Real estate trends: Difference between revisions
→Lower commission rates: add references |
m Reverted 1 edit by CuriosityCatalyst (talk) to last revision by MrOllie |
||
| (225 intermediate revisions by more than 100 users not shown) | |||
| Line 1: | Line 1: | ||
{{Multiple issues| |
|||
| ⚫ | |||
{{globalize|date=August 2010}} |
|||
{{Refimprove|date=August 2010}} |
{{Refimprove|date=August 2010}} |
||
| ⚫ | |||
| ⚫ | ''' |
||
{{Globalize|date=August 2010}}{{Update|date=August 2019}} |
|||
}} |
|||
| ⚫ | A '''real estate trend''' is any consistent pattern or change in the general direction of the [[real estate]] industry which, over the course of time, causes a statistically noticeable change. This phenomenon can be a result of the economy, a change in [[Mortgage loan|mortgage]] rates, consumer speculations, or other fundamental and non-fundamental reasons. |
||
== |
==Buyer agency growth== |
||
At one time, all [[real estate broker]]s and agents, or [[ |
At one time, all [[real estate broker]]s and agents, or [[Realtors]], practiced "single agency", meaning they represented only the seller. In the 1990s, the concept of [[buyer agent|buyer agency]] became popular, allowing a buyer to retain an agent who would represent the best interests of the buyer alone. The first national company to provide this service was The Buyer's Agent, Inc. A 2008 study by ''Consumer Reports'' indicates that prior to this development, a Realtor was presumed by state law to be working for the seller. The same study shows that buyers using buyer agents obtained a savings of $5000 in the price of the home as compared to prices paid by unrepresented buyers.<ref>{{cite web|url=http://www.consumerreports.org/cro/money/real-estate/real-estate/what-the-survey-found/real-estate-what-the-survey-found.htm|title=Consumer Reports Magazine|website=Consumerreports.org|access-date=5 March 2019}}</ref> It remains true that an unrepresented real estate buyer can still call the sellers agent to arrange a showing of the property. In such cases, the buyer should be advised by Agency Disclosure Laws (a state law in every state in the U.S.) that any information obtained, as well as all conversations and negotiations undertaken, will be for the benefit of the seller. |
||
== |
==Lower commission rates== |
||
Historical rates are presented in a report by the [[Government Accountability Office]], Congress's investigative arm. A 2005 study<ref>[http://www.gao.gov/new.items/d05947.pdf GAO Report, August 2005], "Real Estate Brokerage, Factors That May Affect Price Competition", Gao.gov</ref> of real estate commission rates, reported that realtors tended to charge, "about 5 percent to 7 percent of a property's selling price...". More recently, CBS News, "60 Minutes" television news magazine reported in 2007 that competitive pressure resulting from a record number of licensed agents has driven down the average sales commission rates paid by sellers.<ref>{{cite web|url=https://www.cbsnews.com/news/chipping-away-at-realtors-six-percent-11-05-2007/|title=Chipping Away At Realtors' Six Percent|website=Cbsnews.com|date=11 May 2007 |access-date=5 March 2019}}</ref> A new breed of marketplaces that enable agents to compete for sellers further add pressure to the commission rate structure. |
|||
In some states, companies such as Redfin still advertise a commission, but provide a rebate to sellers based on the quality of their surveys reflected in post-close surveys. This is also fraught with difficulties.<ref>{{cite web|url=https://www.redfin.com/blog/2013/06/redfin-ends-commission-savings-for-oregon-home-buyers.html|title=Redfin Ends Commission Savings for Oregon Homebuyers|first=Redfin|last=Real-Time|date=13 June 2013|website=Redfin.com|access-date=5 March 2019}}</ref> |
|||
== Agent/brokers relationships == |
|||
| ⚫ | |||
Traditional real estate brokerages "split" commission with agents. Historically, most brokerages paid 50 percent commission to agents, and retained 50 percent for brokerage operation costs such as facilities, utilities, clerical staff, office machinery, yard signs and marketing.{{Citation needed|date=August 2010}} This arrangement was known as a 50/50 split. Under this arrangement, the brokerage paid almost all of the agent's costs. More successful agents might negotiate a higher percentage of the commission. With the introduction of the 100 percent commission plan models popularized by RE/MAX and Keller Williams Brokerages, other companies were forced to raise their commission splits to as high as 70/30 or even 90/10 or 100 percent.{{Citation needed|date=August 2010}} The first number represents the percent of commission retained by the agent. With high agent splits came a shifting of costs from brokerage to agent. Agents on higher splits tend to work from home or pay desk fees (monthly fees for the use of office space). Under these arrangements, agents often pay for their own phone and fax lines, office furniture, clerical assistance, signs, and advertising.{{Citation needed|date=August 2010}} |
