Real Estate Trends On Deck for 2019

Ranked in the Top 100 in both Sides (closed transactions) and Volume (sales volume) of the REAL Trends 500, Watters International Realty has its finger on the pulse of the real estate industry. Since founding Watters International in 2010, CEO Chris Watters has successfully navigated myriad industry changes and fluctuations, growing the company to one of the most compelling in real estate today. Watters credits the success of his company’s team model to its continued ability to stay in step with and ahead of trends, and provided some insight on what’s he’s expecting in the year ahead.

The biggest trend that emerged in 2018 was the increased amount of capital being infused into real estate from business and financial institutions. Companies are surfacing that are buying homes in bulk with no agents representing the seller. These companies are raising hundreds of millions of dollars in test markets around the U.S. in an effort to solve the issue of liquidity for homeowners. The downside to this, however, is that these homes are selling at below market value. I’m not convinced this business model is recession-proof, either.

Elsewhere, national real estate companies are attempting to scale as discount brokerages and having a difficult time. While third-party platforms offer discounts to sell homes, they are losing money so they are narrowing in on what they'll buy, leading to regimentation that is becoming less appealing to the masses. Recently, we’ve started seeing these companies charge more than advertised and upselling people to pay more in commission, too, diminishing their models’ sustainability.

Technology has impacted the real estate industry a lot in recent years, so how do you expect it to continue playing a role in 2019?

I think technology will continue to help agents automate processes to increase efficiency. Currently, about 80 percent of an agent’s time is spent trying to find clients as opposed to working with clients. Trying to identify qualified clients is incredibly time-consuming, so automation, artificial intelligence-powered bots and other technology built to help systematize the lead follow-up process will create more time for client engagement and communication, valuably enhancing user experience and helping clients feel better about the home buying or selling process.

The big thing that is coming in 2019 is rising interest rates and downward pressure on pricing. From the economic perspective, pricing will be more stagnant and we won’t see much appreciation. This will likely affect certain cities and price points specifically because while lower proceed homes will continue to appreciate, homes north of $400,000 will take much longer and ultimately be harder to sell. This doesn't bode well for the luxury market.

Staying ahead of trends is a result of extensive market research. Everywhere is different. Our agents are trained to calculate market absorption rates for every neighborhood they are selling in. We have created a sales model based on this information and as a result, can advise clients on how to price their homes to capitalize on the appreciating market, or, to the contrary, how to avoid the downside of a depreciating market.

Calculating these numbers for specific locations, beyond just pulling comps, helps consumers stay ahead and prevent them from chasing the market down because historical results don't dictate future results. This education and trained expertise will continue to be a key differentiator for us