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MoxiWorks rounds out end-to-end solution for enterprise brokerages with back office product, MoxiBalance
MoxiBalance joins MoxiWorks’ slate of products driving brokerage profitability through increased productivity
Seattle, WA (January 25, 2022) — MoxiWorks, the leading real estate technology platform, announced today the launch of their back office system, MoxiBalance. MoxiBalance is designed for brokerage leaders seeking to streamline and facilitate record-keeping in their enterprise office. MoxiBalance evolved from back office solution, Reeazily, which MoxiWorks acquired in 2021.
With the addition of MoxiBalance, MoxiWorks now offers a complete end-to-end, lead-to-close, solution for enterprise brokerages. The back office solution joins their easy-to-use suite of tools including their CMA, CRM, websites, and marketing & lead generation solutions all focused on improving and increasing productivity across the brokerage.
“MoxiBalance, formerly reeazily, was built by real estate for real estate when RE/MAX Northern Illinois needed a better system for franchise membership management, billing, and reporting,” said Senior Director of Product Management, Jim Smoak. “MoxiBalance is robust and intuitive, and fully equipped to handle complex back office reporting for enterprise brokerages of any size.”
MoxiBalance is an enterprise solution designed to be an end-to-end for brokerages. The system manages the movement of money in clear, reportable, and convenient ways to match the bustling pace of a growing membership, while providing a secure platform to manage your business. MoxiBalance provides all of the features of a robust custom records system with the flexibility of cloud-based software. This provides the best of both systems for optimal back office tech. Brokerages powered by MoxiBalance can:
- Set up multiple brands and offices and easily connect them to their ledgers
- Design templates for agent-specific commission structures
- Build out items for repeatable billing and fixed and variable costs and,
- Manage agents with the same data populating the rosters of other MoxiWorks products
Additionally, MoxiBalance is designed for strong integration with transaction management systems like DocuSign, DotLoop, or SkySlope. It offers two-way QuickBooks sync and subscription-based purchase. This allows users to manage transactions, review documents, collect earnest money deposits, and even automate and export disbursement letters and funds for closing. Easy-to-use profit/loss, drilldowns, cap tracking, and forecasting reports help to protect both businesses and individual agents.
“We understand how complex the accounting and back office process can be,” said Smoak. “Working with a product that is not only sophisticated and easy to use, but also integrates so seamlessly with your preferred transaction management system will transform your processes and improve the overall functionality of your back office.”
To learn more about MoxiBalance and how it can benefit your business, visit moxiworks.com.
About MoxiWorks
MoxiWorks is a comprehensive open platform system for large residential real estate brokerages that serves over 800 brokerages and 400,000 agents nationwide, accounting for more than 20% of the transactions in the U.S. MoxiWorks’ customer retention over the past seven years stands proudly at 97%. Their integrated tools are centered on sphere methodology that increases agents’ repeat and referral business by 54%, while lowering overall technology, training, and support costs for the brokerage. The open platform known as the MoxiCloud has tools from more than 100 partners that integrate to create unique brokerage solutions. Find more information at moxiworks.com.
MoxiWorks – Let’s sell more homes together
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For more information on this topic and other press inquiries at MoxiWorks, please contact Jordan Barrish at Jordan.barrish@moxiworks.com.
2022 Home Sales Predictor: Steady Stream of Home Sales to Kick off the New Year
It’s 2022 — time sure is flying!
Our data team is already hard at work analyzing and making predictions for the year ahead, so let’s dive right in.
We finished December with 566K home sales which were 4% more homes sold than we expected. That was a 2% increase from November, but a 3% decrease from the year before in December 2020.
Last month in our reporting we predicted a ‘Strong year of home sales on the horizon in 2022’ and we’re already seeing that come true as we look ahead to January. In any other year, we would expect to see a 20-25% decrease from December to January.
Instead in 2022, we predict we will only see a 16% decrease with 477K homes sold, which is also a 16% increase year over year.
In February we predict we will see a 4% increase from January with 496K home sales which would be a 19% increase year over year.
