The competitive housing market is squeezing real estate brokers
Competition in this spring’s housing market is hotter than ever, thanks to strong demand and record supply.
Selling a home has probably never been easier, and while that might sound like great news for real estate agents, there’s a catch: They’re desperate for listings.
“Frankly, now is not the time for amateurs,” said Dana Bull, a Boston-area real estate agent. “It’s the big leagues here.”
Bull has been in the real estate business for over a decade and has never seen it look so lean. It’s not just Boston; Nationally, there are about half the number of homes for sale currently without a contract than a year ago, according to realtor.com. The typical home is also now selling a week faster than last year.
According to the figures, there are now about twice as many active real estate agents as there are listings. Spring is usually the time of year when the most listings come on the market, but in March there were 20% fewer homes than last March.
Potential sellers have several concerns, the biggest being that they may not be able to find or afford another home. Not only are home prices incredibly hot, up more than 11% year over year, according to the S&P Case-Shiller Home Price Index, but rents are also rising rapidly.
Nationally, almost 61% of property offers written by Redfin agents faced bidding wars in February, up from 59% in January. This is the 10th month in a row in which more than half of Redfin deals have faced competition. More than a third of homes are also selling for more than the list price.
“Rising mortgage rates are likely fueling Following short-term bidding wars because house hunters rush to buy homes before rates rise even more,” said Redfin chief economist Daryl Fairweather.
Officer Dana Bull prepares for an open house outside of Boston, MA.
Marco Mastrorilli | CNBC
For agents, finding more listings is a constant struggle. Supply was tightest on the low end of the market, but now the high end is also shrinking.
“We’re doing everything in terms of senders, in terms of social media access,” Bull said.
The pandemic also offered him another avenue. Potential customers are no longer limited by location or journey, due to the new remote work culture.
“So we operate our network, try to facilitate some of these transactions, and some of them happen, going to Boston, out of Boston, out of state, across the country. So we network and let’s do everything we can, work our channels and work our connections,” Bull said.
At a mid-priced Boston condo last month, potential buyers lined up outside and bemoaned the competition inside. Listing agent Geoff Strobeck said he had never seen anything like it.
Selling is easy, he says, but finding more listings is hard. He said he focuses on educating and enticing potential sellers.
“There’s no magic bullet,” Strobeck said. “For me, it’s, ‘Hey, that house in your neighborhood sold with 11 offers, or it sold for more than asking, and I think we can do that with your house, too. “”
The condominium sold in just two days with several offers above the asking price. The high sale prices, however, only go so far. Would-be sellers are still wary of allowing people to view their homes, especially in areas where Covid numbers are rising again. Agents are using virtual tours, even personal virtual tours, but salespeople are still nervous.
Rising mortgage rates aren’t helping either. Most current owners have refinanced to record low rates. More than a dozen record lows were set last year. Now the rates are higher, which means anything they buy next would cost them more in interest payments.
Agents therefore continue to get more cunning, trying to entice sellers with other properties available in their areas.
“It feels a bit like a game of Tetris,” Bull said. “Where we look at the whole game board, and we try to place people and move them strategically in a way that best suits their lifestyle.”