On REAL Trending Episode 79 we're discussing this housing recovery, where to focus now and lessons from the agent rankings, what these trends mean and how can brokerage firms best deal with them.
From REAL Trends, the trusted source for real estate industry news and trends, this is REAL Trending episode 79. We're analyzing the most important trends affecting brokerage companies and agents. I'm Steve Murray, President of REAL Trends and today we're discussing this housing recovery, where to focus now and lessons from the agent rankings, what these trends mean and how can brokerage firms best deal with them.
The housing recovery, after speaking with nearly 80 brokerage firms of all types models and brands around the country in the last 10 days, it's a blessed thing that everybody's business in virtually every market has rebounded smartly and for many companies and in many markets, the contracts in June and the pendings for July are very nearly what they were last year in 2019.
What do we think about that looking at all the data we're looking at from showings to pendings, to contracts and what we're reading from all the sources you can read, it would appear that we took the 60 day normal spring season, mid-March to mid-May and just shifted it 30 to 45 days into the future. What's then caused it of course, to collide with the normal May June home buying season. So we have this inordinate amount of demand hitting the market all at once. 120 days worth of normal activity compressed into 60 to 70 days.
Now that's a great blessing for most brokers in the country when you consider what we were looking at the last part of March, which for many, it looked like the abyss of housing sales. So it's a real blessing that this business has come back extremely strong. We repeat, however that among most brokers there remains uncertainty is what does this mean for August, September, October, for example. We would warrant for our listeners that this will not keep going at this pace.
It simply cannot for two big reasons. One, where we had a scarcity of inventory back in February and early March, we now have a critical shortage of inventory. Some markets reporting, for instance, that they have 20 or 30 or 35 or 40 of inventory. Number two, we have between 25 and 30 million of our fellow American citizens out of work, many of whom will not be coming back to work anytime soon with the rise again, in COVID cases causing various governors to kind of pull back on opening their economies.
The tourist industry particularly is not going to bounce back anytime soon, nor are some retail and restaurant businesses. When you have that many people out of work and with federal unemployment benefits running out the end of this month, it's not going to be pretty this fall when we have that many people that are unable to have jobs, pay their normal bills and certainly not to buy homes.
Now the stock market has recovered and that's extremely good news for the upper end. We hear that in many markets, not all the upper end continues to perform extremely well, particularly in those areas outside of the largest urban core cities. So this housing recovery is still fragile. If we're looking down the road 60 to 120 days.
That leads us to our second point, which is what steps to take now? We have said and shared with our readers listeners, since mid-March dozens, if not hundreds of times, there are two things for broker owners and or their agents and teams to focus on at a time like this. Number one, get closer to your customers. If you're a broker owner and you look at your agents as your clients and customers, to build a stronger communication with them to make sure they're aware of what's going on in the marketplace.
Particularly as we head into the latter part of the summer, as to what's going to happen with the housing market. It is more important than ever that you establish and build and maintain strong relationships, if you're a broker owner with your agents, and if you're an agent or a team now is the time to double down on your outreach and conversations and communications with your customers both current past and future.
Number two, it is also a time not to get careless with spending at all. We don't know, no one knows exactly what the housing market is going to look like in August, September or October.
To our benefit people are coming back to work, just not as many as we need. Mortgage rates are at historic lows, but we all know that underwriting standards are getting tougher across the board, whether it's conforming loans or jumbos we know that that is going to tighten up as the economy sputters, if you will, to come back from where it's been. So preserve your cash, preserve your capital, watch your spending very carefully at this time.
The lesson really hasn't changed in a time of uncertainty, getting closer to your clients and customers and preserving your capital are the two most important things anyone can do right now.
Lastly, lessons from the agent rankings this year, REAL Trends and the Wall Street Journal and Tom Ferry, who all great partners of ours. We sifted through 14,685 agent and team submissions to our annual agent and team rankings.
There was some confusion this year, as we added new categories. We separated out for instance, teams and agents who own their own companies are in their own categories and we did that purposely because of the fast growing number of agents and teams who do own their own brokerage and where the data is not necessarily available to qualify them to make sure the data is correct. We did separate the teams into three different size teams.
Most importantly, for the first time we carefully looked at approximately the top thousand submissions in terms of looking at their websites, how they present and market themselves and how they are structured. While we made some mistakes in looking at some who filed as individuals, but market themselves as teams, and yet didn't actually have a team. We did uncover a large number of individuals or those who filed as individuals who actually market themselves as teams and have agents on their teams.
We will never and cannot ever promised to be perfect but when we look at 14,600 plus filings with an error rate of under 1%, we're getting closer to actually getting it correct. About these agents and these teams, 10.5% of all the transactions in the country in 2019 and 16.5% of all the volume done in 2019 done by fewer than 1.5% of all the licensed realtors in the country.
It is clear that the consolidation of the business done in our country is being done by fewer agents... or I should say more business being done by fewer agents and more business being done by teams.
One other piece of information, we've commented in the past that teams are becoming an entirely new form of business organization and that continues to go forward. If you look back five or six years, there were fewer than 1,500 teams that qualified. This year that number was almost 6,000.
Learn more about industry trends and successful tactics for brokerage firms, agents, and teams, as well as listen to past REAL Trending on Apple podcast, Spotify, Google Play and others visit www.realtrends.com/channels/. This has been Steve Murray, until next time.
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