Baby boomers own 1/4 of all large homes in the US. They aren’t selling

by Verl Workman | Sep 11, 2024 | Industry, News Feed

Prices and politics drag pending home sales down to new low in July

by Verl Workman | Aug 29, 2024 | Industry, News Feed

Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.

Concerns about housing affordability and an impending election stunted pending home sales growth in July, according to the National Association of Realtors pending home sales report on Thursday.

The Pending Home Sales Index (PHSI) declined 5.5 percent month over month to 70.2, the lowest PHSI since NAR began tracking contract signings in 2001. All four regions experienced monthly declines in July, with the Midwest (-7.8 percent to 67.8) and South (-6.5 percent to 83.5) posting the biggest losses.

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Lawrence Yun

“A sales recovery did not occur in midsummer,” NAR Chief Economist Lawrence Yun said in a statement. “The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election.”

Several economists said pending home sales won’t improve until existing-home median prices and mortgage rates make a meaningful decline.

First American Deputy Chief Economist Odeta Kushi said a decrease in purchase mortgage applications “confirms [the] disappointing news” about pending home sales. The Mortgage Bankers Association’s latest survey said purchase mortgage applications declined 9 percent year over year, despite an 80-basis-point decline in mortgage rates over the past year.

“Average monthly purchase applications have declined in July and August, despite a decline in mortgage rates and increase in housing inventory,” she said in an emailed statement. “Modest improvements in affordability may not be enough to significantly boost demand, as household incomes remain stretched relative to mortgage payments.”

Echoing Kushi, Realtor.com Sr. Economic Research Analyst Hannah Jones said a good chunk of homebuyers simply cannot afford to “participate in today’s market” and pending sales will continue to reflect that frustration until affordability improves.

“Recent mortgage rate improvement stoked buyer demand to some degree, but many buyers are holding out for more significant rate movement before getting into the market,” she said in an emailed statement. “As has been the case over the last couple of years, today’s housing market hinges on affordability.”

“Though inventory has improved significantly year over year, and homes are spending more time on the market, today’s home prices have not fallen significantly from year-ago levels, and are just a few thousand dollars below the 2022 peak,” she added. “As a result, many buyers, though eager, still cannot afford to participate in today’s market, and home sales, including pending home sales, still lag year-ago levels.”

Neither economist said what the magic mortgage rate would be; however, an Aug. 27 Inman Intel and Dig Insights survey of 3,000 working U.S. adults pinpointed a range of 5.5 to 5.0 percent.

“If mortgage rates fell below 5.0 percent, it would convince 25 percent of renters to seriously reconsider their reluctance to buy in the next 12 months,” the survey read. “But sub-5-percent rates would only convince 16 percent of homeowners who are reluctant to buy in the next year to reconsider.”

Even if rates reached sub-5 percent, lacking existing-home inventory would likely keep the market from experiencing the sales rally agents are looking for.

“More new housing construction could be part of the puzzle,” the survey added. “But if builders can’t keep up, rates might have to fall to 4 percent or lower before renters and homeowners warm to the housing market at similar rates.”

Email Marian McPherson

Highnote launches AI-powered buyer presentation system

by Verl Workman | Aug 16, 2024 | Industry, News Feed

Innovation is in our DNA at Inman — that’s why we’re excited about August’s Technology and Innovation Month. We’ll kick it off by celebrating the companies and individuals pushing the industry forward with an expanded slate of Inman Innovator Awards at Inman Connect Las Vegas. Then, we’ll continue to celebrate the brightest minds in real estate all month long.

Digital sales presentation solution Highnote is helping agents break through the noise with a new Digital Buyer Presentation system and Done-for-You, a service that enables agents to outsource the creation of their presentations to expert designers. Both new offerings are available to agents starting Friday.

Mark Choey

“Our platform goes beyond design because our founder and investors are all former top-producing agents. We understand what’s needed to create a top-tier tool that amplifies professionalism and raises the bar in the industry,” Highnote founder and CEO Mark Choey said in a written statement on Friday. “Highnote isn’t just about presentations; it’s about defining a better way to communicate with clients.”

The Digital Buyer Presentation system leverages a ChatGPT integration to help agents craft more engaging presentations and real-time interactive data that guides agents on how and when to follow up with prospective clients.

The first part of the Digital Buyer Presentation is a pre-meeting presentation that introduces homebuyers to the agent and their team, lists key performance stats (e.g., transaction sides, sales volume, etc.), and provides a guide on buyer agency and the value buyer agents provide during the transaction.

