A closer look at the nation’s hottest housing markets
In this episode, Nath and Wheeler discuss the latest Real Trends 500 list, which ranks the largest real estate brokerage firms in the country by transaction sides and sales volume.
For some background on the interview, here’s a brief summary on the recent median home sale price report:
The median home sale price increased 16% year-over-year to $331,590 – an all-time high, per a report this week from Redfin. But that’s not stopping buyers from snatching up homes days after they’re listed.
During a four-week period ending March 21 and covering 400 metros, 58% of homes that went under contract had an accepted offer within the first two weeks on the market. And between March 14 and March 21, 61% of homes sold in that timeframe had been on the market two weeks or less, and 48% had sold in one week or less.
And offers are coming in well-above asking price, too. Nearly 40% of homes sold above their list price – another all-time high – and 15 percentage points higher year-over-year. The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased to 100.2%.
This is concerning for experts, though, many of whom believe home prices will remain high even after mortgage rates, inventory, and building material costs recover to pre-pandemic levels. Rates are already above 3% – after falling into the 2% range during the majority of 2020 – but construction companies are still struggling to keep up with insane lumber prices, stifling new builds.
National Association of Home Builders Chairman Chuck Fowke recently noted that supply shortages and high demand have caused lumber prices to jump “about 200%” since April 2020, and the elevated price of lumber is adding approximately $24,000 to the price of a new home.
HousingWire Daily examines the most compelling articles reported from the HousingWire newsroom. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Victoria Wickham.
HousingWire articles related to this episode:
- Average home sale price hits all-time record
- These brokerages topped the RealTrends 500 in 2020
- Portland, Maine housing market is a “full-on frenzy”
Below is the transcription of the interview. These transcriptions, powered by Speechpad, have been lightly edited and may contain small errors from reproduction:
Brena Nath: Okay. Happy Monday, Sarah. The last Monday in March, which is exciting. Thanks for joining us today.
Sarah Wheeler: Of course, I love being on Monday Morning Cup of Coffee.
Brena Nath: For those who aren’t familiar, every Monday we go live in this HousingWire Facebook group. If you’re listening to us on the podcast, feel free to catch us there. HousingWire Facebook, HousingWire group. You search it, you join. We go live around 8:30 Mountain Time. We’ll do the fast math. It’s about 9:30 Central Time. Kind of give you both behind the scenes, look at what’s coming across our news desks. We interview everyone from who we have right now, our Editor-in-Chief, Sarah Wheeler, to our managing editor, James Kleiman, and pick their brains on the top stories that are coming across the news desk, what’s piquing their interest. And also what to kind of look forward to for the weekend ahead.
So excited to have Sarah joining us today. And then for those who don’t know, I’m Brena Nath, HW+ managing editor here at HousingWire. I’m doing all things HW+ magazine. So just to say the least March was a busy month and want to jump right in. So let’s start off Sarah with our favorite question of kind of, we had some big news, to say the least, that came out recently. It definitely came across our news desk. We’ve been working hard on it. Can you kind of tell us a little bit more and go into some detail about what that is?
Sarah Wheeler: Sure. It’s the RealTrends 500 list. And so RealTrends is now a sister company to HousingWire and we’re super excited. They put together this incredible list of the 500 top real estate brokerages, and that’s by transaction sides and by sales volume. So really comprehensive list that requires a lot of research on their part but always very highly anticipated. And this year was really interesting. So if you’re looking at transactions, the top of the list is HomeServices of America, which is a subsidiary of Warren Buffet’s Berkshire Hathaway. And they had like 343,000 brokerage sides and 150 billion in sales volume. So by transaction sides, the top five looks like number two is Realogy. Number three was eXp. Number four was Compass. Number five was Howard Hanna Realty, which is the top independent brokerage on the list.
