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Tips for first-year real estate agents

Tips for first-year real estate agents

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CONGRATULATIONS – you have yourself a real estate license! It’s official: you are now a real estate agent.

So, what’s next? Garrett Lenderman, lead writer and researcher for Keller Williams’ publishing division, offers valuable insight.


“Your database is your business.”

Oftentimes, the difference between an average business and a mega business can be pinpointed to the number of times an agent communicates with members of their database.  

“Each time you touch people in your database, you gain a piece of mindshare, which will help position you as someone they need to talk to when they think about buying or selling real estate. The more frequently you communicate with your database, the more mindshare you gain, and the more you’re able to profit from the relationships you build within it,” Lenderman explains.

He also emphasizes that how you talk to your database matters. While the world continues to invent new, easier ways for us to communicate with one another, for real estate agents, the number one weapon of choice is still the phone. This isn’t because real estate agents are old-fashioned; it’s because voice-to-voice communication is extremely efficient and effective. When engaging with someone else, what we say is only one half of the equation – there’s also how we say it. When speaking with someone else, we constantly send and receive millions of signals that all add up to our interpretation and understanding of what’s being said. When using simple forms of communication like text messaging, we restrict our ability to use our full arsenal of communication tools.

So go out and talk to people, and make sure what you say counts. Lenderman suggests, at the very least, you should pick up the phone and call everyone in your database at least once a quarter. When designing touch plans to add to that, remember that the more personal you make it, the more effective it will be.

“No is a spectrum.”

The importance of learning that “no” and “yes” fall on a spectrum is key to becoming a successful agent. When someone tells us “no,” there’s usually a condition associated with it. When talking with people who are interested in real estate, it’s important to gauge how strongly someone is committed to their current decisions and what needs to happen for them to change their minds. Sometimes you’ll find that you have the ability to help people turn their no into a yes.

Learning to interpret people’s needs is part of being a good communicator, which is why it’s important to focus on building your skills through scripts and dialogues, as well as experience, on a daily basis.

“You have to invest in your business and you have to invest in yourself.”

Starting out viewing your job as just that – a job – is a mistake. Agents should view and handle themselves as business owners. By treating real estate as an enterprise from day one, you set yourself up for future growth and success. This means operating off of a schedule that allows you to take control of your time, investing in a database that provides you and those you’re looking to serve with continuing value, continually educating yourself so that you can educate your customers, and pairing big goals with big actions and big accountability that will guide you to the future you desire. 

“It’s never that hard again.”

Starting something from scratch is always going to be hard. Your first cold call is hard. Selling your first home is hard. The good news is that it is only going to get easier from here. Repetition, making mistakes, and learning as you go will help make things exponentially easier. Experience is a great teacher, and relying on your own and asking others to share theirs will help you on your own personal and professional growth journey.

“Take a leap.”

Jumping into a new career in real estate can be challenging. Working on outreach, making real connections with customers, creating a strong database, and treating real estate like a business are all key ingredients for success.

MREA_copy_1287094641101.jpgAssuming you’ve chosen to hang your license with Keller Williams, you’ve already started your career off on the right foot. Plug in to your market center by taking advantage of the training and expertise all around you. And, if you haven’t already, start memorizing the proven models and systems of The Millionaire Real Estate Agent –  a book that has sold more than 1,000,000 copies and helped agents just like you create a business worth owning.



Americans believe home price correction imminent

Americans believe home price correction imminent | 2017-08-09 | HousingWire

Americans increasingly believe the housing market is overheating and home prices continue to rise, and said they suspect a housing price correction may be imminent, according to the latest Modern Homebuyer Survey from ValueInsured, a provider of down payment protection for homebuyers.

However, housing confidence continues on a positive trajectory due to high home prices and low inventory. The company’s Housing Confidence Index score increased one percentage point from the first quarter to 68.7 in the second quarter on a hundred-point scale.

And nearly eight in 10 Americans, or 79%, saying homeownership is an important part of the American Dream.

