During that time we’ve seen about 20 homes, and put in two offers that didn’t work out for various reasons.
We’ve been approached by someone who is going to sell their home, but is not on the market yet. They want to sell to us directly as a home for sale by the owner. We are OK with that.
However, we are also looking for advice on how to fairly compensate our real-estate agent for the work they have done so far.
What’s the best option for us? Is it wrong to ghost my real-estate agent?
Fortunate
Dear Fortunate,
The clue is in the question. Ghosting does not treat others with respect, and does not give them the explanation they deserve. Tell them the truth. Explain your situation, and have an open and honest conversation. You will feel better for doing so.
It’s great that you found a home, and one that is directly sold to you by the owner. That will save you thousands of dollars in commissions and fees that you don’t need to pay real-estate agents, so that’s a big win.
Typically, when a home is sold, the listing agent and the buying agent each get a 3% commission, both of which are paid for by the seller. The stage is set for the buyer’s agent to no longer automatically receive a 3% commission.
Last month, a Missouri court found the National Association of Realtors and two real-estate brokerages guilty of conspiring to inflate real-estate commissions, a decision that will likely have a deep impact on the U.S. housing market.
Negotiate a fee
Just because you found a house by yourself doesn’t mean you should ghost your real-estate agent. They scoured through listings for you, took you to 20 open houses, and even helped you put in two offers. For that work, you should think of how you would want to compensate them. And you seem to agree.
Have you signed anything that would require you pay them a commission if you find a house? Typically, sellers sign such contracts for a period of around six months.
Obviously, if the seller was using a real-estate agent, it would make no difference: The seller’s real-estate agent would simply have to split their 6% commission with your agent.
Assuming that the seller does not have a real-estate agent, you could negotiate a fee for the services provided by your real-estate agent thus far. Have a number in mind — say 2%, slightly less than the fee they would have gotten — and see if you and your real-estate agent are comfortable with it.
Enlist your real-estate agent’s help
But here’s another route that could be a win-win for the both of you: Consider keeping them until the transaction is finalized, and make that 2% contingent on them providing those services.
After all, real-estate agents do more than just setting up open houses and showing you the property. They can help you with paperwork, purchase agreements, contacts, schedule inspections and appraisals; help you find multiple lenders; and help get you a good mortgage rate. Plus, they may be able to spot any potential red flags that you would’ve overlooked.
“I would recommend formally utilizing their [agent] in the transaction, with a negotiated fee paid by the buyer at closing,” Erin Sykes, chief economist and real-estate wealth adviser and broker at Nest Seekers International, told MarketWatch.
“This gives the buyer protection as the Realtor will have their best interest in mind, doing due diligence, and they gain the benefit of full representation,” she added.
Putting a value on time
The leverage you have is goodwill: They are getting something for their time, but they also have no other option. Many other people would simply ghost their real-estate agent, buy the house and run.
Ultimately, if you decide that you don’t want to pay your real-estate agent for not playing a role in closing on your new home, then that’s your prerogative. You can choose to not pay them a dime.
But remember this: How would you like that if the tables were reversed? Is their time not as valuable as yours? And is this the kind of karma you want buying your new home?
This week’s Big Move question was spotted on Reddit.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.
- The recent $1.8 billion jury verdict against the National Association of Realtors and several top brokerage firms highlights mounting legal and market pressures on real estate commissions.
- A recent Keefe, Bruyette & Woods analyst report estimated that the $100 billion paid in real-estate commissions annually could be cut by 30%, with as many as 1.6 million agents losing their source of income.
- Commissions are already negotiable, but buyers agents are likely losers as homebuyers are more likely to bypass them, or in the least, negotiate for lower fees.
Toronto Star | Toronto Star | Getty Images
A recent jury verdict against the National Association of Realtors and large residential brokerages could upend the residential real estate industry.
The real estate compensation model is at the heart of the issue. Plaintiffs contend that commission rates are too high, buyer brokers are being overpaid, and NAR rules, along with the corporate defendants’ practices, lead to fixed pricing. By contrast, NAR contends the rules promote competition and efficient, transparent and equitable local broker marketplaces.
NAR, whose CEO left shortly after the landmark court loss, is appealing the $1.8 billion jury verdict, so it could be several years before the case — which covers the Missouri markets of Kansas City, St. Louis, Springfield and Columbia — is resolved. But coupled with similar lawsuits that are in process, the potential for policy changes that could impact realtors’ pocketbooks is palpable.
The impact on the market continues to spread. Shares of Re/Max Holdings, for example, were down over 8% on Tuesday amid fears of litigation, even though it had settled with plaintiffs before the recent NAR case verdict.
Here’s what real estate agents, homebuyers and sellers need to know about potential changes in residential real estate economics.
A bad time for bad news in real estate
The jury verdict comes at a time when many real estate agents are already feeling a pinch.
The rapid rise in interest rates caused by the Federal Reserve’s fight against inflation recently led to the 30-year fixed mortgage average rate topping 8% — though rates have come back down a little since — exacerbating an existing affordability crisis in the U.S. housing market. Potential sellers don’t want to move if they have to contemplate a mortgage rate as much if not more than double their current one, while millions of potential homebuyers can’t make the monthly payment and are currently shut out of the market.
Existing home sales recently dropped to their lowest level since 2010. According to an October report from University of Colorado Boulder scholar-in-residence Mike DelPrete, existing home sales are on pace for 4.15 million transactions this year, based on NAR data, which would be down from over 6 million in 2021 and 5 million in 2022.
At a time when home sales are already under pressure, “this lawsuit is just another punch in the gut for real estate franchises,” said Bill Gross, a self-employed real estate broker associate in California with eXp Realty.
Thus far, there’s been little-to-no trickle-down effect for individual brokers and agents as a result of the legal proceedings, but that may not be the case forever, depending on how legal battles, taking place on multiple fronts, shape up. An analysis from Keefe, Bruyette & Woods analyst Ryan Tomasello published last month, before the jury verdict was reached, estimated a 30% reduction in the $100 billion paid in real-estate commissions annually and as many as 1.6 million agents losing their source of income.
Pressure on transaction fees will increase
Fees generally have been under pressure for the past number of years, with technology leading to more transparency and the recent court battles intensify that industry pressure.
Also, as home prices have gone up, the fees are more apparent relative to the deal size, said Gilbert J. Schipani, founder of Tempus Fugit Law, which represents buyers, sellers, realtors, lenders and businesses through commercial and residential real estate transactions.
Lawsuits focused on fees reinforce the general trend of trying to lower fees in the real estate market, Schipani said.
“It’s another step in the direction that we’ve been going for the past 10 years,” he said.
As the court cases progress, there’s likely to be more disclosure around fees in the future, for transparency purposes, he said.
As Glenn Kelman, CEO of tech-led real estate brokerage firm Redfin, recently wrote, “In the weeks leading up to the verdict, the National Association of Realtors already updated its guidelines to let agents list homes for sale that don’t offer a commission to the buyer’s agent. … Traditional brokers will undoubtedly now train their agents to welcome conversations about fees. … This is as it should be.”
RedFin, and another tech-focused realty brokerage firm, Compass, are among targets added to new legal challenges.
Buyers agents could be the biggest losers
Plaintiffs argue that buyers, not sellers, should foot the bill for the buyer’s agent, but that could have an untoward impact on how readily buyers’ agents are used.
