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Higher “hidden” homeownership costs have brought a halt to many buyers’ plans to move out of their current neighborhoods, according to a report released last week by Bank of America.

Households have deferred moving not just because of high home prices and interest rates, but partially due to high “hidden” homeownership costs such as property taxes, insurance and the economic impacts of climate change.

Gen Zers and lower-income families, however, are bucking the trend in search of affordable housing.

Data suggests that Gen Zers make up 13 percent of those moving to another city, up from 8 percent in June 2020, while households earning less than $50,000 annually make up 18 percent of this group, up from 12 percent in 2020.

Analysts attribute the rise in inter-city relocation for these groups to “moving more out of necessity” as costs of homeownership in some areas, along with declining housing affordability, leave homeowners “with less disposable income to fund a move.”

According to Census Bureau data, the homeownership rate is 35 percent for 25- to 30-year-olds compared to 66 percent across all ages, and metropolitan statistical areas (MSAs) with relatively affordable rent have seen the fastest population growth in the second quarter of 2024.

‘Hidden’ costs can be quantified by evaluating mortgage payment growth for non-movers

According to the Federal Reserve Bank of St. Louis, it is estimated that 92 percent of all mortgages in the U.S. are fixed-rate loans. Non-movers are unlikely to have seen a change in base mortgage (interest and principal repayments) over the last year.

On the other hand, they are likely paying more to live in their home as a result of rising property taxes and insurance premiums, which are often tied to mortgage payments.

According to Bank of America data, non-movers have seen positive median mortgage payment growth YoY for the past three years, sitting at 3 percent YoY, compared to 5 percent YoY across all customers, including movers.

Populations significantly declined in northern and western MSAs in the second quarter of the year, a pattern that has remained consistent since the COVID-19 pandemic.

In the Northeast, New York and Boston saw large net population outflows while in the West, San Francisco, Los Angeles, Seattle and Portland, Oregon, saw significant YoY declines.

The South shows a mixed trend with Austin, Texas; San Antonio; and Tampa, Florida, seeing large inflows, while Miami, Orlando, Florida; and Washington, D.C. have seen declines in population. In the Midwest, Columbus, Ohio, has consistently seen large gains.

‘Hidden’ costs associated with climate change can be quantified by comparing household location with utility payments

A recent Treasury Department report stated that over half of U.S. counties face heightened exposure to climate hazard, whether it’s flooding, wildfire or extreme heat. As climate conditions change, households face financial strain.

For example, households exposed to heat waves are more likely to utilize air conditioning, which could increase energy consumption and utility payments. A recent Residential Energy Consumption survey indicated that 88 percent of U.S. households currently use air conditioning.

In March, the average utility payment per customer was nearly $300, a 23 percent increase since 2019 on a three-month rolling basis.

Lower-income customers and customers in the Northeast and West have been feeling the financial pressure, with average utility payments that were 38 percent higher in March than the 2019 average. For the two-week period ending March 21, 2024, 38 percent of households with incomes lower than $50,000 were unable to pay their energy bill or were unable to pay the full amount at least once over the last year.

The Northeast and the West have experienced the highest average urban price of electricity, resulting in the fastest growth in average utility payments since 2022.

In the second quarter of 2024, moves from one MSA to another fell 4 percent year-over-year (YoY) following a 15 percent YoY decrease in Q2 2023. This is a significant change from the second quarter measurement in June 2021, when pandemic-era relocations yielded a 32 percent YoY increase as more employees worked from home and further from their offices.

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Inman Connect is moving from Las Vegas to San Diego in 2025 and it’ll be bigger, better, and bolder than ever before. Join us for Inman Connect San Diego on July 30-Aug. 1, 2025 with the brightest minds in real estate to shape the future of the industry. Reserve your spot today for an exclusive discount.

Leonard Riggio, founder of book-store behemoth Barnes & Noble, has landed a buyer for his waterfront property on North Ocean Boulevard in Palm Beach, Florida, The Real Deal reported.

The 8,000-square-foot property that asked $96 million sits on 1.7 acres and is now under contract. Lawrence Moens, of Lawrence A. Moens Associates, held the listing, which was put on the market on June 20, according to Zillow.

A living area overlooking the patio | Zillow

As the island market otherwise rides out its slowest period of the year, it appears that serious buyers are still biting, according to agents. Buyers have been reportedly flying into the area for a day or two to look at properties and make an offer if they see something they like.

As a finite resource, oceanfront properties on the island are extremely coveted. This year, the only such oceanfront sales in Palm Beach have been Playboy Mansion owner Daren Metropoulos’ purchase of a $148 million property in June and Ideavillage founder Anand Khubani’s sale of a one-acre lot in April for $85 million.

