Kymber Lovett-Menkiti, President, Keller Williams Capital Properties, Washington, D.C., Broker Relations Liaison for NAR
Christian Barnes, President and CEO, Better Homes & Gardens Real Estate, Kansas City Homes, Overland Park, Kansas
Patrick Bain, President and CEO, The Long & Foster Companies, Chantilly, Virginia
Liz Nunan, President and CEO, Houlihan Lawrence Real Estate, Westchester, New York
Kymber Menkiti: Harry Potter author J.K. Rowling once noted that predicting the future is a difficult business, primarily because the consequences of our actions are so diverse and so complicated. That observation is keenly felt in our real estate industry today. Mortgage rates have nearly tripled from what they were during the height of the pandemic marking the most dramatic increase in US history. That should be putting a significant dent in sales. Yet given the shortage of housing inventory, home prices in many areas are still on the rise, and well-tended homes in desirable areas are bringing quick sales and multiple offers. Just where do we stand as we enter the last quarter of the year, and what can we predict going forward?
Christian Barnes: It has certainly been a rollercoaster of a year. In our market, the buyer pool has shrunk slightly in the wake of higher rates, but with many sellers not motivated to move, we still lack inventory, and thus, are still experiencing multiple offers in many cases. The average selling price is still appreciating, although that is beginning to taper some.
Patrick Bain: It’s not the usual pattern, for sure. In past years, when rates rise, we’ve seen a decline in prices. But in most of our markets, we, too, are seeing prices rise. The increases are not as dramatic as they were during the pandemic, but continued low inventory and high demand are likely to keep them slowly moving up.
Liz Nunan: In Westchester County, sales are down overall, yet in the face of record low inventory, the median sales price has increased about 2% year to date. Multiple offers are still coming in, we see a lot of cash deals and many sellers are getting way above asking price.
KM: Can we really project where the market is headed in 2024?
PB: When it comes to rates, at some point the Fed will hit the pause button, but I’m not sure they’re done just yet. I think rates will remain where they are, or even move slightly higher, this year. But at the same time, consumers are adjusting to rates where they are. They realize we won’t see 2.5% or 3% mortgages again any time soon. As for next year, if rates do pull back a bit, it may spur some buyers and sellers to get off the sidelines and make a move—and if that happens, it could help our inventory challenges.
CB: I think rates could slide back under 7%, but not until the second quarter of next year. In the meantime, the market will likely cool some, but as we know, there will always be people who, because of life’s circumstances, have to move. It’s going to be a slow climb out of the inventory shortage and I don’t foresee big changes in that soon, but we may see more price normalization.
LN: I expect next year to be similar to 2023, with rates about where they are today along with low inventory levels. Keeping our agents engaged, motivated and happy will remain a primary focus for us.
KM: I was just going to ask how your agents are coping, especially newer agents, who came in during the pandemic and have never had to deal with a cooling market.
LN: A successful initiative at Houlihan Lawrence has been our Young Professionals Network, which we started mid-pandemic and has since grown to about 100 agents. We’re focused on helping these agents who are newer to the business, grow their business by discussing best practices via webinars and speakers as well as fostering networking and referral opportunities across our vast market area in New York and Connecticut.
PB: The market is what the market is. There will always be things we can’t control. We focus on the things we can control, and that starts with keeping morale high and agents competitive. We have a long history of excellence in our market, and we’re doing what we do best—putting people first and helping our agents help their customers buy, sell and own real estate.
CB: It’s back to the basics for all our agents, and that means sticking to a day-to-day routine of keeping in touch, building relationships, and staying informed so they can tell their clients what they need to hear. Our job is to help our people position themselves as knowledgeable, caring, go-to professionals in any market environment.
The Power Broker Roundtable is brought to you by the National Association of Realtors® and Kymber Lovett-Menkiti, NAR’s Broker Relations Liaison. Watch for this column each month, where we address broker issues, concerns and milestones.
For more information, visit https://www.nar.realtor/.