But despite this commitment to homeownership, they are less confident in buying a home now and don’t believe it will hold its current value. The survey showed 57% of Americans said home prices are overvalued and unsustainable in the second quarter this year. This is an increase of seven percentage points from the first quarter.

The fear was even higher in urban areas, where 65% of Americans said homes are overvalued and unsustainable.

Prospective homebuyers were also more wary as 63% of all homebuyers and 72% of all Millennial homebuyers said they are concerned with the timing of the market and want to make sure they are not buying high.

“We see more homebuyers concerned with timing the market,” ValueInsured CEO Joe Melendez said. “This is especially true for Millennials, who are more likely to switch jobs, relocate or need to upsize in the next few years. No one wants to buy at the peak and find themselves underwater as so many did a decade ago.”

While experts explained living in a home more than seven years could lower the homebuyer’s exposure to market fluctuations, only 37% of Millennials plan to live in their next home more than six years.

“Beyond the jitters, I see in our survey an increasingly informed nation of homebuyers, who understand the risk of the market,” Melendez said. “To those concerned about a price correction, or waiting to time the market, I recommend a proactive approach. Have an exit plan, then anytime you find a home you love is a good time to buy.”


We’re Definitely Not In A Housing Bubble

We're Definitely Not In A Housing Bubble | Seeking Alpha

By FS Staff

In 2005 and 2006, Financial Sense regularly warned that US housing was in a bubble. Now, with the national average above the 2006 peak (see below), does that mean we are in a bubble again?

This was the subject of our recent FS Insider interview with Rick Sharga, a leading expert at the largest online real estate marketplace in the world, Ten-X.

Rick Sharga: We’re Are Definitely Not in a Housing Bubble

We're definitely not in a bubble. We have a handful of markets that are frothy and probably have hit an affordability wall of sorts but the fact of the matter is, while prices nominally have surpassed the 2006 peak, we're not talking about 2006 dollars. We've had 9 years of inflation to factor into home prices today...and, in fact, if you really dug into the analysis what you would find is that home prices today have basically recovered to about where they were in 2004."

This is true. If you look at a chart, inflation-adjusted home prices are exactly where they were in the first half of 2004.

But, then again, doesn't that mean that we could be just a year or two away from entering one? Not necessarily - it all depends on the growth rate.

From 2002 to the final peak in 2006, home prices were consistently growing 7.5% or greater every year and even jumped to as high as 16% on a year-over-year basis during the blow-off phase in 2005. Currently, home prices are appreciating around 6.5% each year. That's still pretty good, but still below bubble-level growth rates.


Timeline: How To Build Your New Real Estate Career From Day 1

Timeline: How To Build Your New Real Estate Career From Day 1

Timeline: How to build your new real estate career from day 1

A career as an agent can be one of the most rewarding jobs you ever have (and also one of the most challenging)

  • Develop your motivation for becoming a real estate agent.
  • Know the personal and financial resources you’ll need to succeed.
  • Get a mentor, a sponsor and a buddy.

The real estate event of the summer
Connect with other top producing agents at Connect SF, Aug 7-11, 2017

Congratulations! You have made the wonderful decision to pursue a career in real estate as a licensed real estate agent.

A career as an agent can be one of the most rewarding jobs you ever have — both personally and financially. On the flip side, there are certainly many challenges and obstacles for anyone who wants to become the next great agent.

What’ll you find in this post is a timeline and a to-do list wrapped into one. The timeline starts from the moment you make your decision to become a real estate agent.

I’ve divided the timeline into two parts: The time before you pass your real estate exams and the time after. If you handle your business well before you get your license, you will be able to launch into your career faster and more prepared than most agents.

Again, congrats on making the decision to become an agent. Now, let’s make that dream a reality.

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Part 1: Before licensing

Step 1: Determine your objectives

Month 1

As with starting any new job or before doing anything in business, the best question you can ask yourself is: “Why am I doing this?”

Determining your motivation — your reasoning, your why — is the most important thing you can do because it will keep you going from day one to day 10,000.

