Real Estate News
President and CEO Nick Bailey — a 30-year industry veteran — takes a long-term perspective on real estate, and he already sees positive shifts.
- Bailey said he’s seen plenty of real estate cycles in his career, and he believes the next decade will bring an influx of activity from younger buyers.
- He also argued that the extreme focus on mortgage interest rates is holding the market back.
- Regardless of the market, Bailey is a big believer in working efficiently, and he offered up his personal productivity tips.
The real estate market may be a little “lumpy” right now, said RE/MAX CEO Nick Bailey — but he’s focused on the long game.
“We’ve got great demand over the next 10 years for housing,” Bailey told Real Estate News. He expects home sales to be in the range of 55 million to 60 million over the next decade as large numbers of younger millennials and Gen Zers enter their prime homebuying years. That’s a big uptick from the current annual pace of around four million sales.
“Short term, in this spring market, we’re not seeing the move-up buyers. Their inventory is not coming to market. But that’s not a forever thing,” Bailey said, noting that eventually life events will force people to move and let go of their 3-4% mortgages.
Bailey, who took over as president and CEO of RE/MAX in January 2022 and has spent 26 years as a licensed real estate agent, has seen these types of cycles throughout his career. And that perspective allows him to stay optimistic. He believes things are starting to turn around for buyers, who are paying around 98% of the asking price this spring instead of well over asking, which was often the case a year ago.
“So that means sellers are negotiating and getting closer to buyer-seller equilibrium,” Bailey said, adding that it’s still a sellers market for the most part. He expects interest rates to come down this year, bringing more inventory to the market, which will in turn promote greater equilibrium.
Looking beyond the traditional mortgage
The weekly (or even daily) fluctuations of the 30-year fixed-rate mortgage have captivated buyers and the industry at large, but Bailey believes that focus is holding back the market. He noted that other financing options, like adjustable rate mortgages and buydowns, made up 35% of home loans pre-pandemic — but they practically disappeared when 30-year rates dropped to record lows.
Mortgage interest rates are now back to historical norms, Bailey said, and he believes the industry needs to remind buyers about these options instead of “training the consumer that all they should ask about is the interest rate” — and remind them that their loan amount is probably lower in this cooler market.
“What they don’t remember is if you were a buyer a couple years ago, you might have a 3% interest rate, but you were paying $100,000 over the ask price. Now, if you’re not paying over ask price and your rates are higher, your affordability in many cases could be about the same.”