The industry threat of the loss of cooperation and compensation is very real. And, brokers are starting to pay attention after hearing about a recent ruling by Judge Andrea R. Wood of the U.S. District Court for the Northern District of Illinois that the “Moehrl case,” named after its lead plaintiff, had achieved class certification, nearly a year after a similar federal lawsuit known as Sitzer/Burnett received class certification.
Plaintiffs in the Moehrl case, filed in 2019, allege that commission sharing inflates the costs for sellers, in violation of the Sherman Act. A ruling against National Association of Realtors (NAR) and various franchisors, including Anywhere, HomeServices of America, RE/MAX and Keller Williams, could disrupt the brokerage commissions model across the country.
But, the class action lawsuits aren’t the top threat that brokerage leaders have on their minds, according to the RealTrends Q2 2023 BrokerPulse survey. In fact, only 1.14% said that the outcome of commission and antitrust lawsuits are a top challenge.
Most are just as concerned about interest rates, regulation and a potential bank collapse. Carlos Barron of TNG Real Estate in California is just one of 100 respondents to name these issues. “Regulation by local, county and state agencies that prohibit building of new homes puts pressure on inventory,” he said. Another California broker agrees. “Overregulation by the Fed hurts consumer confidence nationally.”
Also mentioned: margin compression due to 100% and low-fee business models, lack of agent training and low inventory. “The lack of inventory and the press spreading rumor that have no basis in truth is a challenge,” said one broker from Atlanta, Georgia. “I have no confidence that our Federal Government has the ability to make good decisions that will lead us to a better economy,” he added.
RealTrends BrokerPulse requests surveys from some 19,000+ real estate brokerage leaders around the nation on market trends and brokerage opportunities and challenges. Of the 182 completed surveys, 26% were from the Southeast, 29% from the Southwest, 18% from the Midwest, 20% from the Northeast and 8% from the Northwest. RealTrends BrokerPulse is a forward-looking, quarterly survey.
Housing market outlook
Real estate leaders surveyed for the RealTrends Q2 2023 BrokerPulse were much less pessimistic about today’s housing market outlook in the second quarter. Only 19% said they were pessimistic, compared with 30% in the Q1 2023 survey. Some 41% were optimistic and 40% were neutral
In addition, they only 30% predicted the market would be down more than 5% this quarter, compared to a whopping 66% of those surveyed who felt the market would be down in the first quarter. Some 39% said the market would be flat, while 32% thought the market would be up more than 5% in the first quarter.
When it comes to home prices, 55% thought home prices would flat in the second quarter, while 27% predicted home prices will be up more than 5% and 17% predicted they would be down more than 5%.
Some 48% of respondents predict that interest rates will go up this quarter. Only 11% said they think they’ll go down.
Productivity, motivation and regulation are key
Brokers continue to prioritize increasing agent productivity and looking for ways to keep agents motivated as we move through this uncertain market.
Other challenges rounding out the top five were keeping agents motivated, increased regulation, rising interest rates and inflation, pressure on margins and competing with new business models.
Of course, as in all markets, recruiting and retaining agents are top mentions when asked about priorities.
RealTrends recently added an AgentPulse survey which will help brokerage leaders gauge what agents understand about the services brokerage’s offer and offer agents a temperature of the market.
If you have questions about BrokerPulse, email RealTrends Editorial Director Tracey Velt at tracey@hwmedia.com. Also, be sure to sign up for the new RealTrends Daily, a roundup of news, tips and strategies for success. Each Tuesday, we release a brokerage-focused issue.
