Keller Home Loans is proud to offer this list of current homebuying trends to help real estate agents stay ahead of the market and best serve their clients.
In an ever-changing economic climate, it is crucial for real estate agents to stay ahead of housing market trends in order to best serve their clients.
By positioning yourself as a knowledgeable, reliable resource for buyers in your market, you can stand out from the competition and build a reputation for empowering your buyers to make informed decisions.
To that end, the real estate experts here at Keller Home Loans are proud to provide a list of the five most important homebuying trends real estate agents need to know in 2023.
The Top 5 Homebuying Trends for Agents to Watch This Year
Here is what you and your buyers can expect to see from the housing market in 2023.
1. Localized Market Corrections
While many markets are still seeing year-over-year increases in the median sales price, others are seeing prices come down a bit following double-digit growth from the pandemic era.
West Coast tech hubs like Seattle, San Francisco, and San Jose seeing some of the most dramatic market corrections with year-over-year decreases in median sales prices of 17.1%, 11.8%, and 9.19% respectively (according to Redfin data from April 2023). For comparison, sales prices in hot markets like Ft. Lauderdale, FL have grown by over 14% from April 2022 to April 2023.
These corrections are primarily due to the unsustainable gains that caused property in these markets to become over-valued. The reduction in values serves to bring prices back in line with more sustainable rates of growth.
What Market Corrections Mean for Agents
If you work in a market where prices are declining, make sure potential buyers are aware of the dip. Buyers unwilling to purchase at the $1,000,000 mark last year might be willing to buy at $925,000 this year. Also, make sure your buyers know that price drops are temporary. Values will come back up at some point, so your buyers may want to make a move now to avoid paying more later.
2. Stabilizing Mortgage Interest Rates
On May 3, the Federal Reserve voted to increase its key interest rate by one-quarter of a percentage point in its ongoing fight against inflation. But the Fed also indicated that this may be the final rate hike for the year as long as inflation rates continue to fall.
This could be good news for buyers who were afraid of continued increases in interest rates. The bad news for buyers is that there’s no sign of rates coming down in the immediate future.
What Stabilizing Interest Rates Mean for Agents
Buyers are being inundated with media sources explaining how much more expensive homeownership is because of the post-pandemic interest rate hikes. Put today’s interest rates in perspective for your potential buyers. Yes, rates are higher today than we’ve been used to since the housing collapse of 2008. But, compared to the double-digit rates of the 1970s and 1980s, today’s rates are reasonable.
It’s also important to let your buyers know that they don’t have to be locked into an interest rate. Your buyers can consider an adjustable-rate mortgage so that their rate fluctuates with the market. Or, if they choose a fixed-rate mortgage, they might consider a refinance to get a lower rate if rates drop in the future.
3. Low Inventory
Despite higher interest rates dampening buyer demand nationwide, we’ve not seen any sign of a housing market crash. This is partly because the limited inventory of available homes for sale has kept the supply and demand equation in balance.
Home builders have been hesitant to develop new housing since The Great Recession left many of them without buyers for their new construction projects back in the first decade of the 2000s. Combine this with the fact that more homeowners are choosing to age in place rather than downsizing, as previous generations had done, and we have a persistent shortage of housing.
What Low Inventory Means for Agents
Low inventory means that we are unlikely to see a housing market crash. But some buyers are still waiting for a crash to bring home prices down to pre-pandemic levels. Educate your clients on how the lack of inventory is supporting the perceived “high” prices. And point out the lifestyle benefits of becoming a homeowner so that your buyers aren’t only considering the financial optimization of their purchase.
4. Additional Online Real Estate Services
As technology advances, more services are available to homebuyers online. Some services (like iBuyers and discount “virtual agents”) are aimed at bypassing traditional real estate agents. But many of these services are being developed to support real estate agents.
Take virtual tours, 3D floorplans, and virtual staging for example. These services allow buyers to get a feel for a property without visiting it in person. In fact, 90% of millennial homebuyers report being willing to buy a home sight unseen.
What Additional Online Services Mean for Agents
You can take advantage of today’s tech solutions to make your real estate business more efficient. Use virtual staging to help buyers visualize what a vacant home could look like furnished. Post 3D floorplans so buyers can see if a layout works for them before they contact you. And offer virtual tours to make showings more convenient for your buyers and less intrusive for your sellers.
5. Homebuying Assistance Programs to Mitigate Risk
With higher home prices and interest rates than we’ve been accustomed to, homebuyers are exposed to greater financial risk. To help mitigate this risk, governmental departments and lenders are both expanding homebuyer assistance programs.
In addition to the government-backed mortgage loans (FHA, VA, and USDA loans), the federal government has announced new incentives for homebuyers, particularly first-time buyers and low-income buyers. The Federal Housing Finance Agency, for example, has announced a First-Time Home Buyer Mortgage Rate Discount, which reduces conventional mortgage rates by up to 1.75 percentage points for eligible buyers. Many state and local governments also offer down payment assistance programs to reduce the upfront expense of purchasing a home.
What Homebuying Assistance Programs Mean for Agents
Homebuying assistance programs make it financially easier for your prospective buyers to become homeowners. It can be difficult for agents to keep up with the many grants, loans, and other offerings available to buyers, especially as the eligibility requirements can be complex and the available programs can change regularly. That’s why Keller Home Loans is committed to offering mortgage resources for real estate agents. Our team remains current on the available programs that can make homeownership more accessible for your buyers.
The Bottom Line
Keller Home Loans remains dedicated to serving real estate agents and brokers as you help your buyers find and secure their dream homes. We invite you to review our resources, call us with specific questions, or connect your buyers to us for direct assistance.
