
How did we get here?
For the last number of years, the housing market has been one of the hottest topics, for better or worse, flooding feeds with headlines and grand statements about everything from bidding wars to price declines and housing crashes.
And for the most part during the “Unicorn Years” between 2019-2021, the trends and insights being reported applied to nearly every market in the country. Americans embraced home-selling jobs as soon as the pandemic began, powered by soaring prices and sales. Historically, anytime home prices really go up, Realtors flood into the market. A lot of people view it as a way to make money - and often a quick buck, off the housing boom. Prices were appreciating, mortgage rates were low, bidding wars were high and average days on market were short. It was a total feeding frenzy and business was booming. Many agents got lucky with how easy it was to attain business during the “unicorn years” but this market is different and what worked before most; likely will not work now.
And then, like the flick of a switch, that all changed. The shock of rising mortgage rates stopped many buyers and sellers in their tracks, waiting in a holding pattern for them to go back down again. While they’ve budged a little from their peak of 7.08% last October, they’re unlikely to go back down significantly any time soon.
As the old adage goes, you have to play the hand you’re dealt. However, unlike gambling, a real estate business cannot be built on luck. It is not quick nor easy money. For myself personally; and most Realtors I know - we work 7 days a week, holidays and through vacation time. We make ourselves available most hours to meet our clients needs. It also takes money to make money. Realtors pay for a laundry list of expenses which includes marketing their clients homes and also marketing their business as well. In addition to licensing and continuing education fees, insurance expenses, MLS fees, association and subscription dues and the list goes on and on.
Agents that didn't have a book of business built up over the years pre-pandemic are struggling now. Tens of thousands of real estate agents are giving up on the profession, thinning their pandemic-era ranks as the housing market comes back to earth. More than 60,000 have exited the sector over the last six months, according to data from the National Association of Realtors, analyzed by Reventure Consulting. As the housing market booms, so does the real estate profession - and the reverse is also true.
While that “boom” may be slower, it’s not over. The number of real estate agents is still near its historical high - and the housing market has remained resilient despite falling sales and prices in certain markets. People will always need to buy or sell a home; and when mortgage rates drop, there will be an influx of ready buyers and sellers needing a Realtor.
The uneasiness has seemed to have worn off as consumers get used to the “new normal” of today’s housing market. Real estate markets are showing resilience, especially as buyers have accepted mortgage rates in the new normal of 6% – 7% range. This has kept a steady pace of sales over the past few months.
The bottom line...
The key word to focus on here is resilience. Despite the rollercoaster we’ve seen the past number of years with everything that’s been thrown our way – real estate continues to stay strong. Some experts may even say this is one of the strongest housing markets we’ve ever experienced, and it won’t be slowing down anytime soon.
That’s why it’s never been more important to not only tell our clients but show them what’s actually happening in their market. That way, they can see for themselves that prices are, for instance, rising and pacing higher than the national average. Also; that homes are selling and selling fast (when priced correctly).
While news feeds may be filled with doom and gloom about the state of the real estate market, what’s actually happening in your area may be the opposite. The thing that matters most here is that you are likely seeing those same messages in your daily dose of scrolling, which leads to even more confusion. You need to know what’s happening locally right now, and you need to hear it from a trusted real estate professional.