I was thinking that if you are an agent where the Orthodox decided to buy into your coverage area you would have done well. In Jackson houses seemed to move. There were 3 out of 21 that sold for very high prices on my street. And they sold quickly. I know that is anecdotal. I would think some towns like Mahwah may have seen the same.
Houses are moving and moving VERY fast with multiple bids. Total number of sales is trending at all time lows when adjusted for population. In other words, you make more money selling 10 houses for $700K than 5 for $800K
The 3 houses that sold on my block were the first 3 to sell in 10 years so in my small window there was more activity than prior years. If you were selling my neighborhood last year was a great year.
I am sure some builder and/or agent had up years while the majority had down years.
I am sure some builder and/or agent had up years while the majority had down years.
This article captures an issue. It really is a tale of two cities for the rich and upper middle class versus the poor.
www.cnbc.com
Inflation has created a dark cloud over how everyday Americans view the economy
Anger about higher prices appears to outweigh the benefits of a hot labor market in the minds of consumers.
I've addressed all of your questions but I'll answer again, I am the director of sales for the DC/Baltimore Division for a regional homebuilder. I've held an active real estate license since 2011, am currently licensed in 4 states (Md, Va, WV, Pa) and had a long standing relationship as an independent agent prior to coming on with my builder. Last year my team settled 58 houses at a median price of $490k in 6 different neighborhoods in Montgomery county, Anne Arundel, Baltimore county, Harford County(2x), and Franklin County Pa. We also settled a few one off builds in West Virginia and another outside of Alexandria. We are going to finish 2023 with just under $30 million gross sales this year
Where the money was this year was in investor buyers in townhomes/multi-family units. THAT'S where the money was. (My biggest deal this year was an entire townhouse building, 8 units, $1.8 million combined price, one investor) Grown men talking here, I'll make $30k more this year than I did last year, $10k more than I made in 2021, and $25k more than I ever made in my best year as an agent (my last 4 years as an independent agent all making 6 figures).
I don't disagree a lot of agents had down years in comparison to 2021 and 2022 and even years prior to that, however the notion that the "market" itself is down is completely false, The market is hotter than ever, the issue is INVENTORY. Still today as long as its not in the middle of no where any SFH under $375k that's not a total rehab is getting gobbled up faster than a fat kid eating his birthday cake. As rates have come down and assuredly will continue to into next year (beyond what Jerome Powell has come out saying there's simply no shot an incumbent president seeking re-election will ever allow rates to increase in an election year *REGARDLESS OF PARTY AFFILIATION*).
Now that leads back to something I stressed earlier, the real estate market is entirely oversaturated with agents. Everyone and their sister wants to be a real estate agent, there's entirely too many agents in the pool for the inventory that available. But that's a different conversation than the health of the market
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Question is, are there differences between regions? The real estate agents in North Jersey are saying very different things.
They are saying the same thing. In yessir’s case is that he works for a home builder that produced inventory to sell vs KK or agents that need to find inventory to sell.
This is the problem... The real estate MARKET is as competitive as its ever been, the issue is during Covid SOOOO many new peolpe switched careers and becoming a real estate agent was something a ton of people did. Agencies I've had relationships with for years went to staffs of 20 to 40 seemingly overnight (Real estate Agents work 100% on commision most times so it doesn't matter to the broker how many agents they have). There's simply not enough houses to go around.
Now the rates certainly didn't help but I gotta be honest, that's an excuse made by real estate agents who have no idea how to sell. You'd be blown away at how few real estate agents are actually true professional sales people and have the ability to ask for the sale and close the deal. It's a dying art and with the massive influx of agents who simply took a 75 hour test during covid on real estate laws who wanna call themselves agents without selling a thing in their life now clawing for every lead.
Wanna amuse yourself? Go to your local facebook page and search for the last post made for a recommendation of a real estate agent, you'll see about 300 responses in a town that has a population of 3000 people.
TLDR:/ Real estate has become oversaturated with agents since Covid, as a result many of them are not making as much but the market itself is still extremely strong.
Inventory is definitely lower however that's not the only thing causing so many agents to panic. The bigger issue for them arguably is the massive influx of new agents in the market. Essentially now instead of a broker having 5 agents to disperse the 10 leads that came in over the weekend you have 8 agents to disperse those same 10 leads.
