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“The most common plot of economic history is the role of surprises.”

I’m currently reading The Psychology of Money by Morgan Housel. He talks about how history studies the past and then tries to map the future and that’s ironic because so many events are results of unpredictable events. He used Hitler as an example. The odds that his parents had been fighting instead of conceiving 9 months before he was born aren’t that crazy and then the whole world to this very day would be different. I know this isn’t a philosophy blog. I also know that looking backward has helped us predict very poorly what would happen in 2023. As we approach 2024, many of us can feel things shifting in the market. We are feeling optimistic. Even though just two months ago, we were stoically wrapping our brain around the fact that things were going to get much worse before they got better. That 2024 was going to be another very rough year. Then this week, Bank of America joined UBS in predicting that there will be rate cuts in 2024. Everyone is perking right up. Candance Browning, head of BofA’s Global Research was quoted saying not only that 2023 defied expectations (no shit, right?) but that they “expect 2024 to be the year when central banks successfully orchestrate a soft landing.” That would be amazing. If we could see inflation under control without an economic disaster. What would it mean for real estate? We have to access what 2023 has meant for our industry and its consumers first. In my opinion, the most impactful or pivotal things have been:

  1. Interest Rates (duh)

  1. NAR Lawsuits

  1. Locked up Inventory vs. New Builds

Now we can see how each of these things may or may not play out in 2024.

Interest Rates We just got bond friendly news this morning, Thursday. PCE numbers came in showing that inflation was flat in October. I am nervous about November’s numbers though. I mentioned previously concerns about health insurance driving up inflation numbers but also, and you’ve probably read this too – Black Friday and Cyber Monday sales hit record levels. People went hard on the retail therapy. That might be really bad for us over here because not only did they spend their down payment funds but they are fueling inflation with every splurge, impulse purchase.

At least for the moment, based on current inflation readings and economic reports, interest rates have a pretty good trajectory. So it’s likely we are going to see both mortgage and listing activity continue to pick up as buyers get priced back into the market. I want to share with you my experience this year, of qualifying buyers and then over the next few weeks them losing their qualification as market conditions took yet another dump. The only way to navigate this was constant contact. I had to keep in very close touch with them even if the news wasn’t great, so they a. had real-time information, rather than relying on the lag in news from the media. And b., so they knew we were still in this game together. You are going to need to do the same thing with your lender as things trend better. You don’t want to be behind the curve or misinformed. I also want to make sure we stay on guard. It’s not likely going to be a free fall to better, happier times. I’m almost certain there will be a little more whipsawing and bumps in the road ahead. We can handle it, we just have to have realistic expectations.

NAR Lawsuits There are currently two lawsuits playing out against the National Association of Realtors regarding realtors’ commission. The first, in Missouri, was already ruled in favor of the plaintiffs as you are most likely aware. It is being appealed. The second is a class action lawsuit filed on behalf of anyone who has sold a home in the last five years. Plus the Department of Justice is investigating NAR’s policies regarding realtor commissions. So it feels like a lot. The reality is that this may not change much at all. The reality is that lawyers are probably the only ones benefiting as they poke at your 3% commission while they make something like 33% commission on this very case. But another reality we should be careful not to overlook is that this is peaking the consumer’s interest. As discussed previously, you want to make sure you are working with one of the good ones. If you’re a realtor, I can help you with this.


New construction is really killing it right now. Not only do they have inventory they are eager to move, they are also offering very low interest rates. You might be wondering how. It’s called a forward lock. The builder, who in many of these scenarios, is also the lender, buys a block of mortgages and pays upfront to buy the interest rate down on behalf of the whole lump sum. This costs them money for sure, but they have the margins to cover it because like I said: they are the builder, they are the seller, they are also the lender. So then they can move their inventory with a really attractive interest rate and the buyer honestly wins. As long as there aren’t any hidden fees in there and many times there aren’t. (My team is always happy to check for you.)

On the other hand, as interest rates cool off – we are likely to see sellers reach their tipping point with being trapped in a house they hate because of a rate they love. We could see more resales start to hit the market as sellers try to capitalize on buyer demand returning. Remember for every point interest rates went up, 1 million buyers were priced out. Every point they come back down…you get where I’m going with this…

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