“If plaintiffs had their way, home buyer representation would be a thing of the past in what is for many the most significant and complex purchase they will make in their lifetime,” said NAR spokesperson Mantill Williams, in an email.
If courts force today’s norms to change, more home buyers are likely to try finding properties on their own to save money, and bargain with listing agents, thinking they’ll get a discounted fee since the latter is already being compensated by the seller, Gross said.
Not all real estate professionals will agree to work both sides of a deal because of the “inherent bias,” but it could happen more often depending on how the market shapes up, Gross said. There’s also the possibility that new rules imposed by courts could prohibit real estate professionals from working both sides of a deal, Schipani said.
Kelman noted in his post-verdict analysis that if buyers still hire a buyer’s agent, they’re likely to negotiate a lower fee given the heightened focus and because it may no longer be part of the home price, which allowed it to be financed by a mortgage.
This also suggests new agents may be less likely to enter the industry, according to Gavin Myers, managing partner at Prudence, a venture capital firm that invests in the real estate sector. Most new agents start on the buy side and there’s a risk when you’re trying to break into the industry. If there are questions about how they get paid, or if they’ll get paid, people might not want to work on the buy side, or you might not find high-quality people, Myers said.
Local housing market changes will be key
Local market rules could change based on what’s happening in the courts, or broader market shifts.
For example, the Real Estate Board of New York (REBNY), which is unaffiliated with NAR, recently announced upcoming changes to its rules, in a stated effort to promote transparency and consumer confidence in the residential marketplace. The changes, which had been in the works for months, were voted on in October.
Starting Jan. 1, offers of compensation to buy-side brokers must originate from the seller/owner, according to the change. Listing brokers will no longer be permitted to make the offer of compensation to the buy-side broker, even on the seller’s behalf. Also, listing brokers will no longer pay the buy-side compensation. Rather, the buyer’s broker will be directly compensated by the seller or owner of the exclusive property, which should occur at the closing as is customary in the New York City area, the group said.
“Decoupling the buy side compensation represents the future of how residential real estate is transacted, and expect other listing services to follow this lead,” REBNY said in a FAQ on its website discussing the changes.
Commissions are already negotiable
Right now, real estate professionals don’t have to change their way of doing business, while legal challenges are ongoing. But NAR strongly recommends the use of buyer representation agreements for clarity and understanding purposes. NAR also urges members to continue to tell clients that commissions are negotiable and set between brokers and their clients.
A separate suit against NAR and brokerages, involving multiple markets, could go to trial next year, and there’s also another recently filed nationwide lawsuit to contend with.
“No matter what happens with the Missouri judge, or in any other courtroom, one thing is certain: there’s no going back to the way things were,” Kelman, whose company left NAR before the verdict, wrote in his recent post.
Real estate professionals should stay tuned.
“This is a time to read the fine print, stay as informed as possible both for the sake of your business as an agent and for your client’s best interests,” said Vickey Barron, a licensed associate real estate broker with Compass in New York City.
Published: Nov. 2, 2023 at 8:02 a.m. ET
By Rob Curran
Jones Lang LaSalle’s third-quarter net income and revenue fell as a commercial-real-estate slump continued.
The Chicago commercial real-estate developer posted earnings for the quarter ended in September of $59.7 million, or $1.23 a share, down from $140.2 million, or $2.88 a share, a year earlier. Excluding certain items, Jones…
By Rob Curran
Jones Lang LaSalle’s third-quarter net income and revenue fell as a commercial-real-estate slump continued.
The Chicago commercial real-estate developer posted earnings for the quarter ended in September of $59.7 million, or $1.23 a share, down from $140.2 million, or $2.88 a share, a year earlier. Excluding certain items, Jones Lang LaSalle posted adjusted earnings of $2.01 a share, matching the average Wall Street target, as tabulated by FactSet.
Third-quarter revenue fell by 1% to $5.11 billion, compared to the mean analyst estimate of $5.04 billion, as tallied by FactSet.
Commercial real estate developers have struggled in recent quarters because of a toxic combination of stubborn work-from-home trends and rising mortgage rates.
“The industry-wide slowdown in investment sales and leasing transactions continued,” during the third quarter, said Chief Executive Christian Ulbrich, in a statement.
Write to Rob Curran at rob.curran@wsj.com
Existing-home sales in August buckled under pressure from higher mortgage rates. New home sales, a bright spot in an overall dreary housing market, might not be immune.
With data expected this week on August’s new home sales, investors will get a read on whether rising mortgage rates will continue to slam home builder stocks as they did recently.
Existing-home sales in August dropped for the third straight month to a seasonally-adjusted annual rate only 1% higher than its recent 12-year low, set in January. Mortgage rates are the likely culprit: the average 30-year fixed mortgage rate rose above 7% in mid-August before ascending to its highest level in more than 20 years.
Sales activity looks unlikely to have rallied in September: Mortgage rates measured by
have remained above 7% so far this month, at a recent 7.19%. One leading indicator of future sales, the volume of applications for home purchase loans, has remained well below year-ago levels this month, according to Mortgage Bankers Association data. “As homebuyers continue to face higher rates and limited for-sale inventory, which have made purchase conditions more challenging,” Joel Kan, the trade group’s deputy chief economist, said in a statement last week.
Should the bond market reaction to expectations of fewer rate cuts in 2024 hold, this week’s Freddie Mac survey will likely move higher: the 10-year Treasury yield, with which mortgage rates often move, reached its highest level since 2007 on Thursday. Rocket Mortgage, a large mortgage originator, was quoting rates at 7.63% on Friday morning.
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Mortgage rates could reach 8% in the short-term, National Association of Realtors chief economist Lawrence Yun said last week. That could put further pressure on existing-home sales, driving them to a new cyclical low, he said.
Shares of home builders, who had been the beneficiaries of the unusual housing market dynamic created by higher rates, have fallen recently as mortgage rates have risen. Earlier this year, builders stepped in to fill the void created by homeowners who have stayed put thanks to their ultralow mortgage rates. New home sales, as a result, soared: the metric rose as much as 32% above year-ago levels in July to its highest seasonally-adjusted annual rate since February 2022.
But mortgage rates’ recent rise has shaken confidence that the trend can continue: builder sentiment measured by the National Association of Home Builders turned negative earlier this month, while single-family housing starts in August slumped about 4% from the month prior.
Economists expect sales of new homes to have fallen in August, too: consensus estimates compiled by
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expect the government’s measure of contract signings to buy a new home to drop 2% from July, to a seasonally-adjusted annual rate of 700,000. The data is expected Tuesday at 10 a.m.
Economists at
the government-sponsored enterprise that buys mortgages from loan originators in the secondary market, expect sales of new homes to slow in the fourth quarter, and in the first half of 2024. The winter months are typically cooler seasonally, but the higher cost of buying a home—a combination of higher mortgage rates and prices—will add further pressure.
Fannie Mae expects a mild recession next year, says Doug Duncan, Fannie Mae’s chief economist, which would also weigh on sales. The economists expect the average mortgage rate to end 2023 at 7.1%, and fall to 6.3% by the end of 2024 as job losses rise and the economy softens.
But all hope is not lost for home builder stocks. “As the easy money has been made, a close inspection of homebuilding points to a fairly decent backdrop for the industry, supported by favorable credit spreads, elevated demand, and low inventory,” Cirrus Research strategist Georgiana Fung and Director of Research Satya Pradhuman wrote in a Sept. 21 note titled “Homebuilders—Buy the Dip!”
