There’s a red, flashing light at the current level of housing sales. What can brokers do about it? Steve Murray goes through the data to predict the market, talks about the new $15,000 tax credit and analyzes the audience for the aggressive, low-cost brokerage model.
Here is a small preview of today’s interview. The transcript below has been lightly edited for length and clarity:
Market predictions: For years, we’ve been measuring one key statistic about housing sales, both new and existing housing sales. It’s a barometer that we look at consistently to determine: Is the market balanced? Is it stone cold or is it raging hot? The best barometer of where we are with the housing market is the percentage of all households, both owner and renter households that bought a home in a given year. The 40-year average is 4.8%. So 4.8% of all households, both renter, and owner-occupants bought a home on average each year, going back to 1980, over 40 years ago. What is it today? And, how does that help predict housing sales.
First-Time Homebuyer and Downpayment Toward Equity Acts: We think the efforts to help first-time home buyers and first-generation homebuyers is admirable, who wouldn’t want to help these people try to get into homes? But, let’s also remember that back in 2003-2006, the federal government’s position had been, ‘if home ownership is good, then more home ownership must be even better.’ That led to a disaster in the housing market and housing sales. The federal government and or state governments can subsidize supply and find ways to do that and restrict it to first-time or first-generation homebuyers and have a far more profound impact on housing sales.
Aggressive, low-cost brokerage models: There is a huge audience, among the 1.5 million Realtors in the country, for a low-cost option, both from high, productive agents who think they’ve got their business built, as well as lower producers who just want a place to hang their license. We think that this is further segmenting of the agent population.
RealTrending features Steve Murray, founder and partner with RTC Consulting and a senior advisor to HousingWire. He offers insight and analysis on three trending real estate issues. Steve’s 30+ years in the industry allows him to give you a deeper understanding of today’s real estate business happenings. Hosted by Steve Murray and produced by Victoria Wickham.