Key Highlights
- 80% of brokerage owners optimistic about housing market for next three months
- Quiet concerns that market shift coming
Housing Market Sentiment Booming for Now
The latest RealTrends Q2 2021 Broker Sentiment Survey results are in…a whopping 74% of brokerage owners said that the housing market will continue to boom over the next three months.
Brokerage owners predicted that home sales will increase +5% over the next three months. And, an eye-popping 96.5% of brokerage owners said that home prices will increase anywhere from +1% to +5% in the next three months.
Then What?
Most housing experts do NOT believe the market is in a bubble BUT…when asked, “What do you think will cause the next market shift? ”40% of brokerage owners pointed to two things: rising interest rates and unsustainable pricing.
Jeff Perry, CEO of Florida’s Berkshire Hathaway HomeServices Results Realty, said, “Current prices are not sustainable, interest rates have to rise at some point and inflation seems inevitable.”
Asked about the timing of any potential market shift, Perry said, “I suspect Spring/Summer of 2022 will be the start of the shift.”
Causes of Potential Market Shift?
On top of the big three mentioned by Perry…unsustainable home pricing, rising interest rates, inevitable inflation…32% of brokers mentioned government spending and new taxes.
Additional issues mentioned that could shift the housing market included continued lack of inventory, government regulations and an increase in foreclosures and distressed sales.
Some Brokers Optimistic About “Forward” Market
Some brokerage owners who responded to this latest RealTrends Q2 2021 Brokers Sentiment Survey said that the market will continue to push forward in 12 to 15 months by continued migration to remote working and an increase in new construction as prices in supplies and materials even out.
Andy Camp, president of Cutler Real Estate in Ohio, said, “I think the hyper-competitive market will be the new normal.’
Sam Averbuch, COO of Tennessee’s Zeitlin Sotheby’s International Realty, agreed. “I think we are in the early stages of steady and consistent growth for many years in our market.”
Brokerage Competitive Concerns
Brokerage owners voiced additional concerns including
- Discount, fee-for-service and other business models
- Venture capital-backed brokerages
- Independent contractor and commission lawsuits
- Third-party disrupters and technology companies
- Threats from inside the industry such as ethical and professionalism challenges
Ongoing challenges for brokerage owners over the next three months also include (in order of importance):
- Finding inventory
- Pressure on net/gross margins
- Recruitment difficulties
- Reducing costs
- Increased regulation
Thanks to RealTrends.
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