According to the listing description, the Riggio home includes seven-and-a-half bathrooms and five bedrooms. The primary suite features a large sitting room and private gym, and the home also includes a separate apartment for staff.

The home’s kitchen | Zillow

Riggio and his wife, Louise Riggio, purchased the property in 2003 for $14 million, according to records, and conducted a renovation shortly thereafter. In 2009, the couple purchased an adjacent, quarter-acre lot for $1.4 million.

Once the deal for the property on North Ocean Boulevard closes, the Riggios will still own a property in Palm Beach County. Louise Riggio purchased a home in the village of Wellington for $8.1 million in June, The Real Deal reported.

The couple’s primary residence, however, is at 720 Park Avenue in New York City. They also own a sweeping, 13-acre estate in the Hamptons where the couple displays their extensive sculpture collection, according to The Wall Street Journal.

A bedroom overlooking the ocean | Zillow

Leonard Riggio began working in book sales when he was hired as a clerk at New York University’s bookstore while studying there part-time in the 1960s. Eventually, Riggio decided he could run a better business than NYU and decided in 1965 to launch a competing book store, Student Book Exchange, after dropping out of the university, according to Entrepreneur.

The store did so well that Riggio was able to use the profits to open four more college bookstores throughout the city. By 1971, Riggio was able to secure a loan for $1.2 million to purchase the then-floundering Barnes & Noble on Fifth Avenue. In an age when brick-and-mortar bookstores have faced increasing challenges to their business, Barnes & Noble has largely remained resilient.

Riggio retired from his position as executive chairman of the company in 2016.

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Alex Elias, CEO and co-founder of Qloo, was asked by a skeptical investor to further demonstrate the power of his company’s “cultural artificial intelligence.”

The challenge was to determine the fashion preferences of his neighborhood. So Elias launched the application, drew a polygon around his investor’s home, and asked Qloo for a report.

It predicted the very brand of pants the investor was wearing.

Artificial intelligence’s use in predicting consumer trends is driving remarkable change in the accuracy of advertising messaging, how music services recommend new artists and, to the interest of Inman Connect’s Las Vegas audience, what homes a person may buy.

“We’ve all been using AI longer than we think, from Pandora to Spotify and Netflix, you’re getting intelligence from behind the scenes that sort of decides what it is you consume,” Elias said. “When we started Qloo, we wanted to take that kind of data science and that type of AI to expand it across all categories.”

The company has scaled its AI across a range of industries, such as dining and music and, according to Elias, is most excited about the “enormous implications for real estate.”

Alongside Elias on stage was the founder and CXO — Chief Experience Officer — of Torque, Eric Masi. The Chicago-based company works with real estate companies in all sectors, including industrial. A component of Torque’s mantra is that branding begins with people, and that AI is doing a lot to help us understand how people operate.

“How can you use AI to really build a brand, the brand of a home, the brand of a neighborhood? Well, it’s like dating,” Masi said. “We all want to read the mind of the other person; reading your date’s mind is kind of an obsession.”

Elias agreed, saying that when AI is applied to real estate, it suddenly becomes more individualized and qualitative. He provided an anecdote about how an agent’s intuition will always be valuable to buyers and sellers, but that AI can scale that intuition, and create models around the fundamental expertise of the agent.

“What we’ve come to realize is that [agent intuition] is not that different from how Spotify makes a recommendation,” Elias said. “There’s a super exciting opportunity now with the consumer-friendliness level we’re at with AI to scale that intuition, to empower brokers to really understand the tastes of the people they’re serving.”

The pair agreed that if AI can learn what kind of pants a person in a specific neighborhood is most likely to buy, there’s no reason the industry can’t become better at helping buyers determine what kind of home they want, and general consumer tastes — clothes, music, dining choices — absolutely play a part in that.

A number of startups are capitalizing on Elias’ and Masi’s collective take, using it to better align lifestyles and deep personal wants with available inventory. LocalizeOS, Lundy, Eden, ListAssist and Tomo are a few examples. The major portals, which have a bigger lift to achieve integration, are moving toward more a human search experience, as well.

“Where this gets really interesting is that you can tell your customer base that you have this tool, that you have the ability to really get to what matters to them,” Masi said. “That’s a differentiator. Instead of advertising on a billboard that you know your city, you can say, ‘We have data; we have tools.’ Once you have a great tool, claim it. It’s an edge.”

“In this climate, having data is an edge, it’s an advantage,” said Elias.

At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.

