In this 9 minute video, Amber Kovarik and I discuss the latest in real estate and lending.
M & A and Industry Changes:
There is news of new mergers and acquisitions nearly every week. Two weeks ago it was Zillow’s $500 million acquisition of ShowingTime and last week it was Redfin’s $608 million acquisition of RentPath.
Many companies are spending big money on PropTech investments and acquisitions. Their end goal is to create the end to end platform for real estate transactions. That may look different from company to company, state to state but for real estate, the speed of new tech adoption is increasing drastically.
Zillow announced last week that in 20 markets, including Phoenix, their Zestimate will also be their iBuyer offer from Zillow Homes, as long as the property qualifies. In order to qualify, a property must fit Zillow’s buy box which is an average sized home, around the median price, that only needs light renovations.
Regardless of the reality of the situation, consumers will now expect, at a minimum listed Zestimate. It now seems like an initial offer and not an opinion. This is all about perception; not the reality that a property has to qualify. Because now, sellers see a clear bottom price. Why would they ever accept an offer less than the Zestimate? Yes, in today’s market, getting above the Zestimate, even above the appraised value, is not difficult. However, this too shall pass; nothing lasts forever, especially not in real estate.
If you do not already, I highly encourage you to check out the Zestimate before going on another listing appointment. Sellers do their homework and they know that number when you arrive.
The Zestimate live offer feature is available to qualifying homes in Phoenix and Tucson, AZ; Charlotte and Raleigh, NC; Miami, Jacksonville, Orlando and Tampa, FL; Portland, OR; Denver, Colorado Springs and Fort Collins, CO; Nashville, TN; San Diego, Los Angeles, Riverside and Sacramento, CA; Dallas, Houston and San Antonio, TX; Las Vegas, NV; Atlanta, GA; and Minneapolis, MN.
Inventory remains low. Crazy low. Demand, which has been elevated is now dropping faster than inventory. Our demand is now about 19% higher than normal and inventory is over 76% below normal. Prices continue to go up with no end in sight. The limited inventory is the cause of the decreasing number of pending listings each month. We are still running 13% above last year when we had significantly more listings available.
Amber discusses the rise of interest rates and the reasons why. A stronger economy, lower unemployment, more confidence, the light at the end of the tunnel. There is a lot of activity and the markets are responding favorably.
As the economy gains strength, expect the Fed to pull back on its mortgage backed securities. This is all part of the normalization of the market. The low rates were manipulated to aid the economy during the height of the pandemic but as there is improvement, the Fed will back off and rates will normalize at the levels that match the market.
Continue setting expectations with buyers and make sure that they prepared for the day-to-day changes happening in housing and lending.
Sarah has been with Lawyers Title of Arizona since 2004. As an award-winning sales executive, Sarah’s role is to bring transactions to Lawyers Title. To do this, she focuses on supporting her clients and helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today’s home buyers and sellers.