New listings inched up as some homeowners opted to cash out, fearing that elevated mortgage rates could drive a drop in home prices

New listings climbed 1.4% month over month in September, the largest increase since February 2022 on a seasonally adjusted basis, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s a glimmer of relief for homebuyers, who for months have been waiting for more homes to hit the market.

“A lot of Americans are sitting on piles of money in their homes, and some are opting to cash out even if it means giving up their low mortgage rate; they’re worried there’s a possibility home prices will fall if rates remain elevated. We expect rates to remain high for the foreseeable future,” said Redfin Chief Economist Daryl Fairweather. “But we also expect prices to stay high into next year. Housing supply is so strained that even a small uptick in listings lures buyers off the sidelines, bolstering sales.”

Still, new listings dropped 8.9% on a year-over-year basis in September and remained far below pre-pandemic levels. That’s because mortgage rates hit the highest level in more than two decades, with the average weekly 30-year-fixed rate clocking in at 7.2%. It has since moved even higher, last week hitting a weekly average of 7.63%, and 8% on a daily basis.

The overall supply of homes for sale (active listings) rose 1.9% month over month in September on a seasonally adjusted basis, the largest gain since last summer. But active listings fell 16.9% from a year earlier and remained near the lowest level on record as homeowners continued to feel locked in to their low mortgage rates.

September 2023 Highlights: United States

Pending Home Sales Tick Up, But Deals Fall Through at the Highest Rate in Almost a Year

Pending home sales rose 1.3% month over month to the highest level in nearly a year on a seasonally adjusted basis as more listings hit the market. They were down 12.1% from a year earlier.

But while pending sales—the number of homes going under contract—improved in September, closed sales fell to the lowest level since the onset of the pandemic. They dropped 1.5% from a month earlier and 12.8% from a year earlier on a seasonally adjusted basis.

Pending sales ticking up and closed sales ticking down can be explained partly by a high portion of buyers backing out of contracts due to rising mortgage rates. Roughly 53,000 U.S. home-purchase agreements were canceled in September, equal to 16.3% of homes that went under contract that month—the highest percentage since October 2022, when mortgage rates surpassed 7% for the first time in two decades. That compares with 15.2% a month earlier and 15.8% a year earlier.

“Buyers are extra cautious right now. They want to make sure they’re getting a good deal given how much mortgage payments have gone up, and when they don’t feel like they’re getting a good deal, they’re backing out,” said Heather Kruayai, a Redfin Premier Agent in Jacksonville, FL, which saw the second highest rate of deal cancellations among the major metros Redfin analyzed. “Transactions are also falling apart due to skyrocketing insurance premiums and disagreements between buyers and sellers over necessary repairs. Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close the deal.”

Prices Continue to Climb as Lack of Supply Creates Competition

The median U.S. home sale price rose 1.9% year over year to $412,081 in September, and fell 2% from a month earlier—typical for this time of year.

Activity in the housing market is sluggish due to high mortgage rates, but prices remain near their record high because the buyers who are out there are competing for a limited number of homes.

Nearly two of every five homes (37.4%) that went under contract in September did so within two weeks, up from 32.6% a year earlier—a sign of homebuyer competition. Starter homes are particularly competitive right now, Redfin agents say, because housing affordability has fallen so dramatically.

Metro-Level Highlights: September 2023

• Pending sales: In Honolulu, pending sales fell 34.5% year over year, more than any other metro Redfin analyzed. Next came Birmingham, AL (-34.1%) and Colorado Springs, CO (-33.9%). Only three metros saw increases: North Port, FL (5.4%), Detroit (3.3%) and Tampa, FL (2.3%).
• Closed sales: In Tacoma, WA, closed home sales dropped 40.2% year over year, more than any other metro Redfin analyzed. Next came Oxnard, CA (-28.6%) and Fresno, CA (-28.5%). Closed sales rose most in North Port (42.8%), Cape Coral, FL (17.6%) and Tampa (15%).
• Prices: Median sale prices rose most from a year earlier in Rochester, NY (14.6%), Anaheim, CA (13%) and Buffalo, NY (10.9%). They fell in 17 metros, with the steepest declines in Austin, TX (-5.2%), North Port (-3.7%) and San Francisco (-2.5%).
• Listings: New listings fell most from a year earlier in Tacoma (-31.5%), Atlanta (-30.8%) and Houston (-29.9%). They rose most in North Port (33.6%), Cape Coral (30.6%) and Tampa (17.8%).
• Supply: Active listings fell most from a year earlier in Las Vegas (-41.7%), Stockton, CA (-38.2%) and Tacoma (-35.2%). They climbed most in Cape Coral (27.1%), New Orleans (26.5%) and North Port (26.4%).
• Competition: In Rochester, 72.8% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came San Jose, CA (68.6%) and Worcester, MA (66.6%). The shares were lowest in North Port (8.9%), Cape Coral (10.3%) and Austin (12.2%).
• Speed: In Rochester, 71.8% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. Next came Grand Rapids, MI (64.3%) and Buffalo (62.6%). The lowest shares were in Honolulu (5%), Lake County, IL (11.8%) and Chicago (11.8%).

