Real estate trends
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Real estate trends is a generic term used to describe 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.
Property Values Declining Instead Of Rising
MSN reports that home prices have dropped by a record amount[1] and illustrates with a chart of historical real estate prices. See "S&P/Case & Shiller Housing Price Indices". Real estate property values have trended upward in the range of 2 - 5 percent almost every year since World War II, but for the last 3 to 5 years they have declined. From 2007 to 2008 prices declined as much as 39% per year -though the average decline appears to be lower. [2]
Buyer agency growth
At one time, all real estate brokers and agents, or realtors, practiced "single agency", meaning they represented only the buyer or only the seller - and generally 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. 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.[3] 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' investigative arm. A 2005 study[4] of real estate commission rates, reported that realtors tended to charge, "about 5 percent to 7 percent of a property's selling price..." This indicates a range with an average of 6 percent. 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. The current average at that time was reported to be roughly five percent (slightly higher or lower in some markets).[5]
Marketing trends
The internet has come to dominate real estate marketing, eclipsing local newspapers and all other sources as the consumers most preferred method to learn about homes for sale.[6] "An overwhelming majority (87%) of recent home buyers in the US say they used the internet as an information resource during their home-buying process, and nearly one-third say they first learned about their newly purchased home from an online channel, according to a study by the National Association of Realtors (NAR).
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.[7]
U.S. government involvement
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."[citation needed] 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."[8]
See also
- Independent contractor
- United States housing bubble
- Real Estate Transaction Specification (RETS)
- Reduced-commission MLS Listings
- Internet Data Exchange (IDX)
- Pocket listing (or exclusive listing)
- List of real estate topics
References
- ^ Home prices drop by a record amount
- ^ Article, Real Estate on MSNBC[1]
- ^ Consumer Reports Magazine
- ^ GAO Report, August 2005, "Real Estate Brokerage, Factors That May Effect Price Competition"
- ^ CBS News: 60 Minutes
- ^ National Association of Realtors
- ^ http://www.marketingcharts.com/print/internet-realtors-most-popular-resources-for-home-buyers-6809/
- ^ "Antitrust division launches website on competition in the real estate brokerage industry". Retrieved 2007-10-17.