Source: MoxiWorks Home Sales Predictor Jan|Feb ‘22
There are several reasons we expect to see this stronger number of home sales in January, but two of the substantial factors that will drive behavior are rising interest rates and inflation.
Inflation has now increased at its fastest pace in 40 years. And, how does inflation impact home prices? Inventory and interest rates.
Last week, the Federal Reserve Chair Jerome Powell discussed the impact of inflation on interest rates with a Senate panel:
“But some higher prices, such as rents, could prove to be stickier. Rental costs, which have accelerated since summer, rose 0.4% in December, the third consecutive monthly increase. That’s significant because housing costs make up one-third of the government’s consumer price index.
Powell told Congress that if it becomes necessary to fight high inflation more aggressively, the Federal Reserve is prepared to accelerate the interest rate hikes it plans to begin this year. The Fed’s benchmark short-term rate, now pegged near zero, is expected to be bumped up at least three times this year.” (source)
Additionally, Altos Research has reported a few other leading indicators that are also pointing to a strong start to 2022, including immediate home sales trends and increased home prices. Their recent article on HousingWire shares more about this and how that is impacting this potential flurry of buyers at the beginning of the year.
The final piece that we think is worth keeping an eye on is how institutional buying will impact the market as financial institutions are hedging in residential real estate as it’s the least likely to go down in value.
According to a recent Bloomberg survey, 1 in 5 homes that were flipped by an iBuyer in 2021 were sold to institutional investors. With inventory already at such a low, if this trend continues, when will we see it rise again?
We’ll be watching all of this closely to see how this all plays out but based on these reports last week it appears there will likely be some shake-ups in the market this year.
Buckle up!
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.
Get our Home Sales Predictor Monthly Report delivered to your inbox!
MoxiWorks unveils upgrades to digital advertising platform, MoxiPromote
Agents and brokers now have access to enhanced advertising across Facebook and Google with MoxiPromote
Seattle, WA – (January 11, 2022) – MoxiWorks, the leading real estate technology platform, announced today the relaunch of its digital advertising tool, MoxiPromote. MoxiPromote simplifies the sophisticated process of digital advertising, empowering brokers and agents to use lucrative marketing channels like Facebook Audience Network and Google Display Network without having to have significant expertise in these platforms.
With MoxiPromote, advertising dollars go further than with competitors. Other providers typically apply less than 20% of an agent’s budget to actual ad spend, but MoxiPromote puts the agent and their budget goals first. With every dollar spent on ads, more than 50% is applied directly to media spend on their selected channels.
Jim Smoak, MoxiWorks Senior Director of Product Management
“We know how hard you work on your business,” said MoxiWorks’ Senior Director of Product Management, Jim Smoak. “This is why we’re committed to supporting brokers and agents by not nickel and diming them, but by offering an advertising solution that gives you a bigger slice of the pie.”
MoxiPromote also keeps agents ahead of the competition by making digital marking easy for agents, saving them time and expanding their reach. The advertising tool auto-fills listing information and images by pulling up-to-date listing information from MLS feeds via the MoxiCloud and pulls agent information from the brokerage’s roster. As a result, agents can get ads up and running with just a few clicks. Agents are able to expand their sphere of influence, drive awareness to their listings, generate leads, and promote their services as a local real estate expert.
“These new upgrades to MoxiPromote will give agents an even easier to use, sleeker and more intuitive platform for advertising their listings, their offices, or themselves,” said Smoak. 
Agents can manage ads across both the Facebook Audience Network and the Google Display Network. Across these platforms, they can run lead gen ads, traffic ads, and always-on campaigns. And, as a cherry on top, MoxiWorks is recognized by Facebook as a Facebook Top Provider.
To learn more about MoxiPromote and how it can benefit your business, visit moxiworks.com.