”Although mortgage rates have risen rapidly in response to the aggressive Fed rate hikes, the current pause and even the expectation of a reversal in policy should shine a ray of light on the housing market,” they wrote, highlighting
(ticker: PHM) and
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(MTH) as small- and mid-cap ideas. The companies’ shares were down 3.1% and 4.8% last week, respectively, but up about 62% and 33% so far this year.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
Interview with Jolanda Castagna, Managing Director of Akka Kappa
What is your evaluation and perspective on the real estate industry in Ghana?
If you have had the opportunity to visit Ghana recently, particularly within the last year, you would have noticed a significant surge in real estate activities. Despite the prevalent concerns about the economic situation, both historically and in the present, the substantial ongoing real estate projects are quite astonishing. This fact remains somewhat surprising considering Ghana’s past and current circumstances. However, it is important to recognize that numerous dynamics have been influenced by the COVID pandemic.
Considering the context of Ghana as your current location, investing here appears to offer favorable conditions and promising returns, especially given the limitations on moving capital around due to the present circumstances. Consequently, local investment seems to be a more feasible option. Shifting focus to the real estate landscape, the emergence of numerous high-rise structures is noticeable. Conversely, there is a lack of projects involving gated communities, townhouse complexes, and upscale residences designed for CEOs or diplomats. The availability of such properties is currently extremely limited.
This shortage is largely attributed to the high cost of land. Developers find it economically viable to maximize land value and space by constructing apartment buildings. Nonetheless, from my perspective, this approach could lead to a genuine predicament within the next two to three years. The apartments currently being constructed predominantly consist of studio, one-bedroom, and two-bedroom units. Given the scarcity of townhouse initiatives and the insufficient development of three and four-bedroom apartments, a dearth of suitable housing options for families is anticipated. It is evident that a family of three or four cannot comfortably reside in a two-bedroom apartment.
We are encountering a problem concerning the legal framework and the difficulties in establishing clear property ownership in Ghana. This issue has led to numerous complexities, and it appears that a solution is not on the horizon or anticipated.
Absolutely, and that leads me to another crucial point. The resolution might not be forthcoming because this is how the legislative system operates, particularly with these sublease arrangements. Essentially, property ownership is granted for a specified duration. This setup can be less appealing to foreign investors due to the absence of outright ownership or long-term property rights. Moreover, as one moves away from the central areas of Accra, the clarity of property ownership becomes even more elusive. For instance, if you acquire land in Airport or Cantonments, it is considered government land that has been leased to an individual for a specific timeframe. This intricacy presents challenges in asserting ownership. Considering these circumstances, there is potential to explore alternative avenues that could contribute to the expansion of our business opportunities.
Shifting our attention to your organization, could you offer a summary of your Akka Kappa’s operations? How many years of experience does your company have, and what distinguishes you in terms of competitiveness within your industry?
My journey in the real estate sector began back in 2006. I became part of the esteemed Trasacco Group, a renowned luxury real estate developer in Ghana. I assumed the role of Chief Property Consultant, which was a pivotal point in my career. Throughout this period, I was involved in significant sales accomplishments, including the Villagio Primavera and Villagio Vista apartments, totaling over 260 units. Additionally, I contributed to the Trasacco Valley projects, which encompass executive luxury homes located about a 20-minute drive away from Accra. In 2012, I embarked on another significant project, the Aurora Apartments situated in Cantonments. This journey paved the way for me to amass substantial real estate experience.
Before this, I worked for five years at the British High Commission, although my role wasn’t directly related to sales. However, my tenure there laid the groundwork for my local real estate experience. Working for a developer of Trasacco’s caliber exposed me to a wide spectrum of investors and first-time homebuyers. Building and maintaining relationships with these individuals was a crucial aspect of my role, and it proved to be an invaluable experience.
After eight fruitful years, I had to step away from my role due to health reasons. Following a period of recuperation, I returned to Ghana from Italy. I discovered that my personality was not suited for an inactive role, and this led me to embark on a part-time venture – Akka Kappa. Initially, it was a modest endeavor with a handful of listings, one employee, and a focus on rentals at the port.
The journey from then to now has been marked by growth and evolution. Starting with a single service and a small team, we have expanded considerably. Our team now comprises 30 members, and we offer an extensive range of services. Our approach involves careful portfolio curation, listing properties that cater precisely to our clients’ preferences. Geographical focus is integral to our strategy; we list properties only in specific locations where we can dedicate the necessary attention to our clients. This strategic approach ensures that our clients receive the highest level of service. In essence, our growth has been fueled by a commitment to specialization and a profound understanding of our clients’ needs.
Could you please offer a comprehensive perspective on the operational facets of your company? A detailed breakdown of the industries you engage in and the range of services you provide would be highly valuable.
Our core focus lies in assisting clients with selling, buying, renting, and managing properties. We cater to diverse needs, whether it is facilitating property purchases, making investments, renting out properties, or offering property management solutions. Our services extend beyond typical property management – we provide a tailored, bespoke management service. This is especially valuable for clients who may be remote or lack the means to oversee property matters firsthand. We oversee repairs, utilities, cleaning, tenant interactions, and more, ensuring a comprehensive and hands-on approach to property management.
First and foremost, our core focus lies in property rentals. We have established strong partnerships with a range of corporate clients, including major multinational organizations in Ghana, as well as embassies and institutions like the World Bank. This enables us to deliver a highly comprehensive service tailored to their needs. Our clientele essentially falls into two categories: tenants and companies, along with property owners. You see, property owners require rental services, while tenants require assistance with relocating. We extend our support right from the beginning and throughout their entire stay in Ghana. Our key offering is what we term as “relocation management service.” This involves a thorough process. When someone plans to move to Ghana and might not be familiar with the country, we kick off with an online session. During this session, we guide them through various aspects – what to anticipate in Ghana, insights into daily life, the housing market, school locations and rankings, medical facilities, and everything else. We also equip them with our “Akwaaba handbook,” an information-packed resource to provide them with comprehensive insights. Moreover, we furnish them with a directory encompassing local businesses, so they gain a good understanding of what to expect.
Upon reaching the stage where they are probably considering accommodations, they might have arranged a hotel stay or we have assisted in booking one for them. We personally greet them at the airport and accompany them to either the chosen property or the hotel. Following that, if you are ready the next day, we provide a dedicated one-on-one onboarding session. This session delves deeply into various topics. Additionally, we organize trips for them and their family to explore different neighborhoods. This is particularly important if they are moving with family members. For instance, let’s consider schooling. If they are interested in a school located in East Legon, it is likely more practical to look for housing options in the same area. Similar considerations apply if they are considering a school in Cantonments. We take them on tours of these neighborhoods, allowing them to familiarize themselves with amenities, since the landscape is rapidly evolving. I can personally attest to the transformation of East Legon over the past 15 years – from having almost nothing to now being a self-sustained area with restaurants, schools, clinics, all within a short 15-minute drive from central Accra.
Once they have made a decision about the school and neighborhood, we transition into the house hunting phase. We collaborate closely with landlords to locate suitable houses, and we ensure the properties are prepared for them. After this, we facilitate a seamless handover. From here on, we serve as their primary point of contact. This role is especially crucial, as it relieves clients, particularly corporate organizations, from dealing with potential issues on their own. Instead, we take on the role of intermediary, addressing concerns such as difficulties with landlords or situations where a landlord might be financially strained to address specific needs like replacing an air conditioner or purchasing a new washing machine. This role plays a significant part in simplifying the assignee’s life, enhancing productivity, and ultimately reducing stress for both HR departments and general service teams. We effectively act as mediators, ensuring smoother interactions between all parties involved.
