As real estate market conditions continue to decline, so does the market for real estate agents.
Home sales begin declining at the beginning of 2022. By May, they were down around 9% year-over-year for the fourth month consecutively. By September, home sales waned down around 10.2% year-over-year.
Real Estate Agents on the Decline Along with Home Sales
Realtor demand is on the decline, with less property availability.
Along with home sales, the abundance of real estate agents in the Phoenix area is on the decline as well. From September to October alone, the number of real estate agents dropped 34%.
The numbers are even worse in Mesa. During the same time, the number of active agents decreased by 40%.
Jonathan Cardella, the CEO and co-founder of AgentStory says that many buyers are reluctant to take out loans of 6% or more.
In the same manner, sellers do not want to list in the current real estate environment. They are aware that rates are very high and demand is dried up. Across the Nation, price reductions are now the norm.
Lower Numbers of Active Real Estate Agents
In Arizona alone, there were 2,393 active agents in October. 713 of those agents were in Phoenix, 308 agents were in Scottsdale, and 311 were in Mesa. These are the three cities AgentStory conducted studies on.
The market decline is no match for some realtors, however.
Carson Eilers, a designated real estate broker in Arizona, however, noted that he saw his transactions trend upward. Eilers said that the reason for this was likely because of the focus on sales training and a deeper dive into the market. He also noted that the realtors performing consistent training were actually doing quite well.
Eliers’ partner, Hauge, noted that they were experiencing a significant reduction in the amount of monthly business for each agent. The reason for this significant drop was the logical result of decreasing monthly sales and reduced buyer demand. Eilers recalled entering the real estate market back in 2008 when it was contracting.
What Does This Mean for the Future?
Geoff Thoren, a Scottsdale U.S. Bank mortgage loan originator, says that he expects to see similar mortgage rate pressure in the first quarter of 2023. However, he does not expect to see any large increases.
According to Thoren, who is also a U.S. Bank private wealth mortgage banker, the Freddie and Fannie rates will likely see the most pressure. This is because the Federal Reserve will no longer participate indeed Mortgage Backed Securities program.
With all of that said, luxury real estate agents continue closing deals, even with soaring interest rates.
This is because there are many cash buyers flocking to the valley with millions of dollars to purchase homes. These buyers look into areas like Paradise Valley and Scottsdale. They can acquire larger homes on bigger parcels of land than they could in other states.
Experts also note that lowering the cost of obtaining a mortgage to buy a home will create higher demand for real estate, which pushes prices up.
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