From there, the guide reminds buyers of when and where the consultation will take place, what will be discussed, and information about critical parts of the transaction process, from signing a buyer representation agreement all the way to closing.

After the consultation, agents can create and send a post-meeting presentation summarizing what was discussed, providing key market insights, highlighting several potential listings based on buyer needs, and the next steps should a homebuyer agree to sign an exclusive buyer representation agreement.

Highnote tracks homebuyers’ real-time engagement and provides an easy-to-follow timeline of how many times the presentation was opened, which sections were viewed and for how long, giving agents clues on how best to follow up with a buyer.

Agents can customize the presentations at any time or offload that task to a team of designers through the new Done-for-You service, which is $349 for the first presentation. The second Done-for-You presentation is $299 and includes further discounts for subsequent orders. The Digital Buyer Presentation system is part of the Highnote subscription, which is $348 per year for individuals.

“With this process, agents are able to win clients, leads, listings and buyers before the meeting because this is something that stands out so far beyond what other agents are doing. It sets a professional tone [and] shows value just in the presentation itself,” Choey told Inman. “The sales process is full of documents and a lot of steps, so putting it in this platform makes it clear for buyers and sellers. This will be a game changer for agents.”

Choey said these services are critical for the industry as agents brace themselves for cooperative compensation policy changes per the National Association of Realtors’ buyer-broker commission settlement. 

“You really should be giving your examples of how you’ve helped clients in the past before getting through these tricky steps,” he said about the guidance consumers especially need in light of the NAR settlement. “For winning buyers, it’s just a game changer and it’s going to be the standard for real estate agents to be pitching with digital interactive presentations because old school is not going to work long term.”

Spark Tank Media CEO Jeff Lobb and Keller Williams Midtown Atlanta Managing Broker Deborah Blue seconded Choey in written statements, noting Highnote’s new services will help agents “stand out among the noise.”

“It’s become critical to treat buyers just like sellers — with a professional presentation designed to win buyers’ business. And Highnote is a great platform that provides such a solution,” Lobb said.

Added Blue, “Technology moves fast, and our consumers move faster. Having a platform like Highnote allows me to present every aspect of our communication from nurture to close. The feedback from sellers, investors, and buyers … ‘impressive,’ ‘professional’ and ‘informational.’ We stand out among the noise. Love it!”

Choey said the Highnote team has plans to introduce more AI-powered features this year, including a Highnote AI coach that can review a potential client’s digital footprint and craft a personality profile. That profile, he said, will help agents give their presentations an extra-personal touch.

“We’re rolling out a personality lookup using AI this quarter,” he said. “So you say, ‘I want to pitch to [a new prospect] and I need to know [their] personality. I need to know what [they’re] interested in and what [they’re] not. So you enter [their] email or LinkedIn profile, and then [the AI coach] will do an analysis of [their] personality and give tailored recommendations as to how to design the presentation to [them].”

“AI is so powerful for agents and we believe in practical AI,” he added. “It’s about focusing on the stuff that’s going to work and help an agent win more buyers, win more listings and get their jobs done faster.”

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10 top takeaways from Inman Connect Las Vegas

by Verl Workman | Aug 6, 2024 | Industry, News Feed

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.

One of the standout aspects of the Inman Connect Las Vegas (ICLV) event was the dynamic array of insights shared by industry leaders, all crafted to guide real estate professionals through an ever-evolving landscape.

The event was nothing short of invigorating — buzzing with energy, fresh perspectives and groundbreaking ideas. It also served as a crucial reminder for real estate agents to stay informed about changes to buyer agency and steer clear of the misinformation often found in popular real estate groups on social media.

Whether you’re a tech enthusiast, a champion of consumer empowerment, or a firm believer in the power of personal connections, ICLV had something valuable for everyone.

I had the privilege of handpicking and attending standout sessions with the aim of reinforcing the invaluable takeaways from these impactful discussions. With over two decades of experience in the industry, I deeply understand the importance of placing community at the heart of everything we do. These sessions highlighted the immense value of community and collaboration in driving our industry forward.

1. Navigating the new commission landscape

Ed Zorn, California Regional MLS | Photos by AJ Canaria Creative Services

Adapting to new commission structures is a crucial focus for real estate professionals. Ed Zorn, VP and General Counsel at California MLS, emphasized the importance of staying informed, clearly communicating with clients and adjusting business models to align with the new rules. These changes are part of a broader trend toward transparency and efficiency in real estate transactions.

