3% Landlords, How are November Raleigh Area HomesSales?, Time to Assess, Adapt and Execute. Pre-Holiday Update!
This scares me: The allure of renting your home with a 3% mortgage is strong, it makes sense, cheap money. BUT, if you are looking at a $400-$500 a month cash flow after mortgage, taxes, HOA and insurance make sure you figure in vacancy rates, delinquencies, HVAC repair and replacement, frivolous tenant lawsuits and my favorite Warren Buffett saying of all time:
No one washes a rental car.
Another thing to contemplate: will the lower down payment on your new home increase rate or mandate mortgage insurance. Food for thought.
November home sales in Raleigh / Wake County are so 2023, down 20% to 512 month to date (11/16), average price up 10% to $598,000. Total sales volume down $35,000,000.00.
Three homes have closed in November over $4,950,000.00, yes three. Two existing homes ITB, the largest being $6,400,000.00 and a new build in Mid-Town.
The average Raleigh home price will end up around $560,000.00 for November, up only 3% from last year.
Real Estate is changing, Surely you have read a jury in Missouri (I can not say that enough) found NAR and some large brokerages guilty of conspiring to inflate commissions. This was based on the standard practice of sellers including the buyers agent commission into what they pay their agent to split with buyers agent and the MLS systems mandating an offer of compensation. ( This is very high level, the details are boring). This is creating a lot of conversation in the industry right now about what this means.
It is a great diversion for an industry that saw revenues dive by 22% this year. Anybody with math skills knows what 22% top line reduction does to the bottom line, BRUTAL!
But this is half the story, by focusing on agents, and agents focusing on agents a new revenue sucking machine has entered the game, the referral company. Cold callers, Zillow and the other real estate sites, who sell your data as a lead to the highest bidder regardless of ability, specialty or honesty. The number of these leads have grown so much that real estate companies have started to operate on 60-70% of the total commission paying the difference to the source.
We have not spoken to the fact ancillary income is down, not on volume alone, but also competitiveness.
To base revenue drops solely on commissionable volume is not accurate, the pain is greater.
The real estate industry as we know it is in big trouble. It is time for new thought, a realistic view of what is happening, as my Dad always total me Assess, Adapt, Execute.
This is seriously the best time in decades to be in Real Estate, the future starts now.