While I may have outgrown the idea of Santa Claus, I’ll never outgrow the magic of the season—the belief in hope, connection, and the possibility of something truly special. This year, instead of wishing for gifts under the tree, my hopes are focused on a real estate market that offers balance and opportunity for everyone—buyers, sellers, and those dreaming of their next chapter. Here’s what’s on my holiday wish list this season…
Increased Inventory
While the number of homes available for sale in many parts of the nation is beginning to rise, Monroe County homeowners remain resistant to installing “For Sale” signs in their front yard. In November, there were just 551 homes to purchase locally, compared to 2,118 eight years ago—a staggering 74% decrease. This significant loss of inventory has turned Rochester into one of the most competitive real estate markets in the country.
Bidding wars have become the norm, and on three separate occasions this past spring, Rochester ranked as the second most competitive city in the U.S. for homes sold through multiple offers. In the coming year, the National Association of Realtors predicts an 8.7% increase in local sales as inventory grows slightly. Unfortunately, this increase, while welcome, is nowhere near the levels that would provide relief for potential buyers.
New Construction
There are several major factors contributing to the real estate inventory shortage. Some reasons, like the “lock-in rate”—where homeowners hold onto low-rate mortgages instead of trading up—are beyond local control. Others, like the dearth of newly built homes, is something we can address. Some of the builders I’ve spoken to report a backlog of more than 200 clients, all desperate for their housing developments to begin. But unnecessary hurdles, such as permitting delays, bureaucratic red tape, and opposition at town planning board meetings, keep projects from moving forward.
Often, just a handful of vocal opponents at a public meeting can derail a development that could satisfy the housing needs of hundreds of families. Add to this the exorbitant cost of preparing land for construction, and it’s clear why so many potential projects remain stalled. If local governments streamlined permitting processes, recognized the needs of the many over the few, and encouraged collaboration with builders, we could quickly create new housing opportunities for the growing number of buyers in need of homes.
Mortgage Rates
One of the great impediments to a more stable and stronger real estate market is the high cost of borrowing money to purchase a home. After rising to 7.87% in October of last year, 30-year mortgage rates dropped to 6.11% in September before climbing back up to our current rate of 6.68%. Although rates have improved slightly, they remain higher than many buyers can comfortably afford.
When comparing the predictions of fourteen separate economists and other prognosticators, the average projection shows that rates will stabilize at around 6.34% by the end of next year, providing some relief. But as we know, forecasts—much like the weather—aren’t always reliable. Economic predictions in the past few years- whether it’s the rate of inflation, job creation, or mortgage rates- have been woefully inaccurate. Until borrowing costs drop more significantly, potential buyers and real estate professionals alike are left hoping for lower rates to ease affordability and help more families achieve their dream of homeownership.
Fewer Real Estate Agents
The surge in licensed real estate agents during the post-COVID boom brought many new faces into the industry. Interest rates were at historic lows, buyers were eager, and a booming market often masked inexperience. However, as Warren Buffett stated in one of my favorite aphorisms, “Only when the tide goes out do you discover who’s been swimming naked.”
Last year, 50% of all licensed real estate agents in the U.S. didn’t sell a single home, while an additional 10% sold just one or two. This means many buyers and sellers were left with inadequate representation during one of the largest financial transactions of their lives. To improve the industry, brokerages should prioritize mentoring newer agents, states should consider raising licensing standards, and those who aren’t thriving in real estate might consider exploring other careers. Ensuring that clients have skilled, knowledgeable representation is crucial for maintaining trust in our profession and improving outcomes for all parties involved.
Conclusion
As the holiday season reminds us of the power of hope and renewal, I look forward to a new year filled with possibilities for a more balanced and accessible real estate market. Whether it’s increasing inventory, easing construction challenges, or fostering a stronger professional community, I remain hopeful that those in a position to make a difference will work toward making this list a reality. In the meantime, best wishes for the remainder of the holiday season!!