Hello! I’m an engaged observer of the home selling industry. I’ve noticed dynamic changes recently, largely guided by shifts in realtor demographics and transformations in technology. The ways of presenting, negotiating, and closing a house sale are rapidly evolving.
Changes like these have significant impacts on seller statistics and even for-sale-by-owner (FSBO) scenarios. These factors are already influencing predictions regarding the housing market for 2024.
If you’re keen to delve into this topic more, there’s a comprehensive article published on Harrison Square Chicago shedding light on these transformations. Check it out!
Changes in REALTOR® Demographics
What’s the typical profile of REALTORS® today?
Majority of REALTORS® are licensed sales agents, accounting for 65% of the demographic. About 22% and 17% hold broker and broker associate licenses respectively.
The demographic is mostly composed of educated, white females who own homes. Most REALTORS® are around 55 years old.
What’s their employment longevity and working hours like?
REALTORS® typically have a work experience of approximately ten years in real estate. Nearly three-quarters (73%) anticipate remaining active professionals for at least two more years.
The median tenure at their current firm is five years. Most of them put in around 35 hours of work per week, as of the data from 2023.
How profitable is their line of work?
The median gross income, which is earned solely from real estate activities, was noted to be $55,800 in 2023. This showed a slight decrease from $56,400 in the previous year.
What constitutes a typical workload for them?
In terms of transaction sides in 2023, residential specialists accounted for 10 residential sides and commercial specialists managed 3 residential sides and 4 commercial ones.
What does their education profile look like?
About one-third (34%) are bachelor degree holders while another third (27%) attended some college. About a mere 7% only finished high school.
Are they more affiliated with firms or independent contractors?
An overwhelming majority (88%) serve as independent contractors. A small percentage (5%) are employees, while the remaining function in other capacities.
Technology’s Impact on Home Selling
The home selling industry is undergoing a significant metamorphosis, thanks to the advent of AI-driven realestate technology startups. Arguably, these changes are forging new pathways for addressing America’s affordable housing crisis.
- Tackling the Affordable Housing Crisis: By integrating artificial intelligence into home-selling, access to affordable housing options is broadening. The application of AI expedites and simplifies buying, selling, and renting properties.
- The Role of AI in Real Estate: Artificial intelligence enhances property valuation speed, reduces associated costs, and improves customer experience. Automation frees professionals to concentrate on complex tasks, thus refining the overall home-selling process.
- Impact on Home Selling: Technology increases efficiency while decreasing costs in property valuations. The automation in various stages of the process leads to cost savings for both buyers and sellers.
- Investor Confidence: Investors’ substantial funding in these startups demonstrates confidence in AI as a solution for the affordable housing conundrum.
- Future Prospects: Technology’s advancement can be utilized to develop innovative solutions for housing affordability issues. Consequently, it promises accessibility and affordability of housing to a wider population segment.
ATechCrunch article explicates how an AI-driven startup raised $22 million funding, underscoring tech-influence in this sector.
The potential of AI-powered tools for transforming realestate operations is colossal, from buying or selling a home to renting one. The overarching impact that technology has on this industry is indeed promising.
Evolution of Home Seller Statistics
The home selling industry has transformed significantly over the years. In 2009, a total of 4.21 million homes were sold, indicating a relatively healthy real estate market.
By 2010, the numbers had escalated to 4.91 million—an increase reflecting buoyancy in the sector. The year 2011 experienced a slight dip to 4.26 million
Moving forward, 2012 marked a slight recovery with 4.59 million homes sold, while in 2013 the number rose drastically to reach 5.09 million.
Despite a slight slowdown in 2014 at 4.94 million, the numbers grew consistently in the next two years—5.25 million and 5.45 million for 2015 and 2016 respectively.
“The evolution and stability of home seller statistics have significantly impacted the real estate market, fostering growth and appealing investment options.”
By contrast, a small dip was recorded in the following year—5.22 million homes were sold in 2017.
Nonetheless, this didn’t pull back the industry as it made its way up to sell 5.34 million homes in 2018 and saw a steady figure of around the same at about 5.33 million houses sold in 2019.
The onset of new decade witnessed an upward trend with an impressive figure of 5.64 million homes sold in 2020—a year that was marked by many economic challenges around the globe.
Come 2021, we experienced an exponential leap to reach a staggering number of around 6.12 million units sold—an all-time high record.
Shifts in FSBO Statistics
The independent home selling sector, also known as For Sale By Owner (FSBO), accounted for 7% of total property transactions in 2023.
