Real May Agent Survey Reveals Shifting Market Dynamics Amid Continued Affordability Challenges
June 20 2024 - 7:30AM
Business Wire
Survey Also Finds Increasing Adoption of
Generative AI Among Real Estate Agents
The Real Brokerage Inc. (NASDAQ: REAX, “Real”), the
fastest-growing, publicly traded real estate brokerage, today
released results from its May 2024 Agent Survey. The survey
indicates agents’ continued optimism despite a predicted decline in
North American home sale transactions during the month of May.
“While affordability challenges persist, it is promising to see
our Agent Optimism Index remain in positive territory, reflecting
agents’ confidence in the future,” said Tamir Poleg, Chairman and
CEO of Real. “Real is committed to equipping our agents with
advanced technology, comprehensive resources and a collaborative
culture to thrive in any market condition.”
“As one of the first real estate technology companies to deploy
a proprietary artificial intelligence (AI) layer for agents, we are
excited that over 80% of agents are actively using AI to power
their businesses or planning to learn,” remarked Sharran Srivatsaa,
President of Real. “We will continue to lead the industry with
cutting-edge technology solutions to make our agents’ lives easier
and to deliver differentiated value to their clients.”
Key Findings:
- Agent Optimism Index Declines but Remains Positive: At
the end of May 2024, agents were asked, “Compared to one month ago,
are you more optimistic or pessimistic about the outlook for your
primary market over the next 12 months?” Among the respondents, 39%
felt more optimistic and an additional 9% felt significantly more
optimistic, outweighing the 16% who felt more pessimistic and 3%
who felt significantly more so. The average response resulted in a
weighted index reading of 59.0 on a 0-100 scale, with scores above
50 reflecting a positive outlook. This compares to 63.6 in April,
indicating a month-over-month decline in optimism. The decline was
more pronounced in the U.S. (down 4.9 points to 57.9) than in
Canada (down 2.5 points to 68.9).
- Sellers Losing Negotiating Power as More Agents View Market
Dynamics in Balance: When asked “Would you consider your
primary market to be a buyer's market, seller's market or balanced
market?”, approximately half (49%) of agents noted sellers have the
upper hand, a 12 point month-over-month decline from the April
survey. One third (33%) of agents viewed their markets as balanced,
with neither buyers nor sellers having an advantage, up from 23% of
agents in April. Approximately 18% of agents believed buyers hold
the upper hand in their markets, up from 16% in April.
- Total North American Home Sale Industry Transactions
Expected to Decline Year-over-Year in May: Agents were asked,
“In your primary market, how would you describe the number of
transactions closed in May 2024 compared to May 2023?” The average
response resulted in a weighted index reading of 45.7 on a 0-100
scale, suggesting an aggregate decline in industry transactions
across the U.S. and Canada in May 2024 compared to May 2023. The
U.S. home sales market saw a decrease, offset by an increase in
Canada. May’s index reading of 45.7 compares to April’s 49.9 level,
and marked the lowest monthly index reading so far in 2024.
- U.S. Agents Notice a Pullback in Transactions During
May: Agents observed a decline in the total number of U.S. home
sale transactions in May 2024 compared to May 2023, as May’s U.S.
index reading of 44.8 declined from 50.2 in April.
- Canada Activity Rebounded in May: Agents in Canada
signaled modest year-over-year growth in their respective regions,
with the overall Canadian weighted index rebounding to 54.4 in May
from 46.4 in April.
- Affordability Challenges More Impactful than Inventory
Constraints: The majority of agents surveyed (59%) cited
affordability/mortgage rates as the biggest challenge for
prospective home buyers, followed by a lack of inventory (25%),
economic uncertainty (8%) and buyer competition (6%). Notably, May
marked the lowest month for “Inventory” as a percent of responses
so far this year, and the highest month for “Affordability”.
- Majority of Agents Expect Home Prices to Continue to Rise
Over the Next 12 Months: Over half (58%) of agents expect home
prices to rise over the next 12 months, compared to 28% who expect
home prices to remain stable, and 14% who expect home prices to
decline.
- Half of Agents Using Generative Artificial Intelligence (AI)
With Advertising the Most Common Use Case: Approximately 50% of
agents reported using generative AI in their daily business
activities, compared to 18% who do not use AI, and 31% who do not
utilize AI but would like to learn. Among those who currently use
generative AI tools, the most common use case is writing text copy
for listings and advertisements (86%), followed by the creation of
marketing assets (70%), technical support (34%), responding to
client inquiries (31%), managing client relationships via customer
relationship management systems (30%), and analyzing real estate
market trends (22%). Notably, only 9% of agents currently use AI to
aid in pricing strategies and predictive analytics, suggesting an
opportunity to develop more AI-powered real estate pricing
tools.
An infographic including key survey takeaways can be found on
Real’s investor relations website or by following the link
here.
About the Survey
The Real Brokerage May 2024 Agent Survey included responses from
over 400 real estate agents across the United States and Canada and
was launched in the last week of May 2024. Responses to questions
regarding transaction growth and agent optimism were calibrated on
a 0-100 point index scale, with readings above 50 indicating an
improving trend, whereas readings below 50 indicate a declining
trend. Responses are meant to capture industry-level information
and are not meant to serve as an indication of Real’s
company-specific growth trends. Additionally, given the smaller
sample size, there can be greater variability in Canada index
results on a month-to-month basis.
About Real
Real (NASDAQ: REAX) is a real estate experience company working
to make life’s most complex transaction simple. The fast-growing
company combines essential real estate, mortgage and closing
services with powerful technology to deliver a single seamless
end-to-end consumer experience, guided by trusted agents. With a
presence in all 50 states throughout the U.S. and Canada, Real
supports over 19,000 agents who use its digital brokerage platform
and tight-knit professional community to power their own
forward-thinking businesses.
Forward-Looking Information
This press release contains forward-looking information within
the meaning of applicable Canadian securities laws. Forward-looking
information is often, but not always, identified by the use of
words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”,
“expect”, “likely” and “intend” and statements that an event or
result “may”, “will”, “should”, “could” or “might” occur or be
achieved and other similar expressions. These statements reflect
management’s current beliefs and are based on information currently
available to management as of the date hereof. Forward-looking
information in this press release includes, without limiting the
foregoing, expectations regarding the residential real estate
market in the U.S. and Canada, as well as expectations regarding
the use and deployment of artificial intelligence technology
products.
Forward-looking information is based on assumptions that may
prove to be incorrect, including but not limited to Real’s business
objectives, expected growth, results of operations, performance,
business projects and opportunities and financial results. Real
considers these assumptions to be reasonable in the circumstances.
However, forward-looking information is subject to known and
unknown risks, uncertainties and other factors that could cause
actual results, performance or achievements to differ materially
from those expressed or implied in the forward-looking information.
Important factors that could cause such differences include, but
are not limited to, slowdowns in real estate markets and economic
and industry downturns. These factors should be carefully
considered and readers should not place undue reliance on the
forward-looking statements. Although the forward-looking statements
contained in this press release are based upon what management
believes to be reasonable assumptions, Real cannot assure readers
that actual results will be consistent with these forward-looking
statements. These forward-looking statements are made as of the
date of this press release, and Real assumes no obligation to
update or revise them to reflect new events or circumstances,
except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20240620379251/en/
Investor inquiries, please contact: Ravi Jani Vice President,
Investor Relations and Financial Planning & Analysis
investors@therealbrokerage.com 908.280.2515
For media inquiries, please contact: Elisabeth Warrick Senior
Director, Marketing, Communications & Brand
press@therealbrokerage.com 201.564.4221
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