Across the country, real estate professionals and their clients have benefitted from the economic growth seen in the past few years. More people can now afford to buy homes, sellers enjoy ever-increasing competition that helps to raise asking prices, and many agents see business growing in a way not observed in at least a decade. The good news for all involved is that this trend could continue for some time.
Today, 90 percent of all millennial sellers and 92 percent of buyers in the same age group use agents to help guide them through the real estate sales process, according to the National Association of Realtors’ latest Home Buyer and Seller Generational Trends study. Much of the focus in the real estate industry over the past few years has been on both millennials and boomers, but the NAR’s data suggests that it may soon be Generation X who pushes the market forward.
Alleviating the constricted inventory
It’s worth noting that many members of Gen X are already homeowners, but they had to delay their home purchases – potentially for years, and longer periods than even millennials now face – because of the student loan debt they carried, the data showed. Even now, Gen-X buyers say they’re still dealing with an average student loan balance of about $30,000. But another group of Gen Xers has an even greater role to play: selling their homes.
The average Gen Xer now selling a property has been there for 10 years, and have often been locked out of selling simply because they wouldn’t get a good return on their investment until home prices reached, and then surpassed, pre-recession norms. That’s now happening in most parts of the country, and may encourage current owners to sell in the months and years ahead.
“Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home,” said Lawrence Yun, NAR chief economist. “More Gen X sellers are expected this year and are definitely needed to ease the inventory shortages in much of the country.”
Growing demand for agents
The good news is that the market now seems to be adequately prepared for a potential glut of new buyers and sellers in the near future, according to the latest NAR membership data. Through the end of February, more than 1.21 million agents were members of the NAR, up more than 5 percent from the 1.15 million seen in the same month last year. Not surprisingly, some of the most populous regions in the country also have the largest membership numbers; California (more than 174,000), Florida (almost 161,000) and Texas (nearly 103,000) are the only three states with upwards of 100K agents. However, the state with the most agent growth on an annual basis is South Carolina, at nearly 11 percent.
With more agents, comes more competition, even as the number of sales is likely to rise in the near future. To that end, it’s important for agents to do all they can to stand out from the crowd by marketing themselves as experienced local experts.
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