NAR shares consumer guide on negotiating written buyer broker representation agreements

September 30, 2024 in California Housing Market, National Association of REALTORS®, Real Estate, Residential Real Estate Forms, Silicon Valley, Silicon Valley Association of REALTORS® | Tags: , , , , , , , , | Leave a comment

As part of the National Association of REALTORS® Settlement agreement related to broker commissions, as of August 17, buyers nationwide are required to sign a written buyer broker representation agreement after they have selected a real estate professional they want to work with. On Sept. 24, Gov. Gavin Newsom signed AB 2992 (Nguyen), a California Association of REALTORS®-sponsored bill limiting buyer broker representation agreementsto three months. The new law, which takes effect on Jan. 1, 2025, makes California one of 28 states requiring homebuyers to have such an agreement with their agents.

The new law will strengthen protections for California consumers, according to C.A.R. President Melanie Barker. “By mandating buyer broker representation agreements, consumers will have more choice and more clarity about the services they are getting from the REALTOR® they choose to help them through a complex transaction.”

The Silicon Valley Association of REALTORS® shares one of several consumer guides NAR has produced on different topics related to the new rules. Here’s what you need to know about negotiating an agreement with an agent who is a REALTOR® whom you have selected:

When will I be able to negotiate? Written buyer agreements are required for many real estate professionals before you tour a home with them, either in-person or a live virtual tour. These agreements help ensure both you and your agent are clear about roles, responsibilities, and agent compensation. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement. Learn more about written buyer agreements here, and learn more about open houses and tours here.

What can I negotiate? Agreements with your agent are negotiable, including terms about the services your agent will provide, how much your agent will be paid, how long your agreement will last, and more. You and your agent will work together to reach an acceptable agreement that allows you to get the value and services you need in the homebuying process, while also enabling your agent to pursue fair compensation for their work. Remember: compensation is fully negotiable and not set by law. You should consult an attorney if you have any questions or concerns regarding an agreement.

How is my agent compensated? Agent compensation can take many forms, such as a flat fee, a percentage of the purchase price, or an hourly fee. Agents cannot agree to an open-ended amount or range of compensation such as “the agent’s compensation will be whatever amount the seller is offering” or “between X and Y percent.” You can also ask the seller to offer compensation to your agent, which can be sought in the purchase agreement. More info can be found in our offers of compensation guide here.

What types of services can my agent provide? Agents may offer many types of services such as finding and showing you homes that meet your criteria, accompanying you to showings, sharing their analysis of available properties, negotiating on your behalf, and more. For more, read about the179 Ways Agents Who Are REALTORS® Are Worth Every Penny.

How do I start the conversation? You may want to talk to a few agents to find the best match to help you on your homebuying journey. Start by asking questions about the options available to you. If you are working with a REALTORÒ, they are bound by a Code of Ethics to have open and transparent conversations with you about your options. You can read more about REALTORS’® duty to put client interests above their own here.

What if we can’t agree? You don’t have to sign an agreement that you don’t agree with, and you or the agent can walk away from a negotiation at any time. Keep looking for the right fit – another agent may be able to better meet your needs.

Can we change the terms of the agreement after we make it? Yes. You and your agent can mutually agree to change the terms of your agreement. But your agreement and/or state law may govern when it can be changed or terminated. Read your agreement closely and speak with your agent if you would like to change or exit your agreement. Practices may vary based on state and local law. Consult your real estate professional and/or consult an attorney for details about state law where you are purchasing a home.

Please visit facts.realtor for more information and resources.

NAR shares consumer guide on buyer written agreement

September 30, 2024 in California Housing Market, National Association of REALTORS®, Real Estate, Silicon Valley Association of REALTORS®, Silicon Valley Housing Market | Tags: , , , , , | Leave a comment

As a result of the National Association of REALTORS® Settlement agreement related to broker commissions, as of August 17, one of the requirements is buyers nationwide are required to sign a written buyer agreement (also known as a broker buyer representation agreement) after they have selected a real estate professional they want to work with. To help consumers understand the new rules and practices, NAR has produced several consumers guides on each topic.

