Gen Z Agents’ Struggles

January 05, 2024

THE BIG SPLASH

Gen Z Agents’ Struggles

What you can’t miss today

Gen Z real estate agents, who leaped into the industry during the pandemic housing boom, are now facing a harsh reality check as surging mortgage rates and market shifts challenge their early career dreams.

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  • These digital-savvy agents entered when the market was sizzling, with properties selling like hotcakes, often sight unseen.

  • The broader market has cooled significantly, with home sales dropping due to high borrowing costs and a shortage of available properties.

  • The industry faces a potential shake-up with a Missouri jury finding that commissions were kept artificially high, and a larger lawsuit and DOJ scrutiny looming.

  • Despite the challenges, these Gen Z agents are determined, leveraging their digital prowess and social media skills to navigate the market's ups and downs.

  • But young agents are finding it tough to compete, battling perceptions of inexperience and the Catch-22 of needing experience to get deals.

A SCOOP OF MARKET DATA

The number you should know

4.4%

The U.S. housing market saw the median sales price for homes leap in December, marking the biggest jump in over a year, because apparently, the real estate market just can't stay out of the spotlight.

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  • The median sales price for U.S. homes rose 4.4% to $363,371 in the four weeks ending December 31, the largest increase since October 2022.

  • Newark, New Jersey, led the charge with an 18.2% year-over-year increase in median sales price, closely followed by Anaheim, California, at 18.1%.

  • Other high-flyers included West Palm Beach, Fort Lauderdale, and Miami, Florida, with price rises of 15.2%, 15.1%, and 11.7%, respectively.

  • However, not everyone joined the party - Fort Worth and Austin, Texas, along with San Francisco and Denver, saw their median sales prices drop.

  • Despite these price jumps, the median U.S. mortgage payment fell to $2,361, down nearly $400 from October, luring some buyers back into the market.

A SCOOP OF INSIGHTS

Something you’ll learn

In Manhattan, a staggering 68% of homebuyers waved goodbye to mortgages and paid cash for their swanky $2 million pads in Q4 of 2023, because who needs loans when you've got deep pockets?

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  • Cash sales in Manhattan reached a record 67.9% of transactions in the fourth quarter of 2023, soaring past the usual 50% mark.

  • This cash frenzy is a significant jump from the 55% of cash buyers in December 2022.

  • Luxury real estate advisor Tim Malone attributes this trend to sky-high mortgage rates, which have doubled since January 2022.

  • The average 30-year fixed home loan rate is now 6.62%, pushing more affluent buyers to bypass interest rates altogether.

  • This shift in buying behavior is partly due to mortgage payments now costing more than rent, a reversal from the traditional norm.

  • High mortgage rates and low housing supply are also encouraging homeowners to stay put, further tightening the market.

A SCOOP OF CONTROVERSY

Everyone will talk about it

Shray Goel, self-proclaimed real estate visionary, was charged with running a multimillion-dollar Airbnb scam, tricking guests into booking non-existent properties or double-booked ones.

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  • Goel and his team managed over 100 properties across the U.S., pulling off a bait-and-switch scheme that raked in over $8.5 million.

  • The scam involved double-booking properties and sometimes listing ones that didn't even exist.

  • Goel made $7 million on Airbnb and $1.5 million on Vrbo through this scheme.

  • When guests were double-booked, they were either canceled on and charged fees or tricked into switching to inferior properties.

  • Goel was known to get aggressive with Airbnb customer service, pressuring and insulting them to avoid refunds.

  • Negative guest reviews were countered with negative feedback from Goel's team or by re-listing properties to hide the bad reviews.

  • Goel and associates used aliases and fake identities to conceal their actions and continue listing properties even after being banned from Vrbo in 2015.

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