Key insights:

• Stay informed: Keep up with industry changes and new commission structures.
• Communicate clearly: Ensure clients understand the new processes.
• Adapt practices: Be ready to tweak business models to fit the new rules.
  

2. Tackling buyer and seller objections effectively

 Left to right: James Dwiggins, NextHome; Kendall Bonner, eXp Realty; Ed Zorn, California Regional MLS; Cassie Walker Johnson, Windermere | Photos by AJ Canaria Creative Services

The art of effectively tackling buyer and seller objections requires providing context, encouraging incentives, and educating clients. James Dwiggins, CEO of NextHome, Inc., stressed that by understanding the current market situation and the impact of changes, agents can better manage expectations and facilitate smoother transactions.

Key insights:

• Provide context: Explain the current market situation and how changes impact transactions.
• Encourage incentives: Highlight the benefits of offering commissions as incentives.
• Educate clients: Clear up any misconceptions and ensure clients are informed.

3. The role of real estate agents in an evolving market

Clelia Peters, Frank Martell | Photos by AJ Canaria Creative Services

The enduring value of real estate agents lies in their local expertise and ability to guide buyers through complex transactions. Clelia Peters, Managing Partner at Era Ventures, and Frank Martell, CEO of loanDepot, emphasized that despite technological advancements, the personal touch and deep knowledge that agents bring to the table remain irreplaceable. Understanding the evolving demographics of homebuyers, especially millennials and Gen Z, is crucial for staying relevant.

Key insights:

• Enduring importance of agents: Your knowledge and local expertise are irreplaceable.
• Adapting to demographic changes: Get to know the younger, tech-savvy buyers, learn to interpret their unique language, and lean in to connect through their preferences rather than your own comfort zone.
• Addressing affordability and supply issues: Tackle the big issues head-on, and look for non-traditional solutions to offset the affordability and supply challenges.

4. Maximizing profitability in an ever-changing market

Left to right: Clelia Peters; Joe Skousen, Inside Real Estate; Chris Heller, OJO | Photos by AJ Canaria Creative Services

Let’s face it, financial pressures aren’t going away, so upgrading buyer representation workflows to boost efficiency, support compliance and enhance reporting is essential. Joe Skousen and Chris Heller discussed the importance of streamlining operations and allowing agents to focus on client service. Skousen also predicted that despite the ongoing shifts, he believes that the industry is on the brink of experiencing one of its most profitable years.

Key insights:

• Enhance efficiency: Streamline operations to focus on client service.
• Support compliance: Ensure smoother transactions with improved compliance measures.
• Boost reporting: Gain better insights and operational transparency with enhanced reporting.
• Foster community: Build a collaborative environment for sharing ideas and strategies.
• Encourage continuous learning: Promote ongoing education and knowledge sharing.

5. Embracing technology and consumer empowerment

Zillow CEO Rich Barton | Photos by AJ Canaria Creative Services

Leveraging technology and focusing on consumer empowerment are both keys to future success in real estate, said Zillow CEO Rich Barton. During his session, he emphasized that by embracing data-driven tools and investing in innovations, agents can enhance consumer experiences and stay ahead of the competition. This approach aligns with the broader industry trend toward greater consumer transparency and efficiency.

Key insights:

• Embrace technology: Leverage tech to enhance consumer experiences.
• Focus on consumer needs: Understanding and meeting consumer needs is essential for long-term success.
• Invest in data and tools: Utilize data-driven insights, and invest in empowering tools.

6. The impact of AI in real estate

Left to right: Kendall Bonner, eXp; Shayan Hamidi, Rechat; Scott Martino, Endpoint | Photos by AJ Canaria Creative Services

Artificial intelligence (AI) is revolutionizing real estate by personalizing customer interactions, automating tasks, and providing valuable insights. Kendall Bonner’s session brought together Shayan Hamidi of Rechat and Scott Martino of Endpoint to discuss how balancing technology with the human touch ensures that while operations are streamlined, essential personal connections are maintained.

Key insights:

• Leverage AI tools: Use AI to make your job easier and enhance client experiences.
• Focus on customer experience: AI can help create more personalized and engaging experiences.
• Balance technology with human touch: Don’t forget the importance of personal interactions.