But if you’re going by sales volume, then it’s a different story. Realogy comes out on top with more than 184 billion in volume, just huge volume. So I would say check out the whole list at realtrends.com or we did a story on Thursday on just like the top brokerages where we break out the top 10 and kind of look at what that looks like, what are the movers on the list. And look at it by sales volume and by transaction side. So, but just a huge list and a really interesting way to understand what’s happening right now in the real estate world.
Brena Nath: I’ll extra highlight your kind of point in there about the different ways that they’re breaking down the list. So if you do go to RealTrends website, there’s so many different ways that you can categorize this look and like the top 10, the top 50, by transaction sides, by this, the top independent brokerages. And so really taking a look at that list and seeing how people rank but also divvying it up in the different ways that they’ve really put a lot of time and effort into categorizing this list. So it’s just not one long list but there’s also a lot of deeper dive data that we’ll continue to put kind of coverage around what all these kind of I would say many but separate lists within this are.
Sarah Wheeler: We’re going to be mining that data for, you know, the next year, because there’s really so much there that you can talk about and it’s rich for us. A lot of my stories I was going to highlight today are real estate-related because this is a crazy market. I mean, anyone who’s involved understands it’s a crazy market we had last week, we had average home price hitting all-time high. So, you know, we had Redfin say that the median home sale price increased 16% year over year to $331,000. And, of course, that’s average. I mean, that sounds low but that’s average or that’s median. And 58% of homes that went under contract had accepted an offer within the first 2 weeks of the market. And that’s in a four-week period in March.
So that’s crazy 58% of homes, less than 2 weeks between March 14th and March 21st. So that one week 61% of homes sold in that timeframe had been on the market two weeks or less. And 48%, almost half, one week or less. And that’s across the country. That’s just a crazy volume of homes. And we had nearly 40% of homes sold above their list price, which is another all-time high and something that is such a pain point for first-time homebuyers coming in or anybody who’s trying to compete with the 25, 30 offers on every house that they’re seeing. So pretty amazing.
Brena Nath: I flag his newsletter a lot but I would highly recommend reading James Simon gets that like word on boots on the ground type of perspective. So his last two LendingLife newsletters, the first one he did on appraisal gaps. And then he just had one recently on contingencies. And because of all of these offers and how competitive the market is, the people who are waiving contingencies right now. I, of course, work alongside James that I even responded to his appraisal gap email, like a normal everyday reader. Send him back an email and said, “What a great no. This is so relatable.” I had to go through this appraisal gap situation here where I live.
And so I’d highly recommend kind of getting the broad level. You know, the market is really hot. Home prices are up, and then he goes in and talks to ELOs. Or if you are in ELO, feel free to email him back. His inbox is open. As I also responded, got an email back from him to my thoughts and comments from all the words that he sings. So I highly recommend signing up for the LendingLife newsletter to get kind of the extra feedback on these layers. But diving more into the real estate sites here that you just mentioned, can you go a little bit or dig a little bit more into the real estate stories that you’re seeing outside of, you know, we just talked about the list.
Sarah Wheeler: So we’re really focusing because it’s such a crazy market on Freddie Mac’s hottest 25 metro list. And I think the thing that just struck me when I saw the list of the reason we’re going through it is normally your hottest metros are going to be pretty standard. You know, West Coast, East Coast, big towns, and we all know, you know, big cities. So it’s going to be Seattle. It’s going to be, you know, Silicon Valley. It’s going to be San Francisco. I mean, these are all like second, I would even say third-tier cities. And so it’s just such an interesting list right now. So the first one we did was Pueblo, Colorado. We talked about a couple of weeks ago.
On Friday we published a story about Portland, Maine, which has seen, you know, an incredible increase. That market has less than a month’s inventory right now. And that’s because they’ve seen a huge interest from people leaving a lot of New England cities but especially Boston. In fact, they’re the number one destination for people looking outside of Boston. And so you’re seeing incredible things. Starting last summer, that inventory dropped 25% over a typical summer. Meanwhile, all this new demand and I think that that’s really indicative of what housing markets are going through right now. You have terrible low in inventory. You’ve got way more interest.