  • Are you looking to get your real estate license to practice part-time and do a few deals every year for a select number of family and friends?
  • Are you looking to get your real estate license so you can buy and sell real estate for yourself?
  • Or, are you getting your license to practice full-time and make this job your career?

Once you decide why you are getting your real estate license, you’ll be able to make decisions, such as selecting a licensing school and a real estate broker, that make the most sense for you.

Step 2: Understand the job responsibilities

Month 1

Most people who think about getting their real estate license don’t always understand the full scope of the job. Plus, they always think the job is much easier and more glamorous (as portrayed on TV and in real estate seminars) than it is in real life.

As a licensed real estate agent, whether full-time or part-time, you are always on the clock. Real estate never stops.

Be prepared to put out fires first thing in the morning. Get ready to do deals during lunch and well after sundown. Know that nights and weekends are when most of your clients will want to contact you.

On top of your constant obligations to your clients, know that most your job duties center around prospecting.

You may love looking at houses. You may be the best negotiator in the world. And you may know everything there is to know about financing. But if you don’t have any clients to work for, you won’t be in business for very long.

Other things to consider are all of the benefits that were once provided to you by your previous employer. Things like health care, social security taxes and more are all things real estate agents, as independent contractors, have to provide for themselves.

If you aren’t ready to handle these things yet, you should probably wait to start as an agent until you are ready.

Step 3: Plan your life accordingly

Month 1

Now that you have an idea of what you’d like to do as a real estate agent and you know some of the real requirements of the job, you’ll want to make sure that everyone who’s depending on you is onboard with your decision.

If you’re the head of your household and you aren’t bringing in a paycheck for the first few months as an agent, will you be able to support your family?

If you have time obligations with friends and family on nights, weekends and holidays, will they be OK with you being on your phone to close a deal at 8 p.m. on the Fourth of July?

Have a real conversation with the people that matter most to you in your life, and make sure they’re on board with your decision, too.

Step 4: Research real estate licensing schools

Months 2-4

In most states, there are several different ways to obtain your real estate license. You have to determine which learning style is best for you.

Some schools offer a one-week cram courses so you can learn all of the material and sit for the exam by the end of the week.

Some schools offer online learning programs that allow you to learn at your own pace over the course of 12 months.

Other schools offer a combination of in-person teaching with online resources.

Determine which way you learn best, and then pick the school that offers the best options that match your learning style.

Step 5: Research real estate brokerages

Months 2-4

This step in the process might be the most important part on your journey of getting your real estate license. Your broker can help you set a good foundation as you begin your real estate career.

In general, you will want to take a look at six different areas of expertise that a brokerage can provide and compare and contrast them against each other. The six areas of expertise include:

  1. Education and mentorship
  2. Branding, advertising and marketing programs
  3. Technology tools
  4. Lead generation capabilities
  5. Compensation
  6. Company culture

See which brokerage offers the best tools, options and resources for you, and pick one once you get your license.

Step 6: Start grassroots marketing campaigns

Months 3-5

One of the most important duties of a real estate agent is to prospect for clients. After all, if you don’t have any clients, you can’t perform any of the other parts of the job.

To help you get clients on day one of being a real estate agent, start laying down some grassroots advertising campaigns with your close friends and family now.

Start telling people that you are studying to become a real estate agent and that when you have your real estate license, you’ll be happy to help them with anything they need when it comes to real estate.

Step 7: Secure funding sources

Months 1-5

Most of the people who get their real estate license plan on working as a residential real estate sales agent. These sales agents work as an independent contractor for a real estate brokerage.

As an independent contractor, the best way to think of yourself is as the CEO of your own small business. That small business is you. You are the CEO of the real estate company of you.

As a small business owner — like any business owner in any industry — there are costs associated with starting the business.

Just to get your license and start practicing real estate, you need to spend money. Some people can spend anywhere from $200 to $800 on classes, textbooks, tutors and exam prep.

Once you select your brokerage, you will most likely be required to pay fees to join local associations, get access to the local MLS and even pay your brokerage additional fees. These fees can easily eclipse $1,000 to $2,000 in the first year alone.

