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🏠🔴 Commission settlement winners and losers
Plus, where flipping is still flourishing
Welcome to the Pocket List, investors đź‘‹
Here’s what we’re getting into today…
Commission settlement winners and losers
Flipping is still flourishing in these 5 markets
Where is most of the US population growth happening?
Your FREE pocket listing
Plus, a whole lot more.
Let’s make some money today, shall we?
First, let’s check in on mortgages…
Rates as of 3/27/24 (vs. 3/20/24)
What’s driving rates this week?
Rates fell last Friday and have been virtually unchanged
It has been a bit of a “wait-and-see” week without any major economic data dropping
THE LEAD
Let’s recap what you might have missed this week…
Winners and losers
Source: Giphy
Last week we covered the National Association of Realtors $418M settlement, and the proposed changes to commission structures that have flipped the industry on its head (check out our full coverage here).
ICYMI… Home sellers fought back against the “standard” 6% commission. Anyone who’s sold a home knows that the seller picks up the tab for their agent’s commission, as well as the buyers. This is pretty uncommon outside the US…
Source: Yahoo! Finance
The claims… A group of sellers said in a lawsuit that the National Association of Realtors (and other brokerages) colluded to keep commissions artificially inflated via industry rules and standards.
What now? If the US Department of Justice agrees to the settlement, beginning this summer…
The NAR will pay $418M in penalties
Buyers will negotiate commissions directly with their broker
Agent’s compensation will no longer appear on listing portals
Anything new?
Funny you should ask. Last week brought new developments.
And, gave the industry time to react (and in some cases, overreact) to the news.
First up… Publicly traded brokerage Compass agreed to pay $57.5M to settle with a group of sellers. It will resolve claims similar to those filed against the NAR.
Plus, the industry has had time to digest and react to the news…
(Last week we discussed in detail what it meant for buyers, sellers, agents, and investors.)
A boost for home builders? “This would disproportionately advantage large homebuilders, who have their own salespeople and robust online shopping environments; it is far easier to buy a new home without a buyer’s agent than an existing home.” (Evercore ISI's Stephen Kim)
This means the cost of building could come down. One potential outcome? Cheaper new homes for buyers.
Will online brokerages be the big losers? “Real estate portals that have historically relied more on the buy-side piece of this commission pool for their revenue models, [such as] companies like Zillow, Realtor.com, may need to reconsider the role that they play in the housing market and potentially shift that focus more to the sell side in terms of advertising homes.” (KBW’s Ryan Tomasello)
💠Mr. Pocket Listing says… It’s still wayyy too early to tell how all this will shake out. There’s even a chance the Justice Department doesn’t sign off on the deal.
But one thing is becoming increasingly clear: home buyer’s agents could have the most to lose.
As for investors? I outlined how I think the changes could impact RE investors last week…
More sellers could look to less traditional alternatives (think: off-market listings)
For larger-scale or institutional investors who also have brokerages, commission changes could be felt this summer
There is an opportunity for new brokerage models, and there will certainly be unique ways to find and market new properties
The NAR settlement is definitely a BFD, but there’s plenty of other news to keep an eye on…
What else Mr. Pocket Listing is reading…
Home Flipping Flops as Profits Fall—but These 5 Places Are Still Raking It In (Read)
Home price growth is back at pre-pandemic levels. Here’s what that means for buyers and sellers (Read)
Supply Climbs 5%, Biggest Increase in Nearly a Year (Read)
Jokes, Pop Music and Radical Honesty: How TikTok Is Changing Home Sales (Read)
Renting is now cheaper than owning in all of America’s 50 biggest metro areas (Read)
Baltimore spending board OKs $1 sales of some vacant homes (Read)
Mr. Pocket Listing’s favorite property of the week (a guy can dream, can’t he?)…
Disney-inspired “Haunted Mansion” on the market for $2.2M…
Located in Duluth, Georgia
9,467 square feet
6 beds, 5.5 baths
Designed by a former Disney contractor & special effects expert
Some honorable mentions…
A $20M mansion built ON TOP of a 33-story luxury apartment building in India (not currently for sale, but everyone has a price…)
Silicon Valley legend Marc Andreessen’s 12k sq. ft. Bay Area mansion is on the market for $33M
DATA DUMP
For all the numbers guys and gals out there…
+55.8% / Between February 2020 (right before COVID) and February 2024, mortgage rates climbed dramatically (Read)
Under $200,000 / These 15 cities have median home prices under $200k (Read)
2/3 / More than 60% of counties in the South saw population growth last year (Read)
61% / The percentage of Americans that live in their “ideal climate" (think: no desire to move) (Read)
THE POCKET LISTING
And now, your free pocket listing for the week…
Macon, GA
3 Beds, 2 Baths
1,241 square feet
Completely renovated throughout. Exterior renovations include a new roof, HVAC & deck.
Are you interested in getting this exclusive pocket listing for FREE?
Before we go, one last gift from Mr. Pocket Listing…
When you can't decide between a modern look and an 11th-century look
— Mr. Pocket Listing (@MrPocketListing)
10:16 PM • Mar 26, 2024
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