The 2025 spring housing market brings both challenges and opportunities. In this Ten Minute Talk, Brena Nath sits down with the National Vice President at Coldwell Banker Realty, Rebecca Thompson, to dissect the biggest real estate landscape trends. From buyer behavior shifts to the critical role of agent productivity and inventory sortages this episode dives into the top real estate trends to watch.
Learn why understanding the evolving profile of first-time homebuyers and why understanding luxury buyers is more important than ever. Understanding macroeconomic trends like return-to-work policies is crucial for success with market dynamics in flux. Listen to the full episode to gain a competitive edge during this pivotal season for the housing industry.
Learn why understanding the evolving profile of first-time homebuyers and why understanding luxury buyers is more important than ever. Understanding macroeconomic trends like return-to-work policies is crucial for success with market dynamics in flux. Listen to the full episode to gain a competitive edge during this pivotal season for the housing industry.
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00:00I'm Brenna Nath, Senior Director of Events and Subscriptions with HousingWire.
00:12I'm excited to be here with Rebecca Thompson.
00:14She serves as National Vice President at Coldwell Banker Realty.
00:19She's not only an expert on the spring home buying market that we're about to see, but
00:23also like what the year is going to take us through and beyond.
00:28She's a speaker at our event coming up next week, or at this point, maybe it's already
00:31passed, the Housing Economic Summit, where she'll be chatting about some of the forecasts
00:36for the year and bringing all of the insights to the data.
00:39So I wanted to share some of that with our audience here today.
00:43And first off, Rebecca, just kind of talk about the spring home buying market and what
00:46you're seeing.
00:47But before we jump in, I just wanted to say welcome.
00:49Well, Brenna, thank you so much.
00:51I'm thrilled to be here and so excited for the Economic Summit.
00:55I love nerding out when we talk about trends, when we talk about data, but also the importance
01:01of how we actually apply that to our businesses, respectively.
01:07Speaking of trends, your title, I know I just said National Vice President, there's actually
01:11a lot of things that are in your purview that make you an expert on a handful of things
01:15that the housing market is going to walk into.
01:18Trends that are happening, themes is a word I like to use a lot.
01:21So knowing that you recently even took on more, I would love for you to share with our
01:27audience, OK, given that scope that you have, what are some themes, some trends that you
01:33think are going to shape either the spring home buying market or the 2025 housing market?
01:39Absolutely. Well, one of my big focuses is on agent productivity, and I love looking
01:45at PropTech and FinTech and how that is really transforming how we do business and how our
01:52consumers do business on a day to day basis.
01:54So some of the things that I see shaping our spring market is 2025, I expect our consumers
02:02are going to have more choices.
02:04Now, what that means, we've had a lot of change in the industry in 2024.
02:08And so this means more choices for buyers and sellers in who is going to represent them
02:13in the transaction and how, but also optimistically, I'm putting it out there, but more
02:20inventory choice for buyers, which is so important with our market conditions, between
02:26interest rates and pricing stabilizing a bit.
02:30We may see some more negotiating power on the buy side.
02:33And so what that tells me is agents leaning into negotiation training is going to become
02:39that much more important as we might start to see that dynamic shift.
02:44One of the other big pieces, Brenna, is return to work.
02:48You know, pre-COVID, so like once upon a time, five years ago, we were seeing across the
02:54country, urban markets booming.
02:57We saw a lot of downtowns where there was reinvestment.
03:00We saw a ton of new building going up.
03:03And then all of a sudden, pandemic hits, break, screech, people want yards.
03:10So we saw suburban markets boom.
03:12Then we saw remote workers really scattering, I'm going to say across the country,
03:15although we did have global scattering.
03:18And we saw people going to coastal areas.
03:20We saw places like Texas doing really well with people relocating.
03:24Now, since then, we've seen a lot of companies downsize on how much space they have.
03:30So whatever their office footprint was five years ago is probably not what they have
03:34today. But for the spaces that they're having, they're saying, hey, it's time for people
03:39to come back to work.
03:41And whether that's two days a week or five days a week, people are really having to
03:45reevaluate what quality of life means.
03:48So those big, beautiful yards, if you're commuting two and a half ways or the super
03:52commuters that we're all seeing stories about who are hopping on planes back and forth,
03:57that may not be sustainable.
03:59And so one of the big trends is with return to work, the buyers that we're going to see
04:03coming to the market and the sellers who are going to be making a move.
04:07And we initially thought they're locked in.
04:08They have these great interest rates.
04:10They won't move. That can be a reason for us to unlock some of this inventory and see
04:16a lot more market movement between return to work.
04:19Those are great call outs.
04:21They kind of fall into that same theme of demographics and something like a motorshow
04:26merely in us always says is people are going to have babies are going to get married.
04:30Unfortunately, they might get divorced.
04:31There's going to be changes within the people's lives that are going to force things to
04:36happen to to move, even if they love their mortgage.
04:39I know I love my mortgage rate.
04:40It's going to take me a lot to get rid of it.
04:42But those are great points, especially the return to work, the trend away from the cities
04:47to back to the cities.
04:49What you called it out, you know, we all walked through a lot of people in the industry,
04:54unless you're kind of new, went through the shift from, you know, the late, you know,
04:58twenty eighteen, twenty nineteen.
04:59Then you go into the covid.
05:00Then you have this housing market boom and you kind of what we were calling the mortgage
05:04rate lockdown into twenty twenty five.
05:08What is unique about this year and what would you say is different?
05:14And how does that feel like a strategy?
05:16Obviously, everyone wants to grow this year.
05:18I hope people want to grow.
05:19So how do those changes and what makes twenty twenty five special that they can build into
05:24how they build a plan to grow?
05:27Well, twenty twenty four was definitely a challenging year.