About MoxiWorks
MoxiWorks is a comprehensive open platform system for large residential real estate brokerages that serves over 800 brokerages and 400,000 agents nationwide, accounting for more than 20% of the transactions in the U.S. MoxiWorks’ customer retention over the past seven years stands proudly at 97%. Their integrated tools are centered on sphere methodology that increases agents’ repeat and referral business by 54%, while lowering overall technology, training, and support costs for the brokerage. The open platform known as the MoxiCloud has tools from more than 100 partners that integrate to create unique brokerage solutions. Find more information at moxiworks.com.
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For more information on this topic and other press inquiries at MoxiWorks, please contact Jordan Barrish at Jordan.barrish@moxiworks.com.
Strong year of home sales on the horizon in 2022
As we close out 2021, hopefully with our loved ones, we are taking one final look back at home sales for this year before we turn the calendar and embark on the next chapter in our industry.
2021
2021 took us on a wild ride as we got a peek at the possibility of new seasonality trends. It was also proof that people’s need for a great home to live their lives, raise their family, and now work, is resilient against almost all other things.
Since October we’ve also been predicting that we will see 6.8 million home sales this year. The last time we saw a year of higher home sales was back in 2005. It’s almost hard to believe after a year of non-stop talk about inventory shortages that the result will be a historic number of transactions.
So what does all of this mean for 2022? First, let’s take our last look at 2021.
November 2021
In November, there were 536K home sales, which was 4% more than we predicted. The result was a 6% decrease in sales from October, but a 2% increase year over year. While we historically see a 2% increase YOY as we saw in 2018 and 2019, in 2020 there was a 24% increase YOY, which means November stayed a hot month even not in the height of a pandemic.
December & January
In this final month of 2021, we predict there will be 545K home sales in December which would be a 2% increase from November. In January we predict we will start the year strong with 515K home sales, which would be a 5% decrease from December, but a 27% increase year over year.
Ringing in 2022
As we look ahead to 2022 there are a number of things to consider that will impact transactions. One of the main areas we are paying attention to is inflation, and specifically wage inflation.
As home price decelerates, wage inflation will likely increase affordability therefore causing another strong year of transactions across the country. That’s not to say that all markets will be affordable, but the wage inflation (arguably caused by corporations like Amazon setting the new standard for wages) will have an impact on new homebuyers coming on the market especially in more affordable communities.
Something else that will likely impact the rate of home sales is the Great Resignation. Coldwell Banker recently released a study that revealed the impact the Great Resignation will have on the housing market, particularly in more affordable areas of the country. Around the country workers have indicated they would take a pay decrease in order to live in a more affordable area of the country. So what will that mean for inventory and transactions?
Ultimately, we predict with the deceleration of home prices, wage inflation, and for the foreseeable future, continued low-interest rates, 2022 could be another record-breaking year for home sales.
What role do you play?
As more and more ways to buy and sell homes emerge on the market, one thing remains true – buyers and sellers need a trusted advisor. The most recent data from NAR in 2020 stated that “87% of buyers recently purchased their home through a real estate agent or broker” (source). That means 87% of home sales are dependent on all of you.
Continue to nurture your sphere. Be the first person someone thinks of when they are ready to buy or sell, or, even before they are ready. You have the power to make a difference for your clients, your community, and the industry as a whole.
See you in 2022!
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.
Get our Home Sales Predictor Monthly Report delivered to your inbox!
Holiday home selling season in swing
Happy November — it’s a big month here at MoxiWorks as our Home Sales Predictor turned 1. It’s been an exciting year making predictions, gleaning insights, and up-leveling the data we provide to you to help you and your brokerage become more profitable.
As we round the corner on year 2 of this pandemic and recovery, there will likely be more ebbs and flows in the market, but we are also hopeful that we may be finally be falling into more of a “new normal” when it comes to home sales. Only time will tell, but we’re looking forward to seeing the results.
October Lookback
We predicted there would be 594K home sales in October. The actual was 558K which was a decrease of 4% month over month and 9% decrease in sales year over year. Historically we’ve seen a modest uptick in home sales between September and October (in 2020 there was a 1% increase, 2019 a 3% increase, 2018 6% increase).
There could be a number of reasons we saw this decrease this year. Are we possibly heading into a new seasonality impacted by the pandemic? For example, this year we saw a 35% increase month over month between February and March putting us into a strong Spring season. Is that going to be the new norm?
