These times are tough for almost all real estate businesses. But as Intel’s monthly industry sentiment indicator shows, different parts of the country report unique challenges and business approaches.
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Brokers across much of the U.S. face some common obstacles: high mortgage rates that inhibit new inventory, weak sales and a series of commission rulings and settlements that have created uncertainty for the brokerage business.
But the squeeze on tight inventories is particularly severe in some parts of the country. In other cases, a significant portion of clients are already pressing their agents for more answers on how they can manage or benefit from the upcoming NAR rule changes.
To derive these findings, Intel dug deep into its flagship real estate sentiment survey to find the key trends and factors driving business in four major U.S. regions: the Northeast, South, West and Midwest.
Here are the four biggest regional takeaways from the latest Inman Intel Index, a survey of 708 real estate professionals conducted June 20 through July 3.
1. Inventory shortages are a different story in the Midwest and Northeast
It is difficult for new homes to come onto the market in most parts of the country, but the decline in inventory has stabilized in most places.
But if you’re an agent in the Midwest or Northeast, your new listing business may have been hit particularly hard over the past year.
- The percentage of agents who told Intel in June that their listings customer pipeline had “significantly decreased” over the past year was twenty three% in the Midwest and 27% In the Northeast.
- compare 12% Respondents from the West and 15% Some in the South say their pipeline to listings is down sharply from this time last year.
Due to ongoing screening of the listing pipeline, agents in the Midwest and Northeast are more likely than agents in other regions to report lack of stock remains the biggest threat to its business.
- 33% Agents in the Midwest Region and 44% Agents in the Northeast ranked “insufficient inventory” as their most concerned business issue.
- In comparison 15% Agents in the Southern Region 19% Westerners say the same thing.
Agents in the South and West are more likely to point out inventory challenges rather than highlight them mortgage interest rate as their biggest concern. They are also more likely to report holding positive outlook Buyer and seller pipeline for the next 12 months.
2. Splits among top brokers are common in much of the country—except in one place
Ultra-high brokerage cuts have become increasingly common in recent years as large brokerage startups offer attractive packages to fuel their rapid growth, and as franchisees and independents respond, competing for top talent.
But the latest Inman Intel Index results may also reveal more layered regional dynamics.
- less than 5% The interviewed agents in the Northeast region said, 90/10 split or above with their brokerage firm.
- This is much lower than 18% Agents in the central and western regions, 31% in the west and 34% Southerners told Intel they were divided 90/10.
This may be partly explained by the population that responded to the poll, but not entirely.
- There are agents in the Northeast region More likely Agents in other areas than any other reported working with publicly traded non-franchise brokerage brands such as eXp, Compass or Real Brokerage.
- At the same time, agents in Northeast China also More likely than any other group reported 70/30 splitalthough a smaller percentage said their brokerage firms use a franchise model, which makes it easier to adopt carve-outs across the spectrum.
Here is a table with the complete regional breakdown.
3. Western sellers may already be aware of the NAR changes
Although many attorneys have answered at least some of their clients’ questions about commission litigation, clients don’t always have a specific strategy in mind.
But in western U.S. states, more and more agents are seeing a level of customer engagement with details not reported elsewhere.
- 35% Agents in the West told Intel that a large proportion of their seller customers (at least 1 in 10) had inquired Do they need to pay a buyer’s premium? recent months.
- This ratio exceeds other regions: twenty two% Agents in the southern region, twenty two% in Northeast and 17% The Midwest says the same thing.
Perhaps partly for this reason, Western agents are among those most likely to be named. Commission compression or negotiation as their top business concern.
- 26% of Western agency respondents said their biggest concern was commission compression or negotiation, roughly the same 25% Who said the same thing in the south and more twenty two% in the Midwest and 20% The Northeast also had the same reaction.
Still, in a region of the country where prices are generally high, the biggest concern is 34% Agents in the West are still focused on mortgage rates, not commission compression.
4. Eagerness to change jobs and wait-and-see attitude
A region-by-region examination of the latest Intel Index results also reveals different dynamics in hiring.
- In the northeastern states, 12% of agency respondents said they would almost certainly switch brokerages at some point in the next 12 months.
- The proportion of agents who think they will definitely move is 10% in the South, 9% in the west and only 3% In the Midwest.
But just because so many Midwestern agents haven’t sold yet doesn’t mean they’re saying no.
- 18% Midwest agents who responded to the Intel Index in June said their decision 50-50 or slightly tilted towards Compared to leaving your current agency 14% All other regional agents said the same thing.
Methodological Notes: Inman of the month Intel index poll The survey was conducted from June 20 to July 3, 2024, and 708 responses were received. The entire Inman reader community is invited to participate, and rotating, randomly selected community members are prompted via email to participate.. Users answered a series of questions related to their self-identified real estate industry—including real estate agents, brokerage leaders, lenders, and proptech entrepreneurs. Results reflect the opinions of the participating Inman community, which may not always align with the opinions of the broader real estate industry. this poll Do this once a month.
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