Editor's note: Watch for more detailed breakdowns and analysis of this year’s Power Broker Report in the coming days and weeks.
Many couldn't believe what they were hearing. Home prices were growing at the fastest pace since 2015, far outpacing wage growth, and the word "bubble" was once again making its way into media vernacular. Could the housing market really be headed for another crash less than 10 years later?
But that was 2018.
Now, with the first quarter of 2019 behind us, the outlook is quite a bit different. Sales have flattened, prices have calmed and a sense of order seems to have been restored. And, for the 49 percent of Power Brokers who describe their market as "balanced," that's not a bad thing.
Despite headwinds like affordability and low inventory, this year's Top 1,000 Power Brokers still reported a collective sales volume of $1,424,776,652,825 for 2018, more than $100 billion above 2017, and representing more than 100,000 transactions over 2017, as well. See the Top 500 Power Brokers ranked by sales volume here.
NRT again captured the No. 1 ranking for sales volume, at $176,431,375,000, and for the first time, HomeServices of America landed at No. 1 for transactions, closing 346,629 last year. The brand has completed several high-profile purchases in recent years, including the acquisitions of Ebby Halliday REALTORS® and The Long & Foster Companies.
"I think 2019 will be a year of pause," says Pat Riley, CEO of Allen Tate Companies. "For us, builders are still way behind demand, appreciation rates are sliding back to normalcy, days on market are increasing, boomers are squatting, and first-time homebuyers are having a tough time getting out of their leases financially. What this all adds up to is an adjusting market, which means cautious optimism and a return from a seller's market to a balanced market."
Riley's comments reflect the feelings of the majority of this year's Power Brokers, 59 percent of whom describe their confidence level as "cautiously optimistic." While 43 percent of respondents reported their confidence level as "high" in 2018, this year, just 30 percent report such enthusiastic sentiments.
And while a shortage of inventory still ranks as the No. 1 challenge to business for Power Brokers, the percentage has dropped significantly from 71 percent of respondents last year to 49 percent of respondents this year. What's taking inventory's place among top broker challenges? The economy.
Ranked as a concern by just 1 percent of respondents last year, in this year's survey, 25 percent of respondents reported economic uncertainty as the second-greatest challenge to business. While most feel that the economy and job growth are faring well, it is tainted by a degree of instability brought about by an uncertain political environment that continues to toy with consumer confidence and the stock market.
"This is the year of uncertainty," says Janelle Wohlfeil, manager of Real Living Kee Realty. "The inventory crisis seems to be ending, but what will the Fed do? I would not be surprised if market volume was down 15 percent or up 10 percent."
"Governmental and economic uncertainty is a distraction to the general public," agrees Ed Forman, president of Watson Realty Corp. "There is a huge business impact when people are uncertain and distracted from their financial goals."
But despite this uncertainty and the challenges presented by inventory and affordability issues, Power Brokers do expect home sales to tick up in the year ahead as home prices level off and inventory gradually improves.
This is being reported even from Power Brokers in hot markets like Denver. "We are expecting a decrease in the rate of home appreciation and an increase in inventory, resulting in a more balanced market," says Donald Sarno, CEO of Keller Williams Preferred Realty Denver North.
Power Brokers also agree that the fallout from national news will need to be balanced more than ever with the wisdom of local expertise.
"Real estate remains local," says Robin Miller, president of Coldwell Banker RPM Group. "It is important that real estate professionals do a better job of educating buyers and sellers in their local market, especially those of us located in balanced markets. The national real estate news seems to carry the weight, which can impede a balanced market."
What keeps Power Brokers at the top of their game, however, is their imperviousness to market conditions, political unrest and the media. As Mavera Mir, broker/owner of Realty ONE Group United, says, "Real estate happens in any kind of market. It's up to the REALTOR® to be dictated by the market, or to dictate the market."
Continue to next page to view more Power Broker totals for agents and offices, as well as the “State of the Market,” how Power Brokers across the U.S. view the current market conditions. Sneak peak: Some say it’s booming, while others say it’s challenged—see how the percentages shake out on Page 2.