It’s also entirely possible that the majority of people who were going to move because of the pandemic have amended their housing accommodations for now and will instead be focused on traveling/spending time with family during the holidays.
We were also curious what the steep increase in national home sale prices has looked like over the years and were not all that surprised to see the drastic average difference nationwide the second half of 2020 and into this year.
While the drastic increase has slowed some, with this sustained, overly expensive market, could that also be explaining why transaction velocity may be slowing?
It’s also possible that it’s a combination of these high prices, low inventory, bidding wars and institutional buying have all created pessimism among buyers, especially for first-timers that is causing the slowdown.
Looking Ahead
Based on the activity of agents inside MoxiWorks products we predict there will be 513K home sales in November which would be an 8% decrease in home sales from October and a 2% decrease YOY.
In December we predict there will be 521K home sales which would be an increase of 1% from November, but a 9% decrease year over year looking back at 2020. And, if all of this holds true we are still expecting this to be one of the strongest years of home sales with 6.6 million home sales across the U.S.
Close the year strong
Whether you and your agents are completely wiped from this banner year, or are still full steam ahead, we know that whether we’re in a pandemic, working through the recovery, or in more precedented times, the market is always regionally and locally specific.
Your local experience matters. What’s happening in your market matters. Be that expert for your sphere. Let them know what’s happening in their area and why now is a good time to buy or sell. You have the chance to make this your best year yet for you and your clients.
Cheers to finishing this year strong!
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.
Get our Home Sales Predictor Monthly Report delivered to your inbox!
Fall-ing Number of Home Sales?
We may all be settling into our cozy sweaters and Fall activities, but home sales aren’t settling down, just yet.
In September our prediction was within 1.5% (564K home sales) with the result being 572K home sales across the U.S. That’s a 6% decrease in home sales from August to September and a 5% decrease year over year. And this all makes sense as Redfin reported a 23% decrease in active listings during September. And while that would make it seem like we are finally settling into some sort of normal seasonality, our data suggests otherwise.
October/November prediction
Based on the activity inside our MoxiWorks products, in October we predict there will be 594K home sales across the U.S. which is a 4% increase from September and only a 2% decrease year over year.
Keeping Current Matters also recently reported on realtor.com data saying, “The number of homes available for sale should increase. According to realtor.com, you can expect to see more new listings come to market the week of October 3. The findings estimate we’ll see roughly 17.6% more homes available than we saw at the start of the year. This means, while home prices are still appreciating overall, you may see some homes with price adjustments from eager sellers. The process of closing a house takes time. To close before end of year, sellers may be more motivated this October.”
Source: MoxiWorks Oct-21 Home Sales Predictor
And then looking to November we expect that maybe seasonality will finally kick in with 556K home sales which is a 7% decrease from October, however, it will be 6% more homes sold than in November of 2020.
Closing out 2021 strong
Even as it looks like we might actually settle into some seasonality as we start to round out 2021 there are still nearly 2 million homes to be sold as we are predicting there will be 6.8 million home sales across the U.S. in all of 2021.
We probably sound like a broken record at this point, but it’s true. With this many homes to still be bought and sold this year the more you can engage with your sphere, work on your repeat and referral business, the more of this 2021 slice of the (pumpkin) pie you’ll be enjoying.
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.
Get our Home Sales Predictor Monthly Report delivered to your inbox!
Back to School, Back to Business, Back to…Normal?
September 2021 – The MoxiWorks Home Sales Predictor delivers monthly predictions based on agents’ activity inside our suite of products
The first day of Fall isn’t until next week on the 22nd, but in many parts of the country it’s already starting to feel like the autumnal months have begun with kids going back to school (either in person or via the web), getting back to the grind ourselves, and for me personally, the start of football season.
It’s been a really strong Summer of home sales and while a bit of a seasonal slowdown is ahead, it’s not as much as you might think. 2021 continues to keep us on our toes.
For a quick review of the past few months, you can read July and August’s reports here and here.