Here are what buyers should know about the written buyer agreement:

What is a “written buyer agreement?” What does it do? A written buyer agreement is an agreement between you and your real estate professional outlining the services your real estate professional will provide you, and what they will be paid for those services.

Why am I being asked to sign an agreement? Written buyer agreements became a nationwide requirement for many real estate professionals as a part of the NAR’s proposed settlement of litigation related to broker commissions.

Are these agreements new? In some places, yes. Many states have required them for years, while some have not. As a result, it is entirely possible you or others you know have not used them in the recent past. Regardless, they are now a nationwide requirement for real estate professionals.

Are these agreements negotiable? Yes! You should feel empowered to negotiate any aspect of the agreement with your real estate professional, such as the services you want to receive, the length of the agreement, and the compensation, if any. Compensation between you and your real estate professional is negotiable and not set by law. In the written agreement, the compensation must be clearly defined (e.g., $0, X flat fee, X percent, X hourly rate) and not open-ended or a range. Only sign an agreement that reflects what you have agreed to with your real estate professional.

How do I benefit from these agreements? These agreements clearly lay out what services you, as a homebuyer, expect your real estate professional to provide, and what your real estate professional will be paid. These agreements make things clear and reduce any potential confusion at the outset of your relationship with your real estate professional.

When do I need to sign an agreement? You will be asked to enter into a written buyer agreement with your real estate professional before “touring” a home with them, either in-person or virtually. If you are simply visiting an open house on your own or asking a real estate professional about their services, you do not need to sign a written buyer agreement.

Does this mean I have to pay my real estate professional out of pocket? Not necessarily. While you are responsible for paying your real estate professional as outlined by your agreement, you can still request, negotiate for, and receive compensation for your real estate professional from the seller or their agent.

Do agreements dictate a specific type of relationship I need to have with my real estate professional? No. You are allowed to enter into any type of business relationship with your real estate professional allowed by state law where you are purchasing a home.

Can I change or exit an agreement? Yes. You and your real estate professional can mutually agree to change your agreement. Agreements may have specific conditions under which they can be exited, so read the text of the agreement and speak with your real estate professional if you would like to change or exit your agreement. Realtors are members of the National Association of Realtors and are ethically obligated to act in your best interest.

For more information on this topic and other guides for consumers, visit https://www.nar.realtor/the-facts.

Silicon Valley REALTORS® award scholarships to 18 high school seniors

September 10, 2024 in Charity, Education, Silicon Valley, Silicon Valley Association of REALTORS®, Silicon Valley REALTORS® Charitable Foundation | Tags: , , , , , , , , , , , , , , , , , , , | Leave a comment

The Silicon Valley REALTORS® Charitable Foundation Trust, the charitable arm of the Silicon Valley Association of REALTORS®, presented scholarships to 18 graduating seniors from public high schools in Silicon Valley at the end of the 2023-2024 school year. Each student received a $1,500 scholarship. The scholarship awards are made possible by donations from SILVAR REALTORS® and affiliates.

The Charitable Foundation Scholarship Program is a partnership effort between the Silicon Valley REALTORS® Charitable Foundation and educators in SILVAR’s service areas. The program recognizes students for their outstanding achievements in academics, extracurricular activities, and community involvement. Scholarship recipients are selected from the high schools in the communities served by SILVAR members.

The selection committee, chaired by Scholarship Program chair Nina Yamaguchi, includes representatives from the local business community and SILVAR. This year marks the program’s 25th year. Since its start, the program has awarded $517,500 in scholarships to graduating seniors in communities served by SILVAR members.