One facet of our operations encompasses property sales. If you are in the market seeking to purchase a house as an investment, our portfolio boasts over 1,300 listed properties, showcasing a substantial array. Should you not find precisely what you are seeking within our listings, we have a strategic collaboration with a select few trustworthy agents in the market. Our primary objective is to ensure thorough understanding of each property, as well as the reliability of the seller. This guarantees that buyers can make well-informed decisions when it comes to their investments.
We take our service a step further. In addition to aiding buyers in sound investment choices, we equip them with comparative market analyses. Navigating the investment landscape involves considering multiple factors, as there is a wealth of market dynamics. One cannot simply make a choice based on familiarity with a developer. Informed decisions leading to successful investments with optimal returns require a deeper understanding. Notably, the real estate landscape has shifted significantly over the last five years, with a surge in the availability of apartments for platforms like Airbnb. While this diversification is positive, it also hints at a potential future scarcity of properties suited for families. For now, however, the market offers a wide range of options, from one-bedroom to two-bedroom units, and the Airbnb market is thriving.
This is where specialized companies focusing solely on Airbnb properties come into play, enhancing the attractiveness of investment returns. Speaking of returns, our projections indicate the introduction of over 3,000 new property apartments into the market by the close of 2025. Given this influx, it is crucial for buyers to exercise prudence in their decisions. Here, our role takes center stage. We provide buyers with comprehensive comparative market analyses, along with insights into the dependability of developers. Our priority is to ensure that investors make choices aligned with their goals and the market trends.
Our unique value proposition lies in advisory services. If you are contemplating property acquisition and are familiar with one developer or have inspected one property among others, your perspective may be limited. You might be uncertain about the broader market offerings or which investment would yield the best returns – say, a studio apartment versus a one-bedroom unit. Furthermore, questions about management arise: how to optimize rental success? how to position the property effectively in the market and maintain high occupancy rates year-round? We address these queries through our advisory service, offering invaluable guidance. This aspect of our service stands as our paramount contribution to potential investors.
Our operations extend to encompass resales as well. Currently, there is a noticeable uptick in resales, particularly among younger Ghanaians. This trend is largely driven by individuals seeking ready-to-move-in apartments. There are several reasons behind this shift. For one, the daily commute from their current residences to Accra can be a hassle due to traffic congestion. Financial readiness is also a key factor, as these individuals are in a position to make such a commitment. Often, these buyers are looking for apartments that are move-in ready and tend to lean towards larger living spaces. It is worth noting that they often gravitate towards older projects, as opposed to properties currently under construction. This is where our focus on resales becomes significant.
The dynamics of the market are intriguing. Some individuals sell their current property to fund the purchase of another, while others make a move driven by a desire for a change in location. In these scenarios, we play a pivotal role by providing a comparative market analysis. We guide them through the options available – what they can buy, where they can buy, highlighting the advantages in terms of location, amenities, facilities, construction quality, and of course, pricing. Price, being a critical factor, naturally comes into play. We also factor in release periods and other relevant considerations.
So far, we have discussed the facets of sales, lettings, property management, and property investment advisory services that we offer.
We have an autonomous department that functions independently, known as the construction consultancy division. This particular department exists due to my husband’s extensive background in civil engineering and his extensive experience in the construction field spanning over 45 years. He has worked in various countries, including Nigeria and Italy, before dedicating his expertise to Ghana since 1987. He has been a key figure in the realization of numerous projects, ranging from mining crushers to thermal plants, and has also played a crucial role in notable endeavors like the iconic One Airport Square. This project, designed by renowned Italian architect Mario Cucinella, marked Ghana’s initial venture into eco-friendly or green building concepts, making it a highly intricate construction endeavor.
Another of his notable involvements includes projects such as the World Bank headquarters, the Accra Stadium, and the hockey pitch, to name a few. In 2019, he took a significant step by resigning from his role as the managing director of one of Ghana’s largest construction companies. He joined our team to establish the construction consultancy department, which specializes in providing comprehensive construction-related services.
Initially, he began with a small team consisting of just himself and an architect. However, the department’s growth has been remarkable, even outpacing the expansion of my own team. Presently, we are in a friendly race to foster development. Noteworthy achievements under his leadership include the rapid completion of the expansive Orca Deco showroom and warehouses, spanning over 20,000 square meters. This project, completed in just 10 months, serves as a testament to the efficiency of our construction consultancy team.
Furthermore, our construction consultancy division is currently involved in the design and development of two of Accra’s most impressive and spacious mansions, office buildings, multiple showrooms, and even an office space for a mining company. It is important to clarify that our construction consultancy team does not engage in physical construction. Rather, they specialize in guiding clients through the entire project development process. From the inception of the client’s idea, they assist with project briefs, design, cost estimation, material sourcing, and selection. Additionally, they handle the tender process, inviting contractors and suppliers to submit their proposals to the client.
Once the contractors and suppliers are selected and construction commences, our team takes charge of quality control and project management. Our objective is to ensure that the project is executed according to schedule, budget, and the expected quality standards. This comprehensive approach is distinctive within Ghana’s real estate services landscape.
Our company takes pride in offering a unique range of services all under one roof. Our construction consultancy division is just one example, staffed with qualified professionals including architects, civil engineers, quantity surveyors, and project managers. Similarly, our other departments boast specialized teams, each contributing to a holistic and exceptional client experience. This integrated approach defines our commitment to excellence within the realm of real estate services in Ghana.
We are interested in understanding your expansion strategies beyond Ghana. Although you have connections in Nigeria, it appears that Ghana remains your main area of concentration. Is this assessment correct?
Indeed, our growth trajectory has been remarkable, rapidly scaling from one to thirty team members and from offering a single service to an entire suite of services, even amidst the challenges posed by COVID. Looking at 2023, we perceive it as a year of solidifying our presence within Ghana. However, we are actively exploring prospects beyond our borders, and Nigeria is a key contender. Our scope extends to West Africa, as well as Dubai, considering the substantial connection between Ghana and Dubai. While we are not discussing this in great detail just yet, as we are in the process of finalizing our plans, the intention to venture in those directions is definite.
I have personally cultivated a substantial list of Nigerian clients, primarily due to the nature of services I previously provided. Notably, there has been growing interest not just from Nigeria, but also from individuals within Nigeria who are intrigued by opportunities in Ghana. This evolving landscape bolsters our confidence in the vision we hold for expansion in these directions. Rest assured, as we navigate this journey, we are optimistic about its potential success.
Could you provide some information about the current and forthcoming projects you are engaged in or personally supervising? We are keen to learn about these initiatives that are taking shape.
About a year ago, a developer approached me with a novel real estate concept, quite fresh for Ghana – a beach resort. This intriguing idea, along with the promising location and the intended high-quality construction, caught my attention. Without hesitation, I made the decision to take on this project, despite the absence of my colleague Eduardo, who usually contributes to these choices. This initiative is called Eleven Eleven. It is a remarkable investment option that is generating considerable interest. Unlike typical apartment investments in Accra, this venture involves purchasing beachfront apartments or villas that will be managed by a hotel company. This unique setup guarantees consistent and attractive returns for investors, given the absence of competing luxury beach resorts along the coastline. This project, set in a picturesque area with smaller resorts, includes features like apartments, beachfront villas, restaurants, a conference center, ballroom, spa, gym, and more. With Ghana emerging as a tourist destination, we are witnessing increasing interest and footfall, which bodes well for projects like Eleven Eleven.
