“The best time to buy a home is always five years ago.” — Ray Brown
Each homeowner invests a considerable amount of resources in the house they're purchasing, including what physically goes into their new home. In this way, purchasing a house reflects overall consumer confidence, and many industries and businesses benefit from buying, selling, and developing real estate. Home construction in 2017 alone added $107 trillion to the American economy (a full 6% of the GDP) and 2017 was lower than average. It's clear that real estate is tightly woven into the U.S. economy as a whole.
In 2018, the housing market continues to benefit sellers: people are in a position to buy in this economy, and housing inventory remains quite low. In many ways, inventory is not staying up with demand, yet new construction to increase the availability of homes also creates more jobs and pushes unemployment numbers lower and wages higher. This cycle potentially creates even more people ready to buy and sell homes, and thus feed the American economy.
In a jarring shift for many, rents are raised when home inventory is low and renting becomes a struggle for those with lower to middle incomes. In many urban areas today, from eternally high-end New York to Detroit, Pittsburgh, and San Antonio, purchasing an expensive home is less costly than long-term renting.
The current real estate market is no time for owners or their agents to be lax about selling. High demand and a seller’s market means a lot of inexperienced folks on both sides are entering the industry for the first time. Millennials are a huge percentage of buyers right now, and a good portion of people preparing to downsize may also be ready to sell, perhaps decades after their last time. Now is the time to stay savvy and continue to grow your real estate career.
A seller’s market is absolutely no time for a house to sit accumulating multiple days on the market because there’s something seriously, and costly, wrong with it. It’s also no time for a house to miss getting the highest possible price for want of a little TLC. Knowing competition for homes is fierce, buyers who fall hard for a house may be more willing to make a higher offer, so make sure you're properly communicating with your clients about their wants and needs. Sellers need to understand why a home might not be selling and what to do in these cases - such as easy-maintenance curb appeal, decluttering/cleaning, the right neutral colors, professional staging, etc. Agents need to be able to communicate why these steps are so important and then give the best advice/recommendations for getting them done.
It is still beneficial for agents, especially those representing first-timers, to know current trends and expectations in the market, whether it be design or smart home technology. Now is the perfect time to guide sellers to reliable vendors for professional or DIY home improvements. The buyers in this intense housing market are always competing, so make sure your client’s home makes a lasting impression and snags the highest bids.
Real estate's main effect on the economy is its contribution to the market. Through real estate buying and selling, people can improve economic conditions as a whole. Real estate also engages many professions, from agents to photographers, and boosts jobs throughout the nation. As a real estate agent, you are improving the American economy through your personal business and each of your clients.
This content was created in partnership with Lin Nulman, HomeLight writer and educator.