What’s the old saying— “When you've hit rock bottom, the only way is up?”
While 2023 wasn’t quite rock bottom for the housing market, it felt that way at times. A spring homebuying season that never was, persistent low inventory, high prices, and soaring mortgage rates that peaked at over 7% all led to the least affordable year for homebuying on record.
Thankfully, hope is on the horizon, with an expected decline in home prices and lower mortgage rates in 2024.
Use the links below to jump to a specific section of this blog:
The SoftPro team has put together our predictions for the upcoming year, along with five tips to set you up for success no matter what the market throws your way.
Last year, the housing market saw mortgage rates reach heights unseen in over two decades, severely hampering affordability and sales. However, 2024 promises a turnaround, with rates expected to fall below 6%. Some forecasts even suggest a drop to around 4.25% by summer. This expected decline is attributed to decreasing inflation and a strengthening economy, although regional variations are expected, with coastal areas like Florida possibly seeing more significant adjustments. Nevertheless, we won’t see an immediate change, and patience will be key as we await the timeline for the Federal Reserve's potential interest rate cuts.
Inventory Challenges Will Persist
The persistent U.S. housing shortage is well documented, rooted in years of underbuilding, labor shortages, and supply chain disruptions. Now, many homeowners are also holding onto properties due to previously locked-in lower rates. Though some improvement is anticipated, the issue will remain prevalent in the short term. New construction builds are expected to add more options, and, as mortgage rates decline, more sellers may be inclined to enter the market.
The combination of high mortgage rates and low inventory drove prices sky-high in 2023. However, 2024 is likely to see a stabilization. Experts predict a minimal decline of 0.2% in home values, while some anticipate more significant drops in certain regions. Factors like climate risks and inflated pandemic pricing are contributing factors, especially in coastal Florida. Local government initiatives, such as the land-value tax, may also play a role in enhancing affordability. So, while a general stabilization is expected, regional variations will likely occur depending on multiple factors.
The housing industry, particularly vulnerable to cybercrime, witnessed an increase in wire fraud, business email compromise, and other phishing schemes last year. Additionally, seller impersonation fraud, a type of crime where fraudsters pose as legitimate sellers to misdirect funds, became even more prevalent. With over 73% of real estate firms reporting increased attempts, this trend is one to keep on your radar. Anyone involved in real estate must brace for an intensification of these threats, with fraud tactics becoming more sophisticated and fraudsters utilizing AI to enhance their schemes. Additionally, the expected increase in transaction volume could stretch the resources of many real estate companies thin, making them more susceptible to fraud.
Speaking of AI, it’s set to further transform the housing market this year, impacting everything from customer communication to property management. While the potential threat it poses in regards to fraud must be addressed, title and settlement agents, who are traditionally burdened with manual processes, stand to particularly benefit from AI's efficiency in data extraction and process streamlining. What previously took hours with the potential for human error could now only take minutes with AI, with promised boosts in accuracy and efficiency. However, it will be crucial to approach this technology with an understanding of its potential risks and challenges – more on that in a bit.
Understanding these upcoming trends is just the beginning. Now, it's time to focus on strategies to help you excel in this changing landscape.
Five Essential Tips Designed to Empower You in 2024:
As we mentioned, AI holds immense potential in streamlining complex, manual processes in real estate. Its application in analyzing documents, like property records and contracts, and identifying risks could prove invaluable. However, it's crucial not to view AI as a fix-all solution. This technology requires constant checks for accuracy and cannot replace the nuanced decision-making of your skilled employees. Privacy concerns and AI-generated fraud risks are also significant worries.
Additionally, the complexity of AI systems and the need for specialized knowledge to implement and manage these technologies can be a significant hurdle. We’d recommend you start by educating yourself on AI's capabilities, then, gradually integrate this technology into your operations. Prioritize understanding how its role can be utilized in your workflows and be prepared to adapt and refine your approach as you learn.
With refinance transactions likely to rise in 2024 as interest rates fall, automation will be essential to ensure your title agency operates as efficiently as possible. With SoftPro Select, you can take this to the next level thanks to our suite of tools designed to automate the most time-consuming tasks within your operations. From data entry, document generation and streamlined communication with clients and partners to convenient integration with third-party services for title searches and reporting, we ensure your agency is ready to handle the increased volume without compromising on service quality.
Want to learn more about SoftPro Select automation features? Click here!
When it comes to automation, other technologies like Robotic Process Automation (RPA) can simplify manual data transfers, minimize human errors and save time. However, there are also plenty of non-technology-based options you can try. By standardizing processes, creating templates for routine communications, and employing batch processing, you can significantly reduce the time your team spends on repetitive tasks. You can also encourage your team to organize workspaces efficiently, apply effective time management, and use checklists for quality control. Additionally, cross-training employees can improve your operation’s flexibility and resilience, maximizing efficiency to sustain the ebbs and flows of the real estate market.
As the market improves and competition intensifies, differentiating yourself will become even more important. Knowing your story and your strategy will be vital in this environment. Identify what sets your agency apart – whether it’s your local expertise, niche services, or exceptional customer care. Then, develop a marketing game plan that allows you to articulate this unique story to your customers. Use various platforms, including social media, marketing emails, and community outreach, to share your story. Make sure to create content that resonates with what your clients need in order to showcase your expertise. As you consistently align your marketing efforts with your unique story, you’ll not only differentiate your company, but also build lasting relationships with your clients.
You have a wealth of knowledge at your disposal, with underwriters, vendors and your other real estate partners consistently sharing valuable content and resources. If you’re not already, actively follow their publications, blogs, newsletters, and other online platforms, and engage in any educational offerings they provide. Carve out time to assess these insights and see how they can address your company’s needs and challenges. Then, implement the strategies and tactics that align with your goals and don’t hesitate to contact these partners for personalized advice or collaboration opportunities. SoftPro works hard to understand your needs and offers abundant resources and support, extending beyond software solutions to industry knowledge and best practices. By tapping into this knowledge pool, you’ll gain fresh perspectives to help you navigate the challenges that come your way.
We’ll just say it: many agents are underutilizing their title production software. Often, the solution or feature you're considering adding might already exist within your current software suite. Conduct a thorough audit to understand the full range of available functionalities. Consult your software provider to explore all capabilities; you may uncover tools to streamline workflows, improve efficiency, and enhance client servicing. This approach can save costs on new solutions and ensure optimal use of all your existing tools.
SoftPro offers specialized consulting services to help you get the most out of the software and tools we provide. Our team can conduct an in-depth analysis of your operations and provide tailored recommendations for improvement. Leveraging our expertise, you can unlock hidden features and functionalities within your SoftPro software aligned with your specific needs. This will not only help to improve your workflows and efficiency, but also ensure you're fully utilizing its capabilities to best serve your clients.
As 2024 unfolds, we know you face many challenges, opportunities, and decisions, no matter what happens going forward. SoftPro stands with you on this journey. That's why we design our products specifically for the needs of our clients. Whether you're with a large company or small business, we design our customizable software solutions with you in mind. If you'd like more insights and industry news, check out our blog or give us a call.
Would you like to download a PDF version of this blog?