Real Estate Blog

Election year madness, real estate industry regulation changes, interest rate fluctuations, and capital market volatility have a lot of people wondering how to best position themselves for the second half of 2024. Times are interesting, to say the least, but the more informed you are, the better you can understand how to respond and execute.

Election years, especially this one, have become more and more chaotic as the media gets more involved. People have greater access to information, and social media has provided people with more of a platform to promote their ideas. The reality is that elections have become more noisy and influential in people's decision-making. Historically, the markets haven't had much of an impact from election year cycles; they have actually continued to climb for the most part. Yes, policy does affect that, but the election year itself hasn't been a big factor. We are starting to see that change slightly over the last couple of cycles as they have become more and more divisive. Fidelity Investments, a major financial management firm, has recently conducted a major study on this, which can be found HERE.

The real estate industry has also gone through a lot of changes, with several class action lawsuits over the past year. Most of those stemmed from commission disclosure issues, largely around buyer agents commissions, arguing that commissions inflated costs and that they were not negotiable. There was never a fixed price for commission, and different agencies offer different structures as all agents are independent contractors. However, the disclosure practices have been the biggest formal change we have seen from this. 

Starting on August 17th, there will be new disclosure documentation for sellers looking to list their home. Specifically, how the commission is paid out, how much that will be, and for which party. Buyer agents will now be required to have a formal representation agreement with all buyers before showing a home. That representation agreement will specify how the buyer's agent will be compensated and if the buyer will be paying all of their commission, part of it, or none of it.

All in all, we believe that the requirement for further transparency is a move in the right direction. Precision Home Group has always taken pride in overdelivering on service and communication throughout the sales process. Change can be good and challenge the status quo, and with the new disclosure regulations in place, all parties should have a better understanding of the process. 

Interest rates and the capital markets have seen a ton of recent fluctuations. We have seen some big dips in the stock market and reductions in mortgage rates. This is starting to peak buyer interest, especially with the recent announcement of a September Fed rate cut, which will further lower mortgage rates and make homes more affordable. With stocks taking a hit, I have personally seen some of our investors re-engage in commercial real estate investments and multifamily properties.