Recalibrate: Adjusting Business Models to Be More Efficient
There are more real estate agents than at any other time.
There are fewer properties, based on population, than any other time.
The real estate business has changed; the issue is that most professionals haven’t.
Everybody needs order flow, AKA leads; but the means by which they come has changed and is going to change even more with the introduction of AI.
Because inventories are so low, agents cannot rely upon a non-systemic model. Also, as mortgage rates move into the 7% range, the current sellers are not so disposed to sell when they will have to end up paying a higher mortgage payment, even though they are downsizing.
The 30-year fixed mortgage rate is around 6.9% this week, up from 4.99% in 2022.
And with the higher rates comes lower demand. Right now it is not just inventories that are down, but according to the Mortgage Bankers Association, demand for mortgages is down 26% from 2022.
According to a Redfin report, real estate transaction volume is at a 10-year low, with only 1% of the nation’s homes changing hands in the first half of 2023.
And as the number of transactions declines, so do the advertising services, which declined 3% year-over-year to $380 million, as in the case of Zillow. The interesting point of this metric lies in the sustained strong demand for ads from agents, which only fell marginally.
Traffic Drops Slightly
The search traffic to the Redfin and Zillow platforms fell. Redfin’s mobile apps and website reported 52 million average monthly users, which is down from 53 million in 2022. Zillow Group saw a 3% decrease in average monthly unique visitors, totaling 226 million, representing a decline of 8% in visits compared to 2022.
The digital interest has not abated, just the inventories and the deep-discounted mortgages.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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