How can agents help buyers and sellers understand these market trends? For sellers, increased competition may drive down the price they expected to ask for their homes. For buyers, the array of choices can seem overwhelming, and they may need some extra guidance on how to navigate the market. An educated real estate agent can help smooth the rough edges. When agents have a deep knowledge of trends at both the local and national levels, they can better serve clients during this active season.
Here are some of the questions that your agents may encounter this spring and tips on how they should handle them.
“Are we heading for another crash?”
This is a weighty question. Many people are concerned about the value of their homes, and those looking to buy don’t want to make a bad investment. The housing market is so intertwined with the economic ecosystem as a whole that it can take a Ph.D. to unravel it. The National Association of REALTORS® regularly tracks the shifts in the market — and your agents can keep an eye on market shifts by following NAR’s statistical releases. At the moment, some observers suggest the housing market is indeed headed for a slowdown. But no need to panic — experts say the financial and economic factors that were in play during the big crash a decade ago don’t exist today. This year’s forecast can be attributed to the natural ebb and flow of the market. Brokers: Make sure your agents have the most up-to-date information to share. Clients will look to your company for expertise and appreciate the insights.
“What about mortgage rates?”
Most of the real estate predictions for 2019 initially indicated that rising mortgage rates would be part of the picture. And although mortgage rates have slowly been inching up over the past few weeks, they remain below last year’s rates. Lawrence Yun, NAR’s chief economist, said in late March that he doesn’t anticipate rate increases from the Federal Reserve in 2019. Knowing the likely direction of interest rates is a good way for agents to show their buyer clients that it still makes sense to purchase. How much will they spend in rent if they don’t buy? How much equity can they expect to build in the first five years? Once they see the value of their investment, they might be more likely to take another look at the financial side of things.
“How will increased inventory affect me?”
When it comes to real estate clients, the market segments go on and on—single adults, couples without children, families, retirees—and increased inventory may affect each group differently. Empty nesters who have been building equity in their homes for decades may decide to wait on selling until the market is back on the upswing, while millennials may decide to buy instead of rent. In fact, many believe that this year will be the “year of the first-time home buyer,” as younger people start looking at building that nest egg by purchasing a home. Conversely, investors may see this as the time to purchase more properties, so the rental pool may increase and drive down rents, which could make renting more appealing.
Because a home is generally the largest purchase and investment of an individual’s life, changes to the market are bound to drive clients interest—and anxiety. Make sure your agents are ready with answers. Help them brush up on the latest data, use your expertise to draw the best conclusions for your market, and encourage them to share those insights with clients and prospects. Some great resources include: the National Association of REALTORS®, the real estate section of local and major national newspapers, research from your local association, statistics from your MLS, and vertical media specific to the industry.