At the end of the day, the real estate market (not individual agents incomes which I could care less about) looks poised for a strong 2024. Going back to the title of the OP, it definitely appears to be correct that the real estate market was never a "Bubble about to burst"
@yessir321
Is your company delivering more than expected homes in 2023? Do you expect that trend to continue? New home sales were softer than expected.
Is your company delivering more than expected homes in 2023? Do you expect that trend to continue? New home sales were softer than expected.
Not sure exactly what that question is but I'll do my best to answer, we did meet our projections for 2023? yes and individually myself and my team (I have a small staff of 3) exceeded 2022 in terms of settlements (58 this year, 52 last)
Perhaps my company is the anomaly because we settle about 90% of the contracts we write (National average for builders is MUCH lower than that). Now granted we qualify the heck out of people, require multiple deposits, and I have no problem rejecting someone's offer if I have any reason to suspect they will not settle
I disagree entirely that new home sales were softer than expected. We expected Sales to get crushed by increased rates but yet because there's such an inventory shortage we actually exceeded last year.
You will not hear me say there's not a major inventory shortage in real estate right now with really no end in sight as entirely too many people are locked in at 3% and below and are never leaving their rate. That issue is VERY real. Reality is though Millenials never stopped longing for the dream of homeownership and as an incredibly resiliant generation they pushed forward regardless of their $4k mortgage living completely housepoor.
I agree the market sucks for millenials, it absolutely sucks, it's not fair, it's not cool and flat out sucks. I'm simply sharing the reality of whats happening though. Trust me when I tell you, NOTHING would make us happier as a builder than to offer SFH's for under $300k, unfortunately between land/material/labor/development costs its simply not possible. The only way that happens is if you "steal" the land. Materials, labor, etc do not vary in cost all that much, the biggest variable is development (Blasting, excavating, etc) and the cost of the land itself. Land costs are SKY HIGH these days, just 10 years ago the average lot was around $30-40k, its more than twice that today. I can assure you though that a concerted effort is being made to find ways (Less nice finishes, etc) in order to make houses more affordable for people. We hear the public, we're not in the business of strictly building mcmansions
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@yessir321 my question is really more on the delivery side of your company. Is the pipeline as strong for 2024?
It is yes. The last 5 weeks especially have been exceptional, we've been averaging 2 contracts written per week. Our website/foot traffic over the last couple months as well has increased and again, we were already exceeding 2022.
Market is extremely strong right now
I don't know if I can take another guy ITT sticking his fingers in his ears and telling me everything is fine.
I laughed reading that article. The author is so tone deaf. Pricing is up 30% in 3 years and they can't figure out why people are happy that CPI prints (which like 1% of the country understands) are trending lower.This article captures an issue. It really is a tale of two cities for the rich and upper middle class versus the poor.
Inflation has created a dark cloud over how everyday Americans view the economy
Anger about higher prices appears to outweigh the benefits of a hot labor market in the minds of consumers.
Yeah, without derailing a good thread, "they" need to get in their glad handing, that a good job is being done . . . . such an utterly false narrative. It's been like this for a very long time, but the advent of social media and alternative perspectives that are not controlled has helped to expose these false narratives.
Mixture of both established and "Up and Coming". One of our best performing neighborhoods last year that currently has 5 houses under construction is in Rockville Md which is one of the nicest suburbs of Washington DC. I also had a settlement a couple months ago for a $650k house we built on 10 acres outside of Berkely Springs WV along with a $260k townhouse in Chambersburg Pa last month which I would absolutely consider "up and coming" compared to areas in Rockville, Anne Arundel County and Cockeysville Md (Baltimore county) where we also have neighborhoods. Not sure if that answers your question
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Would seeing my paystubs make you a believer? Or you just gonna continue watching the "Doom Loop" for all your media in anticipation that the world is ending. I had a neighbor growing up in Princeton convinced Y2K was going to be the end of the world, were you him?
I believe you that you had a good year. What I don't believe is that you cannot understand the rest of the industry has gotten pummeled this year.