Students who received scholarships, the schools from which they graduated, and the colleges/universities they plan to attend are William (Wei Chi) Yao, Cupertino High School (UCLA); Batoul Mortada, Fremont High School (University of Detroit Mercy); Ezra Furtado-Tiwari, Henry M. Gunn High School (UC Santa Barbara); Mahi Patel, Homestead High School (UCLA); Manasija Bhargavan, Leigh High School (UC Santa Barbara); Audrey Fan, Los Altos High School (Stanford University); Dana Hathaway, Los Gatos High School (Northwestern University); Sophie Yang, Lynbrook High School (University of Chicago); Sarah Jay Weintraut, Menlo-Atherton High School (UCLA);Amy Zheng, Monta Vista High School (Stanford University); Mikayla Kim, Mountain View High School (UCLA); Haley Oba, Palo Alto High School (Columbia University); Sophia Tian, Prospect High School (University of Pennsylvania); Natalie Tsung, Santa Clara High School (UCLA); Lynn Dai, Saratoga High School (Yale University); Zachary Jansons, Westmont High School (UC Berkeley); Vidhya Vishwanath, Wilcox High School (Carnegie Mellon University); and Kayla Tsui, Woodside High School (Cal Poly San Luis Obispo).

Members of the SILVAR presented the scholarship awards to the recipients during senior awards night at their respective schools. Presentingthe awards this year were Joanne Fraser (Compass), Katherine Frey (Katherine Frey Real Estate), Jimmy Kang (eXp Realty of California), Alex Lewicki (DeLeon Realty), Theresa Loya (Coldwell Banker), Wendy Marioni (Compass), Tracey McNeely (eXp Realty of California), Sunita Merchia (Merchia Realty), Russell Morris (Coldwell Banker), Suzanne Myers (Intero Real Estate Services), Navneet Parmar (Real Estate Experts), Tammie Peters (Christie’s International Real Estate Sereno), Denise Welsh (Compass) and Mark Wong (Compass).

VIEW 2024 CFT SCHOLARSHIP RECIPIENTS

September is REALTOR® Safety Month: Join NAR REALTOR® Safety Month Webinar on Sept.18

September 10, 2024 in California Housing Market, National Association of REALTORS®, Real Estate, Real Estate Scams, Silicon Valley, Silicon Valley Association of REALTORS® | Tags: , , , , , , | Leave a comment

REALTORS® face real threats when working in the field, and it’s crucial to be prepared. September is REALTOR® Safety Month, and there’s no better time to reassess your safety protocols and make safety a top-of-mind priority.

The National Association of REALTORS® 2023 REALTOR® Safety Survey highlights alarming statistics of the potential dangers REALTORS® face while on the job:

  • 56,000 REALTORS® were victims of a crime while performing their duties.

  • 322,000 REALTORS® felt fear for their safety while on the job.

  • 406,000 REALTORS® don’t have safety protocols in place to protect themselves.

Join NAR’s REALTOR® Safety Month webinar on Wednesday, September 18, 10 AM Pacific Time, and learn how to identify potential threats, leverage technology for safety, and effectively handle emergencies.

REGISTER HERE

Make the 10-Second Rule a habit whenever you are on the road.

The 10-Second Rule for Keeping Safe on the Road

Inattention is one of the main reasons people find themselves in dangerous situations.

Take a few precious seconds to assess your surroundings to help you spot and avoid danger. Make it a habit, and then share it with someone else.

Take two seconds when you arrive at your destination.

• Is there any questionable activity in the area?

• Are you parked in a well-lit, visible location?

• Can you be blocked in the driveway by another vehicle?

Take two seconds after you step out of your car.

• Are there suspicious people around?

• Do you know exactly where you’re going?

Take two seconds as you walk towards your destination.

• Are people coming and going or is the area unusually quiet?

• Do you observe any obstacles or hiding places in the parking lot or along the street?

• Is anyone loitering in the area?

Take two seconds at the door.

• Do you have an uneasy feeling as you’re walking in?

• Is someone following you in?

Take two seconds as soon as you enter your destination.

• Does anything seem out of place?