And so you see prices through the roof, which just goes back to our last story about why prices are so high, but in individual markets, you’re seeing that. So their median listing price is up 8.9% year over year. But what those houses are actually selling for is up 31% over last February. Thirty-one percent, I mean that’s crazy if you own a house all right. So we’re really looking at that hottest 25 metro list. It’s a really interesting list. You have like five, four, or five from Idaho on there. We continue to see that migration from Silicon Valley over into adjacent areas.
Next step, we’re going to be looking at this week at Bay City, Michigan, which is outside of Detroit. And then after that, a few of the markets in Utah, which again, are seeing some of that tech trending coming in there but really markets I’ve never heard of in Utah. So it’s just a really crazy time. And if you’re a real estate agent, you’re frustrated, you’re doing all the work, putting all those contracts together but winning very few of them. Because you know, if you have 25, 30 contracts on a house, then you have 25, 30 real estate agents who are putting in all that work, who aren’t getting paid for any of that work. And they might do that over and over and over as they’re trying to get their buyers. And so it’s been a really crazy market.
Brena Nath: It’s been interesting to have a unique bird’s eye view into the Colorado Springs market and the Pueblo article. And it makes you wonder like across markets across the nation. I told the person who wrote that article at Tim Glaze who has been covering the real estate markets that Pueblo, it is more affordable than the Springs in Denver but a huge thing that you lose, which is a big reason people move to Colorado in the mountains. And even your temperature difference down there, it could be completely dry and no snow. We’re just 30 minutes north of them and we have full dumping of snow.
And just interesting that perspective of, okay, all these people are moving to these outside suburb markets outside of these big cities but that small gap and change can create a lot of besides affordability. What else, what else, you know, when people have this list of must-have wants to have, what are we giving up needs to have to pick their new home in order to get into the market? So I’m excited to read all those local market pieces and a lot of real estate agents’ voices on that. And so I do have an HW+ piece on the local markets.
So Matthew Blake, who is our senior real estate writer, he has been for the magazine interviewing different agents across the nation, similar to these pieces but really any market and getting boots on the ground view from local real estate agents on what they’re seeing. And it’s been fascinating to read. He did like Bowling Green, which is where the Corvette is headquartered and where they make the Corvette. And, you know, it’s a market that no one ever really hears of but that market is super-hot. Houses are growing like crazy to your point of like these smaller markets are just as busy and just as hot.
Sarah Wheeler: It’s really crazy. And I just think it’ll be interesting to see a couple of years from now because you know, we know the pandemic people want to spread out and we know right now people have that flexibility if they can work from home. So it is going to be interesting to see. On the other hand, if you’re an employer and your people have actually moved out during this time and bought a house, I mean, they’re pretty planted there. So how are you going to get them back? So interesting. We’re seeing a lot of employers now kind of, announcing whether people are coming back in or what their policies are going to be. So we’ll be able to get that for the mortgage industry too. Are there going to be flexibilities by the end of the summer, or are we going to see more people want people to come into their corporate headquarters?
Brena Nath: Yep. Small, I think we all have our own mini case studies about where we’re at but I do know I’ve thought about obviously Logan’s data heavily right now talks about the demographics. You have the strongest demographics right now to buy a home. And I’ve been wondering just in my own conversation with friends, different ones have moved back home with their parents because they haven’t been able to spend time with their parents before. So they moved back home just to save money on rent and how much money right now is possibly getting saved that wouldn’t have been saved that could eventually feel the housing market or fuel this, and how many friends I’ve had or talk to. Especially with girlfriends, we’ve talked a lot with friends about paying off debt.
How many friends I’ve watched and listened to been able to pay off debt over the past year since there’s nothing else for them to do. They move back home with their parents. They didn’t have to pay rent, and seeing how that plays out on the hospital market and the road ahead. So that might also just mean the market will continue to stay busy as more people enter it. The 30-year-old age range is very much about to enter or entering actively the housing market.
