Emerging from a tumultuous 2022 that saw the final 2 quarters of sales activity diminish at a rate never before seen, the real estate industry sure seems to be in flux. As a subscriber to multiple real estate news organizations, we see the headlines every day and think the worst. However, upon a click of the headline, the real story emerges: Real Estate Technology companies are hemorrhaging billions of dollars. They are losing money faster than our government can spend it. It's clear that not all of their grandiose ideas about disrupting the residential real estate transaction have been good ones. So what are they missing, and why are they laying off their workforces hundreds of workers at a time?
One obvious reason is market conditions have changed dramatically in the past year. What was a blistering seller's market featuring dozens of offers on seemingly every listing has undergone a "sticker-shock" moment of recalibration. Interest rates have doubled in many cases in the past year while inventory has only slightly increased. We are now in a market that is completely foreign to even the most experienced Realtor. Mortgage lenders are gasping for air as they look to secure what little purchase business there is as refinances have all but dried up. The disruptors have no answer to these questions either. All anyone knows is that houses sell every day, everywhere, regardless of market conditions, and it's important as a player in the industry to secure as many of those deals as possible.
So what have we learned? We believe the clearest trend in Louisville, KY and many other places like it is nothing new: All real estate is local. It's different when you cross county lines, it might be different when you cross the street, but the bottom line is there is no substitute for local knowledge and boots on the ground. The technological aggregators have failed to account for this nuance. Want proof? Look at the institutional buyer space that's now been abandoned by nearly everyone from Zillow to Redfin. It's simply not as easy as the valuation algorithms were betting it would be. When a market shifts dramatically, those who persist in providing keen knowledge and great service see the shift far in advance and reposition themselves and their clients to think rightly about what's happening. Algorithms can hint at these changes and maybe even identify them, but it takes local knowledge to know how the changes affect local geography.
So the next time you see a real estate industry headline describing mass layoffs, click the link. Chances are it's a support/technology company headquartered somewhere else that's shedding workers. Great Louisville Realtors are here to help. We remain strong and well-positioned to navigate whatever market we find ourselves in because we know that people want, and sometimes need, to move. At the Thomas Group at Keller Williams Louisville East, we have decades of real estate experience in Louisville and the surrounding Kentucky counties. We have navigated the great recession, the Covid market, and now the aftermath, and we are confident that we are the very best option for buying, selling, and investing in Louisville real estate that there is. We would be honored to speak with you about your situation, so reach out anytime!