T3 Insight

In 2022, Opendoor faced significant challenges and recorded a net loss of $1.4 billion despite selling over 39,000 homes. However, in 2023, the iBuyer returned to profitability in its second quarter. A pivotal move was partnering with Zillow after the latter ceased its iBuying program. This partnership expanded Opendoor's reach, with 40% of their total acquisition contracts in Q2 coming from such collaborations. Additionally, Opendoor is doubling down on relationships with real estate agents, increasing incentives and strengthening its brand marketing efforts.

Opendoor's strategic shifts and renewed emphasis on partnerships can offer brokerages, agents and team’s insights into evolving market dynamics and potential collaboration opportunities in the iBuying space.

The federal antitrust case involving REX, Zillow and NAR is gaining attention. REX alleges that Zillow and NAR hid non-MLS listings, causing a decline in traffic to REX’s lower commission properties.

The trial is set for September 18 in the U.S. District Court in Seattle.

In July 2023, NAR reported its member count reached over 1.56 million members, despite a decline in housing transactions. NAR membership increased in states such as Florida, Texas and Georgia, with Florida leading with over 223,000 members. However, Lawrence Yun, NAR's chief economist, anticipates a 5% drop in membership by December due to the competitive business environment and the nearly 19% decline in home sales year-over-year in June.

Brokerages and agents face stiff competition with the decline in the number of home sales in 2023. Success will require smart strategy and savvy marketing.

Mortgage interest rates in the United States have reached their highest levels since 2002, with the 30-year fixed rate averaging 7.09%. This increase is attributed to a strong economy reflected in factors such as consumer spending and wage growth, as well as an elevated 10-year treasury yield due to concerns about the US debt load and long-term rate expectations.

The real estate industry may continue to face a slowdown in home purchases as higher mortgage rates deter potential buyers, despite the underlying strong economy indicating sustained demand.

The August mortgage monitor report from Black Knight shows that in June 2023, home prices hit new highs in 30 of the 50 largest markets.  High home prices combined with elevated borrowing rates have resulted in rising monthly mortgage payments, with July's typical payment reaching a record of $2,308. This trend, coupled with the growing inventory deficits in over 90% of markets, suggests further challenges in affordability.

A recent survey by John Burns Research and Consulting reveals that interest in developable land has soared, with the market for such land being the most robust it's been since early 2022. The surge in demand is attributed to the tight existing home market, prompting builders to seek land for new developments. Regionally, the Northeast leads in the land rush, with high demand due to limited supply near job centers. In contrast, areas like Texas, Florida, and most of the Midwest have seen a cooling trend.

With the existing home inventory remaining tight, builders are capitalizing on the moment. Real estate agents, after witnessing clients lose in bidding wars, are increasingly directing them towards new construction.

A recent analysis shows a positive shift in home equity appraisals, indicating improvement in appraisal fairness. It has shown that  there is a racial gap in appraisals with minority neighborhoods receiving lower valuations than majority-white areas. Efforts by the  Property Appraisal and Valuation Equity (PAVE) task force have contributed to a decrease in low appraisals in minority areas over the past two years, according to the latest Federal Housing Finance Agency data. Although there's still a notable gap, the difference has lessened by 2.9 percentage points between white and minority tracts over the past two years.

Real estate agents, brokerages, and teams must stay informed and advocate for fairness in the appraisal process to ensure equitable housing opportunities and build trust with diverse clientele.