Once you begin your career, you’re going to have to advertise yourself and your services. These activities cost money. It is nothing for some agents to spend $500 to $1,000 (or more) per month on these campaigns.

What’s more, you could potentially have no income sources for up to three, six or even 12 months on the job before you close your first sale. The loss of potential revenue (the money you would have made if you stuck with your old job) is a major expense that most agents overlook in their first year.

You need to find a way to secure funding sources for you as a small business owner.

Some agents develop savings over months and years before they go into the career full-time. Some agents get part-time jobs to help pay some bills. And some agents even find loans and investors to help them grow their business.

Whatever way you intend to pay for your business, be sure you have a solid business plan that can keep you afloat for at least the first year of being in business.

Part 2: After Licensing

Step 1: Select a brokerage

Month 5

When you are doing your research on brokerages, you should ideally interview with at least four different brokerages. The four different types of brokerages include large national franchises, regional franchises, large local brands and small independent brokerages.

Interviewing with at least one brokerage from each of these categories gives you a better understanding of what the tools (and costs) are associated with joining a particular brokerage.

Once you weigh all of the pros and cons, pick the brokerage that best works for you.

Step 2: Determine your business goals

Month 5-6

As an independent contractor, you are your own boss. You are the boss of your own small business, and your small business is being a real estate agent.

Like any good small business, you’ll want to create goals for your business. You’ll want to create goals regarding how many homes you want to sell, how much money you want to make by the end of the year and how satisfied your clients are with you.

If you set goals for yourself, you have something to strive for. It gives you that extra motivation whenever things seem dull or when your business seems to be in a rut.

You are more likely to accomplish your goals when you write them down. Plus, if you start telling other people your goals, you are even more likely to accomplish them.

Step 3: Find a mentor, a sponsor and a buddy

Month 5-7

The career of a real estate agent, as we think of it today, has been around for nearly 100 years. There have been millions of individuals who have come before you to do the exact same job duties you’re planning on doing in the foreseeable future.

Sometimes you don’t need to reinvent the wheel. Talk to the people who already tried inventing it to see what works and what doesn’t.

This is where finding a mentor is highly recommended.

A good mentor for a first-year real estate agent is typically someone who has been in the real estate industry full-time for at least the past three years or more. Typically, you’d like to see some level of success with this mentor, either through sales or involvement in the community.

A good mentor is one who will listen to your hopes and dreams, your ups and your downs, and your pitfalls and challenges.

Your mentor will then be able to give you the words of encouragement that you need to succeed and let you know when you’re traveling down the wrong path. A good mentor will help you build a framework for your career.

A sponsor is a little different from a mentor in that a sponsor can be someone either in or out of the real estate industry. He or she doesn’t need to be someone with tremendous business success (although the more the successful the better). A sponsor needs to be able to open doors for you that otherwise wouldn’t be opened.

A good sponsor is someone who has your back and will shout your name to everyone he or she knows with a vote of confidence that means business. Finding a good sponsor can be harder than finding a good mentor, but it’s well-worth the effort.

A buddy is a fellow real estate agent, preferably someone who has about the same knowledge, talent and resources as you do.

Your buddy, or accountability partner, is someone who can help keep you on track of your daily goals. Perhaps you and your buddy can prospect together, go to networking events together or even show homes together.

A buddy is someone who will make the doldrums of everyday work life feel better.

Step 4: Create your database of 100

Month 5

When you first get started as a real estate agent, you may be tempted to launch into several different costly advertising campaigns. I’m here to say that those activities aren’t necessary and can actually do more harm than good.

Instead, for your first few months as a real estate agent, focus on the people that already know, like and trust you. You are significantly more likely to work with a close connection than a random lead on the internet.

Spend your first few weeks as a practicing agent developing your database of 100. This list is a list of the 100 people you know, like and trust best. These are the people who, if you were to call or text today, would respond to you within a few minutes.

Inform the people on your database of 100 that you’re now a practicing real estate agent and that you can help them (and their database of 100) with any real estate services they may need.