05:30We had a lot of headwinds and, you know, any economist that you asked late twenty twenty
05:34three, what's twenty twenty four going to look like?
05:37All of them were saying, hey, we had predictions and that reprieve never actually came in.
05:43Home sales last year were actually the lowest they were in the last 30 years.
05:48And the crazy thing is, in that same 30 years, we have seen exponential population growth
05:54and we're not seeing the movement match now for twenty twenty five.
05:59What we're seeing is, yes, we're going to still see price gains, but I'm optimistic
06:04that they're going to be more steady.
06:05There's been in some of our markets very dramatic price increases, which are pricing
06:10some people out of the market.
06:11What this means is by more steady gains, you might get more buyers off the sidelines
06:17where even if there are multiple offers, they're not priced out.
06:20If they didn't get that home this week, two weeks later, they're not chasing the
06:24market. There's a lot more predictability.
06:27The other trend that we started to see, but I think a huge shift is cash being king.
06:34We had a record number of purchases in twenty twenty four that were all cash purchases.
06:39We're expecting that to grow in twenty twenty five.
06:42And that as far as focus is also looking at that luxury buyer.
06:46We saw that luxury buyer being a really strong force.
06:49I would say the last two years they are picking up steam.
06:52So we're not only expecting that trend to continue, we expect some gains on that front.
06:58And so really understanding who is that luxury buyer, what's important.
07:03And that that buyer has shifted in that same vein when I say luxury buyer.
07:08And there may have been the profile we had a couple of years ago of here's some of the
07:11interest, some of the wants and wellness trends.
07:14And there's definitely some things that buyers are looking for today.
07:17Our first time home buyer is not who they were even in recent years.
07:22And so this is like a big shift for whether you're on the mortgage side, whether you're
07:28agents on the brokerage side.
07:30The first time home buyer is now thirty eight.
07:34And when I say that, people's jaws drop because it's not really who they would expect
07:39that to be. And part of the reason is some of these people have been waiting for rates
07:43to drop and they've been waiting and they've been waiting.
07:46And they're really needing to tailor their education process to what I'm going to call
07:51a more seasoned buyer.
07:53So they may have more general financial acumen.
07:57They may have more assets, although depending on market, if your rent rates have been
08:02really high, you may see at thirty eight you're expecting a higher down payment.
08:07It may or may not be there.
08:08And so looking at down payment assistant programs and again, looking at how we educate
08:14now this thirty eight year old first time home buyer about what the process is and what
08:19to expect, I think is a fairly dramatic shift for where we've been in prior years.
08:25Thirty eight, wow, that is not the number that I would have initially said, but it's a
08:30great call out. People have been waiting and waiting and waiting as we wrap up our ten
08:35minute talks. One of my favorite questions that I like to ask because it really just
08:39frame what is a focus area that people are thinking about is what do you think is
08:44keeping real estate leaders up at night in today's market?
08:46You can frame that for yourself if you want to just take it to you and what's keeping
08:50you up at night in the industry or maybe a theme since you are a leader among leaders.
08:54What is keeping the industry up at night?
08:56Well, I'll start with, you know, I'm big into mindset and there are things that we can
09:02control and there are things that we cannot.
09:04And so distinguishing between those two, I think, is very important.
09:07And there's been even just in recent weeks such a flurry of changes in governments.
09:13And we're going to be watching how some of these policy actions impact the markets, the
09:18economy as a whole within the real estate market.
09:21We're looking at what does that mean for even interest rates, CFPB, deregulation.
09:27There's so many unknowns on this front that's going to be exciting to see how it plays out
09:31in the months ahead. Worrying and fretting about a lot of that isn't going to get us
09:37anywhere. And so it's really just, I think, in order to stay up at night, it's really
09:42making sure you're informed, you understand what is actually happening.
09:48You're taking time to understand the implications.
09:50Inventory, I touched on already, but inventory is keeping a lot of people up at night.
09:55And there's a lot that could change.
09:57So cap gains, capital gains, that number has not changed in 25 years.
10:03And so looking at are we going to start to see some changes on that front, increased
10:07emphasis on bringing more homes to the markets, possibly more new housing starts.
10:12And so, you know, what can one do?
10:14It's looking at on a local level, what are the things, what are the programs available?
10:19What are the things that you can do to help spark more?
10:22Maybe there's zoning deregulation, things that can help create more inventory in the
10:26market. But the last piece, and this is the one that gets me excited, is keeps me up not
10:32in a bad way, tech.
10:35And people talk about AI and tech.
10:37And I think, you know, you're either in it or you're not.
10:41And good news, you're never too late.
10:44I heard someone say it, you know, people can look at AI as just never needing to start
10:49with a blank page again.
10:50And it's really looking at how we can automate, how we can become more efficient, how we
10:56can refine what we're already doing, even designing systems, processes, business plans.
11:01And whether you're on the mortgage side, the brokerage side, there is so much that can
11:07be done to tap into what you're going to do for your own business on tools and resources
11:12you can give your clients.
11:13And so that is keeping me up tonight in today's market, but in the best way possible.
11:18I feel like I start going down a rabbit hole and there's just so much available and
11:24changing. And it's exciting.
11:26That's, I think, going to be such a great change in 2025.
11:31I always appreciate an optimistic outlook, and I've never heard it put that way.
11:36It's so eloquently said, AI means you never have to start with a blank page again.
11:41That's a great way to fuel productivity is that blank page can take up a lot of time and
11:47brainpower. So thanks, Rebecca, for walking us through not only the themes of the market,
11:51all the way to how is this year different to what is keeping people up at night?
11:55You've really mapped out what I think a lot of leaders are looking at and some tips and
12:00advice on how they can approach this market.
12:01So thank you for joining with me on Ten Minute Talks.
12:05Great being here. Thanks for having me.