Sarah Wheeler: Super interesting. Yeah. You know, I had two of my kids live with me last year for five months. They actually still had to both pay rent on their apartments where they were from. But still, I mean, your average person were just not spending that much because you can’t go out and do as much as you’d like. So I really do think there’s going to be huge pent-up demand when we can do that.
Brena Nath: That’s the word I’m looking for, pent-up demand. Well, speaking of Logan, wanted to quickly touch on HW+. For those who don’t know Logan Mata Shami, he’s our HousingWire lead analyst. He dives into a lot of the housing and economic report. So we’ve all been watching and following the existing home sales, new home sales. He’s come out regularly. And each time we kind of do the normal pour on, “Okay, here’s what existing home sale says.” And then we also get a take from Logan on what he sees in the story. So, for example, new home sales came out last week. The Census Bureau reported that in February 2021. New single-family home sales were at a seasonally adjusted annual rate of 775,000, which is a big miss from estimates.
So that’s the number that the Census Bureau reported. To Logan, he said that because February sales last year in 2020 right before entering the pandemic were so strong, that the year over year growth in sales for February 2021 is impressive at 9.1% and then kind of digs more into that data. So now Sarah has been editing them a lot, kind of being able to get a first-hand look at the pieces that he’s putting out but he really just takes the numbers and the estimates or the hit or the misses that are coming out with these reports.
And then gives you his take on like, “Here’s what you need to take away. Here’s why maybe right now we shouldn’t look at year-over-year data for this specific report, especially knowing that last year was such a unique year. So if we compare everything to last year, what are the extra details that Logan’s pointing out? Keep this in mind because this happened in 2020, or keep this in mind as we go ahead because of the lumber construction.” Pieces like that. And so right now all of his content has deeper dives for his unique takes are behind the HW+ paywall. And so Sarah, I wanted to give you a quick chance to kind of touch on the piece that he has coming out today.
Sarah Wheeler: So he wrote a piece today that is on sort of exactly what we were talking about, the stimulus checks, inflation, what does that look like? Mortgage rates and what those three things, those ingredients look like for the housing market for the rest of this year. And his stuff is hugely popular with our readers because he was very right last year when he called some things that no one else called about when he saw the recovery starting to happen and what that would look like. And really it couldn’t have played out more perfectly than what he said. So we love really having him as our lead analyst and really giving us an insight into what’s coming.
And I think there’s a lot of questions right now with inflation, especially, and mortgage rates. You know, you have some rates going up obviously, but then you have some other things in play as well. So, yeah, that’s great. And I would love for you, Brena, to tell us a little bit about HW+. We say that like people know what that is. And really about this time last year, we launched our membership program, which is called HW+. And it’s really to provide premium content to HW+ members. So I’d love for you to tell us a little bit more about that.
Brena Nath: I think it’s been a year. So we did launch last year around this time. HW+ if I had to put kind of a few quick high-level words around it to describe it, it’s really the deeper dive content. But also I would say community and exclusive access to things within the newsroom. So between getting, you know, around five new pieces of HW+ exclusive content, you get the pieces from Logan where he does the deeper dive on the economic report. You get the longer pieces from our newsroom. And when I say longer, you have your normal hits. Logan’s a great example of it. You have your standard report. This is what existing home sales does.
HW+ content goes, “Okay, what does this mean for the industry?” So a lot of us have been tracking the UWM broker war with Rocket right now. And so we have the initial news on this as what happened. And then our managing editor, James went back in and he interviewed all these ellos. He interviewed both the companies and figured out what exactly this means for the industry and what people are their takeaways for. And a lot of it right now is forward-looking. So what does this look like for the road ahead? Not just always a look back but what do you need to know to operate ahead into the rest of 2021?