Additionally, we embarked on another fascinating project eight months ago, closely following Eleven Eleven. This second venture involves beach villas situated within a resort, catering to those seeking both a weekend getaway and an investment opportunity. This approach is more personal, allowing owners to utilize and potentially rent out their beach villas within the resort. This project aligns well with Eleven Eleven and forms a comprehensive investment duo.
Shifting focus to Accra, we are discerning in our approach to marketing. Rather than promoting every project, we exercise selectivity. Our goal is to offer clients well-informed choices, catering to their preferences. For instance, our target market seeks two, three, or four-bedroom units within secure and exclusive environments. This leads us to favor boutique apartment complexes with fewer than 50 units, a trend resonating with our clientele.
Diversifying further, we are promoting a novel project that is steeped in Ghanaian culture. This venture combines construction with Ghanaian symbols, designs, and materials, creating a uniquely local experience. Our dedication to catering to various needs is also evident in our facility management service. We recently secured a contract with an oil company, managing a complex that initially served offshore workers needing quarantine during COVID. Now transformed into a full staff residence, this project highlights the demand for such managed accommodations.
As for construction consultancy, our team is actively engaged in various ventures. These include mansions, warehouses, showrooms, and office buildings, among others. The plethora of projects has necessitated team expansion. Just recently, two new additions, an architect and a civil engineer, joined our construction team. This consistent growth is essential to efficiently deliver on our project commitments.
As we conclude, it would be greatly appreciated if you could offer a glimpse into your future vision. Can you describe where you envision yourself and your company in the next three to five years? What are your aspirations and goals, both at the local and broader levels?
While I believe in staying grounded and realistic, I also acknowledge the importance of aspiring for greatness. Looking ahead, our goal is clear – to establish ourselves as the premier provider of real estate services. This achievement encompasses a multitude of elements. Building a reputation that extends beyond Ghana involves exploring opportunities beyond our borders. We have reached a commendable level of recognition, and in the next three years, we aim to solidify our position as the largest and most dependable real estate services firm across the West African region.
Our commitment to this ambition is underscored by the certifications we have acquired and the designations of sellers and buyers representatives. I am also pursuing further personal development, including learning French. This is in response to the increasing number of Francophone clients we are serving and our strategic interest in neighboring Francophone countries. We approach expansion cautiously, understanding the nuances of different regions and political landscapes. Ghana’s political stability, though exceptional, necessitates careful planning to address potential challenges.
As we venture into new territories, we are mindful of maintaining the high level of service that’s become synonymous with us. Successfully establishing ourselves in other countries requires meticulous planning that anticipates setbacks. Our aim is to ensure that our service quality remains consistent across locations.
Additionally, international partnerships are on our radar. This growing trend reflects a global interest in collaboration, and over the next three years, we foresee forging valuable partnerships that align with our mission. Finding the right partners in the region and beyond will contribute to our collective success.
Could you provide more details regarding the characteristics of the partners you are seeking? Are you interested in forming partnerships with established real estate or construction companies aiming to enter the Ghanaian or regional market?
When discussing potential partners, we are considering significant players in the real estate and construction domains – those who are aiming to establish their influence and investments within Ghana. Ghana, as a nation, is proactively marketing itself. The Ghana Investment Promotion Center stands as a testament to its exceptional efforts in showcasing the country to a global audience. This strategic push has brought foreign developers and investment funds to our doorstep more frequently. They express interest in establishing a foothold in Ghana or initiating ambitious projects here. The rationale behind this approach is having a reliable local partner who can offer the necessary support to navigate the intricacies of operating in a new environment.
However, it is important to acknowledge that these initiatives do not materialize overnight. They entail rigorous due diligence and meticulous planning. Despite the time-consuming nature of such endeavors, we offer an optimal solution. We possess the expertise, experience, and local insight to guide these ventures toward success. Looking forward, I anticipate that by the middle of the upcoming year, we will begin witnessing the initial stages of these partnerships taking shape, marking a significant step in this direction.
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Published: Sept. 7, 2023 at 1:52 p.m. ET
By Josh Beckerman
Shares of Sigma Additive Solutions rose 32% Thursday after it reported letters of intent to buy travel technology company NextTrip Holdings and sell intellectual property assets related to its quality assurance software for 3-D printing to an unnamed strategic buyer.
The stock recently traded at 29 cents and is down 28% for…
By Josh Beckerman
Shares of Sigma Additive Solutions rose 32% Thursday after it reported letters of intent to buy travel technology company NextTrip Holdings and sell intellectual property assets related to its quality assurance software for 3-D printing to an unnamed strategic buyer.
The stock recently traded at 29 cents and is down 28% for the year to date.
Sigma said it will buy 100% of NextTrip in exchange for shares constituting 19.99% of its outstanding common stock plus additional shares upon the achievement of post-closing milestone earnouts. It said the total transaction will have a starting valuation of about $48 million if all milestones are earned.
The transactions are expected to be completed in the fourth quarter, subject to conditions including negotiation and execution of a definitive NextTrip acquisition agreement. Sigma is expected to change its name to NextTrip.
Write to Josh Beckerman at josh.beckerman@wsj.com
Seasoned Far North real estate veterans, innovative entrepreneurs and some up-and-comers whose performance is eye-catching make our list of the top 20 agents you’ll want selling your house.
There are more than 300 agents in Cairns — here’s our pick of the best.
Have we missed someone? Email bronwyn.farr@news.com.au
Ray Murphy, broker/owner, RE/MAX Cairns
Ray Murphy has led the team at RE/MAX Cairns to a swag of RE/MAX awards in the past two years, expanding the sizeable Whitfield office with more than 25 on the team to include a swish new workplace at Palm Cove and leading the auction scene with brother David Murphy.
He’s sold 107 properties in the past 12 months, tends to sell mid-priced properties and the average days advertised is 30 days – and sold.
Mr Murphy started in the industry aged 18 as a property manager and attributes his accolades to a never-give-up attitude, obsessive focus and a natural propensity to connect with people.
RE/MAX Cairns has rapidly grown under his helm to be the biggest agency in Cairns and has won some stellar national awards.
Mr Murphy is calm under pressure and, according to his clients, a genuinely nice guy.
Ray Murphy of RE/MAX Real Estate Services. Picture: Brendan Radke
Udo Jattke, premier agent, New Level Real Estate
Building industry and real estate veteran Udo Jattke launched New Level Real Estate earlier this year and business is brisk.
With Glenwood homes, he built and sold more than 3750 homes and 1120 units.
He provides accurate and up-to-date advice on property values and prides himself on effective marketing strategies.
Udo is the selling agent for the JAC company’s giant Sugarworld residential development at Edmonton and The Greens at City Edge among many projects.
Udo has a five star rating with clients saying he instilled confidence in the sale process, had in-depth knowledge of the market, and outstanding communication, keeping clients informed every step of the way.
Udo Jattke of New Level Real Estate. Picture: Brendan Radke
Nicholas Slatyer, principal, Belle Property
Nicholas Slatyer and wife Renae are a formidable team at Belle Property, which specialises in lifestyle and premium property – a market sector Mr Slatyer said had strengthened in recent years in the Far North.
