Are you rockin or dragging Might be your bug me list!

The median asking rent climbed for the fifth consecutive month, up 0.9% year over year to $1,645

The median U.S. asking rent rose 0.9% year over year in August to $1,645—the biggest annual increase since April 2023. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Rents were up 0.1% on a month-over-month basis.

Rents for 0-1 bedroom apartments ticked up 0.1% year over year to $1,495, while 2 bedroom apartments remained unchanged at $1,725. Rents for 3+ bedroom apartments fell 1.7% to $2,008. The discrepancy between the overall result (showing a 0.9% gain) and the three different bedroom counts (which either fell, remained the same, or rose by a lower amount) is the result of a statistical phenomenon known as Simpson’s paradox.

While rents rose the most in nearly 18 months, August marked two years from when they hit an all-time high. Lower rents, paired with wages growing 3.8% year over year, show that rental affordability has improved.

Multifamily building completions are at historic highs in 2024 and in some areas supply now outweighs demand. That is driving some building owners to reduce rents and offer concessions to prospective tenants.

“Almost everything in our lives costs more than it did two years ago—but rents have remained largely stable thanks to the construction boom, especially across the Sun Belt states,” said Redfin Senior Economist Sheharyar Bokhari. “We are seeing rents tick up a little now that new construction is starting to slow down, but asking rents are likely to stay relatively flat for some time due to the backlog of new apartments that are still coming onto the market.”

Rents in Austin and other Sun Belt metros continue to fall the fastest

The trend of increased construction leading to lower rents is most obvious in Austin, TX where the median asking rent fell 17.6% year over year in August—the steepest decline of the 33 major metros Redfin analyzed. In dollar terms, that means rents in Austin are $317 a month less now than they were a year ago.

Authorities in the Texas capital signed off on the most new construction in the country in an effort to keep up with soaring demand during the pandemic. Demand has now leveled off, but a lot of new apartments are still coming onto the market, so asking rents are falling.

San Diego (-13.3%) and Jacksonville, FL (-13%) also recorded double-digit decreases in asking rents in August, while San Francisco (-7.8%) and Tampa, FL (-5.8%) rounded out the five metros with the largest rent decreases.

The median asking rent in Virginia Beach, VA rose 15.2% year over year in August, the biggest jump among the metros Redfin analyzed. Washington, D.C. (up 12.2%), Baltimore, MD (up 11.3%), Chicago (up 10.8%) and Cincinnati, OH (up 9.4%) posted the next highest gains.

To view the full report, including charts, metro-level data and methodology, please visit:

https://www.redfin.com/news/rental-tracker-august-2024

Employees are your biggest asset when it comes to business innovation and driving transformational change. Now, when I say “innovation,” many business leaders think of those large-scale, revolutionary advancements that propel organizations to the forefront of their industry. These big ideas are what I call “transformational innovation,” and they are what business leaders dream of. Every leader looks to fully transform innovation his or her industry landscape and see a tremendous ROI as a result.

While transformational innovation is what we all strive to achieve, it does not just fall out of the sky. Likewise, these are the innovations that take place over the course of time, not overnight. Transformational innovation requires many small stepping stones to turn that dream into reality. In other words, it is “everyday innovation” that gets you to that transformational innovation end goal.

Build a Team of Everyday Innovation Innovators

The best way to reach those revolutionary innovations and become masters of everyday innovation is to create a culture where continuous improvement and everyday innovation is at the core of everything you do. Embracing innovation is essential for fostering a culture where continuous improvement and everyday innovation is at the core of everything you do. And it all starts with your team!

Anticipatory Leaders around the world agree with me: Employees are your biggest asset, especially when it comes to innovation. They are the ones on the ground floor of your operation, interacting daily with products, services, and customers. By opening the door to the unique insights and perspectives of your hard-working employees, you encourage them to think with an Anticipatory Mindset. This supports not only a united Futureview® but a culture of continuous improvement — and sets your organization on the road to groundbreaking creative ideas.

To encourage this type of thinking throughout your workforce, you simply have to reward the behaviors that foster this type of culture.

Insight Into Innovation Labs in Business Innovation

About a decade ago, LinkedIn instituted what they call the LinkedIn [in]cubator. Once a quarter, everyday employees are encouraged to come up with an idea, put together a team, and pitch that idea to the executive members of the staff. If the idea is approved, the team has three months to turn its idea into a product or service, with free and full use of the capital necessary to effectively execute it.

What an inclusive way to incentivize employees at every level to help positively influence the company!

Whirlpool hosts structured ideation sessions that any employee can join. In these, individual employees go through basic idea generation, form a business case, and compete for the opportunity to develop their idea. The winning innovative ideas then go through a testing and experimentation phase before they are finally released to the public. Again, the incentives that come along with this program, including the educational aspect of learning how an existing product comes to fruition, really incorporate the talents and potential of employees at every level in a unified way.