To view the full report, including charts, tables, a metro-level breakdown and methodology, please visit: https://www.redfin.com/news/housing-market-tracker-september-2023

Attracting and retaining the best employees are two completely different concepts. Hiring the best is usually a streamlined process of seeking out the most qualified and skilled individuals and getting them to view your organization as a positive workplace to be in.

But after hiring is complete, it is their turn to interview you, in a way. They finally get to see what is behind the front door at your organization. Hiring the best employee for the job is one thing, but retaining the best employee for the job is a whole other arena in the business world.

Yes, each of these instances may be difficult, but it is arguable that retention has become the bigger of the challenges.

The Great Resignation of 2020

During the COVID-19 pandemic of 2020, we experienced what is now known as “the Great Resignation.”

On the surface, thousands upon thousands of employees left their jobs for various reasons. But one of the most pervading feelings behind many resigning from their roles was that those individuals took a defining moment in human history, a global pandemic, to search for something offering more personal fulfillment.

Recruiting, training, and benefits can cost $1,500 per employee turnover — a hefty chunk of change if you consider how many employees were exiting their roles during 2020. Retaining employees has now become more crucial than ever to many companies across industries.

A recent study found that the top tenured organizations include HSBC Bank and Neutrogena, with an average 10.2 years worker retention. Some of us cannot fathom top-notch employees staying around that long! So what is their secret?

No one sets out as a business leader to replace team members every year. We all want to keep our best-performing workers, so it is crucial that business leaders understand there is more to employee retention than money.

Align Your Futureview®

The question you are likely asking yourself is: If we are an Anticipatory Organization®, how will this ensure our top employees stay on our payroll?

Futureview.

The term “Futureview” is one I coined some 30 years ago as a fundamental component of the Anticipatory Organization Model. If you are new to my blogs and new to the concept of an aligned Futureview, let me explain:

Futureview is a vivid mental picture each of us holds of our future existence, both personal and professional. It is not a goal or plan — it is the actual image in your mind, good or bad, of what is to come.

Every individual at a business or organization has their own Futureview. Your Futureview is incredibly powerful, as it controls the decisions you choose to make and the actions you forego. We need to analyze what our Futureview actually is, as a positive one can be leveraged as a powerful strategic tool that allows us to take control of the future.

When employees have a positive Futureview about where your organization is heading and their place in it, they are more likely to choose to stay and contribute to the good of the organization and everyone in it. Conversely, when they have a negative Futureview and feel as though the company is headed in a bad direction, morale declines and they begin to hunt for other positions for their own security.

It is your job as a C-suite executive, business leader, or manager to unite the Futureview of your employees as part of your organization! This alignment to a positive Futureview is not an easy task and requires critical thinking, but it is very possible.

Below are some steps to how you can establish a positive Futureview for your employees: 

• Analyze Your Own Futureview

A positive, united Futureview is pervasive. This mindset naturally spreads to those around us at your organization. Do you yourself have a positive attitude about the future or a pessimistic, negative one? Do you see the future as filled with opportunity and abundance? Or is what you see in front of you one of disruption and insurmountable challenges?

You cannot retain quality employees by being a negative leader. So the first step in retaining employees is to first get your own priorities in order. Analyze your own Futureview and make sure it is a positive one. This is a vital steppingstone that allows you to open your workers’ eyes to the bright future you believe in.

• Give Employees Purpose

Are compensation and benefits important? Absolutely! Everyone needs to pay the bills. But is that all you have to offer? Not by a long shot! Employees need more than just money to feel fulfilled and satisfied. 

It is human nature to seek validation, to want to feel heard and seen, and to want to be recognized for our achievements. In addition to competitive salaries, retaining employees means aligning them with a sense of purpose, a reason to want to come to work, and giving honest feedback to let them know that their work has made a difference.

• Foster a Culture of Anticipatory Thinking

We all know those businesses that have had success in the past or that have found quick success, relying on that success for years until they became complacent and then fell behind. Nokia, Kmart, Blockbuster, and others always come to mind. To keep moving into the future and have your employees moving with you, you need to leave the legacy mindset and behavior in the past.

Trying to cling to the “glory days” often leads to a disconnected and disjointed company Futureview. So instead, encourage anticipatory thinking among all of your employees and various managers! Incentivize them to pre-solve predictable problems using my Hard Trend Methodology, and foster a culture of innovation in which everyone contributes and is a stakeholder.

• Reward the Right Behaviors

Believe it or not, many companies inadvertently reward counterproductive behavior. They reward knowledge hoarding, an every-person-for-themselves attitude, and chances to showboat. This leads to the breakdown of a team and fosters selfish mindsets. We have witnessed this time and again in sports teams built around one player who then goes down with an injury.

Don’t foster a culture of competition. Retaining employees involves creating dynamic reward systems based on sharing interdepartmental knowledge, having loyalty, embracing creativity, and meaningful advances in wisdom. Incentivize collaboration by teaching the importance of employee contribution. Proper incentives are a crucial asset in innovation.