|||
Another trend is the emergence of alternatives to the commission model, including [[Flat-fee MLS|flat-fee]], hourly home selling, and for sale by owner tools. |
|||
| ⚫ | |||
Buyers used to drive neighborhoods and call agents when they found a house they want to see. Newspaper ads were a very large part of the marketing of a home for sale. Most ads were paid for by the real estate broker or agent who listed the property.{{Citation needed|date=August 2010}} The broker or agent would recoup expenses only if and when the house sold. Since the 1990s, buyers have relied more and more on Internet marketing, and less on print advertising.{{Citation needed|date=August 2010}} It is estimated that as many as 80 percent of buyers use the Internet to identify and screen homes during their search.{{Citation needed|date=August 2010}} |
|||
| ⚫ | |||
| ⚫ | |||
The [[Internet]] has become a major [[lead generation]] method for real estate marketing, eclipsing local newspapers and all other sources as the consumer's most preferred method to learn about homes for sale. When the National Homebuying Survey was conducted in 1981, the most important rated information source in the home search, after agents, was newspaper ads. In 2020, 97% of homebuyers used the internet in their home search.<ref>{{Cite web |date=September 2021 |title=Real Estate in a Digital Age |url=https://www.nar.realtor/research-and-statistics/research-reports/real-estate-in-a-digital-age |website=National Association of Realtors}}</ref> With social distancing and health guidelines coming from the COVID-19 pandemic, technology has played an even larger role in the buying and selling of homes according to a study by the [[National Association of Realtors]] (NAR). The majority of real estate companies use popular internet marketing methods like [[SEO]], advertising, and social media. |
|||
| ⚫ | The [[United States Department of Justice Antitrust Division]] announced the launch of a new website in October 2007 to "educate [[consumer]]s and policymakers about the potential benefits that competition can bring to consumers of real estate brokerage services and the barriers that inhibit that competition."{{ |
||
Websites like [[Craigslist]] ([[United States]]), [[Daft.ie]] ([[Republic of Ireland]]) and [[Gumtree]] ([[UK]]) became in the 21st century the main sources for both buyers and sellers. Rapid changes in the market environment forced some countries to introduce new laws regulating real property market on the web. |
|||
| ⚫ | |||
* [[Independent contractor]] |
|||
Even with the introduction of the internet, traditional media and methods of generating leads were still an important part of Real Estate trend: |
|||
{{blockquote|Though the internet was the most popular source, buyers also cited information from real-estate agents (85%), yard signs (62%), open houses (48%), and print or newspaper ads (47%). Fewer buyers relied on home books or magazines, home builders, television, billboards, and relocation companies.<ref>{{cite web|url=https://www.marketingcharts.com/industries/financial-services-6809|title=Internet, Agents, First Stops for Home Buyers|date=12 November 2008|website=Marketingcharts.com|access-date=5 March 2019}}</ref>}}[[Mobile app]]lications are also changing the way real estate agents conduct business.<ref>{{Cite web|url=https://www.forbes.com/sites/allbusiness/2014/06/24/10-best-apps-for-real-estate-agents-and-brokers/#764a4cd87e05|title=10 Best Apps For Real Estate Agents And Brokers|website=Forbes.com|access-date=2016-03-28}}</ref> Apps like [[Zillow]], [[Trulia]], Zumper, and [[Rentberry Inc.|Rentberry]] are primarily accessed via mobile devices and have become very popular sources for listing properties for sale or rent. These applications function similarly to websites like Craigslist in that they allow agents or private sellers to list a property like they would in a classified ad albeit with a more dynamic display as well as mechanisms for users browsing a listing to contact the seller directly from the app. These platforms allow buyers to view homes in their desired area from anywhere.<ref>{{Cite web|last=Thompson|first=Jeremy|date=2014-01-27|title=How the Internet Has Changed the Real Estate Industry|url=https://www.homes.com/blog/2014/01/how-the-internet-has-changed-the-real-estate-industry/|access-date=2021-10-14|website=Homes.com|language=en-US}}</ref> Mobile applications are particularly prominent with millennial real estate customers. |
|||