7. Strategic team management and adaptation

Verl Workman, Workman Success Systems | Photos by AJ Canaria Creative Services

Effective team management while adapting to industry challenges involves specialization, leveraging technology, and adopting a consumer-centric approach. Verl Workman of Workman Success Systems provided insights into innovative team structures and compensation models that can ensure long-term success and resilience.

Key insights:

• Specialization: Focus on specific areas of expertise.
• Technology integration: Use AI and predictive analytics for high-quality lead generation.
• Consumer-centric approach: Always prioritize your clients’ needs, even if it takes you outside your comfort zone.

8. The relatable effect: Building genuine connections in real estate

Rachel DeAlto, MatchGroup | Photos by AJ Canaria Creative Services

Building genuine human relationships in real estate is paramount. Rachel DeAlto’s session highlighted the importance of authenticity, effective communication, and inspiring clients by sharing your passions. Developing relatability as a skill can lead to deeper connections and greater client satisfaction.

Key insights:

• Craving for connection: People need connection, and this is crucial in real estate.
• Human experience in business: Focus on creating human experiences for your clients.
• Relatability as a skill: Develop your relatability through authenticity and embracing discomfort.
• Principles of relatability:
  • Connect: Be authentic, and find common ground with your clients.
  • Communicate: Be present, make clients feel valued, and lead with purpose.
  • Inspire: Share your passions, and inspire clients with your enthusiasm.

9. Leveraging branding and audience engagement

Left to right: Kevin Knight, initial team at Facebook and former global head of brand for Pinterest; Sydney Miller, The Agent Upgrade | Photos by AJ Canaria Creative Services

A unique brand identity and effective audience engagement are vital. Sydney Miller and Kevin Knight of Upgrade emphasized the importance of defining a compelling brand, understanding audience needs, and maintaining direct communication with clients — all strategies that are essential for standing out in a competitive market.

Key insights:

• Unique brand identity: Highlight what sets your services apart from competitors.
• Audience engagement: Build direct relationships, and adapt to platform changes.
• Value proposition: Clearly articulate the value and benefits of your services.
  

10. Empowering women in real estate

Left to right: RENEW’s Lauren Martin, Anywhere’s Lynette Gladdis, Christie’s International Real Estate’s Natalie Hamrick, Council of Multiple Listing Services’ Denee Evans, Kellers Williams’ Julia Sashay Israel, and Coldwell Banker Realty’s Lindsay Listanski | Photos by AJ Canaria Creative Services

Empowering women in real estate involves mentorship, confidence and inclusivity. The “What Moves Her” session, led by Lindsay Listanski, brought together amazing women leaders who shared their experiences and strategies for success. Supporting each other and creating an inclusive environment can drive success and innovation in the industry. Embracing failure as a learning opportunity is also crucial for growth.

Key insights:

• Mentorship: Share your knowledge, and support your peers.
• Confidence and resilience: Stay true to your skills and knowledge.
• Inclusivity and delegation: Create an inclusive environment, and don’t hesitate to ask for help.
• Embrace failure: View failures as learning opportunities, and keep pushing forward.

As you can see, Inman Connect Las Vegas was a whirlwind of wake-up calls, inspiration and innovation, where fresh perspectives and actionable strategies took center stage.

So what was the overarching moral of the story? Embrace technology, focus on consumer empowerment, and build genuine connections to be the type of real estate professional who can navigate the complexities of today’s market with strength and confidence. By tapping into the collective power of community, understanding the importance of continual learning, and the need for a client-centric approach, our industry will be well equipped to serve amidst all the change.

And if I may, as someone deeply committed to fostering connections and building robust communities within our industry, I was not only moved by the collective wisdom shared during the sessions, and even more importantly, I was truly reinvigorated.

If taken to heart, the insights shared by our industry leaders can not only help us continue to navigate any challenges ahead but also serve to elevate our practices and drive lasting impact across each of our organizations. Together we are stronger and indeed equipped to make our industry even better, one genuine connection at a time. 

Author Stacey Soleil is the SVP Community & Engagement at Inside Real Estate, Inman contributing writer and national speaker.

Affordability: It’s not just high mortgage rates and home prices

by Verl Workman | Aug 1, 2024 | Industry, News Feed

HAPPENING NOW! 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 VIRTUALLY.

Elevated mortgage rates and home prices have had a chilling effect on home sales, but would-be homebuyers may face a host of other complex problems that they’ll need help from real estate agents and loan officers to navigate.