• Is anyone present who shouldn’t be there or who isn’t expected?

Give your safety the attention you deserve. All these take a total of 10 seconds! Protect yourself with more safety tips and resources from www.nar.realtor/safety

PRDS releases updated contracts & forms today

August 12, 2024 in California Housing Market, National Association of REALTORS®, Silicon Valley, Silicon Valley Association of REALTORS®, Silicon Valley Housing Market | Leave a comment

PRDS updated contracts and forms that comply with the new National Association of REALTORS® settlement guidelines for Buyer and Seller Representations are available today. REALTOR® members of the Silicon Valley Association of REALTORS® (SILVAR) and the San Mateo County Association of REALTORS® (SAMCAR) can access these forms on all electronic platforms – on the Transactions/zipForm Edition, TransactionDesk/Instanet platform at https://prdsforms.transactiondesk.com and on the SILVAR and SAMCAR websites, and on www.Glide.com (for SILVAR members only).

PRDS Forms is an extensive line of online forms for residential purchase and sales transactions. These forms are available online as a member benefit to all REALTOR® members of SILVAR and SAMCAR. The Standard Forms Committee, which is composed of brokers and top producers from SILVAR and SAMCAR, meets every other week and works very hard to make sure all forms are current and reflective of local practice.

NAR reminder to implement practice changes this week

August 12, 2024 in Real Estate | Tags: , , | Leave a comment

Here are a few reminders from the National Association of REALTORS® regarding actions that are required to obtain a release of liability and protection from claims related to broker commissions:

  • All MLSs must implement practice changes by August 17 to remain in compliance with NAR policy. Some MLSs are implementing practice changes earlier. MLSLIstings will implement rule changes tomorrow, August 13.
  • Offers of compensation are prohibited on MLSs. Offers of compensation will continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. Offers of compensation help make homeownership and the benefits of professional representation more accessible to buyers, including first-time homebuyers, increase homeownership opportunities for historically underserved groups, and benefit sellers by expanding the potential buyer pool.
  • Agents working with a buyer must enter into a written agreement before touring a home. Ahead of August 17, NAR encourages all members to address form changes and prepare to educate real estate professionals and consumers about revised forms. NAR policy does not dictate terms of buyer agreements, including the type of relationship – e.g., agency, non-agency, exclusive, or non-exclusive – or the length of the term.

The practice changes are detailed here, and clarifying information is available in NAR’s FAQ on facts.realtor

There’s value in organized real estate for REALTORS® and benefits for consumers

March 12, 2024 in National Association of REALTORS®, Real Estate, Silicon Valley, Silicon Valley Association of REALTORS®, Silicon Valley Housing Market | Tags: , , , , , | Leave a comment

The role of the REALTOR®, the benefits received from member involvement in REALTOR® association activities, and the importance of organized real estate to REALTORS® and their clients were laid out to members of the Silicon Valley Association of REALTORS® (SILVAR) by CEO Paul Cardus at the beginning of the year.

Cardus shared the following scenarios of what life would be for an agent or consumer if REALTOR® associations like the National Association of REALTORS® (NAR), California Association of REALTORS® (C.A.R.) or SILVAR did not exist in light of just one benefit, that of legislative advocacy:

