Real estate agents are increasingly understanding how the NAR settlement will impact their business and are increasingly open to brighter possibilities, according to a new analysis from Intel.
This report is available exclusively to subscribers of Inman Intel, Inman’s data and research division, providing deep insight and market intelligence into the residential real estate and proptech businesses. Subscribe now.
It wasn’t a fluke.
The improvement in the real estate customer pipeline that the agency reported in September has held up and even increased in subsequent months, providing a major boost to expectations for next year’s business revenue.
The improvement in attitudes among these real estate agents revealed in the November Inman Intel Index survey bucks the trend for mortgage rates, which are still more than half a percentage point higher than when Intel last measured industry sentiment. There is.
Intel restarted its flagship industry survey this month after pausing it in October to make way for another survey of Inman readers.
However, the latest Intel Index reaction in late November serves to confirm that the spike in agent sentiment that occurred two months ago was not just a blip.
November Client Pipeline Tracker Score: -1
Last score: September -5 Recent peak: January +7
daniel houston charts
This month’s tracker metrics are based on real estate agent responses to the Intel Index survey conducted from November 18th to December 4th.
In this report, Intel examines the factors that have driven agent sentiment back into neutral territory in recent weeks from its low point in late May.
Read the full breakdown of the latest Client Pipeline Tracker results.
Buyers test the waters
Our Client Pipeline Tracker summarizes how agents feel about their buyer and seller pipeline over the past year and in the near future.
Intel explained the methodology in this post, but here’s a quick refresher on how to interpret the scores.
A score of 0 represents a neutral period in which the client pipeline is neither improving nor deteriorating. A positive score reflects a market where client pipelines are improving or are widely expected to improve within the next 12 months. The higher the rating, the more confident the agent is that things are progressing in the right direction. A negative score indicates that the client’s pipeline situation is deteriorating or is widely expected to deteriorate further next year.
A very positive total score would sit around the +20 mark. This type of score indicates that a large portion of the industry agrees with the fact that the pipeline has improved and will continue to improve.
On the other hand, an extremely negative total score is closer to -20. This is slightly lower than where the industry was in September, when Intel first surveyed distributors about its pipeline.
Results as high as +50 or as low as -50 can be observed for each of the four separate components included in the score.
Below are the component scores for the latest survey and how each sentiment category has changed since the last survey.
Tracker component score
September→November
Current buyer pipeline: -37 → -30 Future buyer pipeline: +7 → +6 Current seller pipeline: -17 → -15 Future seller pipeline: +7 → +13
Two things immediately stood out.
One is that buyer pipeline activity has been booming since late September, even as mortgage rates have generally increased.
Just under 53% of agents said their buyer pipeline had worsened in the past 12 months, down from 59% two months earlier.
And second, agents’ attitudes toward future listing prospects track Federal Reserve policy more closely than the weekly rises and falls in mortgage rates themselves.
In November, 82% of agents expected their listing pipeline to stay the same or improve over the next 12 months, up from 76% in our previous survey.
Additionally, while agents’ expectations for the buyer pipeline over the next 12 months did not improve significantly from September, they remain near the highest level since February, before the terms of the NAR settlement were made public. be.
journey here
In May, the agency’s performance was weak.
By that point, the industry had several months to process the effects of the NAR settlement changes. As a result, agents have significantly lowered their expectations for the buyer pipeline over the next 12 months.
Adding insult to injury, the spring home buying season was already slower than expected. And as the Federal Reserve continued to delay rate cuts, officials resigned themselves to a slower-than-ever-expected market after the summer.
Much of it came true as expected.
But by late November, the industry had passed another important turning point. The NAR settlement rule will take effect in mid-August, and the Federal Reserve will move into an era of interest rate cuts.
The outlook for future business conditions has improved as estate agents understand the impact of the rule changes and see some customers in the market come back into the fold.
In late August, just days after the rule changes went into effect, more than one in nine Intel Index agent respondents expressed deep pessimism about buyer business in the year ahead. After two months, the percentage of highly pessimistic buyer agents had decreased to less than 1 in 16 agent respondents.
On the listing side, agents are less pessimistic, perhaps expecting rate cuts to eventually materialize, even if they are delayed.
However, a clear trend is also emerging on the listed side. Agents who were cautious about the listing pipeline in August have become increasingly optimistic in recent weeks.
In August, 45% of agent respondents expected the listing pipeline to remain about the same over the next year, compared to 35% who expected it to improve. By late November, only 39% of agents expected the listing pipeline to remain unchanged over the next 12 months, while 43% thought listing business would grow year over year.
Indeed, real estate experts see the year ahead as full of uncertainty, with some wondering if there will be just as many challenges ahead as 2024.
But since details of the NAR settlement were made public in March, representatives remain as open as ever about the possibility that better days are just around the corner.
Methodology note: This month’s Inman Intel Index study was conducted from November 18th to December. As of April 4, 2024, 751 responses were received. The entire Inman reader community was invited to participate, and a rotating selection of randomly selected community members were encouraged to participate via email. Users answered a series of questions about their self-proclaimed niche in the real estate industry, including real estate agents, brokers, financiers, and proptech entrepreneurs. Results reflect the views of our passionate Inman community, but do not necessarily align with the views of the broader real estate industry. This survey is conducted monthly.
Email Daniel Huston