The average FSBO home sold for around $310,000. In contrast, the median price for agent-assisted home sales stood at $405,000.
Marketing Avenues Explored
There was a variety noted in the marketing methods adopted by FSBO sellers. Relatives, friends, or neighbors formed a significant 20% of marketing efforts.
About 19% of sellers displayed yard signs, while 14% relied on third-party real estate platforms to spread the word about their properties.
The Challenge of Pricing
Obtaining an appropriate price was found to be the most challenging aspect for 15% of FSBO sellers. It outranked other issues like prep work and paperwork.
The Time Factor
Selling within the planned timeline posed a challenge for 7% of all FSBO transactions. The same rate was observed for understanding and executing relevant paperwork.
Finding Buyers and Closing Deals
A small percentage struggled with attracting potential buyers (4%) and assisting them with financing options (5%), pointing to areas where professional support might be helpful.
Forecasts for the Housing Market 2024
According to data, home values are expected to experience a 2% growth in 2024, increasing from the previously projected 0.4%.
This represents a significant forecast change, as revised projections suggest a smaller decline of just 1% by June 2025 compared to initial estimates.
- An increase in home sales is also anticipated, with data suggesting a boost of 4.2 million transactions, marking a 2.3% year-over-year growth.
- A stronger outlook for home value appreciation is also expected due to improving mortgage rates forecasts pointing towards reduced interest rates in the future.
Moderate home value growth is predicted for the upcoming years despite these positive indicators.
This could be due to an increase in new-for-sale listings and less rapid demand recovery.
Data also indicates that inventory has been recovering nicely, up by a solid 23%, which could offer more variety and options for prospective buyers.
The trend also seems to favor buyers given the wider selection of listings and more time for house hunting.
Home Builder Sentiment Adjustments
The NAHB/Wells Fargo Housing Market Index (HMI) saw little to no change in April 2024, steadying at 42 points as observed in the previous month.
After two-point elevation in March, it was expected to maintain an upward trajectory. However, the builder sentiment sadly stayed in the pessimistic domain.
Parsing The HMI Components
The prominent segments of HMI experienced a mixed bag of slight fluctuations.
Present Sales experienced a negligible decline, moving from 47 in March to 46 in April.
Sales Expectations managed to sustain its previous score of 44, showing stability.
The Traffic of Prospective Buyers noted an increase by a single point, settling at 29 on closure of April.
A Regional Overview
Moving to geographical distribution, slight rises and falls were again apparent within the HMI.
In the Northeast region, two improvement points were noted, boosting the sentiment up to 44.
The Midwest marched slightly upwards as well with a score of 42 points noted for April.
You can check out more details about these statistics on the NAHB website.
Despite alternating numbers, overall the builder sentiment lingers in negative territory, indicating a somber mood amongst housebuilders. Unwillingness to embark upon new projects might be a result of this sentiment.
Existing-Home Sales Transformations
The shift in conducting existing-home sales is significantly noticeable. With data from 210 Board/MLSs being used to create a representative sample each month, this statistical groundwork forms an imperative economic indicator.
Now, the homes sales data used in this methodology is divided into four distinct regions – Northeast, South, Midwest, and West.
Economists from NAR diligently analyze the raw sales volume originating from these participating Boards/MLSs. This thorough scrutiny is done to ensure absolute data accuracy.
Still, some potential problems might appear due to changes in jurisdiction of association/board/MLS, or alterations in vendors/staff, or even lack of response by the associations/boards. Not to mention faulty data reports.
Once these inconsistencies are cut out of the equation, the aggregated raw volume figures are weighted accurately representing the sales activity per region.
This technique of calculation is also known as the non-seasonally adjusted volume. The weights are benchmarked every ten years to keep up with the regional demand shifts – portraying a clearer picture of changing trends.
| Method | Process | Purpose |
|---|---|---|
| Data Reporting | Used from 210 Board/MLSs | Economic Indicator |
| User Response | Analyze Volume from Boards/MLSs | Data Accuracy |
| Quality Check | Cut Out Inconsistencies | Remove Faulty Data |
| Data Calculation | Weighted Aggregated Figures | Sales Activity Per Region |
| Review | Benchmark Weights Every 10 Years | Reflect Regional Demand Shifts |
| Table: Existing-Home Sales Process | ||
The median prices are calculated for the nation and four census regions on a consistent monthly basis – providing a transparent and standardized method of data comparison.
This year, NAR research group has been focusing on widening their regional coverage to ensure representation consistency amidst different parts of the nation.
The Research group is also working on building statistics that follow the nine census divisions.
