From the Desk of Adam

Last edition was all about the real estate commission lawsuits...and, quite frankly, I feel like I can't not continue this conversation. It's too big. But this week I'm going to approach it from the perspective of the consumer - specifically, why I feel like YOU (whether you're a buyer, seller, or investor) should be thrilled with the changes that are taking place in the real estate industry.

Without further ado, here are the Top 5 reasons:

5) Increased transparency

I've had more conversations over the past few weeks about how I get paid than I ever thought possible. Is it kind of awkward? Sure! But it's also for the best. No matter what industry you're in, it can feel weird to talk about money, why you charge what you charge, and why you're worth it. But you know what? The time has come (clearly!). I've found that the vast majority of conversations have proven to not just be illuminating, but fruitful. You're committed to me because you know the value that I'm bringing to the table. You know what I'm doing for you, and for how much. These are conversations that, yes, I started having well before the lawsuits started transpiring...but honestly I wish I had been having them from Day 1.

4) There will be fewer real estate agents

I'm not celebrating and will never celebrate anyone losing their job...but that's not what this is. Your cousin Sally who sells one house every few years will not be renewing her license. Agents who don't adapt - and instead choose to resist or deny changes - are going to falter. New agents are going to find it much more difficult to get their business off the ground (how are you going to demonstrate your value when it's unproven?). This was starting to happen with the more difficult markets of '22 and '23...and now it's going to accelerate. I believe this is good news for the consumer because serious, established practitioners lead to better business practices. Simple stuff.

3) There will be fewer tire kickers

All my buyers know that part of the reason for attending an open house is to gauge interest level from other buyers. On many occasions, I've literally sat outside in my car counting attendees. Is it kinda creepy? Yes! But hey, anything for my clients. With the caveat that there will always be "nosy neighbors" attending open houses, there will also likely be fewer "tire kicker," non-serious buyers distorting the marketplace. These are folks who either would scoff at paying for representation or not be prepared to make an offer through the listing agent even if they liked what they saw. I also believe there will be fewer non-serious sellers. Non-serious agents work with non-serious sellers. These are the properties that are listed for a laughable amount, and would only sell to a true fool. Less of that, please!

2) The changes are, in actuality, minimal

Commissions have always been negotiable, and you've always had options. You've never *had* to sell your house with an agent, you could have always gone the for-sale-by-owner route. You've never had to use a full-service broker like myself, you could have gone the discount broker route. The options are just way more clear now. And in turn, the value proposition that I as an agent need to make needs to reflect that clarity. I've never been the type who wants to work with as many people as possible, do as many deals as possible, etc etc. I want to work with people who want to work with me, and see the value in what they're paying for. That's always been the case, and it will still be the case.

1) Professionalism has been heightened

I was in an interesting training the other week that spoke about how effective salespeople know how to intentionally shift dialogue between the professional to the casual/personal and back again. I've found this to be especially true in real estate (as opposed to used car dealerships) because this is a relationship-based industry. We spend a lot of time together, often in our homes or other peoples' homes. We get to know each others' families and finances. It's not a quick sale. This mix of the professional and the personal will always be part of the agent-client relationship, but now the former has been ramped up. And not just "t"s crossed and "i"s dotted. There's never been more of a need for me and other agents to justify our professional value, and YOU are going to benefit from this. Realtors are a competitive breed - and I am certainly of that ilk - so what you're going to see is even greater lengths being reached. If we're currently working together, I'm hoping you'll agree that you've already seen this. If we're yet to formally start working together, I welcome the opportunity to not just tell, but show you how I'm the best professional for the job.

So there you have it - the top 5 reasons you should be happy with changes in the real estate industry. If you have questions, I am here for you! And please note that I am still serving buyers, sellers, and investors. You may see some agents shifting entirely over to sellers...but I will not be one of them. Everyone deserves representation.

What's in the News?