He said properties on or near the beachfront were especially sought after with some areas having increased in price by more than 30 per cent in the past 24 months.
Mr Slatyer said some properties that traded in a frenzied environment during Covid lockdowns were on the market again, but the sellers weren’t leaving Cairns, and these properties were finding buyers again at increased prices.
He said the effects of interest rate rises was not prompting sales because many owners were either mortgage free or very lowly geared.
A recent achievement was selling the high quality redevelopment Pinnacle at Smithfield, which had been student accommodation, with 34 apartments sold and sales of more than $10m in six months.
Mr Slatyer markets properties of the ilk of Villa Be at 8 Explorers Dr in the exclusive gated community Luggers Bay, which was snapped up by part-owner of the Cotton On retail clothing group, Ash Hardwick, and his wife, Samantha, for a cool $8m, easily the highest priced property sold in FNQ in 2021.
More recent sales include a sub-penthouse in the Jack and Newell building for $2.13m, a stunning home at Onyx St in Clifton Beach for $1.9m and an ultra-modern home at Muller St in Palm Cove for $1.77m.
Mr Slatyer sold the palatial property at 18 Stream Ave, Kewarra Beach, for an undisclosed sum that would have been well beyond $3m.
Nicholas Slatyer of Belle Property Cairns. Picture: supplied
Karl Latham, agent, Twomey Schriber Property Group
Karl Latham, in his 15th year selling real estate, is a quiet achiever who continues to amass rave reviews as professional through being helpful and friendly. He’s sold 92 properties in the past 12 months at a median of $630,000 with just 26 days median advertised.
He was rated No. 34 on the Queensland residential agent list – from 10,550 contenders, making No. 53 in 2021 and No. 36 in 2020.
In 2022 he was a finalist for top residential agent Queensland.
Vendors say he gives great advice on staging properties and puts in a lot of time and effort to get the best result.
He says helping families achieve their goals is satisfying.
Regularly among FNQ’s highest selling agent and number one on gross, Karl consistently has five star ratings on realestate.com.au.
He said there was strong demand for mid to high range properties and if a home was presented immaculately, was modern and ready to move in, there were multiple offers.
Mr Latham believes the opportunity is ripe for investors, with a shortage of investment properties and unprecedented rental demand.
He said despite rising interest rates, it was often a better proposition to buy than to rent.
Mr Latham is involved in the community as a sports sponsor and with several frontline charity organisations.
Twomey Schriber Property Group Real Estate agent Karl Latham. Picture: Emily Barker.
Sean Thorpe, boutique agent, RE/MAX Cairns
Mr Thorpe, who is based at the RE/MAX Palm Cove office, won the 2023 Chairman’s Club award with a staggering total sales volume of $33m, an average sale price of $983,817, an average 35 days on the market, and 52 per cent of his sales were street records.
He won the award in 2021 and 2022 as well.
He has a five star rating with buyers saying he was thorough, professional and available at all times.
Recent sales include $1.2m for an Oak Beach property and $930,000 for a Parramatta Park home.
Mr Thorpe said his focus was on exceeding people’s expectations.
RE/MAX Collection boutique agent Sean Thorpe. Picture: Emily Barker
Therese Plath, principal, Ray White Cairns South
An Edmonton resident for more than 30 years, Mrs Plath knows the southern suburbs like no other.
She has won multiple sales and marketing awards, is regularly among the top five sales principals in Queensland.
Career highlights include being the first real estate salesperson to be inducted into the Cairns Real Estate Institute Hall of Fame, having won salesperson of excellence three times.
Named Cairns businesswoman of the year, Mrs Plath is known for her honest, caring and friendly approach.
So far this year, she has sold 84 properties at a median of $500,000 and an average of just 33 days on the market.
Ray White Cairns South principal Therese Plath. Picture: Emily Barker
Nicole Bragg, Explore Property
Starting in the industry in 2003, the dynamic Ms Bragg has been a national top 100 agent for four consecutive years, from a pool of 45,000 agents, and has been in the top 10 Queensland agents twice, regional top five agent for six years, and was awarded being in the top one per cent for transactions in 2021 and 2022.
She has won the Everest award – won by less than one per cent of agents, was named Best of the Best in 2021-22 and has represented regional Queensland as a speaker.
Ms Bragg said meticulous attention to detail and the ability to negotiate the sales process smoothly were key.
Nicole Bragg, Explore Property. Picture: Supplied
Nadine Edwards, director, LJ Hooker Edge Hill
An integral part of a sleek tight-knit team, Ms Edwards holds degrees in both law and accountancy and practised as a solicitor with national law firms in Brisbane and Melbourne before joining the family business in 2004.
She is a life member of the exclusive LJ Hooker Captains Club Diamond multimillion-dollar chapter which recognises the top 2.5 per cent of income producers within the LJ Hooker network.
In 2022 she was awarded for being in the top one per cent in the network.
A formidable Ironman triathlete, Ms Edwards has unmatched energy, having sold 51 properties this year at a median of $597,000.
LJ Hooker Edge Hill is a sponsor of several sporting organisations.
Nadine Edwards of LJ Hooker Edge Hill. Picture Emily Barker
Nathan Shingles, principal, FNQ Hot Property
Mr Shingles’ name is synonymous with Bluewater Harbour, where sale price records continue to be broken for canal front property in the most prestigious enclave of Cairns.
Mr Shingles said serving in the Royal Australian Navy from the 1990s to 2003 provided him with valuable qualities such as discipline, ethics and a focused perspective.
Mr Shingles, who established FNQ Hot Property in 2008 with wife Jenna, predominantly services the northern beaches and has sold 23 properties at a median of $802,000 so far in 2023.
Mr Shingles said being an active investor himself underscored his extensive knowledge and desire to closely study local areas and factors affecting investments.
He is known for his energy and enthusiasm.
A recent highlight was selling 3 Ragamuffin Quay, Trinity Park, for $4.25m – a new Bluewater record.
Mr Shingles sold 22-24 Brindabella Quay for $2.65m among a host of sales at the blue ribbon address.
Real Estate agent Nathan Shingles of FNQ Hot Property. Picture: Emily Barker.
Michelle Champion, director/adviser, Champions In Real Estate
Michelle clocked up more than 80 property sales for more than $41m in 2022 and has not slowed her momentum in 2023, with 71 homes sold so far.
Ms Champion said the property market wasn’t slowing, with a surplus of buyers and a shortage of properties on the market.
She won a Young Entrepreneur award and is involved in the community as an Access Community Housing board member.
Ms Champion has a five star review with clients describing her as professional, a great communicator and very genuine.
She said she believed in paying attention to detail and “pushing the boundaries on what can be done, not what has always been done”.
Michelle Champion of Cairns Estate agency Champions In Real Estate. Picture: Emily Barker.
Gisele George, RE/MAX Cairns
Ms George lives and breathes real estate, having bought her first home in her early 20s and having bought, renovated and sold many properties of her own over the years.
She is highly regarded in the buyer, seller and tenant markets.
Ms George said recognising there was significant emotions involved in property transactions was important.
Gisele George of RE/MAX Real Estate Services. Picture: Brendan Radke
Joan Robb, premier sales agent, RE/MAX Cairns
Named top RE/MAX salesperson of the year, Ms Robb said with more than 20 years’ experience she had in depth knowledge of practically every street in the region, often having sold the same property on two or three occasions.
