The biggest challenges this quarter: interest rates and inflation
Across the nation, the housing market appears to be softening, according to agents surveyed in the second quarter RealTrends AgentPulse. The key challenges include rising interest rates and inflation, housing affordability and low inventory.
About 38% of agents surveyed were optimistic about the housing market in the next six months – a big drop from the 71% who were upbeat in the AgentPulse Q1 report. Another 46% were neutral in their outlooks and 16% were pessimistic.
“I am very worried about inflation and the rise of interest rates,” says a Fathom Realty agent in the Northwest. “Buyers are being priced out of homes and now face rising rates. We have got to get inflation under control.”
A RE/MAX 100 team leader in the Northeast was also pessimistic. “We typically have 1,000 houses on the market at this time,” she says. “However, now there are 89, leaving us with few realistic options.”
But there are still plenty of agents who are still optimistic about the market, typically citing ongoing high demand from buyers. “It appears that our market will continue on its present trajectory of increasing prices and high demand,” says an agent with RE/MAX Success in the Southwest. “The number of active, pending and sold listings remains constant. We are not seeing dramatic increases or decreases.”
RealTrends AgentPulse requests quarterly surveys from some 19,000+ real estate agents around the nation on market trends, opportunities and challenges. Of the 225 completed surveys, 18% were from the Northeast, 22% were from the Southeast, 22% from the Southwest, 25% from the Midwest, and 13% from the Northwest.
In the survey, about 39% of agents think that home sales will be up 5% or more in the next three months – a big drop from the 65% in the 1Q survey. Another 32% said home sales will be flat. When it comes to home prices increase, 28% said they expected home prices to be up more than 5% – a significant decline from 42% in the 1Q report – while 30% expected an increase of 1% to 5%, and 26% said they would be flat.
For example, a Watson Realty agent in the Southeast expects sales volume to drop more than 5% in the third quarter, while prices will be up more than 5%, adding “iBuyers are the biggest challenge.”
Biggest challenges agents’ face
When it comes to challenges, interest rates and inflation moved to the top of the list, nudging out low inventory. Here are the challenges in order of most challenging to least challenging.
- Interest rates and inflation
- Housing affordability
- Connecting with sphere
- Finding leads
- Professionalism of other agents
- Business planning
- Low inventory
- Institutional investors
- Growing a team
- Business planning
- COVID restrictions
Several agents from different regions also noted the importance of maintaining a positive mindset, regardless of changing market conditions. Others cited the challenges posed by lack of professionalism, particularly from new agents.
A variety of marketing tools
When asked about their marketing tools, agents gave a wide range of responses, from traditional farming techniques to 3D modeling and virtual reality (VR) applications for new construction projects. Many agents also cited the importance of the CRM platforms, electronic signatures and video applications on their smartphones.
An agent with Artera Lux in the Midwest noted that the ShowingTime scheduling platform was a huge timesaver, while a Keller Williams agent in the Southeast said monthly postcards were still an effective strategy for connecting with potential sellers.
“Digital platforms like Redfin allow buyers to save and comment on homes, so we can discuss each house that hits the market,” says an agent with The Agency in the Southwest.
Other new digital tools mentioned include Chime, LionDesk, Likely.ai, Padhawk and Cloze.
Reflecting on the need for flexibility in serving clients in a changing market, an agent with LAMERICA Real Estate in the Southwest,” says “Higher interest rates have drastically changed plans for first-time buyers. Those looking just a few months ago now have to shift their focus and we need to assist them in creating a new strategy for home buying.”
If you have questions about AgentPulse or want to be added to the list, email RealTrends Editorial Director Tracey Velt at firstname.lastname@example.org.