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Is This Real Estate Bubble About To Pop? An update from John Sebree, CEO of Missouri REALTORS®




In case you missed it, last week we had John Sebree, CEO of Missouri REALTORS® on the Ensure Podcast and what he had to say was just too good to leave there so we thought we’d write about it too.


As you know, our agency loves serving in whatever capacity we can. We believe in growing in community with each other. In this podcast episode, John hammered in the nail as to why we believe this kind of strategy is so important.


Let’s checkout what he had to say.


To begin, it’s important to understand the different roles in real estate.

Here’s what we covered.


The Missouri REALTORS® advocate for real property rights, lead in professional excellence and engage all members. This is their mission. Any realtor in the state of Missouri is a part of the Missouri Realtors Association and works to achieve this goal. This also includes real estate brokers. A real estate broker is a real estate agent who continues their education and successfully receives a real estate broker license. Brokers may work independently, while agents may work for brokers. Those not included in the Missouri Realtors Association are those that are just simply licensed. These licensees are often not looking to make a career out of real estate, but they have at one point received the education and passed the exams in order to be licensed in real estate. The Missouri REALTORS® Association serves 24,000 Missouri REALTORS®


*wipes sweat from brow

Okay, so now that we have a basic understanding of some real estate terms, let's discuss current market trends.


It’s no surprise that the real estate market is thriving right now. Each month we are finding that the number of homes being sold is increasing, the median price of homes is going up, and the number of days a home is on the market has decreased significantly.


Currently in Missouri, the median home price is $210,000 and is up 16.7%.
Homes are staying on the market for an average of 33 days, compared to 60 days in April 2019.

Many people are worried that we are in a bubble right now that could burst at any time. However, John disagrees saying, ‘I don’t see this as a bubble. It’s different from what we’ve seen in the past. Before, we found so many people were under water on their homes. There were lots of foreclosures and short sales. However, when you look at the statistics now you see that people have wealth in their homes. Their home value has increased so prices are going up and up but those of us that have been in a house for a while have that wealth in our home. Totally different from last time.’


The pandemic has also impacted the current real estate market and we will probably continue to see some of these same trends as many will continue to work remotely even as more places begin to open up.


Spending all of our time at home has allowed us to get creative with what we do with our space.


Over the last year people have been putting the money that they would usually be spending on things like travel and entertainment into their homes. Home improvement is an asset for the future. Those that have improved their space, have now also increased the value in their homes.


However, homes aren’t the only places where people are getting creative. Many businesses have reworked their strategies to fit the pandemic. For example, John mentions how closed schools have turned into condos, or even recently, a hotel in Branson, MO that became an affordable housing unit. This trend is referred to as adaptive reuse and many places are seeing more and more of this.


We are also seeing some people relocate during the pandemic. Previously the average homeowner would stay in a home for about seven years. However, currently many people are rethinking their space because of size or location. John mentions, ‘People no longer need to be close to their work or in a certain school district. They are now realizing that the home they purchased might not have been their first choice and are now more flexible with where they can go. They may want to live outside of the city with more yard space, or they may just need more space in their homes now that everyone is home all the time. Some might be in search of a home office or a place where their kids can study when this wasn’t really a consideration before.’


It’s interesting because here in Missouri we are seeing the price of rent increase, however, the more expensive cities to live in, rent is actually decreasing because people no longer need to go to work there.


Overall, John refers to real estate as sort of the shining star of the pandemic.

John advises, “Anyone thinking about selling, now is the time, just know where you will be going.”

As for the rest of the year and into 2022...


John discusses, “We’ve been nervous with our 24,000 realtors in Missouri because what if they don’t have anything to sell? However, when we talk to our national economist they feel pretty comfortable about the future. In fact, pending home sales have been a really good indicator for the market. Nationwide they are down 4.4% and there is a slight concern that sales will start going down because of the fewer pending contracts.”


“However, the bright side of these statistics is that the midwest is the only area in the national association region where pending sales weren’t down this month.”

John suggests, “I think in Missouri, our quality of life, our cost of living, our median home sales price, all indicates that we are not looking at bursting any bubbles. Instead, we are looking at continuing down the track as we’ve done.

In the future, I personally would like to see the prices level off a little bit. I know the current owners love seeing their values increase, but I’m also thinking about those buyers who we’d love to see get into the market and buy their first home because we know how that is what builds wealth.”


Finally, what our agency found the most cool out of this whole podcast!!


John says, “The thing I would leave your listeners with is just to know there is an organization out there that is looking out for them. Whether they are the buyer, the realtor, the investor, the commercial property owner, the lessee or the lessor, we are looking out for them because somebody has to. Someone has to go to DC and talk to our members of congress about these issues, someone has to go to Jefferson City and talk to our legislators about the issues that impact property owners and renters every day and that’s exactly what we do at the Missouri REALTORS® Association.”


John has mastered waking up thinking, “How am I going to make real estate better today?” He knows that real estate impacts everyone.

“Everyone has a real estate story, everyone lives somewhere, works somewhere, real estate is part of their life whether they think about it or not, so I wake up every day thinking what am I going to do today that is going to make real estate a better investment, something that is more affordable for everyone, or how can I educate a member of congress and help with policies that will help people.”

In doing so, John encourages us all to listen, brainstorm, study the market, come up with creative solutions, and have a great tribe of people surrounding you.


 

This information was brought to you by the Ensure Podcast with special guest John Sebree, CEO of Missouri Realtors.

Listen to the whole podcast at https://www.forsytheagency.com/podcast or find it on Apple Music or Spotify.


For more information about John, read his bio or connect with him at https://www.missourirealtor.org/about/staff


Find John’s market update for the Missouri Realtors Association at


The regional advocacy coordinator for our area is Zack Brown.


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