Texas Relocation Network event focuses on industry insights
Texas Relocation Network (TRN) held their annual educational event earlier this month at the Dallas Carrollton Conference Center in Carrollton. The event gave industry professionals from around the state an opportunity to discuss some of the most compelling issues facing global mobility today.
The theme of the event was “Your Future is Coming into Focus,” which is reflective of the many changes and challenges that are impacting both the relocation and real estate business landscapes.
The keynote speaker was renowned real estate expert, Pam O’Connor, who is the retired CEO of Leading Real Estate Companies of the World. She addressed the housing market, and the various real estate business models that are shaking up the ways that consumers buy and sell homes.
She began by providing an overview on the housing market, and then discussed the competitive real estate environment and what that means within the context of relocation.
As far as the housing market is concerned, O’Connor said that the outlook is very good. This is according to the National Association of Realtors.
“We are starting out with a bang for 2020. Existing home sales thus far this year are 9.6 percent ahead of this time last year, which is great. The forecast right now is a growth of 2 to 3 percent in unit sales, a 4 percent increase in prices, and new home growth of 10 percent,” O’Connor said.
She attributed this to strong consumer demand, fueled by wage growth, maturing millennials who are buying houses, and the continuation of historically low interest rates.
At the same time, O’Connor said that there are also a few issues. This includes the inventory of available properties, which is down compared to this time last year. She said that this is due in part to slow housing starts, and the fact that people are staying in their homes a bit longer.
“The headwind is that we just don’t have enough houses to sell,” said O’Connor. “The high-end market has also been pretty slow, and we obviously have an affordability issue, because in a lot of markets it’s very difficult to buy. But that is easing a little, because of wage growth and some other issues, and homeownership is starting to creep up a little bit, so that’s good news.”
The unknown element in all of this is the coronavirus, which is top-of-mind for most consumers right now. It has already caused significant volatility in the stock market, which can shake consumer confidence.
As for its impact on the housing market, it is really too early to tell.
O’Connor said that although the coronavirus is a wild card that could impact the market, that she doesn’t think it will affect domestic real estate.
The other wild card is that 2020 is an election year, which could bring more of a wait-and-see attitude for buyers and sellers between now and November.
“The jury is still out on the election year, but historically, every time we’ve had an election year, the housing market has improved with a couple of exceptions, and those were really deep recession years. So, notwithstanding some crazy thing that could happen, we’re in good shape this year,” O’Connor said.
In terms of the real estate business environment, O’Connor said that it is a highly competitive, and that consumers have many more choices than ever before. These can range from the traditional brokerage firms, to limitedservice discount brokers, and to the iBuyer companies that are gaining momentum.
iBuyer companies, such as Opendoor and Zillow, use technology to estimate the value of a home, then make the homeowner an instant offer to purchase based on that estimate.
Many consumers find this business model attractive due to the convenience and speed at which they can sell their homes, without the burden of marketing to potential buyers.
But, iBuyers can also have some important ramifications to relocation.
“iBuyer fees could be higher than typical commissions, and they might not all be reimbursable. Many times, there are inspections and repairs that come in after the offer has been accepted, and those can be a lot higher than normal, so that nets the transferee less money. Also, iBuyer contracts are often in conflict with some of the relocation addendums,” O’Connor said.
She added that Dallas and Houston are two of the fastest-growing iBuyer markets in the country.
“I think we would all agree that real estate is the biggest component of a relocation in terms of expense and probably what’s on the mind of the transferee,” said O’Connor. “So, this really does impact everybody. You need to understand what’s driving a lot of that competition out there, and who your transferees are dealing with.”
Michelle Sandlin is an awardwinning writer, journalist and global mobility industry expert. Follow her on Facebook: www.facebook.com/TheMichelleSandlin and on Twitter: @MichelleSandlin. Also visit “On the Move” at blog.chron.com/ onthemove.