Chris Kelly, President & CEO, Ebby Halliday Companies, North Texas; Broker Relations Liaison, the National Association of REALTORS:A global pandemic, its fiscal responses, buyer competition, a shortage of properties, rising inflation and supply-chain issues, and most recently the Russian invasion of Ukraine, have all made it difficult for brokers to thrive in an era of historic uncertainty. What are the issues we face today, how do we read the customer climate and what are we looking for down the road in today’s less-than-stable environment?
Martha Mosier, President, Berkshire Hathaway HomeServices California Properties, San Diego, California: In our Southern California region, we’ve seen a year-over-year price gain of 12.6%, and in high-end areas, an average sales price of $1.7 million as opposed to $1.3 million in 2021a gain of 23% in the midst of historically low inventoryand the variables continue in light of supply-chain issues, state building restrictions and a scarcity of land to build on. Despite all the FUD (fear uncertainty and doubt) that has risen from all this geopolitical pressure, many people are moving and our agents are busier then ever.
Daniel Dennis, President,Illustrated Properties, Palm Beach, Florida: Florida is definitely on the rise. Between the ever-busy Northeast pipeline and the steady flow to our beaches from all over the country, we’ve got a Goldilocks marketa kind of ideal reality that is keeping our agents super busy. Yes, we’ve seen a bit of economic uncertainty, but Wall Street dollars continue to flow in, boosting the luxury market. We had 100 sales in South Florida that exceeded $10 million in 2019, and over 400 in 2021.
Bess Freedman CEO, Brown Harris Stevens New York, New YorkNew York City’s market and surrounding areas are thriving, particularly now that rents are on the rise and buying is more affordable. We’ve been plagued by a lack of supply in the midst of all this global strain and uncertainty, but the fact is, people at the high end are less affected by high gas prices and the like, and in terms of discretionary spending. The momentum is slowing, but it has to return to normal. All things considered, our agents are very productive and busy.
CK: Fannie Mae Chief Economist Doug Duncan noted recently that a slowing economy and decades-high inflation, capped by Russia’s invasion of Ukraine, are weighing on the health of the U.S. economy, and that disruptions in energy and other commodities are putting upward pressure on inflation. That is certainly behind rising interest rates, and as NAR’s Lawrence Yun pointed out, some people who had qualified at a 3% mortgage rate are no longer able to buy at the 4% rateor higher, as more rate hikes are anticipated. What does this mean for the next months?
MM: It suggests the gradual slowing we anticipate after the high, pandemic-induced peak we’ve experienced. However, people who have bought homes for $5 million or more are less affected than others. In San Diego, around 10,000 building permits were issued for 2022. 75% of them are for high-density construction.
DD:People are still hearing concerns from the 24-hour news, but it is not affecting our predominantly cash market. Florida is a competitive market and agents are motivated. We’re looking at a robust spring market.
BF:As are we. Although there may be some waiting and seeing, our greatest problem is the lack of supply. Spring in New York offers inspiration. Our agents are always busy and happy.
CK:A word about happy agents.
DD:Agents are generally happy to return to the office and we want to accommodate them.
BF:Agents desire nice spaces where they are able to meet clients. There are no space reduction plans.
MM:We will be there to help you maintain a healthy environment as brokers.
The Power Broker Roundtable is brought to you by the National Association of Realtors (NAR) and Chris Kelly, NAR’s Broker Relations Liaison. This column will be available each month. It addresses issues, concerns, and milestones for brokers.
