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As any agent making a go of this market can attest, homeowners aren’t exactly tripping over themselves to put their house on the market, leaving buyers with little to choose from. And despite mortgage rates creeping into a range that could spur a spike in sales activity, high prices continue to hold back buyers.
Not helping things is a Jan. 23 report from NerdWallet, published today, that found “About two-thirds (67 percent) of Americans say the housing market has never been worse for buyers than it is right now.”
So what’s there to do?
Hilary Farnum-Fasth
Real estate brokers David Hoffman and Hilary Farnum-Fasth have some ideas and shared them on a panel called “Creative Approaches to Affordability” at Inman Connect New York.
“We believe that the best way to control inventory is by focusing on new construction and development,” Farnum-Fasth said. “You don’t have to be at the mercy of the market, like we were during the pandemic, which was the least fun thing ever, and I was an agent during the Great Recession.”
Farnum-Fasth told the crowd of fellow brokers that finding the right connections for your clients can uncover avenues to affordability. The more you look, the more eager negotiators and unique situations you’ll find.
“We work with builders to put them with our clients, we work with investors, too, many of whom don’t realize that you can partner with a builder to do joint ventures and create spec[ulative] opportunities,” she said. “We can bring new developments to the market and work with lenders who will give you that four, four-and-a-half percent rate, which is not something everyone understands.”
Hoffman told the audience that what Farnum-Fasth was doing wasn’t that hard, and that you can build trust with builders if you find the land and the project goes well.
“We have builders and developers that give us all of their projects now,” Hoffman said. But still, finding affordability can come down to solid, traditional negotiation, according to Hoffman.
David Hoffman
“Even in a bidding war, you can win the house with the lowest bid, find out what else matters,” he said. “If a seller is relocating, they may be open to a lower price if there’s a quick close.” Hoffman also said that buyers who missed out on buying during the pandemic are still out there, and flush with cash, meaning they may have a much better chance of closing and, in turn, are able to challenge the seller on price. “There are a lot of sellers that want that peace of mind,” he said.
Still, the specter of mortgage rates continues to hover over any discussion of affordability, but Hoffman believes it can be exorcised by agents and brokers who educate their clients.
“Five percent is probably going to be the equilibrium, 2 [percent] to 3 percent is not going to happen again, so you have to educate your clients.”
Farnum-Fasth assured the crowd there is a light at the end of the tunnel. She can see it.
“We see relief coming, and that gives [your clients] hope,” she said. “The big takeaway is that we have to be super connectors, we as owners, we as agents, we have to be connectors whether it means finding the lender that can help find that ARM product or a fixed rate, and educate them on what they can do with the budget they have.”