The rollercoaster ride of being an independent contractor and working on commission is not for everyone. Even seasoned professionals hit slumps in their pipeline, and they begin to wonder if they can navigate another sales cycle without regular closings to pump up their reserves. 

Managing anxiety around financial irregularities requires patience, planning and persistence. Finding a strategy to overcome and put those negative feelings aside is an act of self-preservation in this high-stakes/ high-intensity market.

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Anxiety can sit beside you like an unwanted monster, and it can weigh down your normal solutions of solving problems and prospecting by creating doubt and fear that you are not doing enough. 

Here are four strategies to help you move through the anxiety and stay focused and keep your mind on your money (and not your money on your mind) while working through adjusting commission structures and payouts.

Know what you owe

It’s essential to take time to understand how much income you need to cover your essentials and stash away funds for your reserve. If your first thought when you wake up in the morning is about how you are going to pay your bills, you have a major income problem.  

Working by commission takes careful planning, budgeting, and a knack for self-restraint against blowing big payouts on fancy cars and vacations. If you are a real estate agent, you also need to be an expert on personal finance and investments. It’s the only way to stay in — and move forward in — the game of life. 

Know how much debt you owe, plush up your reserves, and have every dollar that comes in commission allocated. Anxiety thrives on worst-case scenarios and unanswered questions. Map out your finances, and “eat the frog” — or tackle your hardest task first — to start chipping away at commission anxiety.

Lean in on management and mentorship for support

You cannot do this alone. Every agent needs a support system, especially someone to grab a cuppa with to debrief, vent and offer encouragement. Your management team should offer resources to help you not just sell but also build a lifelong career. Your management should be invested in you and your well-being. 

If at this point your management team has been “hands off,” or as I like to call it, “hunger games” (may the odds be ever in your favor), then it’s probably time to find a new place to hang your license. Great leadership and office support systems should remove your anxiety, not encourage it or make it worse. 

A great squad will help level out rising anxiety because there will be expectations and systems in place to help you adapt to upcoming changes smoothly.

Take a digital break

Get off social media. Seriously. One of the biggest drivers in commission or pipeline anxiety is FOMO (fear of missing out) or death by comparison against other agents. 

Why are you stalking other agents? Why do you spend so much time talking about someone who has thousands of dollars to invest in marketing and a full team behind them, when you are a one-person show?

To avoid this mind trap, ask yourself these questions:  

• Would their success feel like the same success in my life? 
• Could I handle that overhead? 
• Do I really want to spend all that time on TikTok?
• Does my schedule even allow for me to make that much content? 
• Is their style my style or even my personality?

If you are having anxiety about your own pipeline, but cannot articulate what you are actively doing to fix it — Houston, there is a problem. (It’s an even worse problem if you can explain what six other more successful agents are doing.) 

Take a week off of social media. Unfollow your competition. Get crystal clear about what you want your marketing to look like. Watch your anxiety slowly come down and your brand message build up. 

Take care of yourself

One of the first things I need to ask myself when I am feeling anxious is if I have been taking good care of myself (eating, resting, exercising, keeping my schedule from being overloaded) and usually one or all of those things are off course. 

Admitting you have anxiety about the upcoming commission changes does not mean you are weak, or a terrible agent. It means that you are human, and your career is entering a new season that you need to prepare for. Every season requires new skills, tools, and mindset shifts. Working on being less rigid and more dynamic will help you work through those changes.

This means you probably need to dial back the following:

• Screentime
• Drinking
• Caffeine
• Junk food
• Late nights
• Spending time with toxic people
• Old systems that no longer serve your career
• The hard way

And embrace the following:

• Rest
• Exercise
• Whole foods
• Water
• Time with friends and family (or pets or people you like)
• New systems that allow you to work smarter rather than harder
• The path of least resistance

Your pep talk

Are you doing enough? It depends. Seriously, you may be doing all the right things, and business is just hard to come by in your market. Anxiety will live beside you until you get it under control.

That might mean working on generating other income. That might mean finding a new team. That might even mean working in a different type of position in real estate. (Are you a fantastic admin or creative with marketing?) 

For the seasoned pros, the folks that have been doing this for more than a decade, you know what this is. You have been through this more times than you can count. Look at your anxiety, and tell it that you are the boss — and hand it an official eviction notice. 

Don’t let pipeline anxiety rule your life. Stay vigilant and remember that your personal value has nothing to do with your sales and everything to do with the content of your character.

Rachael Hite is a former agent, a business development specialist, fair housing advocate, copy editor, and is currently perfecting her long game selling forever homes in a retirement continuing care community in Northern Virginia. You can connect with her about life, marketing and business on Instagram.