Byron Lazine and Nicole White are two agents in Connecticut who give us their thoughts on the week’s news every Friday in “The Real Word,” a weekly video column on Inman.
This week, Byron Lazine and Nicole White discussed the differing views of buyers and builders when it comes to the housing market. In the Federal Reserve’s recent buyer-confidence survey, home price expectations for the next year rose sharply to 7 percent, in line with expectations from Fannie Mae and Freddie Mac. Households expect prices to rise an average of 1-2 percent over the following four years.
Rental rate expectations were higher than home price expectations, with an anticipated increase of 11.5 percent this year and subsequent annual rent increases of 5.2 percent predicted.
The housing outlook offered additional insight, with attitudes toward housing as a financial investment generally positive at 71 percent while almost 10 percent saw housing as a generally bad investment. Those who would buy if moving in the next three years came in at only 60 percent; this is down from almost 70 percent last year.
Builder sentiment has fallen two points in the face of higher interest rates. This is the fourth straight month of declines in builder sentiment. This is creating a potential real estate “cold war” where no one is refinancing, no one is transacting, and builders aren’t taking the risk to go and build, Lazine said.
Marketeer of the Week
Agents are using closing guarantees to help buyers win an advantage in multiple-offer situations. According to Lazine, this is a great marketing pitch for those buyer agents who can offer it as a strategy and show proof of concept to potential clients. In multiple offer situations, a closing guarantee is written into a contract, and it says that if a transaction doesn’t close by a certain closing date, the affected party will be compensated.
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