Real estate investment continues to grow in popularity across the United States, as both new and seasoned investors look for opportunities in a competitive market. With the rise in competition, many [[Real estate investing|real estate investors]] are turning to digital marketing strategies, including search engine optimization (SEO), social media marketing, and email campaigns, to reach potential clients quickly. In America, local SEO<ref>{{Cite web |title=Digital Marketing And SEO For US Real Estate Investors |url=https://seotorealestateinvestors.com/digital-marketing-and-seo-for-us-real-estate-investors/ |access-date=2024-09-17 |website=SEO To Real Estate Investors |language=en}}</ref> has become a valuable tool for targeting specific geographic markets, allowing investors to connect with clients in both urban centers and more remote locations. The emphasis on digital channels has only increased following the COVID-19 pandemic, as the shift towards online engagement has made technology-driven marketing more vital for real estate success |
|||
| ⚫ | |||
| ⚫ | The [[United States Department of Justice Antitrust Division]] announced the launch of a new website in October 2007 to "educate [[consumer]]s and policymakers about the potential benefits that competition can bring to consumers of real estate brokerage services and the barriers that inhibit that competition."<ref>{{cite web|url=https://www.justice.gov/archive/opa/pr/2007/October/07_at_803.html|title=Antitrust Division Launches Web Site on Competition in the Real Estate Brokerage Industry|website=Justice.gov|access-date=5 March 2019}}</ref> Among other findings, they report that certain new sales models can reduce consumer home sales costs "by thousands of dollars. For example, in states that allow open competition, some buyer's brokers rebate up to two-thirds of their [[Commission (remuneration)|commission]] to the customer, and some seller's brokers offer limited-service packages that let sellers list their homes on the local [[Multiple Listing Service]] (MLS) for as little as a few hundred dollars."<ref>{{cite web|url=http://www.usdoj.gov/atr/public/press_releases/2007/226685.htm|title=Antitrust division launches website on competition in the real estate brokerage industry|access-date=2007-10-17|url-status=dead|archive-url=https://web.archive.org/web/20071013011519/http://www.usdoj.gov/atr/public/press_releases/2007/226685.htm|archive-date=2007-10-13}}</ref> The Justice Department updated their information in a new website in 2016.<ref>{{cite web|url=https://www.justice.gov/atr/competition-and-real-estate-0|title=Competition and Real Estate|date=25 June 2015|website=Justice.gov|access-date=5 March 2019}}</ref> |
||
== Renting == |
|||
Renting has recently been gaining popularity in the United States. This has become a more popular residential choice for younger generations due to student loan debt and more convenient locations. Some other pros for renting are amenities, flexibility, and credit building opportunities. The demand for rental units is increasing as there become more perks to renting.<ref>{{Cite news|title=Perspective {{!}} The top five reasons more people are choosing to rent rather than buy a home|language=en-US|newspaper=Washington Post|url=https://www.washingtonpost.com/business/2020/01/27/top-five-reasons-more-people-are-choosing-rent-rather-than-buy-home/|access-date=2021-11-04|issn=0190-8286}}</ref> |
|||
| ⚫ | |||
* [[Real estate]] |
|||
* [[United States housing bubble]] |
* [[United States housing bubble]] |
||
* [[Real Estate Transaction Specification]] (RETS) |
* [[Real Estate Transaction Specification]] (RETS) |
||
* [[Flat fee mls|Reduced-commission MLS Listings]] |
* [[Flat fee mls|Reduced-commission MLS Listings]] |
||
* [[Internet Data Exchange|Internet Data Exchange (IDX)]] |
|||
* [[Pocket listing]] (or exclusive listing) |
* [[Pocket listing]] (or exclusive listing) |
||
* [[List of real estate topics]] |
* [[List of real estate topics]] |
||
*[[market analysis#market trends|Market trend]] |
|||
| ⚫ | |||
*[[Case–Shiller index]] |
|||
== |
==References== |
||
{{Reflist}} |
{{Reflist}} |
||
== |
==External links== |
||
* [ |
* [https://www.justice.gov/atr/public/real_estate/ U.S. Department of Justice: Competition and Real Estate] |
||
| ⚫ | |||
{{DEFAULTSORT:Real Estate Trends}} |
{{DEFAULTSORT:Real Estate Trends}} |
||
[[Category:Real estate]] |
[[Category:Real estate in the United States]] |
||
| ⚫ | |||
[[Category:Trade associations]] |
|||
Latest revision as of 10:23, 14 December 2024
 | This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages)
|
A real estate trend is any consistent pattern or change in the general direction of the real estate industry which, over the course of time, causes a statistically noticeable change. This phenomenon can be a result of the economy, a change in mortgage rates, consumer speculations, or other fundamental and non-fundamental reasons.
