Headlines this week addressed many shifts in the real estate industry.
The latest iBuyer report from Zillow showed a decline in market share for iBuyers from the previous quarter. Combined, Zillow Offers, Offerpad and Opendoor accounted for 1.7% of all purchases.
Homeowners sold 12,652 homes to Opendoor, according to the report. On Tuesday, the online company announced its expansion to three new markets.
However, more than half of homeowners do not believe iBuyers yield higher sales prices than traditional sales, according to a new survey from Clever Real Estate finds. 72% of homeowners still want to work with a real estate agent when requesting offers from iBuyers. This has led to some brokerages adding iBuying features, such as Keller Offers, RedfinNow, RealSure and others, to allow agents to handle instant-offer transactions.
Also on Tuesday, Compass laid off 450 workers, or 10% of their workforce, and briefly paused trading on the New York Stock Exchange, according to RealTrends. Redfin followed by laying off just under 500 of their employees, which is 8% of their workforce. Unlike Compass’ wave of layoffs, Redfin’s seems to impact both support roles and agents.
Redfin CEO, Glenn Kelman attributed the layoffs to weakening buyer demand.
“With May demand 17% below expectations, we don’t have enough work for our agents and support staff, and fewer sales leave us with less money for headquarters projects,” Kelman said.
The companies attribute the slowing demand to higher mortgage rates.
In April, the average rate for a 30-year fixed-rate mortgage hit 5% for the first time since 2011, up from 3.2% at the beginning of 2022. Last week, the rate hit 5.2%, according to Freddie Mac. GTR provided key insight to the local press on how these rate increases can affect Tampa homebuyers.
As anticipated, on Wednesday we saw the Fed agree to increase interest rates by 0.75 percentage point, which is the largest increase since 1994. This was done to curb inflation, which has reached a 40-year high.
This rate increase returns the benchmark rate to the early March 2020 level that the Fed slashed to almost zero when the COVID-19 pandemic hit the U.S. economy. However, historically, interest rates in the U.S. and many other developed nations remain at exceptionally low levels.
In this economy and ever-changing real estate industry, Greater Tampa REALTORS® is here to provide you with invaluable expertise and guidance. Emails like this along with GTR’s events, classes, and benefits such as a FREE account to Inman SELECT, are here to support your business and help you adopt the right tools.
