The American housing market has been on fire since mid-2020. You may have seen articles about homes selling in record time or homes selling for $1 million over the asking price, but this market data doesn’t tell the whole story…
To get a more complete picture of the current housing market, we went to the industry insiders, the boots-on-the-ground real estate agents who spend all day studying the market and speaking with buyers and sellers about their changing needs.
So what do these real-world real estate experts have to say about the current state of the housing market?
In a recent survey of 600 active real estate agents, 77% of respondents say that their local market is hot right now.
And these agents are ready to share their experience in their hot markets:
How we got to a seller’s market and what it means for finding buyer and seller clients,
How increasing home prices are affecting real estate incomes,
And how buyer and seller expectations are changing in our post-pandemic world.
Get the real scoop on the real estate market from the professionals who see it every day.
Finding Clients in a Seller’s Market
There’s no doubt that most local areas are firmly in the grips of a seller’s market. 77% of agents surveyed say they work in a seller’s market.
Our current seller’s market is a classic high-demand, low-supply situation. Low interest rates are driving buyer demand. And since the pandemic has provided more remote work opportunities, Millennials who were unable to afford homes in urban areas near their workplaces are now able to move to suburban and rural areas where they can afford to buy. At the same time, the supply of available homes is low because of limited home construction and because more of today’s retirees are opting to “age in place” instead of moving to retirement homes or moving in with family.
65% of agents say that their local market currently has an inadequate supply to meet buyer demand.
This means it’s more challenging than normal to be a buyer’s agent even though buyer clients are comparatively easy to find with so many people looking for a home. 55% of agents nationwide say that many of their buying clients’ offers are currently not accepted.
So many real estate agents are choosing to focus on seller leads. But sellers pose a unique problem. According to the survey data, 9 in 10 agents have clients who want to take advantage of the seller’s market, but they are afraid they won’t be able to find a new home if they sell their current place.
One way agents can land seller clients is by finding them a new home first. If you can find a new home for your potential sellers, they’re more likely to list with you, knowing that their new home is lined up and ready for a quick sale on their current home.
Increasing Home Prices Affecting Real Estate Incomes
78% of agents report that home prices are going up in their area. This is the result of that low supply and high demand that are driving the seller’s market. Not only do sellers have the edge in negotiations, but home values are naturally increasing as buyers compete against each other for the limited inventory. 87% of agents say that buyers have to make offers above the asking price if they want to get their offer accepted in today’s market.
Because real estate agent commissions are tied to sales prices, increasing sales prices mean higher sales revenue and increased incomes for real estate professionals.
Agents reported that they expect an average $1,161,600 increase in sales revenue for 2021 compared to 2020. And 70% of agents report that they are on track to meet or exceed last year’s income, with 39% expecting to make more money in 2021 than 2021.
A Shift in Buyer and Seller Expectations
8 in 10 agents agree that rising prices are contributing to new expectations from buyers and sellers. For example, buyers expect their agents to notify them immediately of new listings to give them a head start over other buyers. And sellers expect agents to provide a quick sale, often expecting to receive over the asking price.
Buyers and sellers are also expecting more in terms of digital services today than they did before the pandemic.
82% of active agents report that buyers expect more digital experiences now:
74% report that buyers are now more willing to make a home purchase based on virtual tours than they were previously.
64% say that their buying clients want fully digital closings.
53% say buyers expect access to smart home reports prior to making a purchase.
36% say buyers prefer to have inspections performed via Zoom or similar platforms.
Seller’s expectations of digital services are also changing, albeit at a lower level than buyers. 55% of agents agree that sellers want more digital experiences now than they did before the pandemic:
67% say that sellers are expressing increased interest in virtual staging applications compared to their interest pre-pandemic.
64% say that sellers prefer Zoom or virtual walkthroughs to giving in-person tours.
Is It a Good Time to Start a Career in Real Estate?
The overwhelming majority of real estate agents surveyed (9 in 10) agree that now is a good time to start a career in real estate.
With high-quality real estate courses accessible online and ample support available, today’s new real estate agents have every opportunity to set themselves up for success. In fact, a whopping 94% of agents surveyed agree that new agents can have success in today’s market with the right education and support.
If you’ve been considering getting into real estate, this is your year! Enroll in your pre-license real estate courses today, and get ready to launch your new career.