She said networking with conveyancers, financiers, building, pest and pool inspectors, photographers and tradesmen was key, ensuring a smooth experience for vendors.
Ms Robb said she prided herself on “ultimate honesty” and a sincere manner.
She has tended to specialise in the Whitfield, Edge Hill, Freshwater and Stratford areas.
RE/MAX agent Joan Robb. Picture: Supplied
Matthew Pearce, sales and marketing consultant, Ray White Cairns Beaches
Mr Pearce has achieved elite premier status in the Ray White Group in the past four consecutive years – in the top 10 per cent of agents, and said his “outside the box” thinking, attention to detail and strong negotiation skills were key.
Clients have said he was knowledgeable, professional and transparent.
Ray White Cairns Beaches agent Matthew Pearce shows Nicole Barry through a property at 49 Seaside Parade, Argentea Estate at Palm Cove. Picture: Isaac McCarthy.
Alli Paterson, principal, Home Realty
Alli Paterson, who launched Home Realty Cairns not so long ago, consistently ranks among the top agents.
She has sold 40 properties in 2023 at a median of $778,000 – and a median of just seven days on the market.
Ms Paterson has more than 20 years in the industry and prides herself on fierce negotiating skills, and a keen eye on how to maximise the value of a property with effective renovation, presentation and staging strategy.
After 19 years of working in Cairns real estate, Alli Paterson has created her own agency. Picture: Brendan Radke
Ben August, sales associate, @Realty
In 2023, Mr August has sold 32 properties at a median of $661,000 and a median seven days advertised.
He has won multiple All Star agent and Rate My Agent awards and has five star reviews with vendors saying he provided thorough information including the best time to go to market, presenting the property, likely buyer behaviour, fair value of the property and managing expectations.
Ben August from @realty at his Redlynch office. Picture: Emily Barker
Natiesha Olufson, principal/sales professional, Explore Property
Ms Olufson has more than 16 years in the industry and has worked with agents in the office to achieve record sales.
She said her approach centred on three key things: exceptional marketing and presentation, transparency and frequent communication, and getting the highest possible price.
Mrs Olufson and husband Kyle marked a decade in their own business when Explore Property moved to Edge Hill, having begun in a modest office at Bayview Heights.
She prides herself on exceptional presentation.
Natiesha Olufson of Explore Property in Edge Hill. Picture: Emily Barker.
Robyn Hawley-Whitton, Cairns Property Office
Mrs Hawley-Whitton is ultra-consistent, having sold 44 properties so far this year for a median of $461,000 with 44 median days advertised.
Many of her sales have been in Cairns’ southern suburbs including Gordonvale, through to Babinda on the Cassowary Coast.
She has 40 years sales and marketing experience, 20 years business management expertise and is passionate about helping her clients with up-to-date information, renovating and styling, and project management for clients who live away from Cairns.
Clients say she has a caring, professional and honest approach, and gets quick results with optimum prices.
Robyn Hawley-Whitton of Cairns Property Office.
Renee Straguszi, Cairns Property Office
Ms Straguszi has taken a giant step into development with the Cutters Rise residential development and Casa Mia retirement village along with her father Ross Straguszi.
She firmly believes Gordonvale is poised to be the new growth hub for the Far North, and stage two of Cutters Rise recently launched.
The development is on a whopping 42.5ha and will have more than 400 lots.
The land has been held by the family since 1935 and the existing home has been semi-converted into a sales office for Ms Straguszi.
The development launched in late 2021 and 41 lots in stage one have sold.
The project has two key points of difference – the lot sizes are very generous, and infrastructure is being built in to Cutters Rise.
It has development approval for a medical precinct, child care centre and the up-market Casa Mia retirement project, comprising 150 villas.
Stage two comprises some 70 lots with prices starting from $189,900.
And this year, Ms Straguszi has sold 63 properties at a median price of $212,000 and median of 30 days advertised.
Cutters Rise sales agent Renee Straguszi in the family home re-purposed as a sale office. Picture: Supplied
Sonia Poole, Ray White Cairns Beaches
Ms Poole is often the name behind top sales in the Kuranda region, with a focus on lifestyle and acreage properties as well as sales on the northern beaches and across Cairns.
She has sold 31 properties this year at a median of $650,000 with 62 days median advertised.
Ms Poole recently sold a home at 30 Gregory Terrace, Kuranda, for $850,000.
She has been listed in the top one per cent of Queensland agents.
Clients say Ms Poole demonstrates empathy and minimises the upheaval and stress of selling a precious commodity, guiding clients through every step of the process.
Ray White Cairns Beaches real estate agent Sonia Poole. Picture: Supplied
Shane Trimby, agent, Cairns Property Office
Mr Trimby is based at Cairns Property Office’s Redlynch base and has sold 17 properties this year at a median of $570,000 with just 10 days median advertised.
His focus is on Redlynch and Brinsmead but Mr Trimby has sold properties from Gordonvale to Palm Cove.
He has more than 18 years’ experience in the industry and has benefited from working with world-renowned mentors.
Mr Trimby is deeply embedded in his local community and clients say that is an advantage when buying.
This down-to-earth agent has humour in spades, an infectious energy and positive outlook and is truly genuine.
Shane Trimby at a recently sold duplex in Whitfield. Picture: Emily Barker
Natasha Whalley-Thompson, RE/MAX Cairns
Ms Whalley-Thompson began her career in real estate in 2013 and has a proactive and energetic approach and is results-driven.
She is genuinely passionate about property.
This year, she has sold 63 properties for a median of $286,000 and 26 median days advertised, specialising in units and apartments throughout Cairns.
RE/MAX Cairns agent Natasha Whalley-Thompson. Picture: Supplied
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Sales of new homes have been a bright spot in an overall sluggish market. Now, two housing technology companies plan to take advantage of the new construction trend to boost their businesses.
(ticker: Z) and
(RDFN) on Tuesday announced a partnership through which
will provide
with listings of newly built homes. The agreement “will dramatically expand the reach of home builder listings on Zillow and allow Redfin customers to explore a broader range of new-construction homes for sale, creating a seamless home-buying experience,” Zillow and Redfin said in a press release.
Redfin and Zillow have different business models, but both are known in part for their home listing search tools. Through the partnership, Zillow will provide Redfin with new home listings from builders. The additional homes will be those not already listed for sale on a multiple listing service, the databases that agents and brokers use to list homes.
There are “tens of thousands” of active new construction communities listed on Zillow that will soon come to Redfin, a Zillow spokesperson told Barron’s. Zillow’s new construction listings will begin to appear on Redfin in the fourth quarter, according to the release.
“Zillow provides a standout platform for home builders to highlight their communities and connect with potential buyers,” Owen Gehrett, Zillow’s vice president of new construction, said in a statement. “The partnership with Redfin extends this unique and valuable resource to a wider audience.”
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The initiative comes as new home sales continue to command the spotlight in an otherwise slow housing market. About a third of all single-family homes for sale in the first half of the year were new construction, the release said, citing a Redfin analysis.
“With buyer demand outpacing the supply of existing homes for sale, Redfin’s home-buying customers are increasingly turning to new construction,” Adam Wiener, Redfin’s president of real estate operations, said in the release.
