To all the agents in the house,
Intrigue has abounded the last couple of weeks! Some companies, namely iBuyers Offerpad and Opendoor, did better than expected, according to quarter one earnings reports. Others, like Compass, continue to struggle with their bottom line. And still others (REX) near a possibly complete demise.
But I wanted to take a step back a bit, and ask readers of this newsletter: What is it like being a real estate agent right now? How is it different from one year ago? And, how is it different compared to before the pandemic?
I'm not asking for philosophical musings here, though those are welcome! I'd like stories from people working in a housing market, where, on the whole, agents are not able to meet their client's demands.
"The homes-for-sale inventory in March was essentially at an all-time low with less than a million homes on the market," National Association of Realtors' chief economist Lawrence Yun stated Wednesday. "Around 1.5 million homes were on the market before the pandemic."
This national assessment of inventory comes amid the U.S. Census Bureau releasing findings on April residential construction, which my colleague Brooklee Han reported on. The report shows an annualized rate of 1.8 million building building permits were issued compared to last April, a 3% increase. Not enough to meet demand, but fine.
But the number of homes completed were 1.3 million, down 8.6% from April 2021.
More distressingly, in my opinion, the difference between the number of housing permits issued and the number of homes actually built is 40%. (The gap between housing "starts" and completions is not much better, about 33%.) This indicates that even when single-family housing developers win the approval of local zoning boards and planning commissions, something — lack of labor, lack of construction materials, poor homebuilder management? — is going wrong.
Real estate agents tend to be an independent and industrious group. There are few, I imagine, who will read reports and be like, "Wow, these macroeconomic numbers really decrease the chance of me closing on a deal. I should go back to bed, or scour job listings sites." However, agents must make adjustments when the bad (low inventory) outweighs the good (skyrocketing demand).
Agents, what are those adjustments now? How has your job changed? Please email me anonymously to mblake@hwmedia.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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