Queens Homebuyer Newsletter: MAR 2024

Hi all, hope you’re doing well! Below is this month’s edition of our Queens Homebuyer Newsletter. In this month’s edition we cover a primer on Treasury Spreads, some information about the lack of housing supply, and some information on the recent NAR settlement regarding real estate agent commissions. A lot of interesting things happening lately so we hope you find it interesting 🙂 

As always, if you have any questions or need any homebuyer resources, please don’t hesitate to Contact Us.   

If you’ve ever wondered what the relationship is between treasury bonds and mortgage rates, this is a good explanation of it from our founder Gary Keller. In this video, Gary explains how the mortgage rate is determined, what the average treasury spread is, and what it looks like may happen within the next year or two based on the pattern you see in the chart. Pretty interesting stuff. Click Here to watch the video. 

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If you’ve been in the market to buy, then you probably know that we’ve continued to experience a shortage of inventory for the last few years. This is what has kept prices from dropping significantly and it is what most likely will keep prices at or above current levels. Without more supply it’s hard for Queens home buyers to gain leverage, and the question is, when will we see more inventory hit the market. A recent article from Fannie Mae actually outlines the several reasons why we are experiencing a shortage of inventory. One reason is the “lock in effect”, but aside from that there are factors like the aging in place trend, the long term decline in consumer mobility, nearby job and family, etc.  It’s a pretty good read. Click Here to read the full article.   

Private Listings

This one has actually been in the mainstream media lately so you’ve probably heard about it. In short, the National Association of Realtors (NAR) recently agreed to a landmark settlement which would eliminate the longstanding common practice of sellers offering out compensation for buyer brokers/agents. For example, in the past homeowners would ask an agent what their commission is and the answer would be something like this “Our fee is 4% and of that 4%, 2% is shared/offered out to buyer agents as incentive for them to show the property to their buyers.” The buyer agent compensation was always negotiable, but it was definitely a common practice for sellers to offer out compensation to buyer agents. 

This appears to be going away because the NAR agreed to make some policy changes in order to resolve multiple class-action lawsuits brought on behalf of home sellers across the U.S. Under this new settlement NAR agreed to change its rules so that brokers/agents who list a home for sale on any of the databases affiliated with the NAR (i.e. MLS) are no longer allowed to include offers of compensation for a buyer’s agent.

So what does this mean? In our opinion, it looks like this may shift the payment of a buyer’s agent over to the buyer. In one way it makes sense because if a buyer wants representation on their home purchase, they should pay for it themselves right? However, what some real estate professionals argue is that this may actually make it harder for home buyers to buy a home. For example, now a home buyer may have to pay for their agent in addition to having money for the down payment, money for the closing costs, and most likely money for repairs or renovations since most homes in Queens are pretty old. Add to this the fact that prices have continued rising and mortgage rates remain elevated, and the decision can easily be interpreted as not being good for the home buying consumer. Sellers will still be able to offer buyer agent compensation under the proposed settlement, but just not on the MLS. 

That said, it looks like our industry is in for some changes and that is definitely okay with us. The question we’re asking ourselves is how can we be the real estate team that gets ahead of the trend and what can we do to modernize our approach for assuming these new policies go into effect. Click Here to read an article which breaks down the settlement and the potential implications. After reading it, we would love to hear your thoughts about it and what you think this means for the real estate industry.

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