  • Agents would not be independent contractors; they would be employees working for banks.
  • Services, including commissions, would be taxed.
  • Conforming loan limits might be set at $400K, if they existed at all, instead of $1,149,825 in 2024.
  • FHA loans likely would not be available.
  • There would be no capital gains exclusion, mortgage interest deduction or 1031 exchanges.
  • The commercial secondary mortgage market, which provides a stable flow of credit, would not exist.
  • The liquidity, stability and affordability provided by Fannie Mae and Freddie Mac in the nation’s housing finance system would not exist.
  • HUD would not employ local agents for sales.
  • There would be no multiple listing service (MLS) or portals with standardized, reliable listing data.
  • Universal buyer representation would not exist, leaving many buyers unprotected in the biggest transaction of their lives.
  • Proposition 13 would not exist, making it hard for California’s seniors to afford to stay in their homes.
  • Without impartial C.A.R. and PRDS standard forms provided by REALTORS® for REALTORS®, buyers and sellers would need attorneys to review and negotiate various one-sided forms for each transaction and be responsible and liable for researching state and local ordinances and codes, instead of using PRDS advisories.
  • Flood insurance would become unobtainable.
  • Property sales would require multiple point-of-sale approvals, like sewer lateral inspection and repair, from multiple agencies and inspectors. Sellers might have to invest tens of thousands in property upgrades just to sell. Escrows could extend for months or even longer.
  • Rent control would be in place statewide, making it challenging to sell a tenant-occupied home or leave the business as a housing provider.
  • Opportunity to Purchase (OPA) programs, like the one SILVAR helped defeat in East Palo Alto recently, would require property owners to offer homes to tenants or nonprofits before listing a rental property on the market and mandate the right of first refusal once an offer is accepted.
  • Thousands of other legislative “bright ideas” would be blocked or kept in check because organizations like SILVAR, C.A.R. and NAR would not be around to engage volunteers, coordinate the resources, and hire professional staff to advocate on behalf of REALTORS® and their clients.

“The benefits that REALTORS® and their clients receive through REALTOR® membership in a REALTOR® association are quite the value,” said Cardus.

2024 Silicon Valley REALTORS® Leadership Installed

March 12, 2024 in Real Estate | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

The Silicon Valley Association of REALTORS® (SILVAR) 2024 leadership team was installed on February 1, 2024 at the Palo Alto Hills Golf & Country Club. 2024 California Association of REALTORS® President Melanie Barker administered the oath of office to 2024 SILVAR President Eileen Giorgi and to SILVAR’s 2024 officers and board directors.

2021 C.A.R. President Dave Walsh served as master of ceremonies. 2023 SILVAR President Jim Hamilton led the Pledge of Allegiance, and Ryan Iwanaga, co-founder and Chief Experience officer at Christie’s International Real Estate Sereno, delivered the Inspiration Message.

Giorgi, a REALTOR® with Christie’s International Sereno, has served as a board director, member of the Los Gatos-Saratoga district council, chair of the REALTOR® Service Volunteer Program (RSVP) that helps senior homeowners with household chores they can no longer do on their own, and as trustee and president of the Silicon Valley REALTORS® Charitable Foundation.

Joining Giorgi as lead officers are Tammie Peters, a REALTOR® with Christie’s International Real Estate Sereno, President-elect; and Jeff Bell, broker manager of Coldwell Banker Realty Cupertino, Treasurer.

SILVAR’s 2024 board directors are Jim Hamilton (Compass), Past President; Brett Caviness (Compass), Region 9 Chair; Denise Welsh (Christie’s International Real Estate Sereno), NAR Director; District Chairs Will McLennan (Yarkin Realty) – Menlo Park-Atherton, Alex Lewicki (DeLeon Realty) – Palo Alto, Katherine Frey (Katherine Frey Real Estate) – Los Altos-Mountain View, Sunita Merchia (Merchia Realty) – Cupertino-Sunnyvale, Navneet Parmar (Real Estate Experts) – Los Gatos-Saratoga; and Directors At-large Alan Barbic (Barbic Real Estate Group), Jimmy Kang (eXp Realty of California), Tracey McNeely (Compass), Stacey Woods (Compass) and Suzanne Yost (Compass).

The 2023 Recognition Awards were presented by 2023 SILVAR President Jim Hamilton and CEO Paul Cardus. Recognized for their outstanding contributions were Karen Trolan (Christie’s International Real Estate Sereno), 2023 REALTOR® of the Year; Creighton Galloway (o2 Mortgage), 2023 Affiliate of the Year: Jane Volpe (REALTOR®), Spirit of SILVAR award; and Joanne Fraser (Compass), President’s award.