Then, spend the rest of your career following up and providing value for the people on your list. A dollar spent advertising to the people on your database is much more effective and efficient than a dollar spent on any other advertising activity.

Step 5: Advertise

Month 6 until forever

There are countless ways in which you can advertise yourself as a real estate agent. In fact, I wrote about 99 different lead generating activities last year.

Lead generation is the lifeblood for any real estate agent. If you are not prospecting today, you will go hungry tomorrow.

You need to spend every day working on your advertising plan. The more time you spend on developing a good prospecting plan, the more you can rely on business down the road.

You don’t need to do every lead generating activity under the sun, and you don’t need to spend a lot of money (if any) doing it either. Like a good exercising and eating habit, you need to spend a little bit of time and effort every day to get the best results.

Step 6: Get educated

Month 7-12 — and beyond

If “location, location, location” are the three most important words in real estate, then “education, education, education” are the three most important words for your real estate career.

First, you are required to take a certain amount of continuing education classes. So, at a minimum, you should be taking classes to learn (or relearn) topics and theories about the real estate industry.

Another reason to focus on education is because all of the great business professionals focus on it. They spend time reading the paper, journals, booksand articles on their industries and about business in general. They spend time going to seminars, conferences and trade shows to hone in on the latest and greatest trends.

If you’re not learning and not getting educated, you are falling behind everyone else in the industry who is taking advantage of all of the great educational resources out there.

Step 7: Get involved

Month 10 and beyond

One of the reasons you wanted to start your career as a real estate agent was because you realized that agents have tremendous flexibility with their schedules. They can often work when they want and where they want.

Well, now that you’ve got almost a year under your belt learning about the real estate industry and perhaps even doing a few transactions, you should use your time wisely and get involved.

That means getting involved in your local Realtor association. Spending time with your fellow practitioners to help elevate the standards of the industry as a whole.

That means getting involved with your favorite local charity and community organization. Use some of your flexibility to give back some of your time to those who need it most.

Finally, use your time to get more involved with your family and friends. If your old job was one that had you working long hours and never able to make the kids’ baseball games or dance recitals, now is the time to exert some influence over your life and take control of the things you want to do.

The lifespan of a real estate agent is one that can last three months or 30 years. If you lay a solid foundation before you even get your real estate license, you will be better prepared to make this job a career.

Follow the steps in this timeline of becoming a real estate agent, and you will find this career to be both financially and personally rewarding.

Nico Hohman is the broker-owner at Hohman Homes Real Estate Brokerage & New Home Consultants in Tampa-St. Petersburg, Fla. Connect with him on Facebook or Twitter.

Email Nico Hohman


Many Bay Area homes have yet to recover pre-recession values

Many Bay Area homes have yet to recover pre-recession values

With double-digit price appreciation returning to some Bay Area markets, we’re used to hearing that the region’s homeowners are a lucky bunch, richer by the minute.

It’s often true, but not always.

A new report by Trulia, the real estate website, finds that only 60.4 percent of single-family homes in the Oakland metropolitan area have recovered their pre-recession peak values, compared with 84.3 percent in metropolitan San Jose and 98 percent in the San Francisco metro area. Out of 100 U.S. metros whose housing recovery was measured by Trulia, Oakland ranks 34th, while San Jose ranks 19th and San Francisco is No. 2 in the nation.


San Jose, Oakland job surges power Bay Area hiring boom

San Jose, Oakland job surges power Bay Area hiring boom

The Bay Area gained more than 12,000 jobs in March in a hiring surge led by the East Bay and Santa Clara County, state jobs data showed Friday, easing concerns about an economic slowdown.

The East Bay added 9,900 jobs in March, Santa Clara County gained 3,000 and the San Francisco-San Mateo area added 200 positions, according to the state’s Employment Development Department.

The gain of 12,400 jobs in the Bay Area — the most in a month since last October — banished job losses that pummeled the nine-county region in January and February. Those setbacks had raised the specter of an economic slump hitting the region.