August Home Sales
August, the month of last-minute vacations and usually less time spent staring at our screens, still resulted in almost 600K home sales across the country, which means we were within 1% of our prediction at 594K home sales. That’s a 3% decrease in home sales from July and no change year-over-year.
Now, historically speaking, the change of the season usually means we see a change in the amount of monthly home sales. On average we’ve seen a 14% decrease in home sales month over month when the calendar rolls over from August to September (2020 was of course an exception when home sales stayed the same at 595K between August and September). This year we are expecting to see only a 5% decrease in home sales month over month from the 594K home sales we saw in August this year.
September/October Prediction
Source: MoxiWorks Home Sales Predictor – SEP 2021
So as you can see, September will drop only marginally compared to previous years. We should see a 5% decrease both month over month and year over year. Looking to October we expect to see the number of home sales creep back up with a 1% increase from September with 569K home sales.
There are quite a few theories about why we don’t expect this seasonality to behave as it normally does for both September and October including the following:
- While home price appreciation isn’t expected to drastically drop anytime soon, according to Mike DelPrete’s most recent report, it is definitely going to start decelerate. NAR, also reported this week that they are starting to see housing affordability increase which means both of these impacts will start to (slowly) swing the market back more towards a buyer’s market.
- Inman is reporting homebuyer sentiment ticking back up for the first time this year since March which could be interesting for how that effects any inventory coming on the market.
- On the more somber side, Fortune reported this week, the mortgage forbearance program is ending September 30th and Zillow says, “25% of the 1.7 million borrowers still in forbearance are likely to list their home for sale.” While that isn’t a number that will solve the inventory shortage, it will add a decent amount of homes on the market for September and October.
What about the remainder of 2021?
Based on everything we have seen this year, we predict there will be 6.8 million home sales in 2021 almost equalling the all-time peak of 7 million home sales in 2005. While time will of course tell if this pace will truly continue, it appears there are many homes still to be bought and sold this year. What are you and your agents doing to take advantage?
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.
Get our Home Sales Predictor Monthly Report delivered to your inbox!
What Seasonality? Home Sales Hold Strong
Summer is winding down in many parts of the country. Kids are going back to school while professionals head back to the daily grind. One thing not winding down? Home sales.
There were nearly 600K homes sold in July with 591K home sales, meaning our prediction was within 1%. While that is a 10% decrease in home sales from June to July and a 4% decrease YOY that is still a very strong month of home sales and it looks like it should stay steady over the next few months, really just throwing our usual seasonality for a loop.
So, what’s ahead for August and September?
Predictions
Based on activity inside our MoxiWorks products we predict there will be a 2% increase in home sales in August with 601K homes sold followed by a 10% decrease in September with 538K home sales.
While that would mean a 9% decrease for September YOY, when comparing it to a more normal year like 2018 or 2019 that’s a 27% and 17% increase respectively for this time of year which definitely points to this wonky year of home sales continuing.
So, what about home prices?
The big thing we’ve been talking about around the virtual MoxiWorks lunch table this past month is less about the waning inventory (even though that is of course still a concern) and more about current home prices and interest rates. Interest rates are still at a record low, but, at some point, they will start to increase again as economic principles come into play. Until that happens this will remain a seller’s market with record breaking home prices that are spooking buyers. Because these buyers are spooked another thing we are keeping our eye on is the increase in non-traditional home buying, i.e. iBuyers. Needless to say, there’s a lot happening and it will be interesting to see what these changes mean in the coming months. So how can you and your agents be ready?
Fall & Covid-19
We are of course not ignoring the Delta variant and what that might mean for the Fall and Winter months of home sales, but for now, our message remains the same. Protect yourself and your agents from whatever is coming our way by staying in flow with your sphere. Keep working for your future by staying in flow with your sphere now. If the last 16 months have taught us anything it’s that things can change at a breakneck pace and you don’t want to be left wishing you had kept your book of business fresh, nurtured and full of your future leads.
Until next month.