Trolan was recognized for her longtime service to SILVAR as 2016 president, board director, C.A.R. director and MLSListings, along with her service to the community as soccer coach, at Girls on the Run, Sierra Region Ski Patrol, and REALTOR® safety instructor. “In so many ways she is the REALTOR® face in her community. Her determination and spirit inspires us, and in her own words, she can still do it,” said Hamilton.

Galloway was recognized for being “a hardworking, hands-on leader and a great proponent of our Association. In addition to engagement at SILVAR and community events, he provides mortgage services committed to ensuring a great experience for our REALTORS®.”

Volpe was praised for her spirit of volunteerism. Hamilton noted, “She works behind the scenes without accolades. She is one of those members that works outside the limelight, recognizing the services of others while never drawing attention to herself.”

Fraser was praised for all the work she continues to do for the association. She served as 2021 SILVAR president, was member of the SILVAR Charitable Foundation and Foundation president in 2009, served as region chair at C.A.R. and as CRS Northern California Chapter President. She was named Ambassador of the Year by the Mountain View Chamber of Commerce.
 
This year’s Installation Sponsors include MLSListings Inc., Los Gatos-Saratoga District, Christie’s International Real Estate Sereno, DeLeon Realty, Wells Fargo Home Mortgage, Los Altos-Mountain View District, Cupertino-Sunnyvale District, Menlo Park-Atherton District, Palo Alto District, Coldwell Banker Realty, Supra, TourFactory, Ty Karges Home, and The Junkluggers.

REALTORS®and their clients receive great value from organized real estate

December 28, 2023 in National Association of REALTORS®, Real Estate, Residential Real Estate Forms, Silicon Valley, Silicon Valley Association of REALTORS®, Silicon Valley Housing Market | Tags: , , , , , , , , , , | Leave a comment

The role of the REALTOR®, the benefits received from member involvement in REALTOR® association activities, and the importance of organized real estate to REALTORS® and their clients were the main focus of the 2023 Economic Seminar & General Membership Meeting of the Silicon Valley Association of REALTORS® (SILVAR).

SILVAR CEO Paul Cardus laid out the following scenarios of what life would be for an agent or consumer if REALTOR® associations like the National Association of REALTORS® (NAR), California Association of REALTORS® (C.A.R.) or SILVAR did not exist in light of just one benefit, that of legislative advocacy:

  • Agents would not be independent contractors; they would be employees working for banks.
  • Services, including commissions, would be taxed.
  • Conforming loan limits might be set at $400K, if they existed at all, instead of $1,149,825 in 2024.
  • FHA loans likely would not be available.
  • There would be no capital gains exclusion, mortgage interest deduction or 1031 exchanges.
  • The commercial secondary mortgage market, which provides a stable flow of credit, would not exist.
  • The liquidity, stability and affordability provided by Fannie Mae and Freddie Mac in the nation’s housing finance system would not exist.
  • HUD would not employ local agents for sales.
  • There would be no multiple listing service (MLS) or portals with standardized, reliable listing data.
  • Universal buyer representation would not exist, leaving many buyers unprotected in the biggest transaction of their lives.
  • Proposition 13 would not exist, making it hard for California’s seniors to afford to stay in their homes.
  • Without impartial C.A.R. and PRDS standard forms provided by REALTORS® for REALTORS®, buyers and sellers would need attorneys to review and negotiate various one-sided forms for each transaction and be responsible and liable for researching state and local ordinances and codes, instead of using PRDS advisories.
  • Flood insurance would become unobtainable.
  • Property sales would require multiple point-of-sale approvals, like sewer lateral inspection and repair, from multiple agencies and inspectors. Sellers might have to invest tens of thousands in property upgrades just to sell. Escrows could extend for months or even longer.
  • Rent control would be in place statewide, making it challenging to sell a tenant-occupied home or leave the business as a housing provider.
  • Opportunity to Purchase (OPA) programs, like the one SILVAR helped defeat in East Palo Alto recently, would require property owners to offer homes to tenants or nonprofits before listing a rental property on the market and mandate the right of first refusal once an offer is accepted.
  • Thousands of other legislative “bright ideas” would be blocked or kept in check because organizations like SILVAR, C.A.R. and NAR would not be around to engage volunteers, coordinate the resources, and hire professional staff to advocate on behalf of REALTORS® and their clients.

