Rob and Greg dive into predictions for 2025, analyzing transaction volumes and mortgage rates while considering the future of MLSs. They debate the possibility of the three-way agreement unraveling and what that could mean for real estate associations. The discussion highlights the importance of community engagement, referencing cultural shifts and the decline of social organizations. Speculation on mergers and acquisitions in the industry adds a thrilling twist, making for an insightful glimpse into the evolving landscape of real estate.
Transaction volumes are expected to increase modestly by 3%, indicating a market recovery from recent lows and influencing key business strategies.
The future of MLSs is uncertain, with predictions suggesting potential changes in their relevance and operational models amid a shifting real estate landscape.
Predictions around major mergers and acquisitions, particularly involving Realtor.com and MLSs like Bright and Stellar, signal significant industry consolidation ahead.
Deep dives
Predictions for Increased Real Estate Transactions
A modest increase in real estate transactions is anticipated, projecting around a 3% growth over the current year. This forecast could bring the total number of transactions to approximately four million, still significantly short of historical averages. The predictions hinge on market recovery from its lows in the past few years, suggesting that the downward trend has leveled off. For agents and service providers, these numbers are critical as they underpin many business decisions and strategies within the industry.
The Impact of Mortgage Rates on the Market
There is consensus that mortgage rates, currently hovering around 6.25%, will likely rise to between 6.3% and 7.5% in the coming year. This increase is expected to affect affordability but might also push potential buyers to make decisions sooner, alleviating some of the declining transaction fears. Discussions surrounding prior historical rates set a new baseline for understanding current affordability challenges, particularly as buyers grapple with anchoring to lower rates from the past. As such, these rising costs could lead to buying behavior shifts within the market.
Home Prices Expected to Rise
Home prices are projected to increase moderately, with estimates suggesting the median price could reach around $430,000 to $460,000. This growth is attributed to supply-demand dynamics, which are still at play despite existing affordability issues that many homebuyers face. There is a recognition that even amidst a challenging buying environment, affluent buyers may still find ways to enter the market, bolstered by gains from other assets, such as stocks. The need for strategies to combat these rising costs remains a topic of concern among consumers and real estate professionals alike.
The Future of Local Associations and MLS
The relevance of Multiple Listing Services (MLS) and local associations is in flux, with predictions indicating potential shifts in how they operate moving forward. Concerns about the ongoing viability of the three-way agreement among agents, brokers, and MLS are mounting, suggesting that new models for real estate interaction may need to emerge. Discussions about associations reassessing their value propositions highlight the necessity of evolving in response to member needs and market conditions. The anticipation of possible MLS divorces raises questions about future collaborations and integrations in the industry.
Predictions for Mergers and Acquisitions
The conversation centered around potential mergers and acquisitions within the real estate space implies significant industry changes ahead. Key predictions involve Realtor.com possibly acquiring a major prop tech company to enhance its competitive edge against other platforms. The discussion also noted that MLSs like Bright and Stellar may explore mergers to strengthen their market positions while addressing competitive pressures. These strategic moves highlight the ongoing consolidation trends within real estate technology and service providers as they adapt to the evolving marketplace.
In this final episode of the year, Rob and Greg deliver their predictions for 2025, exploring how the real estate industry will evolve. They tackle everything from transaction volumes and mortgage rates to the fate of MLSs and the potential unraveling of the three-way agreement. Along the way, they discuss societal trends, like the importance of community and the role associations can play in bringing people together, while reflecting on industry dynamics and the future of key players like Realtor.com and Compass.
Key Takeaways
• Predictions for 2025: Rob and Greg forecast transaction numbers, mortgage rates, home prices, and the biggest M&A moves.
• The Fate of MLSs: Discussion on whether MLSs will remain relevant or adapt to changing times.
• Unraveling the Three-Way Agreement: The potential impact of associations like Phoenix breaking away from NAR.
• The Importance of Community: Inspired by the book Bowling Alone and the documentary Join or Die, they discuss how associations can evolve to foster better connections.
• Major Industry Moves: Speculation on Realtor.com’s next big acquisition and predictions around mergers like Bright MLS and Stellar MLS.
