The future of discount brokerage, inside the 2023 SP 200 + analyzing home prices
In addition to the articles, here are a few items we are reading from across the internet.
Some former members of California-based Corcoran Global Living, which had been Corcoran Group’s largest affiliate and suddenly and surprisingly announced the shuttering of the company in late 2022, have banded together to form a new Corcoran affiliate Corcoran Icon Properties. Corcoran Global Living was one of the nation’s largest brokerages with over $8.1 billion in annual sales, so this transition is notable for the industry.
From February 2012 to June 2022 – 124 consecutive months – the Case-Shiller National Home Price Index reported month-over-month home price appreciation. July through October 2022 saw four consecutive months of monthly home price drops, down 2.4 percent from June’s peak. The correction is here. After years of accelerating growth and heat, home prices are readjusting as the Fed raises interest rates and the country works to stem inflation. This readjustment period could last for all of 2023 and then settle somewhat into a new normal. We’ll be tracking the data closely.
Approximately 6 percent of US real estate agents are Black and earn about a third of their white counterparts, according to U.S. Bureau and NAR data cited in this New York Times article. The article provide valuable insight on life as a Black real estate agent, who grapple with supporting clients and operating in a market marked with the legacy of discrimination and segregation. As the industry works to become more diverse, insight into some of the many different groups working in the space helps all of us better work to make this a more inclusive space.
The West is facing massive water-shortage issues. Lake Powell and Lake Mead, two key portions of the dammed Colorado River, provide water for millions of residents and businesses in the West, are drying up. This New York Times feature profiles a housing development of 500 to 700 homes in Arizona that is left without water service as neighboring Scottsdale, which had provided service, cut it off citing the need to conserve its allotment. This is just the beginning of a major readjustment to life and growth in the West as it confronts increasing populations and decreasing water reserves.
The US Supreme Court denied NAR’s appeal to review a lower court’s ruling that a lawsuit the private listing firm The NLS (National Listing Service) filed against NAR and three large MLSs could proceed. The NLS alleges that NAR’s Clear Cooperation Policy, which requires brokerages to input listings into MLSs within one day of marketing publicly, and its application by MLSs violates antitrust provisions as the policy limits competition from listing databases not affiliated with NAR. In addition to this litigation, NAR faces significant legal challenges with the federal government and class-action suits challenging the industry’s traditional brokerage compensation model.
In a continued blow to the once-hot alternative financing trend, in which companies provided innovative financial products to consumers to streamline the selling and buying process, such as iBuying, Anywhere has announced it is winding down its division that offered those services RealSure. The company will focus on its stitching its digital offerings into a single platform for consumers. This refocus comes amid a lot of companies battening down the hatches for a tougher 2023 and focusing on more core business activities.
Effective January 1, Canada has begun a two-year ban on most international homebuyers in an effort to support affordability and availability of homes for Canadian citizens. The country has experienced outsized price appreciation in recent years, especially in some of its larger metros, which has attracted billions of dollars of real estate investment from foreign buyers and investors. The Canadian government has recently been more aggressive of a regulator of its real estate business, but should inventory remain an issue for US homebuyers, especially those with lower incomes and wealth, it could look to introduce policies to support citizen homeownership.
Existing home sales dropped 7.7 percent from October to November, according to NAR’s latest existing home sales report. That marks the 10th consecutive month of month-over-month declines. The housing market has definitely turned. This stat reflects the new reality brokerages face as they confront 2023 – fewer home sales, which means fewer transactions and less revenue. This is the year when the validity of sharp business practices and profitable models reveal themselves.
Enabling Intelligent Change.