From the rising cost of building and insuring a home to the burden of property taxes, “we’re seeing an onslaught of these types of costs that make it more difficult to afford a home,” loanDepot President and CEO Frank Martell said. “So making the right decision on what home you can afford, getting the right mortgage — all those things are becoming increasingly more important.”

In a wide-ranging discussion at Inman Connect Las Vegas Wednesday with Era Ventures partner Clelia Peters, Martell said he sees technology making life easier for agents and loan officers — not putting them out of work.

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“I think we’re all at an inflection point,” Martell said. “There’s a lot of change coming down the pike and I think we have to take a deep breath and try to figure it out.”

In addition to commission lawsuits and changes coming under the implementation of terms of the National Association of Realtors settlement, real estate professionals are also keeping a wary eye on artificial intelligence and other technology.

Martell — who before taking the CEO reins at loanDepot in 2022 was at the helm of real estate data, intelligence and analytics giant CoreLogic — also serves on the boards of Compass and SmartRent Inc., so he’s heard the argument many times over the years, and isn’t buying it.

“When I came to the industry 25 years ago, one of the first meetings I had, somebody came to my office and told me there were going to be no more real estate agents … and clearly that hasn’t happened,” Martell recalled. “I think we’re at a very exciting point in time where we’re going to have different tools, different data and different platforms to enable the real estate agents who are fronting the transaction to add more value. And I don’t think that’s something that’s going to be disrupted, certainly not in my lifetime.”

While home prices have “escalated dramatically,” there’s also an onset of new factors contributing to affordability challenges, he said.

The rising cost of homeowners insurance and property taxes has made homeownership more costly — even for those who own their homes free and clear.

While lenders require homeowners who are still paying their mortgage down to have homeowners insurance, a recent analysis by the Consumer Federation of America (CFA) found that 14 percent of homeowners who don’t have a mortgage aren’t insured.

For those who do have a mortgage, lenders “have a tremendous issue” if a homeowner loses their insurance policy, Martell said. Force-placed insurance policies often protect only the lender, and it’s homeowners who are stuck with an insurance charge paid on their monthly mortgage bill, the CFA noted in its report.

With regulators turning their attention to so-called mortgage “junk fees,” lenders are “kind of stuck between the rock and the hard place” when a homeowner can’t afford insurance, he said.

State-run collectives are a potential short-term solution, but in the long run, Martell thinks public-private partnerships may be required to make homeowner’s insurance less of a burden.

“I think there are a lot of good intentions to get people into homes and promote affordability,” Martell said. “But a lot of the policies that we have in place today are the inverse of that. They’re driving higher costs. They’re driving higher complexity. And, you know, there’s a million examples at the local level, the county level, the state level and the national level.”

The lack of housing supply is another driver of affordability issues in many markets, and Martell thinks builders will have to construct about 6 million homes to restore the balance of supply and demand.

“That’s a decade, if we really put our shoulder into it, to fix that issue,” he said. “I don’t see any real plan on the horizon quite yet to deal with that. And if we’re six million short, that’s going to drive up home prices and a lack of shelter for people.”

Shifting demographics is another challenge for the real estate industry. The average first-time homebuyer is “31-ish” years old, but because people are waiting longer to get married and form households, Martell sees “a gradual aging of the first-time homebuyer.”

Most first-time homebuyers are nonwhite, come from “all kinds of different educational backgrounds,” and are increasingly likely to be gig employees rather than W2 workers, Martell said.

“A lot of homebuyers are either Latino or they’re Asian — English is not their first language,” Martell said. “Mortgage and real estate is really an English-driven platform, and that becomes an issue as that progresses. So we need to be ready to help on that score.”

While Martell said he’s heard a lot of talk about whether Realtors should also become mortgage lenders to augment their incomes, he “would recommend thinking long and hard before you do that.”

Mortgage lending is “a very complicated, highly regulated industry. So if you want to get into it, you better be prepared for all that.”

LoanDepot has 1,000 loan officers in local markets “that have deep relationships with many, many agents, and I think that that long-term relationship means everything,” Martell said.

“I think both the agent and the loan officer are so integral to making a successful transaction. That relationship is very key, and we work hard to try to keep that relationship going and support the real estate agents.”

At the end of the day, Martell said, “Real estate agents are the key value driver in this industry, and they’re enabled by all this other technology and data. All buying is complicated, and you need that human touch, so that will not change.”

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Email Matt Carter