Buyer agency growth
[edit]At one time, all real estate brokers and agents, or Realtors, practiced "single agency", meaning they represented only the seller. In the 1990s, the concept of buyer agency became popular, allowing a buyer to retain an agent who would represent the best interests of the buyer alone. The first national company to provide this service was The Buyer's Agent, Inc. A 2008 study by Consumer Reports indicates that prior to this development, a Realtor was presumed by state law to be working for the seller. The same study shows that buyers using buyer agents obtained a savings of $5000 in the price of the home as compared to prices paid by unrepresented buyers.[1] It remains true that an unrepresented real estate buyer can still call the sellers agent to arrange a showing of the property. In such cases, the buyer should be advised by Agency Disclosure Laws (a state law in every state in the U.S.) that any information obtained, as well as all conversations and negotiations undertaken, will be for the benefit of the seller.
Lower commission rates
[edit]Historical rates are presented in a report by the Government Accountability Office, Congress's investigative arm. A 2005 study[2] of real estate commission rates, reported that realtors tended to charge, "about 5 percent to 7 percent of a property's selling price...". More recently, CBS News, "60 Minutes" television news magazine reported in 2007 that competitive pressure resulting from a record number of licensed agents has driven down the average sales commission rates paid by sellers.[3] A new breed of marketplaces that enable agents to compete for sellers further add pressure to the commission rate structure.
In some states, companies such as Redfin still advertise a commission, but provide a rebate to sellers based on the quality of their surveys reflected in post-close surveys. This is also fraught with difficulties.[4]
Another trend is the emergence of alternatives to the commission model, including flat-fee, hourly home selling, and for sale by owner tools.
Marketing trends
[edit]The Internet has become a major lead generation method for real estate marketing, eclipsing local newspapers and all other sources as the consumer's most preferred method to learn about homes for sale. When the National Homebuying Survey was conducted in 1981, the most important rated information source in the home search, after agents, was newspaper ads. In 2020, 97% of homebuyers used the internet in their home search.[5] With social distancing and health guidelines coming from the COVID-19 pandemic, technology has played an even larger role in the buying and selling of homes according to a study by the National Association of Realtors (NAR). The majority of real estate companies use popular internet marketing methods like SEO, advertising, and social media.
Websites like Craigslist (United States), Daft.ie (Republic of Ireland) and Gumtree (UK) became in the 21st century the main sources for both buyers and sellers. Rapid changes in the market environment forced some countries to introduce new laws regulating real property market on the web.
