Why Can't Anyone Afford A House?

Another Summer has given way to the crisp winds of Autumn. As the cooler temperatures and falling leaves begin to turn ones mind toward the importance of having a warm place to stay in the upcoming months, it would be prudent to look at how housing affordability has become a true concern for most people in the United States. In a very informative, yet eye-opening article, EconoFact discusses how the vast majority of household are spending well over 30% of the their income on housing. This figure includes both homeowners and renters.

The recently decline in housing unaffordability is concerning for a number of reasons. One of the primary concerns around this current economic trend is the financial stress that higher housing costs place on households. Considering further the inflationary pressures of the past five years and it appears that most American households may be squeezed into an impossible position.

Seasoning Update 2024

It’s been a while since we have discussed seasoning on this blog and it’s about time to talk about the changes that have taken place in the past few years and discuss further the different meanings of seasoning that exist for a mortgage.

What Will Each of the Candidates Do For the Real Estate Market If They Are Elected President?

The 2024 presidential election is coming up in four months and on July 21, 2024, President Joe Biden formally announced that he was withdrawing from the presidential race. This left the Democratic party with a decision which was ultimately made July 30^th, when they name Vice President Kamala Harris as their endorsed candidate for president. With both candidates for president unequivocally named, let’s look at what both Donald Trump and Kamala Harris might do to or for the real estate market if elected as president.

Digitization and the Real Estate Professional

There is no denying that the role and purpose of a real estate professional has changed over the past five years. From advances in artificial intelligence, to the popularity of digital real estate, to the presence of large full service real estate companies in the market, like Zillow 2024, this market is very different from that of 2019. Add to this mix the weakening of real estate professional organizations, like the National Association of Realtors via the NAR settlement and it becomes even more apparent that the real estate service market is in a state of change. Given the current state of flux in the market, some have begun to question the role of a real estate professional. It has therefore become imperative that real estate professionals recognize their current competitive advantages in order to thrive.

The Origin of the 6% Commission Standard

The recent National Association of Realtors (NAR) Settlement is in the process of changing how many real estate brokers and salespeople conduct business. The terms of the settlement all but abolish cooperative compensation amongst brokers. Although this may not be a substantial change for markets in which every buyer offers through a Buyer's Broker and every seller is automatically represented by a Seller’s Broker, the effects will be greatly felt in other markets. Some of the larger real estate markets have developed complex systems of agency that will now be simplified by one premise--in a residential real estate transaction, a buyer will now have to pay a Buyer’s Broker and seller will have to pay a Seller’s Broker.

Shrinkflation In the Real Estate Market

Inflation has been a reality for the past couple of years. As a result, many companies have decided to respond to the rise in prices and the weakening of the dollar by shrinking the size of their products without reducing their price. This practice has been given the name “Shrinkflation,” which is  defined as “the practice of reducing a product's amount or volume per unit while continuing to offer it at the same price.” Shrinkflation started to become apparent during the pandemic, but was so craftily employed that many doubted that it was even happening. Now, however, it is well acknowledged that just about everything is smaller, but more expensive. Shrinkflation has so integrated itself in today's reality that it has made its way into the real estate market.