Because what you are saying is not correct... I'll explain
What defines "the industry"? If you are defining "the industry" as individual real estate agents personal income levels, then sure the "industry" is down, it's oversaturated... I've said this at least 4 times at this point. I've also made it very clear there is an inventory shortage with no end in sight as many folks will never leave their 3% rate and currently 62% of current fixed mortgages are locked in at sub 4% (source below) so in other words 2/3rds almost of the current occupied houses in america are not actively or even passively looking to move.
Nearly 92% of homeowners now have a mortgage rate below 6%
The vast majority of United States homeowners boast a mortgage rate below the current average of 6.71 percent, according to new Redfin data.
www.inman.com
If you define "The Industry" as the "demand" in the real estate market in you couldn't be further from the truth (Demand has a FAAAAR greater effect on house prices than realtor income levels so I'll let you decide which is the priority in defining what "the industry" is). Demand for real estate is ridiculously high, not Covid levels high but compared to say 2014-2019? It's WELL above those years with next year looking to be even more competitive.
I will say it for the 5th time now, the Real Estate PROFESSION is completely oversaturated. There's less houses to sell and more agents to sell them, what do you think is gonna happen to their personal income in that case? What you are missing is that has NOTHING to do with the actual market which has been sustainably strong all year
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I will side with Skoolie here. Industry is all things related to real estate. From material, labor, and down to financing. Housing prices are up but the industry is taking on a lot of pain.Because what you are saying is not correct... I'll explain
What defines "the industry"? If you are defining "the industry" as individual real estate agents personal income levels, then sure the "industry" is down, it's oversaturated... I've said this at least 4 times at this point. I've also made it very clear there is an inventory shortage with no end in sight as many folks will never leave their 3% rate and currently 62% of current fixed mortgages are locked in at sub 4% (source below) so in other words 2/3rds almost of the current occupied houses in america are not going to sell.
Nearly 92% of homeowners now have a mortgage rate below 6%
The vast majority of United States homeowners boast a mortgage rate below the current average of 6.71 percent, according to new Redfin data.
If you define "The Industry" as the real estate market in general you couldn't be further from the truth. Demand for real estate is ridiculously high, not Covid levels high but compared to say 2014-2019? It's WELL above those years with next year looking to be even more competitive.
I will say it for the 5th time now, the Real Estate PROFESSION is completely oversaturated. There's less houses to sell and more agents to sell them, what do you think is gonna happen to their personal income in that case? What you are missing is that has NOTHING to do with the actual market which has been sustainably strong all year
That's not how economics work bud... When an industry is in "Pain", prices do not go up. That's backwards thinking. "The industry" ALWAYS boils down to Supply, Demand, and Price... Other aspects exist however they really are ancillary in relation to those other three items. If the Real Estate industry was "hurting" prices would be falling, they aren't... do I need to remind you of the title of the OP? Why the real estate industry isn't in a bubble"... It isn't, the bubble never popped and with rates coming down it's only about to get even more competitive
What's happened is it isn't 2021 anymore and a lot of real estate agents are mad that they have to actually work now to generate sales rather than sit back and take orders. Rest assured though, those of us who were around for a decade pre-covid still did well in this market, particularly compared to pre-covid levels
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It’s an industry that depends on volume. Real estate attorneys are down, title company business is down, financing is down, home inspectors are doing less. It’s not just the realtors.
All of which are ancillary to Prices when evaluating the "Health" of an industry. I'll ask again, down compared to when? 2021?? Sure! 2018? Not so much... At the end of the day it's very simple, Higher Prices=Higher Demand, Lower Prices= Lower Demand... This is economics 101
The demand in real estate in relation to the current inventory is as competitive now as it ever was from 2014-2019. try finding a single family home in a decent area for under $350k, it's gone in 3 days.
Thus going back to the point and title of the OP, the real estate "Bubble" never burst, had it, prices would have dropped. And yes you can ABSOLUTELY go back on this thread and find several of the CE board loons who were convinced another 2008 was about to happen
There are also the boomers that already paid off their mortgage and are ready to move South for retirement. However, because houses in Florida, Texas and North Carolina have already doubled in the last four years and other costs like insurance have tripled the couple of hundred thousand profit disappears from a couple of years ago. I always looks at these markets and don’t see financially that it makes sense any more.
