In June 2022, the median U.S. home price hit a staggering $416,000. In tandem, home sales slid for the fifth month in a row. Inflating mortgage rates might be the primary reason that buyers are retreating to the housing market’s sidelines, but the sheer cost of U.S. homes has already been repressing many for months. In fact, in February 2022 it was reported that there was only one affordable house listed for every 65 households earning between $75,000 and $100,000.
“A combination of higher prices and higher mortgage rates have clearly shifted the dynamics in the housing market,” Lawrence Yun, NAR’s chief economist, was quoted as saying to the Wall Street Journal in July. “People who want to buy are simply priced out given the affordability challenges.”
Affordability challenges affect every economic class, but they make an especially adverse impact on members of disadvantaged communities. In a February 2022 report conducted by NAR and realtor.com, it was noted that affordability issues hold many Americans back – particularly Black Americans — from homeownership.
As the strikes against affordability continue to mount, an obvious need for solutions has materialized. Headquartered in California (one of the country’s most notoriously expensive markets), real estate technology company, SkySlope, felt compelled to take action.
“At the heart of everything SkySlope does, we aim to make a significant impact with our customers and the industry we serve,” says Tyler Smith, SkySlope CEO. “That is why we could not ignore fair housing initiatives while building our offer solution.”
More than any other point during a real estate transaction, the offer phase is vulnerable to implicit bias; or the automatic, subconscious tendency to associate negative stereotypes with particular groups.
When offers are made on a house, agents and sellers review the offers to select the “best” one. Agents, focused on helping their sellers identify the offer that is most likely to close, will often key in on loan type. Even though no malintent is likely to exist, this practice frequently leads to the dismissal of offers that are backed by government-assisted loans, such FHA. Unfortunately, this is a loan type that is far more likely to be used by members of disadvantaged communities.
Even information as seemingly benign as a potential buyer’s name can sway a seller. A buyer with a more familiar name, for instance, might be considered more “trustworthy.”
To help combat implicit bias, SkySlope is partnering with Steller MLS to pilot SkySlope Offers, an interactive, digital platform that works to level the real estate playing field for all.
When an offer is made on a home, SkySlope Offers initially conceals the buyer’s name. To further educate on the potential places bias can occur and its implications, tooltips enhance the upload workflow, reminding agents of the NARs Standard of Practice and Real Estate Code of Ethics.
One tooltip, for instance, discourages agents from uploading buyer “love letters,” or the increasingly-popular practice in which potential buyers pen a personal letter explaining why their family is the best fit for a home. The practice tends to bode well for those buyers who have a family that most resembles the seller’s.
As surging home prices continue to bar more and more Americans from the possibility of homeownership, innovation remains paramount in ensuring that those who do manage to defy the odds are provided with the unbiased opportunity to obtain a home. SkySlope Offers will be launched in partnership with Steller MLS in late 2022.
Established in 2011, SkySlope is the customer experience platform managing real estate transactions from contract to close. Serving over 450,000 real estate professionals across the U.S. and Canada, SkySlope manages nearly 3 million transactions annually. SkySlope is on a mission to build solutions that reshape the real estate industry by creating the most powerful autonomous transaction platform. For more information, visit SkySlope.