Training for Realtors & Lenders
Tuesday’s and Thursday’s at 11:00AM Pacific (Sign-up BELOW)
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Each session is different so register for both.
Tuesday: Sign-up HERE
Thursday: Sign-up HERE
The Stale State of New Home Listings: Overpricing and Its Consequences
In recent years, the housing market has experienced a significant shift, with over 60% of new home listings now considered stale. This phenomenon can be attributed to builders overpricing their properties. Just as bread goes stale when left on the shelf for too long, homes that are priced incorrectly fail to attract buyers. The simple logic is that at the right price, homes and bread don’t go stale.
According to recent data, in May, over three out of five homes (61.9%) listed on the market had been available for at least 30 days without securing a contract. This is a notable increase from 60% the previous year and approximately 50% two years prior. The trend suggests that new home-builders, such as Lennar, could benefit from participating with off-site realtors and lenders to move more inventory. However, this practice could be perceived as steering, which realtors are unlikely to engage in.
The real estate industry is also facing a significant divide between the opinions of realtors and the general public regarding the recent NAR settlement. A staggering 70% of realtors disagree with the settlement, indicating that NAR may be out of touch with their realtor constituents. This raises the question of why realtors continue to pay dues and maintain their membership.
Interestingly, two-thirds of the general public support the upcoming changes to real estate commissions, while 70% of agents oppose them. The conversation has become more of a popularity contest rather than a logic-based discussion. Three in five Americans agree with the main premise of the NAR lawsuit: home sellers having to pay the buyer’s agent commission is unfair and an anti-competitive practice. In contrast, 89% of agents don’t believe the allegations are valid.
Furthermore, 71% of agents believe the NAR settlement will negatively impact the real estate industry, while the public is split. Forty percent think it will negatively impact real estate, while 39% think it will be positive. It’s intriguing to note that the majority of the general public supports something they believe will hurt them, akin to cutting off one’s nose to spite their face.
The affordability of agent commissions is another pressing issue. Two-thirds of prospective first-time home-buyers (66%) indicated they wouldn’t be able to afford their agent’s commission in addition to other closing costs and the down payment. This highlights the need for lenders and realtors to strive for continuous improvement, as the saying goes, “Good, better, best. Never let it rest. ‘Til your good is better and your better is best.”
The economic reality of home-ownership has made the American Dream less attractive and, in some cases, a nightmare. A study released by Bankrate earlier this year found that while 78% of Americans still consider owning a home to be part of the American Dream, home-buyers today are being priced out of a market with low inventory, high prices, and high mortgage rates.
To address these challenges, loan officers should consider reviving first-time home-buyer seminars. By educating potential buyers about the various aspects of home-ownership, such as the different types of loans, the escrow process, and the long-term trajectory of real estate values, loan officers can help dispel myths and provide valuable insights. Collaborating with title representatives, obtaining lists of non-owner-occupied properties, and personally reaching out to potential buyers can also help generate goodwill and rekindle interest in home-ownership.
In conclusion, the stale state of new home listings can be attributed to overpricing by builders. The real estate industry faces a divide between the opinions of realtors and the general public, with affordability being a significant concern for prospective home-buyers. By focusing on education and outreach, loan officers and realtors can help address these challenges and restore the appeal of the American Dream of home-ownership.