“The March gains take the collapse of the Bay Area economy off the table,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “We will continue to see steady growth in the Bay Area.”


New Year. New Career?

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Why Smart People Don’t Multitask

Why Smart People Don't Multitask | Dr. Travis Bradberry | LinkedIn

Why Smart People Don't Multitask

Dec 21, 2016

You may have heard that multitasking is bad for you, but new studies show that it kills your performance and may even damage your brain. Every time you multitask you aren't just harming your performance in the moment; you may very well be damaging an area of your brain that's critical to your future success at work.

Research conducted at Stanford University found that multitasking is less productive than doing a single thing at a time. The researchers found that people who are regularly bombarded with several streams of electronic information cannot pay attention, recall information, or switch from one job to another as well as those who complete one task at a time.

A Special Skill?

But what if some people have a special gift for multitasking? The Stanford researchers compared groups of people based on their tendency to multitask and their belief that it helps their performance. They found that heavy multitaskers—those who multitask a lot and feel that it boosts their performance—were actually worse at multitasking than those who like to do a single thing at a time. The frequent multitaskers performed worse because they had more trouble organizing their thoughts and filtering out irrelevant information, and they were slower at switching from one task to another.


Multitasking reduces your efficiency and performance because your brain can only focus on one thing at a time. When you try to do two things at once, your brain lacks the capacity to perform both tasks successfully.

Multitasking Lowers IQ

Research also shows that, in addition to slowing you down, multitasking lowers your IQ. A study at the University of London found that participants who multitasked during cognitive tasks experienced IQ score declines that were similar to what they'd expect if they had smoked marijuana or stayed up all night. IQ drops of 15 points for multitasking men lowered their scores to the average range of an 8-year-old child.

So the next time you're writing your boss an email during a meeting, remember that your cognitive capacity is being diminished to the point that you might as well let an 8-year-old write it for you.

Brain Damage From Multitasking?

It was long believed that cognitive impairment from multitasking was temporary, but new research suggests otherwise. Researchers at the University of Sussex in the UK compared the amount of time people spend on multiple devices (such as texting while watching TV) to MRI scans of their brains. They found that high multitaskers had less brain density in the anterior cingulate cortex, a region responsible for empathy as well as cognitive and emotional control.

While more research is needed to determine if multitasking is physically damaging the brain (versus existing brain damage that predisposes people to multitask), it's clear that multitasking has negative effects.

Neuroscientist Kep Kee Loh, the study’s lead author, explained the implications:

"I feel that it is important to create an awareness that the way we are interacting with the devices might be changing the way we think and these changes might be occurring at the level of brain structure.”

The EQ Connection

Nothing turns people off quite like fiddling with your phone or tablet during a conversation. Multitasking in meetings and other social settings indicates low Self- and Social Awareness, two emotional intelligence (EQ) skills that are critical to success at work. TalentSmart has tested more than a million people and found that 90% of top performers have high EQs. If multitasking does indeed damage the anterior cingulate cortex (a key brain region for EQ) as current research suggests, doing so will lower your EQ while it alienates your coworkers.

Bringing It All Together

If you’re prone to multitasking, this is not a habit you’ll want to indulge—it clearly slows you down and decreases the quality of your work. Even if it doesn’t cause brain damage, allowing yourself to multitask will fuel any existing difficulties you have with concentration, organization, and attention to detail.


Dr. Travis Bradberry is the award-winning co-author of the #1 bestselling book, Emotional Intelligence 2.0, and the cofounder of TalentSmart, the world's leading provider of emotional intelligence tests and training, serving more than 75% of Fortune 500 companies. His bestselling books have been translated into 25 languages and are available in more than 150 countries. Dr. Bradberry has written for, or been covered by, Newsweek, TIME, BusinessWeek, Fortune, Forbes, Fast Company, Inc., USA Today, The Wall Street Journal, The Washington Post, and The Harvard Business Review.

If you'd like to learn how to increase your emotional intelligence (EQ), consider taking the online Emotional Intelligence Appraisal® test that's included with the Emotional Intelligence 2.0 book. Your test results will pinpoint which of the book's 66 emotional intelligence strategies will increase your EQ the most.