So outside of the content, you also get our magazine. We have 10 issues a year. Right now I can’t believe we’re about to hit April 1st for the new magazine, which is focused on the closing and title industry, which we know last year, there was a word that probably came to the surface really quickly last year. It was RON and I mean national coverage on this idea that we can’t close at a normal closing table at a title company. So all of these states focused all of a sudden on remote online notarization, what can we do to allow people to still close their homes? It was a busy market. So that’s an issue that I would really pay attention to.
And because of how many states last year adopted RON notarization, not all of them adopted notarization or RON for the long term. So there’s a lot of stuff that happened last year when it comes to title and closing that we’re closely watching because all of this legislation might’ve been temporary. Some of it might’ve been permanent and understanding what does this mean for my state going ahead? And what will it take now that a lot more people are aware or maybe more people are educated on what e-closing is. What is more likely to stick around since there’s a lot more awareness around what this is, how it’s needed, stuff like that.
So that issue is when I would watch. I can’t believe April 1st is on Thursday. So that’s when I’ll be going live with the digital issue. And then outside of that, you also have the Slack channel, which is where the direct line to the newsroom comes into play. We post the stories there first. I know I’m listing a lot but really it’s this idea of there’s so many extra pieces of content in the mortgage industry right now, in the real estate industry. And we want you to have as much information, as much knowledge as possible to navigate the road ahead, since things are changing so fast.
This is an industry that we have a new administration so there’s a constant new regulation. Maybe there’s new legislation, there’s new ways of doing things for the road ahead for the new administration. And we’re trying to stay on top of all of that and give you this deeper dive for the road ahead. So a lot of that to say, we’re almost a whole quarter into 2021 but that’s really kind of the heart of HW+ right now.
Sarah Wheeler: I think the thing is, you know, all of our content has been in front of the paywall, and still so much of our content well, is and will remain in front of the paywall. We really feel like we’re news nowhere else. And we are committed to that service journalism to giving people the information they need about real estate mortgage, servicing secondary market, very much about that but we also wanted to invest in the kind of journalism that really will make what I would think a competitive difference in someone’s business. And that’s really where you get HW+, which is, it’s news nowhere else but it’s at a deeper level. And we really see this desire for that from our audience.
And so we’ve been really excited about that, and we’ve really invested in that kind of journalism with some of our hires and the people that we’re paying to do that kind of deeper dive. And the other thing you get with HW+ is our events. You get full access for free as part of your HW+ membership. I’m the person who puts together the content for our events. So we just had our spring summit. We’re about to have engaged marketing. We’ll have HW annual in the fall, and all of those are free for HW+ members. And that is to me, a huge value add that you get with this
Brena Nath: And that’s a whole another section for HW+. And all of those sessions from the events are on-demand on the website. So we know that if we haven’t said it enough or a busy industry, so if you can’t catch it in the moment, or if you want to carve out an hour of your day every day for two weeks and use that hour to do some, you know, dedicated kind of lunch and learn for yourself or with your team to do is to kind of go forward. That’s also accessible just in case you can’t make those days up events.
So between the events, the content, the magazine, there’s so much content there. So feel free. If you would like a discount, feel free to send me an email at firstname.lastname@example.org. I know we’ve mentioned a lot of different kinds of links here but feel free to just kind of respond to that and we’ll get you set up.
Sarah Wheeler: I think you said that now Logan is exclusively… If you want to read Logan, he’s exclusively behind HW+ paywall because we feel like that is incredibly important information for people and it’s stuff you need to know. So that’s exciting.
Brena Nath: Generally, the deeper dives, and feel free to catch us all on the Clubhouse sometimes, where we kind of dig into it more along with the website and kind of drill into a lot of this data. But I will, as we kind of head right back into the Monday, Sarah, I just wanted to say thank you for joining us. We know it’s going to be a jam-packed week with a lot of news that people want to hear and see. So feel free to check our website for the latest updates. But thanks so much for joining us.
Sarah Wheeler:Thank you. My pleasure.