Another factor not being discussed and it’s certainly a point of concerns is the push to build in most towns of NJ an inordinate number of apartments and condos which are also costing those renters up to 4000 k for a 2 bedroom. Maybe would have better off building more single family dwellings in your towns. When we purchased our home back in 1976 our mortgage rate was 8.5% … somehow we managed to get through that period and soon afterwards refinanced at much lower rate. Times were not good under that now famous man and his administration. History does have a sad way of repeating itself.
And whose fault is that those homes In the south went up? No different than NY-NJ-Conn. We can’t blame them for the fact… many of this was caused by northerners seeing potential for a better lifestyle and cheaper prices. It’s like this current push to blame media for NOT telling the TRUE story of the economy. Right it’s the media ‘s fault . Classic stupidity .
Nobody blaming anyone. It happens, there’s peaks and valley. Some think that everything has to go up because they had it good for several years. This real estate market never should have increased so much if interest rates had increased at least 5-10 years ago like it was suppose to go up.
Computer programers thought everything was great until corporation started to hire consultants with H2 B visa to bring down the cost. I saw the wages and I thought they were outrageous. Just recently there was a shortage of coders which drove their wages even higher $250-400k until they found A1 would eliminate many of their jobs. Time change and people need to adjust to the changes. Same as the stock market, my strategy changes according to the environment.
when A1 really comes to the workplace, you’re going to have thousands or millions complaining about their situation when they needed to plan for the changes.
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By 1980 mortgage rates were much higher. Inflation from Ford, Carter and Reagan was much higher than it is now. And that was a much longer period.
Don’t want to beat a dead horse. When people say real estate industry is taking a beating, they are not talking about prices. Total sales volume is way down. Higher prices will not offset that.
ETA commercial real estate is a total bloodbath.
I am no expert, but I expect commercial real estate is going to put real strain on the economy.
I am not sure anyone could have seen the reduced need in commercial space between Amazon killing shopping malls and COVID creating the WFH movement.
A lot of economic stress is coming on commercial property. Hopefully someone will create a new need or use for a lot of it.
Where possible, they need to re-zone some commercial to apartments. There is a need for mid-priced homes in most cities.
AI is not a threat to most jobs. Putting millions of people out of jobs by replacing them with AI will destroy the companies doing the transition.
If you lay everyone off where is the disposable income in the economy going to come from? If you eliminate 25% of all jobs due to automation, the economy contracts by a minimum of 25%. That would be catastrophic.
I agree but I read that commercial conversion to residential is very difficult and expensive. Mostly because of plumbing going from central locations on every floor to individual units on every floor.
That’s already happening. But to mid-priced homes = not economical feasible in major cities.
I am including title companies, lenders, paralegals and home inspectors. Not the suburban house wife who got her license part time and never closed a deal. I don't know why you're conflating everything. You are stuck on the random realtor who doesn't do business to begin with.Because what you are saying is not correct... I'll explain
What defines "the industry"? If you are defining "the industry" as individual real estate agents personal income levels, then sure the "industry" is down, it's oversaturated... I've said this at least 4 times at this point. I've also made it very clear there is an inventory shortage with no end in sight as many folks will never leave their 3% rate and currently 62% of current fixed mortgages are locked in at sub 4% (source below) so in other words 2/3rds almost of the current occupied houses in america are not actively or even passively looking to move.
Nearly 92% of homeowners now have a mortgage rate below 6%
The vast majority of United States homeowners boast a mortgage rate below the current average of 6.71 percent, according to new Redfin data.
If you define "The Industry" as the "demand" in the real estate market in you couldn't be further from the truth (Demand has a FAAAAR greater effect on house prices than realtor income levels so I'll let you decide which is the priority in defining what "the industry" is). Demand for real estate is ridiculously high, not Covid levels high but compared to say 2014-2019? It's WELL above those years with next year looking to be even more competitive.
I will say it for the 5th time now, the Real Estate PROFESSION is completely oversaturated. There's less houses to sell and more agents to sell them, what do you think is gonna happen to their personal income in that case? What you are missing is that has NOTHING to do with the actual market which has been sustainably strong all year
Just talk to people and ask. That's all I have done the last quarter is asking people in all of those fields.
This is not going away anytime soon. Only way it does is a devastating economic collapse or…,;world war.
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