Nick Bailey, chief customer officer, also warned agents that there are no real estate “get rich quick” programs at the company’s R4 event.
The tail end of the COVID-19 pandemic was marked by soaring home sales, a rapid rise in prices, an oversupply of inventory and historically low mortgage rates.
Things are starting to change, RE / MAX chief customer officer Nick Bailey announced Thursday during a two-hour version of his Good Morning RE / MAX show at RE / MAX’s personal and virtual hybrid R4 event.
At the moment in particular, the market is starting with rising interest rates and a cooling of the home appreciation will soon follow.
“We’re already seeing the front of your markets moving a bit,” said Bailey. “It’s coming. We’ll feel a little of it by the end of this year.”
Before that year, the previous two lowest inventory years were 1995 and 2000, according to Bailey, and the market is currently half the size of available inventory as those two years.
However, low inventory levels are only an issue if you aren’t the company or agent holding those inventory levels, Bailey said before asking each RE / MAX agent to add more inventory.
Even with low inventory levels, budget formation is at an all-time high, which means that even if the winds start to shift, because demand is at such a high level, things won’t get too difficult in the market.
“For 2022 and 2023 we will still have a strong market based on that type of demand but have a savings account,” Bailey said.
According to Bailey, the number of brokers is at an all-time high, which is increasing competition within the industry. The total membership of the National Association of Realtors is currently north of 1.4 million.
But 87 percent of real estate agents fail simply because they don’t sell enough homes, Bailey noted, citing a common statistic. Bailey cautioned agents not to go out and look for companies that promise “get rich downlines,” stock awards, or those that will write you a check for $ 25,000.
“There’s no quick get-rich-quick program in this business,” said Bailey. “The 13 percent of agents who stay in this business – most of them are RE / MAX agents – stay in this business because they sell a lot of houses.”
Bailey, a former Zillow executive, also spoke about the amount of innovation that is happening in the real estate industry and urged brokers not to worry about Zillow, CoStar, or any other perceived concern at a time when a record amount of capital is flowing To make “boogeymen” in the real estate industry.
It was 50 years ago when RE / MAX was considered a boogeyman itself, but the company’s approach to real estate franchising actually helped improve everyone, resulting in real estate agents making more money.
“Zillow might be the boogeyman now, but in 1973 it was RE / MAX,” Bailey said.
The industry feared Move when it became the operator of realtor.com, and even recently there has been fear of holding back the adoption of e-signature technology, which has become an integral part of the realtor transaction.
Zillow’s acquisition of ShowingTime was just the latest thing to fret real estate agents, but in reality, it is leading to more research and development and more market participants in the showing services space.
“You’re not taking your children away,” said Bailey. “You’re not the boogeyman.”
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