Resolve to Buy a Home Early in 2017

Resolve to Buy a Home Early in 2017 |®

Let’s finish out the year with a holiday basket packed with good news: We’re ending 2016 in better economic shape than in recent years. Unemployment is down to 4.6%, its lowest level since August 2007; consumer confidence is higher than it has been since July 2007; and home values nationally and in more than half of the major markets in the country have recovered.

We’re employed, confident, and have recovered equity in our homes. The stock market is up and flirting with all-time highs.

That sounds like the perfect backdrop to buy a home in 2017, whether it’s a first-time purchase, a move up, a downsize, or a relocation. Right?

Maybe. But before you take the plunge, you’re going to have to come to grips with two factors that are now decidedly worse for buying than they were at the end of last year: Mortgage rates are higher, and the inventory of homes for sale is lower.

Mortgage rates are a bit more than a quarter of a point higher now than they were at the end of 2015. That translates into payments that are 3% higher. Still, that increase can be managed by most.

The key challenge for potential buyers is that rates are now likely to move up more—as much as three-quarters of a point in 2017. That would be increasing payments by an additional 9%.

Tight inventory levels have been a problem for more than four years. As sales have grown, supply has fallen. We’ve seen the age of inventory—how long homes sit on the market—drop dramatically as home buyers burn through the available stock.

We’ve had an abnormally strong autumn for home sales because frustrated buyers are keeping at it even after the end of peak buying season. We also saw more new buyers emerge later in the peak season. Then as mortgage rates started to move up in October and then accelerated their rise in November and December, a new sense of urgency was added to the mix.

As a result of this unusually strong demand in the slower time of the year, we will end this year with at least 10% fewer homes for sale than we had last year. And we thought last year was bad!

Get started on your home hunt now

If your New Year’s resolutions include buying a home, I would suggest getting an early start. January and February typically are the slowest months of the year for sales, as harsh weather in most of the country dissuades most potential buyers.

Buyers in January and February face far less competition from other buyers, yet inventory is only marginally lower than in the spring.

Since mortgage rates are likely to move up as the year progresses, the beginning of the year represents the best time to lock in rates before they get even higher.

Early-year buyers can use the holidays to get ready. Organize your financial information to make getting pre-approved for a mortgage easier. Use® to find an expert local Realtor® to help you. And while you are there, sign up for alerts on new homes and price changes on neighborhoods that interest you.

Jonathan Smoke is the chief economist of, where he analyzes real estate data and trends to develop market insights for the consumer. Follow @SmokeonHousing



2017 housing market forecasts — suburbs are in, low mortgage rates are out

2017 housing market forecasts — suburbs are in, low mortgage rates are out - The Washington Post

Various real estate entities have weighed in with their prognostications for the 2017 housing market. Most observers expect home sales and prices to moderate in the coming year. They say suburbs will make a comeback while the days of low mortgage rates are over.

Of course, a lot depends on the actions of the new administration. Although President-elect Donald Trump said little about housing during the campaign, some of the issues he highlighted will have an effect on the residential real estate market, such as infrastructure spending, regulatory and tax reform, and immigration policies.

Below is a roundup of what the experts say buyers, sellers and renters can expect in 2017: predicts “a year of slowing, yet moderate growth.” The listing service for the National Association of Realtors compiled five housing trends for 2017:

Millennials and boomers will dominate the market. expects these two massive demographic groups to power demand for the next decade.

Midwestern cities will continue to be hotbeds for millennials. According to, millennials are clamoring to live in Madison, Wis.; Columbus, Ohio; Omaha; Des Moines; and Minneapolis.

Slowing price appreciation. forecasts home prices will grow at 3.9 percent annually, compared to an estimated 4.9 percent in 2016.

Fewer homes on the market and fast-moving markets. Inventory is down an average 11 percent in the top 100 metro markets, and it is not expected to improve next year. Homes are selling 14 percent faster.

