Consumer confidence is key in the current housing market landscape, according to Joyce Rey, the executive director at Coldwell Banker Global Luxury. Right now, most buyers see a recession coming, which is leading to a lot of sitting on the fence, she explained.
Rey spoke about the conditions of the current market on the first panel of Wednesday’s general session at Inman Connect in New York City.
“We probably are in for a correction, but how big will it be?” Rey said.
“There are buyers waiting on the sideline for a while, waiting to get into the market, and they need a push,” Peters said.
Peters agreed that the market is probably due for a correction some time mid-year, but the recession won’t be as deep as it was in 2008.
Daryl Fairweather, the chief economist at Redfin agreed that the next recession likely won’t be as damaging, but there’s no exact way to predict when and how it will happen. If there was, they would know how to prepare.
“When the next recession happens, it’s not going to be something anyone anticipates,” Fairweather said.
Right now in the current market, fewer and fewer homes are affordable to the typical American, according to Fairweather, but that is changing slightly. Interest rates peaked in November and have since gone down.
“The typical person still wants an affordable starter home,” Fairweather said. “Unfortunately, those homes haven’t been built.”
With the market turning and more homes sitting on the market for longer, especially in the luxury space, the panel’s experts offered real estate agents advice on how to navigate that change. For Rey, the shift means being more selective in choosing listings and instead focusing more on buyers.
Fairweather, explained that agents should only focus on showing their clients the most recent data available and not sale data from early 2018.
“If you can get your hands on current listings or just recently sold — that’s going to be the most informative,” Fairweather said.
For agents who don’t have the tech infrastructure of a brokerage like Redfin, getting that sort of recent data is going to rely on agent-to-agent relationships, Peters said.
She encouraged agents to call some of their agent friends and ask about homes in contract. In exchange, offer them the same data.
“That’s where this network of broker relationships becomes really important,” Peters said.
David Friedman, the co-founder of WealthQuotient believes agents should use the current time to arm their consumers with as much information as possible because everyone wants to feel like they’re getting a deal.
He said it’s important not to push them, but to just give them the information. He said, especially in the upper-end markets, if someone is successful at one thing, they’ll think they’re good at everything.
“If you can be the person that is helping them, feeding them that information, they think you’re their partner,” Friedman said.
Peters disagreed a bit with his characterization, noting that what he was talking about was a “very male,” attitude and way of thinking.
“We’re talking about winning, we’re talking about dominance — in the capitalist patriarchy we live in, a lot of the people who have the type of money you’re talking about are like that,” Peters said. “But a lot of the time they have wives.”
“A home is an emotional, personal and deep connection that you feel,” Peters added.