The real estate market has its ups and downs, but consumers think now is a good time to buy a home. That's according to a new 2019 report from the National Association of Realtors. Their survey of 900 American households indicates that "in the first quarter of 2019, 65% of people believe that now is a good time to buy a home." Those numbers are up slightly from last quarter.
Real estate experts say the industry has seen lots of change in recent years.
"The real estate market has changed pretty drastically over the past five years, probably more so than in a typical five-year snapshot," says Los Angeles realtor Mark Cianciulli. "For one thing, the past five years have represented a majority of the recovery period, in terms of housing prices, from the financial crisis of 2008."
For example, he says the average home price in California over the past five years has gone from $400,000 to $550,000, with the low point around $325,000.
He says nowadays, buyers are more patient and selective. Back in 2014, a for-sale home would have had multiple offers. That's less common now because buyers are more choosey and interest rates are a little higher.
Los Angeles realtor Jennifer Okhovat says the real estate market has shifted dramatically into a seller's market in the past five years.
She says prices have increased year after year and inventory feels slimmer and slimmer.
"What has stayed the same is rental prices increasing, as house prices rise continuously," she says, noting the number one factor in valuing real estate is always, "location, location, location."
A significant change is that consumers don't have to use live agents anymore. Websites provide a lot of the information buyers and seller want and need, limiting the need for consumers to interact with a human being.
Many buyers and sellers are brokering deals online via sites like Zillow Instant Offers, RedfinNow and others. Known as iBuyers, these companies make offers to buy a property, "sight unseen, based on a proprietary valuation model," Forbes reported in 2018.
Discount brokerages such as Purplebricks, which is a hybrid of technology paired with a licensed, professional real estate agent, are helping consumers buy and sell properties, too.
"While initially thought to be a companion to real estate agents, as it sits at present day, these companies are regarded as a threat by most within the industry," says Charleston, South Carolina realtor Brian Beatty, who's the host of the "Brian Beatty Real Estate Show."
He continues, "No longer is the real estate agent the ultimate gatekeeper between the MLS (multiple listing service), with its vast database of homes, and the consumer."
He says the traditional role of the real estate agent has changed. Now agents act as consultants to buyers and sellers, similar to an attorney advising a client.
"The expert will influence pricing decisions and price drops and handle the paperwork," says Beatty, who predicts that while the number of agents will go down, the number of deals agents do individually will go up. "The work will become more specialized and more difficult."
Buyers and sellers are using realty websites to become more informed. According to the NAR, 95% of home buyers used the internet to search for a home in 2018.
Aaron Bowman, a Connecticut realtor, urges agents to use technology to their advantage.
"Realtors who don't use or embrace social media will have a hard time competing with those who do," he says.
Real estate professionals need to maximize their use of videos and virtual reality tours and capture exterior shots using drones (where they're allowed). Consumers, especially millennials -- the new generation of buyers -- want the technology and expect it.
*The Next Five Years
Cianciulli predicts a decline in prices, noting the market has been on the rise for the past seven to eight years.
"In my opinion, this is a good thing since prices have been increasing sharply for several years now and a slower and steadier market is a healthy market," he says.