By Mike Bodeen · 16 October 2023
Plus Thousands of Other Affiliates?
The question on most everyone’s mind who has any affiliation with residential real estate these days (buyers, sellers, Realtors, lenders, title companies, etc., etc.,) is: “What’s going to happen to real estate?”
Another way we’re phrasing the question, which most affects us personally, is: “Will 2023-2024 shape up to bring about the biggest mass industry personnel exodus since 2007-2008?” Or will forces unite to control inflation, lower mortgage rates and calm world markets? The geopolitical events of the past week have unnerved many.
What we “seem” to know, is that the steady rise of mortgage rates has significantly slowed re-sales and continues to slow current re-sales. New home sales are fairing better as builders are better able to provide home buyers with rate buy-downs and additional incentives, but they too will suffer if the current trend continues.
Historically, last month was the lowest number of September sales since the great recession of 2006-2008 – over 15 years ago. The number of homes currently under contract at this time of the year is the lowest since 2007. At this time three years ago, 13,300 homes were under contract. Today there’s 64,16 in escrow – less than one half! See sales chart below.
This is a major economic disruptor that will have profound economic consequences for our industry. Most real estate agents will make one, or even no sales. Only the seasoned Realtor and lender veterans will make enough sales to support their families.
Numerous Real Estate companies have folded up by selling off their businesses to larger companies. It’s not just Realtors. Major downsizing is taking place across the industry, which may finally thrust our country into recession.
As implied above, a steady reversal of mortgage rates could bring more buyers to the market and perhaps place a tourniquet to stop the bleeding, assuming we see a marked increase in homes for sale.
Where all this goes, only the Lord knows.