Google, a long-standing innovation giant that we all know, has a policy that allows employees to dedicate 20% of their time, or one day a week, to working on anything of their choosing. Whether the project they choose is related to their regular work responsibilities or not, they get the option to be creative.

• These initiatives serve as examples of successful innovation, demonstrating how structured programs can lead to significant advancements and employee engagement.

And what a difference that makes. Google is still one of the most innovative organizations in the world.

These are all examples of innovation labs. Innovation labs indirectly and directly encourage employees to identify pain points for their customer base or organization as a whole, allowing them not only to think creatively to solve future problems but to see the results of their hard work.

Mastering “Innovation in Business Importance” for Future Success

While many of these innovation labs are competition based, rewarding employees based on the merit of their innovative new ideas through financial rewards, time off, work flexibility, or even rights to the idea is a way to empower them. All Anticipatory Organizations know that constant business innovation is the true key to longevity and significance — not striking gold on one idea that creates an overnight but momentary success.

Your employees are valuable assets and should be treated as trusted members of the team. Encouraging and incentivizing everyone to innovate will also prevent the managers at your organization from feeling overextended by having to carry this burden alone. Your whole workforce is the whole team after all!

Empowerment Breeds Successful Innovation in Business

Empowered employees are a powerful force. When employees feel empowered, they are more likely to take initiative and bring creative innovative new ideas to the table, as they feel more invested in the success of the organization. Even better, empowered employees feel free to come up with some of the most brilliant everyday innovations that others might never think of.

And how do you empower your employees? By rewarding the behavior you want at your organization.

This is a simple yet powerful concept that is often overlooked by many business leaders. The companies in the innovation lab examples discussed above reward behaviors such as creativity, collaboration, and proactive problem solving. By aligning these desired behaviors with all types of rewards, these organizations indirectly teach their team to have an Anticipatory Mindset.

Instead of trying to guide your employees to this end result through a one-way, static form of communication and lecturing them, incorporate them. Don’t just tell them to have an Anticipatory Mindset about innovation and the future – encourage, inspire, incentivize, and reward them for having it.

When you do this, not only will your employees work towards everyday innovations in continuous improvement, but they will develop the foresight to predict future disruptions and innovation opportunities — thereby setting your organization up for significance and success.

From Idea Generation to Impact

Everyone works hard at an organization. To foster a culture of internal, organization-wide innovation, you must ensure that your employees have a real sense of purpose, and that they feel their contributions are seen. Meeting these needs will foster a culture of internal, organization-wide innovation and drive value creation through employee engagement and innovative solutions. And recognizing and rewarding the behaviors that lead to these outcomes is absolutely essential.

Remember to remind your employees along the way that becoming an Anticipatory Organization is not about doing everything right. It is about creating an environment where every person feels empowered to look towards the future — and to view Hard Trends and Soft Trends not as something to fear, but as something they can use to their advantage to propel the organization and all within it, including themselves, forward.

A few weeks after the new industry rules went into effect, some homebuyers are confused about fee agreements and who is responsible for paying the buyer’s agent.

Most sellers are still willing to cover the buyside commission–but negotiation has become more common in some markets and at higher price points, which could put pressure on fees

the technology-powered real estate brokerage, reported today that negotiation over commissions has become more common in some markets and at higher price points in the wake of industry rule changes mandated by the National Association of Realtors legal settlement.

The report focuses on interviews with dozens of Redfin agents around the country about how buyers and sellers are responding to the reforms. While consumers and agents are still adjusting to the new rules, Redfin agents are seeing different impacts in different parts of the country. In some areas, negotiations over fees are becoming more common, while other markets have not experienced much change at all.

“We've found a tale of two markets," said Redfin Chief Economist Daryl Fairweather. "In slow markets where there's less demand from homebuyers, like Austin, agents report that most sellers are still willing to pay the buyer's agent commission to attract buyers, and agent fees are mostly the same as before. In markets with low inventory and robust demand, like San Francisco and Boston, agents report more instances of negotiation around fees, with sellers asking buyers to make their best offer rather than preemptively deciding what they want to offer a buyer’s agent. Now, like the amount of earnest money deposit or including an inspection contingency, the amount the buyer is asking the seller to pay her agent is a term that impacts the strength of the offer. That will likely drive fees down over time.”

A Redfin analysis in July found the typical buyer's agent commission was 2.55%, down slightly from before the settlement was announced. The new rules have made it harder to track fees by removing them from the MLS.

Under the new requirements, which took effect August 17, listing agents may no longer include a unilateral offer for the buyer’s agent commission in NAR-affiliated multiple listing services (MLSs), and agents must tell potential buyers what they charge before buyers start touring homes.

Buyers are confused about signing an agreement before a home tour.