“The benefits that REALTORS® and their clients receive through REALTOR® membership in a REALTOR® association are quite the value,” said Cardus.


NAR economist projects mortgage rates of 6-7% by Spring 2024

November 21, 2023 in National Association of REALTORS®, Silicon Valley Association of REALTORS®, Silicon Valley REALTORS® Charitable Foundation | Tags: , , , | Leave a comment

Elevated mortgage rates, high home prices and limited housing inventory are making the dream of homeownership difficult for Americans, National Association of REALTORS® Chief Economist Lawrence Yun told REALTORS® attending the “2023 NAR NXT The REALTOR® Experience” conference and expo in Anaheim last week.

Yun analyzed the current state of the U.S. residential real estate market and shared his 2024 outlook during the Residential Economic Issues and Trends Forum. He explained that high mortgage rates and low inventory have dominated 2023, and as a result, he predicts home sales will likely decline by 18% this year.

The housing shortage continues to be what’s edging up home prices, said Yun. “Lack of inventory is providing the support for high prices, but it’s also making it super difficult for first-time buyers to enter the housing market.”

First-time buyers face steep challenges. High rent, student and credit card debt, car loans, and childcare costs for those with children have made it difficult for many to save for a down payment.

High interest rates have had a great impact on the U.S. overall economic performance, said Yun. While the latest GDP figure of 4.9% shows growth, he warned there are some worrying signs in the economy. Business spending is essentially flat. Goods inventory is rising, which means products are being produced but they are not getting sold.

“We cannot keep adding to the shelves,” said Yun. “Just like in housing, businesses have to borrow money, and business spending is down because it’s more expensive to borrow.”

Yun said the jobs data is still positive, but each passing month shows diminishing strength. Based on the trendline, employment could become negative, which makes the upcoming GDP number looks to “worrisome.”

Yun noted that currently, the consumer price index (CPI) is much calmer, and with community banks suffering from high interest rates, the Fed should adjust its monetary tightening posture. In fact, the bond market appears to be reacting as if the Fed will be cutting interest rates next year.

“I believe we’ve already reached the peak in terms of interest rates,” Yun said. “The question is when are rates going to come down?”

Yun projects mortgage rates will head towards 7% in a few months and into the 6% range by the spring of 2024. He also anticipates that more sellers will enter the market.

“Builders are back on their feet, up 5% in newly constructed home sales year to date,” said Yun. “Builders can simply create inventory. In a housing shortage environment, builders are really benefiting.”

Other numerous trends point to possible pent-up seller activity that could trigger much-needed inventory due to life changes. This would include growing families, couples marrying or divorcing and seniors. There are seven million newborn babies, three million marriages, and 1.5 million divorces. Seven million people will turn 65 years old and will be looking to downsize or relocate to live closer to their children and grandchildren. Additionally, four million deaths, four million net new jobs, 50 million job switches, are all reasons sellers will need to sell sooner than later. Yun added that international buyers have declined, but once they return to the market, there will be a boost in buying.

“Pent-up sellers cannot wait any longer. People will begin to say, ‘life goes on,'” said Yun. “Listings will steadily show up, and new home sales will continue to do well. Existing home sales will rise by 15% next year.”

Nearly 12,000 NAR members and industry stakeholders from all 50 states, several U.S. territories and 40 countries attended last week’s NAR conference and expo. Representing the Silicon Valley Association of REALTORS® at the event were President Jim Hamilton and SILVAR NAR director Denise Welsh.

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