Long-Term Success in Real Estate Comes from Relationships (Not Cold Leads)
It’s simple when you think about it: People like to do business with people they know, like, and trust. The evidence for this is everywhere.
Have you needed a babysitter, a landscaper, or a dog-walker?
Chances are you probably started your search with people you’re connected with and asked for recommendations and referrals. Perhaps you’ve been thinking about trying a new restaurant in town – but when your coworker says the food was terrible, you decide you won’t go. We all do it to avoid risk. The same can be said when buyers and sellers chose an agent to work with. Buyers and sellers lean on pre-existing relationships to find their agent.
Now, compared to each other, dropping some Benjamins and waiting around for cold leads to pop up in your inbox is easier than proactively expanding your sphere and getting to know people. The latter takes time and energy, the former only needs money. However, as we’ve seen our local, national, and global economy roil from pandemic effects this past year, it’s a good time to consider ways to grow your business that doesn’t directly rely on cash expenses. Instead, think about the networks of people you’re already connected to, and how you can leverage them to grow your business. It’s truly more profitable than you may have previously thought.
Sphere-focused real estate isn’t a new theory. The great real estate philosophers like Ninja’s Larry Kendall, Brian Buffini, Matthew Ferrara, and more all remind agents that success comes from relationships. Still, we get distracted by “disruptors” and “innovators ” and think the industry will be turned on its head.
Sphere-focused real estate business fills pipelines and builds longevity that’s exponentially more dependable than begging for top-of-funnel leads. You need to be actively communicating with your sphere of influence (SOI) to stay top of mind. This way, the next time one of your contacts is even toying with the idea of making a move, you’re the first one they’ll call and you’ll be there to help before they even consider working with another agent.
The National Association of REALTORS annually publishes a report on buyer and seller behaviors and trends. If you aren’t reviewing these surveys, we highly recommend you check them out. NAR recently released the 2020 report with some fantastic stats.
3 out of 4 buyers interviewed only one agent during their home search.
So, unless you’re reaching out to them first, it’s unlikely you’ve going to be able to grab new business without an existing relationship. Consistently keeping in touch, staying in flow, is about doing more than a once-annual home value report and a sports calendar in the fall.
When surveyed, most buyers and sellers found their agent because they were recommended by a friend, neighbor, or relative, or they used their agent from a previous transaction (NAR, 2020). This proves that people trust recommendations. If most buyers and sellers only interview one agent and most find their agent through a referral, then being that connected real estate agent is practically guaranteed business.
Despite the hugely powerful concept of repeat and referral business, brokerages and their agents are still often distracted by the next transaction. They know they need to stay in contact with people but have yet to create a system that prioritizes a relationship-first business. Their day gets filled chasing tasks, and soon, the agent has lost contact with the people who know, like, and trust them.
This forces agents into a vicious cycle that many vendors take advantage of. The stressed, over-worked agent is told, “Don’t worry, we’ll find you leads and give them to you at cost.” Agents expect the business to come rolling in while they care for current transactions, but in the end, these cold leads take more energy and convert less frequently than if the agent had focused on their sphere. It stresses agents out and brokerages are left constantly fighting agent churn due to low productivity.
The inventor of the phrase “a bird in hand is worth two in the bush” could never have envisioned it applying to modern real estate. This adage reminds us of all that every agent has a bird in their hand: their sphere of influence (SOI). If you aren’t keeping a clean, organized database (a CRM) for your sphere, step one is to start.
This article originally appeared in MoxiWorks’ agent magazine, Mile62. Enjoy more articles here.
Hot housing market, with no indication of a cool down, for now.
In last month’s Home Sales Predictor article we said –
“Only time will tell if this flattening trend will continue or if we will see a spike later this year. Many of our clients have shared with us they are starting to see more listings in their area so maybe we will still see a spike? What trends are you seeing? Do you think we’ve seen the peak?”
And, it appears the flattening has not happened yet. In June there were a record-breaking 636K homes sold across the US. That’s 6% higher than our prediction and 24% higher year-over-year. In fact, that is the most homes sold in a month that we have seen since we started tracking this data back in 2016.