The requirement that agents and buyers agree on fees before they tour is intended to make fees more transparent. But buyers are understandably wary about signing paperwork to tour homes.

Redfin’s approach is to ask house hunters to sign a simple fee agreement–which can be signed online with one click–before their first home tour. The agreement doesn’t obligate the customer to use Redfin; its purpose is to tell prospective clients what Redfin would charge if a Redfin agent were to represent them. Once a prospective client has met a Redfin agent, they can decide whether to continue working with them and take advantage of Redfin's best pricing with its Sign & Save program. Redfin offers competitive buyer agent fees as low as 1.75% depending on the market.

Many agents at other brokerages are taking a more heavy-handed approach, requiring buyers to sign a full buyer agency agreement to tour. These agreements typically obligate the buyer to work exclusively with that agent for their home purchase for a certain period of time.

Alex Galanis, a Redfin Premier agent in San Diego, says, “I showed a $4.75 million home in Carlsbad. The buyer told me she tried scheduling a showing with another agent, but immediately that agent sent her a 12 page buyer representation agreement for signatures. She found it very off-putting, and appreciated our approach. I want to win a customer’s business as much as the next agent, but I don’t think anyone should be forced to make such a big decision before we’ve had a chance to meet.”

The biggest change: Buyers and sellers are negotiating over who pays the buyer’s agent, and how much they’re paid. This is especially true in the luxury market.

The NAR settlement has led more sellers to realize commissions are negotiable, and that they might be able to get the buyer to cover some or all of the buyside commission. The consensus from agents: Like most parts of a real estate deal, how much a buyer or seller can negotiate depends on demand for the listing.

"While I’ve always let my sellers know they can offer whatever commission they want and don’t have to offer anything at all, my sellers are having the conversation with me in more depth than ever before,” explained Blakely Minton, a Redfin Premier agent in Philadelphia. “I recently had a seller decide to offer 1.5%. I let them know offering less commission would most likely mean the buyer has to make up the difference, and it would only matter if you don’t have demand for your home. That 1.5% home listed at $350,000 and got 12 offers. It was a great little home right near the University of Delaware. Half the offers we got still asked for 2.5%. But the two highest offers accepted that the seller would pay just 1.5% to the buyer’s agent."

Las Vegas Redfin Premier agent Fernanda Kriese says: “It’s all price-specific and seller-specific. Sellers understand that agents aren’t going to work for free, but they’re thinking about what percentage they’re going to offer the buyer’s agent: Maybe it’s 2%, maybe it’s 2.5%, maybe it’s 3%, depending on how desirable the listing is. And ultimately, the commission goes together with the price. Sellers may have to list slightly higher if they’re offering to pay a higher commission to the buyer’s agent, and vice versa.”

Agents are reporting there’s more downward pressure on buyer’s agent commissions for high-end listings.

“Buyers and sellers of luxury homes are more likely to negotiate agent fees, which makes sense because on a $5 million home every half a percent is $25,000,” says Mimi Trieu, a Redfin Premier agent in Silicon Valley. “They want to make sure they are getting value from their agent. My luxury listings aren’t offering a certain buyside commission. If the buyer makes a great offer, they’ll consider paying the buyer’s agent.”

But even though negotiations are becoming more common, most sellers are still willing to help cover the buyer’s agent fees.

Before, sellers proactively advertised a commission in the MLS that they were willing to pay any agent who represented the buyer. And often the buyer’s agent accepted the commission offered. Now sellers are evaluating their options and deciding on a strategy based on the housing market and the competition they expect for their home. By and large, most are still willing to cover the buyer agent fee as long as they still net their desired amount.

In New Jersey, Redfin Premier agent Amira Elgoneimy continues to see sellers proactively offer a commission to buyer’s agents. “Sellers in my area are still offering to pay commission to the buyer’s agent in all price points, so far. I wrote five offers the first two weeks the rules were in effect. In all five, we knew the seller was offering to pay commission.”

Gregory Eubanks, a Los Angeles Redfin Premier agent says,“With sellers, I’m laying everything out upfront, presenting the options for payment to the buyer’s agent. One, don’t offer a buyer’s agent commission at all. Two, state that you’re open to paying buyside commission but don’t provide an exact number. Three, go ahead and put a number out there–it can’t be advertised over the MLS, but listing agents can communicate it to buyer’s agents in different ways.”

Removing the offer of compensation from the MLS has resulted in more back and forth between agents when scheduling a showing, with more buyers’ agents contacting listing agents to ask if the seller is offering compensation or open to it. Redfin agents report some listing agents are communicating what the seller is willing to pay buyer’s agents in creative ways. In Dallas and Portland, for example, our agents have seen instances of “3%” written on a lockbox. Still, most agents report they’re mostly communicating about fees via phone calls and texts.

To read the full report with additional agent anecdotes, visit: https://www.redfin.com/news/redfin-agents-report-nar-rules-negotiation