Even with the introduction of the internet, traditional media and methods of generating leads were still an important part of Real Estate trend:
Though the internet was the most popular source, buyers also cited information from real-estate agents (85%), yard signs (62%), open houses (48%), and print or newspaper ads (47%). Fewer buyers relied on home books or magazines, home builders, television, billboards, and relocation companies.[6]
Mobile applications are also changing the way real estate agents conduct business.[7] Apps like Zillow, Trulia, Zumper, and Rentberry are primarily accessed via mobile devices and have become very popular sources for listing properties for sale or rent. These applications function similarly to websites like Craigslist in that they allow agents or private sellers to list a property like they would in a classified ad albeit with a more dynamic display as well as mechanisms for users browsing a listing to contact the seller directly from the app. These platforms allow buyers to view homes in their desired area from anywhere.[8] Mobile applications are particularly prominent with millennial real estate customers.
Real estate investment continues to grow in popularity across the United States, as both new and seasoned investors look for opportunities in a competitive market. With the rise in competition, many real estate investors are turning to digital marketing strategies, including search engine optimization (SEO), social media marketing, and email campaigns, to reach potential clients quickly. In America, local SEO[9] has become a valuable tool for targeting specific geographic markets, allowing investors to connect with clients in both urban centers and more remote locations. The emphasis on digital channels has only increased following the COVID-19 pandemic, as the shift towards online engagement has made technology-driven marketing more vital for real estate success
US government involvement
[edit]The United States Department of Justice Antitrust Division announced the launch of a new website in October 2007 to "educate consumers and policymakers about the potential benefits that competition can bring to consumers of real estate brokerage services and the barriers that inhibit that competition."[10] Among other findings, they report that certain new sales models can reduce consumer home sales costs "by thousands of dollars. For example, in states that allow open competition, some buyer's brokers rebate up to two-thirds of their commission to the customer, and some seller's brokers offer limited-service packages that let sellers list their homes on the local Multiple Listing Service (MLS) for as little as a few hundred dollars."[11] The Justice Department updated their information in a new website in 2016.[12]
Renting
[edit]Renting has recently been gaining popularity in the United States. This has become a more popular residential choice for younger generations due to student loan debt and more convenient locations. Some other pros for renting are amenities, flexibility, and credit building opportunities. The demand for rental units is increasing as there become more perks to renting.[13]
See also
[edit]- Real estate
- United States housing bubble
- Real Estate Transaction Specification (RETS)
- Reduced-commission MLS Listings
- Pocket listing (or exclusive listing)
- List of real estate topics
- Market trend
- Category:Real estate bubbles
- Case–Shiller index
References
[edit]- ^ "Consumer Reports Magazine". Consumerreports.org. Retrieved 5 March 2019.
- ^ GAO Report, August 2005, "Real Estate Brokerage, Factors That May Affect Price Competition", Gao.gov
- ^ "Chipping Away At Realtors' Six Percent". Cbsnews.com. 11 May 2007. Retrieved 5 March 2019.
- ^ Real-Time, Redfin (13 June 2013). "Redfin Ends Commission Savings for Oregon Homebuyers". Redfin.com. Retrieved 5 March 2019.
- ^ "Real Estate in a Digital Age". National Association of Realtors. September 2021.
- ^ "Internet, Agents, First Stops for Home Buyers". Marketingcharts.com. 12 November 2008. Retrieved 5 March 2019.
- ^ "10 Best Apps For Real Estate Agents And Brokers". Forbes.com. Retrieved 2016-03-28.
- ^ Thompson, Jeremy (2014-01-27). "How the Internet Has Changed the Real Estate Industry". Homes.com. Retrieved 2021-10-14.
- ^ "Digital Marketing And SEO For US Real Estate Investors". SEO To Real Estate Investors. Retrieved 2024-09-17.
- ^ "Antitrust Division Launches Web Site on Competition in the Real Estate Brokerage Industry". Justice.gov. Retrieved 5 March 2019.
- ^ "Antitrust division launches website on competition in the real estate brokerage industry". Archived from the original on 2007-10-13. Retrieved 2007-10-17.
- ^ "Competition and Real Estate". Justice.gov. 25 June 2015. Retrieved 5 March 2019.
- ^ "Perspective | The top five reasons more people are choosing to rent rather than buy a home". Washington Post. ISSN 0190-8286. Retrieved 2021-11-04.
External links
[edit]| By location | |
|---|---|
| Types | |
| Sectors | |
| Law and regulation | |
| Economics, financing and valuation |
|
| Parties | |
| Other | |