These four steps are foundational moves that you can make to align your organization’s Futureview and demonstrate to all employees that you truly value them. Let me be frank once more: Larger salaries do help employees of all levels cover their living expenses adequately. But remember: They can get paid anywhere. They may feel they do not have purpose just anywhere, though!

Employees are strategic assets to the success and significance of an organization, so make sure you find a way to help them be significant in their role!

Connecting creates opportunities. Failing to connect leads to failure. Connecting incorrectly is worse than not connecting at all, because it leads you to believe you are doing something of value but are wasting valuable time. As part of business planning for 2024 it is important to look at how you are connecting with people as well as the people you are connecting with. Here are some simple things to look at: 

• Personal Connections

  • 10 personal calls or interactions per day
  • Birthday calls
  • Anniversary calls (annual reviews)
  • Follow-up or update calls

• Professional Connections

  • Social media posts, tags, or shares
  • Realtor support posts
  • Other Professional shares
  • Product & Service provider posts & shares

• Information/Value Connections

  • Video tutorials
  • Video coupons
  • Video professional support
  • Local event support

Your business relies on connecting with people and by providing exceptional value in the process. The quality of the service is often judged by the quality of the experience. The quality of that experience is often dependent upon how much value those around you feel you represent. Your business plan for 2024 must be connection and value driven. People are attracted to quality and value, especially when making life changing choices. Be that professional that provides exceptional value through an exceptional customer experience and surrounding yourself with others that do the same.

Questions or comments: This email address is being protected from spambots. You need JavaScript enabled to view it.

Existing-home sales faded in September, according to the National Association of Realtors^®. Among the four major U.S. regions, sales rose in the Northeast but receded in the Midwest, South and West. All four regions registered year-over-year sales declines.

Total existing-home sales^[i] – completed transactions that include single-family homes, townhomes, condominiums and co-ops – waned 2.0% from August to a seasonally adjusted annual rate of 3.96 million in September. Year-over-year, sales dropped 15.4% (down from 4.68 million in September 2022).

“As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” said NAR Chief Economist Lawrence Yun. “The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.”

Total housing inventory^[ii] registered at the end of September was 1.13 million units, up 2.7% from August but down 8.1% from one year ago (1.23 million). Unsold inventory sits at a 3.4-month supply at the current sales pace, up from 3.3 months in August and 3.2 months in September 2022.

The median existing-home price^[iii] for all housing types in September was $394,300, an increase of 2.8% from September 2022 ($383,500). All four U.S. regions posted price increases.

“For the third straight month, home prices are up from a year ago, confirming the pressing need for more housing supply,” Yun said.

REALTORS^® Confidence Index

According to the REALTORS^® Confidence Index, properties typically remained on the market for 21 days in September, up from 20 days in August and 19 days in September 2022. Sixty-nine percent of homes sold in September were on the market for less than a month.

First-time buyers were responsible for 27% of sales in September, down from 29% in August 2023 and September 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022^[iv] – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales accounted for 29% of transactions in September, up from 27% in August and 22% in September 2022.

Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in September, up from 16% in August and 15% one year ago.

Distressed sales^[v] – foreclosures and short sales – represented 1% of sales in September, unchanged from last month and the previous year.

Mortgage Rates

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.57% as of October 12. That’s up from 7.49% the previous week and 6.92% one year ago.

Single-family and Condo/Co-op Sales

Single-family home sales slipped to a seasonally adjusted annual rate of 3.53 million in September, down 1.9% from 3.6 million in August and 15.8% from the prior year. The median existing single-family home price was $399,200 in September, up 2.5% from September 2022.

Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 430,000 units in September, down 2.3% from August and 12.2% from one year ago. The median existing condo price was $353,800 in September, up 6.8% from the prior year ($331,300).

Regional Breakdown

Existing-home sales in the Northeast rose 4.2% from August to an annual rate of 500,000 in September, down 16.7% from September 2022. The median price in the Northeast was $439,900, up 5.2% from the prior year.

In the Midwest, existing-home sales declined by 4.1% from the previous month to an annual rate of 930,000 in September, down 18.4% from one year ago. The median price in the Midwest was $293,300, up 4.7% from September 2022.

Existing-home sales in the South dipped 1.1% from August to an annual rate of 1.82 million in September, a decrease of 11.7% from the previous year. The median price in the South was $360,500, up 3.1% from September 2022.

In the West, existing-home sales trailed off 5.3% from the previous month to an annual rate of 710,000 in September, down 19.3% from one year ago. The median price in the West was $606,100, up 1.8% from September 2022.

“The Northeast posted the strongest price gain resulting from higher demand coupled with inventory falling by 20%,” Yun said. “The West experienced softer price growth reflecting a pause after years of unsustainable and rapid price increases, especially in the Rocky Mountain region.”

^[i] Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

              The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

              Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

^[ii] Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

^[iii] The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

^[iv] Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s REALTORS^® Confidence Index, which include all types of buyers. The annual study only represents primary residence purchases, and does not include investor and vacation home buyers. Results include both new and existing homes.

^[v] Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s REALTORS^® Confidence Index, posted at nar.realtor.