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Agents often ask about real estate trends. Here are 4 topics that will affect your pocketbook this year. Enjoying a successful 2018 – like every year - will require planning, tenacity and creativity. That’s the stuff that makes you a great agent!
ECONOMY – Expect the West Michigan economic forecast to remain mostly unchanged for 2018. We’ll continue to see another year of moderate growth. While there are several key components (tax reform, repeal ObamaCare mandate, midterm elections) that will impact the national outlook, West Michigan’s stable, conservative business model will be “steady as she goes.” Don’t be fooled by record stock market valuations. Wall Street has little to do with real economic growth.
HOUSE VALUES – One indicator that determines housing values is the cost of the starter home. With Michigan’s minimum wage increasing to $9.25 per hour on January 1st, 2018, expect the average starter home’s price to move towards the $135,000 range. Have you noticed that many buyers tend to purchase their next home at 150% of the current home’s value? This will push next pricing targets toward $200k, $350k and $525k.
COMMISSIONS – While housing prices increase, we are seeing more flux regarding real estate commission rates. In the past, most commission discounting was done on the listing side. Now, the trend is showing itself on the selling side as well. Over 12% of all homes advertised on our MLS offer buyer agents less than 3%. And those rates vary greatly – often from 1% to 2.5%. Many sellers (especially builders) now offer a flat fee to represent buyers rather than a percentage of the sales price. Many of these amounts translate to aprox.1-1.5% of the sales price for buyer’s agents. When working as a buyer’s agent, don’t make assumptions. Take the time to review what the seller is offering you for your services. If you are a listing agent, make sure you have the authority and flexibility to negotiate terms as needed.
TEAMS – Expect the trend where agent teams leave larger brokerages to build their own brands to continue. These teams are great for specializing in specific concepts, niche market, targeted marketing or a specific geography. Working as a team makes a lot of sense. Balancing life and work can be tough for real estate agents. Teaming with other agents who share complementary skill sets is a smart solution. I’ve had a few agent teams approach me to broker their concepts. It’s definitely a growing trend. While a few larger brokerages are fighting the trend by reducing splits in exchange for long term contracts, most teams see the value in keeping those funds and re-investing directly into their team.
Ready for a change in 2018?
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