In a difficult year for home buyers, shares of builders and housing technology companies have outperformed. The
exchange-traded fund (XHB), which tracks home builders and related industries, has returned about 41% so far this year, exceeding the broader S&P’s roughly 21% gain. Redfin and Zillow shares have also soared, rising 70% and 254% year-to-date, respectively, and well outpacing the Nasdaq Composite.
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The announcement comes ahead of earnings for both companies. Zillow will publish its second-quarter results after the bell on Wednesday, while Redfin will report after the market closes on Thursday.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
Increases in rent prices have settled down since their rapid rise earlier in the pandemic, thanks to more choices on the market and less demand. It’s a trend that will stick around for a while.
Two measures of growth, collected by ApartmentList and
Zillow
,
show that asking rents continued to cool in June, compared with year-ago levels. Zillow clocked national rent growth at 4.1% in June, its lowest level since April 2021, while rents gauged by ApartmentList were flat—a level the rental website hailed as a “big milestone” following months of rapid increases in late 2021 and early 2022.
Part of the slowdown is weaker demand, says Christopher Salviati, a senior economist at ApartmentList. Rents are 24% more expensive than in January 2021, Salviati said. “Renters are finding that their money isn’t going as far,” Salviati said via email—adding that inflation, consumer confidence, and recession fears don’t help. “All of this is leading to more cautious behavior when it comes to household formation, meaning less rental demand.”
Increasing rental supply is also behind the slowdown. Construction in buildings with five or more units has been completed at a higher rate than average since September 2022, Census data show. Completions in February rose to a seasonally-adjusted annual rate of 542,000, the measure’s highest level since 1987. Those units will eventually be available, adding to supply.
And there’s more coming: there was a record level of such units under construction in May, seasonally-adjusted Census data show. The supply of rentals under construction means any growth in prices is likely to remain tempered. Those units will hit the market over the next one to two years, according to Zillow.
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Single-family homes built as rentals also are coming to the market. In the fourth quarter of 2022, 8.8% of all new construction started on single-family homes was for rental stock, a record high, according to a BTIG analysis of nearly five decades of Census data. That share remained high to start the year, the analysis shows.
There are questions about what the rental landscape means for the broader housing market, says Carl Reichardt, a BTIG analyst covering home builders. One question is how the cost of renting a home compares with that of owning a home, the analyst says, citing the increase in single-family rental construction.
“If there’s an excess of competition in that business and rents fall, and renting a single-family home becomes potentially even more attractive than owning it, that creates competition for the builders,” says Reichardt. The shares of public builders have been on a tear this year as demand has picked up for new homes. New home sales in May spiked, even as existing-home sales remained tepid.
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Despite the gain in new home sales, buyer sentiment has remained largely sour: 22% of respondents to Fannie Mae’s National Housing Survey in June said it was a good time to buy—higher than all-time low levels of 16% late last year, but well below the historic average of 57%. Respondents were more positive on the prospects for sellers, with 64% saying it was a good time to sell a home.
Another unknown is whether slowing or declining rents lead landlords to list for sale homes they have previously rented, says Reichardt. The ownership of single-family rentals by big institutional investors and online short-term rental listing platforms are relatively new developments, he says. “These are two new dynamics that have impacted the amount of supply on the market, and ways to monetize shelter capacity, that we haven’t seen before,” he says. “We’re not seeing this in any kind of enormous way, but it’s something to watch.”
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
Home buyers have accepted the new normal of 7% mortgage rates, but now they’re feeling a sense of déjà vu as real estate is back to being a competitive sport in many parts of the U.S.
At the beginning of this year, buyers were still holding on to hope that mortgage rates would go back down — they didn’t — and business waned for real-estate agents like Aaron Lanning, an agent with Century 21 based in Menifee, a city in Riverside County, Calif.
“Business was just gone,” Lanning told MarketWatch, looking back at February and March. But all of a sudden, at the end of March and April, the machine sprang to life: Buyers were biting the bullet of higher rates and purchasing homes.
But as they’ve braved the market, buyers are contending with a slew of challenges. Higher mortgage rates present one new obstacle for buyers, who are also contending with some of the challenges of the pandemic-era property market. All-cash offers, bidding wars and waived contingencies like home inspections and appraisals are all in the mix.
In Chicago, real-estate broker and investor Rashauna Scott has observed a similar change among buyers.
“We’re definitely seeing a lot of competition,” Scott told MarketWatch in a recent episode of Barron’s Live. “There’s a lot of competition because the inventory is getting taken up and not only just by home buyers, but you’re also competing with investors in that same space,” Scott, who specializes in multifamily properties, added.
Low inventory is another hurdle for today’s buyers. The number of homes for sale in May was 1.4 million — the lowest figure since Redfin RDFN began recording data in 2012, the real-estate brokerage noted in a report published Wednesday.
The number of new home listings dropped 25% from the same period last year, the company added.
“As the pool of homes for sale shrinks, homebuyers in many markets are grappling with competition, which is preventing home prices from plunging despite a cooldown in buyer demand brought on by elevated mortgage rates,” the report stated. Nearly half of the offers written by Redfin agents in May faced at least one competing bid, the company said.
Down in Miami, Rafael Corrales, a real-estate agent with Redfin, told MarketWatch that he continues to see a steady stream of out-of-state buyers from places like New York, New Jersey and California, as well as foreign buyers from as far away as the Middle East and Asia.
“We’re still seeing increases in our home prices,” he said. But “the real elephant in the room is … the lack of inventory,” he added, which along with high mortgage rates is making the market very challenging for buyers.
Where is Corrales seeing the most competition in Miami? Homes that are renovated and updated in Coral Gables, Coconut Grove and other affluent neighborhoods are selling “within a very short period of time,” Corrales said.
Buyers are getting frustrated by how competitive the Miami real-estate market is, he added. The single-family homes in desirable areas are “going to always have the competitive, multiple offers situation,” Corrales said. Plus, most first-time buyers are competing with cash buyers at this point, he added, given how high mortgage rates are.
Corrales’s top tip for buyers: Prospective buyers who want to be competitive should get all of their financing in order and, particularly, be prepared to offer a larger earnest-money deposits, to show that they’re serious. “The more skin in the game, the better it’s going to improve their chances of having their offers awarded,” he said. Earnest money refers to funds a buyer puts down before closing on a home to show they intend to follow through on the purchase.
“We’ve got to go back to our old 2021 and ’22 ways right now,” Corrales said. “And that would be just being a little bit more flexible with the contingencies that we may need to be waiving to make our offers as competitive and aggressive as possible.”
Back in Riverside, Lanning said that if a house is priced at market value, it is “almost guaranteed” to get a minimum of two offers. In the last month, he sold seven homes, he said, and 22 people showed up at the last open house.
But that’s nothing compared with the frenzy of the pandemic-era days, he added: In July 2021, he had an open house that 96 people visited in one day. Overall, during the initial COVID years, he generally had 30 to 40 people visit his open houses, he added.
Right now, that number has dropped to around 15 to 20, he added.
Lanning’s top tip for buyers: Adjust your expectations.
He described a Los Angeles client who was looking to move to Fontana, another city in California, who ended up looking at homes eight or nine times. That was unusual. Most buyers make just four or five visits. Each time this client lost out on a potential purchase, it was due to being outbid by a competing offer, or because of issues with the appraisal.
It’s pretty much a seller’s market at this point, Lanning said.
“Low interest rates turned a lot of homeowners into landlords,” he said. “They don’t want to get rid of this home that has a 3.5% mortgage. They want to rent it out. That’s hurting us.”