The Market

• In March, newly-listed homes increased by 11.6% year-over-year in the 50 largest metros, according to Realtor.com. The inventory of newly-listed homes increased most in the West (21.3% YOY) and South (15.6%). Here are other key numbers from March:

○ Homes actively for sale were up 23.5%, marking the fifth straight month of growth.

○ The total number of unsold homes, including homes that are under contract, increased 16.5% YOY.

○ The median price of homes for sale remained relatively stable compared with the same time last year, increasing by only 0.2%.

○ Homes spent 50 days on the market, which is two days shorter than last year, and 12 days shorter than before the COVID-19 pandemic.

○ Price reductions rose to 15% last month, up 2.2% compared to a year ago. That's the highest level in five years.

• Millennials have overtaken baby boomers to become the largest group of home buyers, making up 38% of the overall share of homebuyers, followed by Gen X (24%). First-time homebuyers made up 32% of all buyers. That’s according to the newlyreleased Generational Trends Report from NAR which tracked data between July 2022 and June 2023.

• According to a new report from Redfin, median down payments in February were up 24.1% from a year ago, the largest annual increase in percentage terms since April 2022. $55,640 was the median down payment, up from $44,850

• 34.5% of U.S. home purchases made were all-cash deals, up from 33.4% a year earlier. The all-time high for all-cash deals is 38% (in 2013).

• The typical homebuyer’s down payment was equal to 15% of the purchase price, up from 10% a year earlier.

• 15.5% of mortgaged home sales used an FHA loan. Those loans are more common now than they were during the pandemic homebuying boom.

• The monthly cost for the average one-bedroom apartment bumped up to $1,487, a 0.3% increase from February, according to a new report from Zumper, a real estate data site. The price of a typical two-bedroom apartment also jumped 0.5% to $1,847. Rents across the U.S. grew for the first time in 6 months.

• 36% of Millennial and Gen Z homebuyers plan to use money gifted from family members for their downpayment, according to @nowbamedia.

• Boston has the 4th most million-dollar homes of any metro in the country according to Zillow, behind only New York, San Francisco, and Los Angeles.

Rates and the Economy

• The Federal Reserve stands poised to ease rates, contingent upon a compelling impetus from the economy. Recent economic data suggests a lack of urgency for immediate action. Key focus remains on inflation metrics and payroll figures, with today's nonfarm payroll release surpassing expectations, adding 303,000 jobs compared to the projected 214,000. The supply of labor is increasing with the current rate of immigration, so the question is, how much if any will the strong labor growth impact inflation and wage pressures? Despite the market anticipation of 50-75 basis points in rate cuts in 2024, the prevailing strong economic indicators do not signal an imminent necessity to start the easing cycle.

• The Freddie Mac fixed rate for a 30-year mortgage fell slightly last week, dropping from 6.87% to 6.79%. It has stubbornly remained within the range of 6.6% to 7% since last December. Unsurprisingly, this is affecting mortgage applications nationwide. Applications to refinance a home loan fell 2% for the week and were 9% lower than one year ago. Applications for a mortgage to purchase a home dropped 0.2% week-toweek and were down 16% year-over-year.

The Industry

• New ruling by U.S. Court of Appeals allows the DOJ to reopen NAR investigation

• NAR and the MBA are pushing the VA to change rules that currently prohibit Veteran buyers from paying realtor commissions. The change is seen as necessary to ensure VA homebuyers can make competitive offers and are not limited to properties following the NAR commission lawsuit settlements.

Local News

• According to MAR, legislators are considering a bill that would further reduce housing inventory and raise housing costs in the state by taxing homeowners. Allowing these new taxes would set a dangerous precedent that would damage the housing market and our economy. Communities seeking these taxes have blocked housing development and refused available affordable housing funding for decades. Instead of righting these wrongs through existing funding mechanisms and zoning reforms, they want new taxes that protect the status quo, drive down inventory and prevent housing diversity and inclusivity.