July/August Predictions
Looking ahead it appears the market will remain hot with a brief slow down expected for July (which is a historical trend) with 587K home sales. That would be an 8% decrease from June and a 4% decrease YOY. We then expect the market to pick right back up to 601K in August. If our prediction holds true that would be a 2% increase from July and a 3% increase YOY.
When talking with our data team this month about the Home Sales Predictor one thing we all agreed on was the fact that this is a weird housing market that really feels like the tip of a lot of interesting things happening in the world right now.
Especially for us here in the Pacific Northwest. We’ve been living in a market that was mostly closed for the last 15 months, it’s been shocking to see how much has changed in the last two. And, especially in the housing market. A lot has been unpredictable and while we are confident in the data at our fingertips, time will only tell how much wackier this market may get.
Institutions vs. Homebuyers
Things are starting to look up in the economy as we return to work, travel and entertainment. There are even signs things may change for the better in terms of the housing inventory as lumber prices start to stabilize and housing starts will finally be reviving, but we still have an uphill battle to climb as more and more millennials aim to get into the homeownership game.
One of the biggest things at play that we are focusing in on is how much institutional buying is putting pressure on the already shrinking existing home inventory. We’ve been talking for months about the listings shortage vs. inventory shortage, but new data is causing us to take another look when an already pressured consumer market is seeing more pressure from the resurgence of the iBuyers (more on that below) and this further immergence of the institutional buyers that are buying homes and taking them off the market by turning them into rentals.
According to a recent Redfin report investors spent a record $77 billion on homes over the past six months compared to the $55 billion that was spent in the second and third quarters of 2020. That’s 1 of every 7 U.S. homes in the first quarter where in the previous three quarters investor bought closer to 1 in 10 homes (Source: HousingWire).
That same report shared that “Most [investors] focused on single-family homes, which made up the biggest share of acquisitions and first-quarter growth, year over year. Nearly 39,000 of the 55,000 homes investors bought in Q1 were single-family properties, up 4.8% from last year” and that among those buyers were Invitation Homes and American Homes 4 Rent, both “single-family-rental behemoths.” (source: The Real Deal)
So while concerns have been flying around about the resurgence of iBuyers it’s important to note that iBuyers are still only roughly 50% of the way back to their pre-pandemic levels with only 4,383 homes purchased in Q1 of 2021 and only account for 0.5% of homes sold across the U.S. making them nowhere near an immediate threat to our housing shortage.
What does the future hold?
The market will likely continue at this velocity, but the concerns around intuitional buyers squeezing our inventory opportunities will remain top of mind. Especially for how it can disproportionately impact the lower and middle class and especially for minorities who oftentimes lack the generational wealth to get their foot in the door, especially in a crazy market like this one.
And it’s not a great sign when, according to HousingWire “investors gobbled up the largest share of lower-priced homes in the first quarter…One of every five low-priced homes that sold in the U.S. (20.8%) was purchased by an investor, compared to 12.5% of high-priced homes and 11.3% of mid-priced homes.”
So, what can you do?
Use your power as a real estate professional to help overrepresent the underrepresented. Try and focus on building your sphere with families to help get them into homes and start building wealth and generating more opportunities for future growth. The more we can build diverse communities the better for society and the better for our future as an industry. Look for the opportunities to make positive change in your community while making sure all the homes on our street aren’t bought up by investors. Be that valuable resource for all of your contacts in your sphere and educate them on the benefits of buying and selling a home in their market to help continue to foster movement and transactions across the industry.
Sources:
- https://therealdeal.com/2021/05/21/institutional-buyers-are-flooding-single-family-market/
- https://www.housingwire.com/articles/investors-are-buying-up-single-family-homes-across-the-us/
- https://www.redfin.com/news/ibuyer-real-estate-q1-2021/
- https://www.vox.com/recode/22407667/home-sales-boom-rent-housing-single-family-rental
- https://www.wsj.com/articles/lumber-prices-are-way-downbut-dont-expect-new-houses-to-cost-less-11626260401
The Home Sales Predictor is a brand-new set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.
