Agent Migration On the Rise

Plus, New Home Mortgage Apps Increased 15.7 Percent and 6 more Real Estate Insights

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A Lesson From a Book

Most people run from stress. Run to it. Stress keeps you sharp, challenges you in ways you never imagined, and forces you to solve issues and manage situations that send weaker people running for cover.

― From the book Relentless by Tim Grover (Personal Trainer of Michael Jordan and Kobe Bryant)

Today’s Rates

Real Estate Trends

Agent Migration On the Rise link

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  • Real estate agents are increasingly leaving legacy brands for new, low-fee brokerage models, allowing them to keep more of their commissions. In 2023, this trend has continued, illustrating a shift in the industry towards models that provide better financial incentives for agents.

  • Newer brokerages, averaging 14 years old, are attracting agents at the expense of legacy brands, which average 43 years in age. This suggests that agents are not just looking for better compensation but are also drawn to the innovation and potential growth opportunities that newer companies offer.

  • The migration of agents between brokerages underscores a significant industry trend, driven by the search for new opportunities and the entrepreneurial spirit of real estate agents. The relative age of a brokerage plays a crucial role in this movement, emphasizing the appeal of new ideas and business models in the real estate sector.

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February New Home Purchase Mortgage Applications Increased 15.7 Percent link

  • New home purchase mortgage applications rose by 15.7% year-over-year in February 2024, signaling strong buyer demand despite higher mortgage rates. Applications also saw a month-over-month increase of 1%, unaffected by typical seasonal patterns.

  • The average loan size for new home purchases reached its highest since March 2023 at almost $406,000, although it remained below the April 2022 record of over $436,000. This surge reflects the competitive nature of the housing market and possibly escalating home prices.

  • The FHA share of purchase applications, indicative of first-time homebuyer activity, climbed to 25.7%. This increase suggests a robust entry-level market and highlights the critical role of FHA loans in supporting first-time buyers amidst challenging market conditions.

Pent-up Demand Push Single-Family Starts Higher link

  • February 2024 saw single-family home starts reach their highest level since April 2022, driven by moderating interest rates, pent-up demand, and a lack of existing inventory. Overall housing starts increased by 10.7% to a seasonally adjusted annual rate of 1.52 million units.

  • The single-family sector's growth was significant, with starts increasing by 11.6% to a 1.13 million seasonally adjusted annual rate, marking a 35.2% increase from the previous year. The three-month moving average for single-family starts has climbed to over 1.0 million, indicating a robust recovery.

  • Permit activity in February also showed positive trends, with overall permits up 1.9% to a 1.52 million unit annualized rate and single-family permits increasing by 1.0% to a 1.03 million unit rate. This growth is indicative of continued strength in the housing market, despite a 29.0% decrease in multifamily permits from February 2023, suggesting a potential slowdown in apartment construction.

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Off Topic

Chart: Where people care about “having a good time” the most

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  • Japanese people value enjoyment highly, with 77% considering "having a good time" one of the top three aspects of life. This contrasts sharply with countries like Brazil, where only 22% share this sentiment.

  • The importance of leisure varies significantly across countries, from 28% in the United States to 47% in France. This illustrates diverse cultural attitudes towards happiness and leisure.

  • The survey underscores a universal quest for happiness, yet reveals a broad spectrum of how it is pursued and prioritized globally. It challenges us to reflect on our own values and the place of joy in our lives.

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Something I found Interesting

Why home prices have risen faster than inflation since the 1960s link

  • Since 1963, home prices have increased 2.4 times faster than inflation, making the median price of a U.S. home now $412,778 instead of $177,511. This dramatic rise highlights the growing challenge of affordability for many Americans.

  • The housing supply hasn't kept pace with demand, partly due to lengthy building times and restrictive zoning laws. The average time to complete a new single-family home is about 9.6 months, exacerbating price increases when demand outstrips supply.

New Yorkers who moved to Texas, Florida aren't saving as much as they used to: report link

  • The savings for New Yorkers relocating to Florida and Texas have significantly decreased due to soaring rents and home prices. In Miami, for instance, New Yorkers who moved there last year saved 28% less than those who moved in 2019, with savings dropping from $122,956 to $88,036.

  • The cost of living in popular migration destinations like Miami, Austin, and Dallas is rising faster than in Manhattan. While Manhattan saw a rent increase of 3.3% and a home price jump of 29.3% from 2019 to 2023, Miami experienced a 37% increase in rent and a 43.7% hike in home prices during the same period.

  • Florida and Texas are experiencing their own set of financial pressures, diminishing their appeal as low-cost havens. Florida is facing a property insurance crisis, with rates 42% higher than in 2022, and Texas sees a spike in property tax rates due to surging real estate demand, making both states less of a bargain for newcomers.

Location Specific

Apartment Demand in North and South Carolina Outperformed in 2023 link

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  • The Carolinas led the nation in apartment demand relative to existing stock, absorbing units 2.5 times their local share. In 2023, these markets absorbed nearly 25,000 units, accounting for about 10% of all U.S. absorption.

  • Despite only having a 4.2% share of the U.S. multifamily stock, the Carolinas' indexed absorption was notably high. This performance was unmatched by any other region, including the Mountains/Desert region and significant markets like Texas, Florida, and the Southeast.

  • The Lower Midwest, with a similar share of existing stock to the Carolinas, saw much smaller total demand. This resulted in a significantly milder indexed absorption pace, highlighting the unique growth and demand in the Carolinas' apartment markets.

Proptech

Finally, Video marketing platform Roomvu launches in the U.S. link

  • Roomvu, a Canadian video marketing platform for real estate agents, partners with LeadingRE and Realty One for U.S. expansion. Supported by Second Century Ventures, it was part of Canada's 20 most innovative tech companies.

  • The platform offers a library of video content covering real estate topics for effective lead generation. Videos attract 300% more traffic for lead nurturing, with homeowners 73% more likely to list with agents using video.

  • Roomvu's U.S. launch follows its success in Canada, leveraging AI for customizable, hyper-local videos. It aims to set a new standard in property marketing, significantly boosting brand visibility and business growth for agents and brokerages.

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That's all, folks.

Cheers,

Vidit

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