For more in-depth information about the existing-home sales transformation, try visiting this detailed report.
These cumulative efforts will bring forth a more refined data set for our members to utilize to their overwhelming advantage.
Potential 2024 Housing Market Crash
The US housing landscape appears vulnerable in 2024, with soaring prices and limited accessibility for many potential buyers.
Factors such as pandemic-driven inflation and regulatory moves from the Federal Reserve compound the crisis.
- Inflationary Pressures: Prices, rents, and related costs skyrocketed due to pandemic-induced inflation. The Federal Reserve’s intervention to combat inflation through rate hikes amplified the issue.
- Supply-Demand Imbalance: Housing demand outpaces supply, pushing prices even higher.
- Financial Inequality: The housing market is increasingly geared towards the ultra-rich, leaving average individuals sidelined.
- Monetary Policy Impact: Interest rate increments have escalated mortgage costs, adding further strain on affordability.
The housing industry suffers from significant economic risks that could potentially lead to a market crash.
Economic vulnerabilities like growing wealth gaps raise concerns about the overall economy’s stability.
The housing affordability crisis radically alters urban demographics as people migrate to more affordable areas or experience homelessness.
This increases financial insecurity among many people, calling for efficient policies to address the impending crisis.
The government is caught between implementing rent control measures and avoiding economic fallout.
In addition, changes in real estate investments exacerbate the issue with investors renting properties at high rates, further squeezing average buyers out of the market.
For more insights on this topic, read this Bloomberg article. We need strategic actions addressing these shortcomings to mitigate the risk of a housing collapse and its consequential societal impact. If left unchecked, the crisis may have damaging implications.
Effect of Declining Mortgage Rates
Mortgage rates can fluctuate, with updates often influenced by elements such as inflation data and presidential elections. These adjustments significantly affect the real estate market.
Sharp Rate Drops Post-Inflation
The release of fresh inflation data sees notable horizontals in mortgage rates, something keenly observed by lenders.
Repercussions of CPI Release
Consumer Price Index figures possess the ability to shift rates dramatically, a factor lenders consider before making considerable moves.
A Streak of Relative Unchange
Certain aspects such as expected moves in bond markets may not leave a significant mark on overarching mortgage rates.
Potential Buyers’ Market Ahead?
Record high median sales prices alongside falling existing home sales suggest a possible contingency towards appealing more to buyers.
Political Influence on Markets
Ripple effects from presidential candidatures can affect market expectations, including those surrounding yield curves.
Find more related data at Mortgage News Daily. This abundance of information is indeed a testament to the ever-changing nature of the home selling industry.
4 Key Factors Transforming Real Estate
The real estate sector is rapidly evolving with the adoption of new technologies.
Leaders in this space have no option but to embrace these changes for increased efficiency and profitability.
The use of Artificial Intelligence (AI) and machine learning is transforming processes like lead generation and transactions.
Furthermore, consumer housing searches are being enhanced through integrated tech solutions.
- Adopting Advancements in Technology: It is crucial for industry leaders to leverage AI and machine learning for tasks like lead generation and to streamline transactional procedures. Furthermore, integration of advanced solutions can significantly enrich a customer’s home search and purchase experience.
- Digitalizing Property Insurance: Traditional insurance services are witnessing a major shift towards digitalization. By offering digitally driven property insurance offerings, these providers can deliver better customer service and increase efficiency.
Moving towards sustainable practices is also a significant change in the sector.
With advocating environmental concerns, developers and agents are now focusing on eco-friendly homes, sustainable buildings, and energy-efficient properties to meet regulatory standards and cater to a growing environmentally-conscious consumer base.
- Focused Sustainable Practices: Environmental concerns are now leading authorities to impose regulations favoring eco-friendly building practices. These new norms pushing builders towards more sustainable construction methods resonate well with the increasing number of eco-conscious consumers.
The rising trend of hybrid working has given birth to new residential needs.
The real estate industry must adapt by providing flexible workspaces inside residential developments, thereby fulfilling their clients’ evolving requirements.
- Fulfilling Hybrid Workspace Needs: The shift towards remote work is changing residential preferences drastically. As a result, industry leaders should consider accommodating workspaces within residential projects to cater well to this new hybrid work trend.
Transforming Home Sales
With innovative technology and creative strategies, the home selling industry is undergoing revolutionary changes. This transformation has revolutionized transactions, making them more transparent, efficient, and accessible for all stakeholders. The future of home selling is here, marked by digital platforms, virtual tours, and AI-driven price evaluations.
