“Everything we thought about buying a house has been turned on its head,” said Joan Docktor.
Docktor, the president of Berkshire Hathaway HomeServices Fox & Roach Realtors®, the largest single market brokerage in the U.S., along with Helen Hanna Casey, the chief executive officer of Howard Hanna Real Estate Services, the largest independent and family-owned and -operated real estate company in the U.S., discussed industry trends during a PAR webinar this week.
Docktor and Hanna Casey spoke about how challenging the market has been for buyers, especially since the pandemic. “After lockdown, there was a frenzy in marketplace,” said Docktor. “The market took off. Since then, it’s been manic. Inventory keeps going lower and lower. We are seeing many, many, many buyers and not as many sellers.” She also spoke about how many homes are receiving “crazy multiple offers.”
“It has been a sellers’ market for sure and I believe it will continue to be that way,” added Docktor. “Sales prices are up and I think that’s to be expected.”
Hanna Casey agreed, noting that the “tremendous shortage of supply” is impacting buyers of all demographics. “It’s not just first-time buyers pushing this market, people are moving up and differently. There are so many different needs and so much has occurred. We are looking not just at affordability, mortgage rates and inventory problems, our agents have learned to meet these new demands.”
Rising mortgage rates have presented some challenges to buyers, as rates crept from historic lows to exceeding 5%.
“I think we’ll see slow increases for mortgage rates. They are only one barometer. Lower rates drove prices up. I don’t think it will have a great impact on the market.” said Hanna Casey.
Docktor added, “5% is still low; inflation is 7-8%. It’s a bargain. If you can afford it, there is no reason not to jump into the market. For some buyers, they can only afford something less. With less buyers, there will be less of frenzy, and may be good overall for the market; 5% is a really affordable rate. There are so many buyers in the marketplace. There still are multiple offers on properties. People still want a home. Life events happen, people have babies, people pass away. For all the reasons, people want to buy and sell, they continue. I think we have seen less sellers wanting to sell, it’s a vicious cycle. With a lack of inventory, they don’t know where to go. We may see a softening in the market over the next few years. It won’t be anything like the Great Recession. It’s a different atmosphere. We will figure it out, we always do.”
Hanna Casey added that another challenge is the lack of housing being built for baby boomers who aren’t ready for senior housing. “About four years ago, it was a predicted a great tsunami of millennials and baby boomers would be clashing together [in the housing market]. Certainly, we have the wave of millennials, but not baby boomers because they have nowhere to go. I believe the issue of what builders are building to meet the demand of consumers is just not there at all. We have a huge amount of rentals and senior housing being built. But for baby boomers, we aren’t really ready for senior housing. I call it right-sizing, not downsizing.”
Overall, Docktor and Hanna Casey stressed the importance of relationships between Realtors® and their clients. “Individuals who see the importance of connections and technology will succeed. I think as we adapt new technologies and what they are and how they help, we have to continue to look for individuals. The personal connection is still what people want,” said Hanna Casey.
Docktor added, “Relationships are everything. [Buying a house] is too big of an investment for people to not have a trusted advisor for them. Buying a home is very involved and it’s the biggest asset people own. I always say get in front of your clients and have those relationships. Use technology. But it’s not the only way.”