Western cities will continue to lead the nation in prices and sales. predicts prices to increase 5.8 percent and sales to increase 4.7 percent in this region.

[More homes sold in the D.C. area last month than any November in the past seven years]

One prediction you can always count on: No matter what’s happening with the economy, NAR is always going to say it’s a great time to buy. Its fourth quarter Housing Opportunities and Market Experience survey found that 70 percent of people say now is a good time to buy a home. NAR also predicts the rate on a 30-year fixed mortgage will rise to 4.6 percent by the end of 2017.

Zillow says the homeownership rate will bounce back even as renting becomes more affordable. The real estate data firm also sees a reversal of a recent trend, predicting that “more Americans will drive in from the affordable suburbs for work, despite urban development efforts.” Its seven predictions are:

Cities will focus on denser development.

More millennials will become homeowners.

Rental affordability will improve.

Buyers of newly built homes will have to spend more to cover rising costs of construction.

The percentage of people who drive to work will rise for the first time in a decade as homeowners move farther into the suburbs seeking affordable housing.

Home values will grow 3.6 percent.

“Those looking for more affordable housing options will be pushed to areas farther away from good transit options, in turn leading more Americans to drive to work,” said Svenja Gudell, Zillow chief economist. “Renters should have an easier time in 2017. Income growth and slowing rent appreciation will combine to make renting more affordable than it has been for the past two years.”

Redfin predicts “strong buyer interest, better access to credit and a modest and much needed increase in inventory will allow home sales to grow but not as much in 2016.” The national real estate brokerage made six predictions:

The housing market will continue to grow but at a slower pace. Redfin expects median home sale prices to rise 5.3 percent annually in 2017 compared to 5.5 percent this year and existing home sales to increase 2.8 percent annually in 2017 compared to 3.4 percent last year. Although Redfin predicts inventory will be up slightly, it noted that “because we haven’t seen any increase in supply in the most affordable third of the housing market in more than eight months, we expect most of next year’s increase to be in the most expensive third of the market.”

2017 will be the fastest real estate market on record. Homes stayed on the market an average of 52 days this year, according to Redfin. It expects them to sell even faster in 2017.

New-construction growth will slow. Construction is “much lower than historical averages due largely to labor shortages. Given that nearly one in four construction workers are foreign-born, stricter immigration policies from the Trump administration are likely to make the problem worse.”

Mortgage rates will increase but not too much. Redfin expects mortgage rates to rise but no higher than 4.3 percent on the 30-year fixed rate next year

More people will have access to home loans. Next year, Fannie Mae and Freddie Mac will raise its loan limits for the first time since 2006, increasing them to $424,100 for most of the country and to $636,150 for more expensive markets. “This change makes it easier for more homebuyers to qualify for a mortgage in high-priced markets,” Redfin said.

Millennials will move to second tier-cities. According to Redfin, among the places millennials are looking to buy are Raleigh, N.C.; Austin; and North Port, Fla.

The Mortgage Bankers Association predicts mortgage rates will rise slightly but remain low, purchase applications will increase and refinance applications will decrease.

“Strong household formation coupled with further job growth, rising wages and continuing home price appreciation will drive strong growth in purchase originations in the coming years,” said Mike Fratantoni, MBA’s chief economist.

MBA expects rates on the 30-year fixed rate mortgage to remain below 5 percent through the end of 2018.

“Historically low and, in some cases, negative rates around the world continue to put downward pressure on long-term U.S. [bond] rates, keeping them lower than the domestic growth environment would otherwise warrant,” Fratantoni said.

Many times over the past few years the refinance boom has been declared over only to have world events conspire to revive it. Although he adds a caveat to his expectation, Fratantoni said he expects fewer refinances in the coming year.

“The world is an uncertain place, and there is always a chance that rates could drop again in response to global turmoil,” Fratantoni said. “But we expect that refinance volume will most likely be much lower over the next few years as homeowners have repeatedly had the opportunity to lower their rates, and there will be fewer households with an incentive to refinance if rates follow the path we are projecting.”