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Positive Signals for Compass & The Market – Mike DelPrete

1 minute, 42 seconds Read

Compass’s for sale listings are up 15 percent compared to the same time last year – just one example of rising activity across the U.S. real estate market.


Buy/sell, rent/lease residential &
commercials real estate properties.

Why it matters: An increase in for sale listings is a welcome sign of more sellers coming to market, good news for businesses in the real estate ecosystem, and a promising start to the year after a depressed 2023.

  • Compass, the nation’s largest brokerage based on sales volume, currently has 2,000 more listings than the same time last year – and that number is increasing.

On a year-over-year basis, the number of Compass listings has gone from down 8 percent in July to up over 15 percent at the end of January – a significant change in fortunes.

  • Aside from being good for buyers, this is good news for Compass – more listings should lead to more sales and more commission revenue.

New listing volumes and revenue are indirectly correlated (because of the time lag between a listing and a sale). 

  • In Q3 2023, Compass’s listing volumes were down 5 percent and revenue was down 10 percent year-over-year (YoY).
     

  • But things are looking up: Compass listing volumes were up 3 percent in Q4 and are currently up 13 percent in Q1 – positive signs that won’t appear in Q4’s financials but will land in Q1 2024.

And Compass is not alone; according to Redfin’s national data, new listings are up significantly across a number of major U.S. markets.
 

The increase in activity appears to be driven by – wait for it – interest rates.

  • With the recent drop in rates, mortgage demand has spiked to the highest level in six months.

The bottom line: From a transaction volume standpoint, 2024 is off to a promising start.

  • From a business perspective, more transactions means more commission income – the $90+ billion that fuels so much of the industry, from agents to brokerages, from portals to tech vendors. 
     

  • It’s still very early, but these are signs that would signal a positive shift in the market and, therefore, good news for the ecosystem of businesses that surround the transaction.

This post was originally published on 3rd party site mentioned on the title of this site

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