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In Intel’s data reports from recent months, Florida has consistently stood out as an exception to the rule during this market downturn.
Despite being one of the states to which people moved in droves in the early pandemic, Florida’s housing boom has yet to be followed by a correspondingly painful bust. Home prices there are still nearly as high as they were at last year’s peak. And inventory is more balanced in Florida’s major markets than we see in most big U.S. population centers.
Kendall Bonner
Intel reached out to Tampa-area eXp team leader Kendall Bonner, who shed some light on what it’s been like to help clients buy and sell in this relative real-estate sweet spot. Bonner has been vocal about the ongoing commission lawsuits that are threatening to upend the way the industry serves buyers, and had more to say in the phone interview.
Intel also sought Bonner’s thoughts on the impact on real estate businesses of a new Florida law that limits foreign-buyer activity — which the Department of Justice argued last week is unconstitutional.
Her comments have been edited for length and clarity.
Intel: Florida is an interesting market right now. Like Boise and Austin, it was a big migration hotspot in the early pandemic. Unlike Boise and Austin, the state has since retained almost all of its home-price gains, and sales have been a bit more resilient than in other parts of the country. Still, transactions are obviously down. What are you seeing these days on the ground in Tampa?
Bonner: Prices are still very strong in the Tampa Bay area. We have seen an increase in inventory across all sale types — so between single-family, townhomes, condos [and] manufactured homes. So we have seen an increase there over the last 12 to 18 months.
At one point we were close to 4,000 active homes for sale. Now we’re hovering right around that 9,000 to 10,000 range, which is still relatively low. I like to remind people what it looked like in 2009, compared to today, where we had 20,000 to 25,000, and upwards of 30,000 homes for sale during that time. So while inventory is increasing, it is still low. And what’s great is what we’ve been saying all along, which is we’re still moving toward this normal market, where we have more of a healthy inventory instead of being saturated or underserved.
Builders are also starting to build again. From 2009 to 2013 we saw a lot of builders fall off and some go out of business, etc., during that time. And so I think that builders building again now in our market, I think that’s helping to contribute, as well as they’re contributing to the sales because they’re offering incentives and things like that to the consumer in order to help make purchasing their inventory easier, including interest rate reductions and things like that. And so I think that’s helping to keep our inventory relatively strong. Not to mention we still have good jobs, employment rates are still strong.
Also, agents need to recognize the correlation between the rental market and the purchase market. As long as it continues to be just as expensive or more to rent as it is to purchase, purchasing will always be a priority. If there does come a time where the rental market drops and renting becomes very inexpensive, then you will see people make the financially easier decision of renting instead of purchasing. Right now, our rental market in Tampa is also very, very, very strong.
A new state law has restricted some foreign buyers from purchasing certain types of property in Florida. Did you have to prepare your clients for this in any way? Do you anticipate it affecting your business much in Tampa?
I think it’s so new that we have not even begun to feel the impact of it yet. To be perfectly honest, it doesn’t make up a great proportion of our clientele in Tampa. It’s specific also, I believe, to specific types of property, to specific types of land. There’s not a ton of agricultural land in Tampa proper. So there are definitely other parts of Florida, like central Florida and across the northern sections of the state, where this might have a more significant impact in terms of the type of land being sold that would impact some real estate professionals and their customers.
But it is relatively specific, for the most part, about the type of properties to be sold amongst these identified foreign purchasers.
You’ve been pretty vocal about the need for agents and brokers to think about how they would serve buyers in a post-lawsuit landscape. How prepared do you think the industry is for the types of changes that are being discussed in the courts right now?
Completely unprepared, to be perfectly honest.
I think I saw a study six months ago where the broker-owners and broker-leaders were not paying attention to this, thinking this is going to blow over, this is not going to be a big deal, this is not going to affect the industry needing any effectual change. And I think that’s a mistake.
I do think that our industry unfortunately is unprepared, because I think our leadership, meaning the broker-owners, are not talking about it enough yet with their agents and preparing them. I even posted something about the conversation from Disconnect [the Inman conference] on my social media, and then they just said, “Well, it’s not broken, so why are you talking about fixing it?”
And I just, all I could think was, “Oh, my gosh. I’m not claiming it to be broken, that I need to fix it. You’re completely unprepared because you have no idea these lawsuits even exist, and what they threaten to our industry.”
What do you think the conversations should sound like, that broker-owners should be having with their agents right now?
I think broker-owners, team leaders [and] brokerage executives need to be scheduling massive trainings right now to their agents of introducing the topic of, if you had to charge the buyer for your services, are you prepared to do that? And having conversations that mastermind around that. If the light switch was to be turned on tomorrow that you no longer can be paid, or will be paid, by the seller and the listing broker, how would you now change your conversations with the buyer in order to deliver value — and express that value, and charge for that value. And I think there needs to be conversations.
The beautiful thing about our industry is we don’t need — someone said this quote to me the other day — we don’t need to boil the ocean. And I wrote that down, because so many of us think we have to have all the answers, and be able to solve all the problems. And what it really comes down to is, I think we have some really great minds in the industry. There’s so many other outside industries that we can look to for options and opportunities. We can leverage all those things and re-educate ourselves and rebuild ourselves into this pivot, and into this change.
And I think it is going to be a skill question. This is a skill of communication, a skill of negotiation, a skill of putting together a true value proposition from the perspective of the buyer’s agent that listing agents have been perfecting for a long time now.
I think it’s going to be an interesting conversation and a challenge because we will need the cooperation of listing agents to not diminish the value of a buyer’s agent. For example, “I have the listing. Come work with me, but I’m still not going to charge you for my services, buyer, because I’m getting paid a compensation by the seller.”
The biggest mistake I think we can make is listing agents taking listings and still not charging the buyer, so that we truly are working for free. I think that’s a real risk that we have as agents, that we still haven’t found out how to define the value of the agents on the buy-side.
We need to start those conversations today. They’re relevant even if the lawsuits end up going a different direction, and they don’t equate to some sort of change. I think the change can come from within, and we can take this opportunity to — while preparing for it — build a better system, and a better communication and value mechanism for buyer’s agents so that these lawsuits don’t come up again. Because the challenge is, they’re arguing it’s about competition. But it’s not really about competition; it’s about compensation.
This group of people believe that real estate specialists are overpaid for what they do, is what it really is about. And whether that’s true or false, the problem is that we have not done a good job as an industry of communicating our value. Because cost is only an issue in the absence of value. People will pay, but they have to believe it’s worth paying for.
