Pete Flint is the co-founder and CEO of Trulia.
Are you optimistic about 2015?
The 2015 housing market has a lot going for it. The market has emerged from the worst pains of the housing crisis. Foreclosures have declined sharply, as has negative equity. Even though the recovery remains unfinished, the housing market is becoming more stable and more certain for buyers, sellers and renters. Plus, consumers are optimistic. Almost three-fourths say that homeownership is part of their personal American Dream, and 93 percent of young renters plan to buy someday. Consumers think 2015 will be a better year than 2014 to buy and to sell.
What are you worried about?
The housing market can no longer depend on the rebound effect for its recovery. Instead, the market depends on fundamentals like job growth, household formation and demographics, which point to a slow and uneven recovery as the market gets closer to normal. Young adults are still much less likely to be employed than before the recession, and household formation is struggling to recover as many millennials are still living with their parents. An urgent worry in many markets is affordability. Home prices and, especially, rents are out of line with historical norms in many markets, particularly where construction is restricted.
How much do you fret about global events?
Heading into 2015, the U.S. economy is in better shape than those of most rich countries. Global events — economic or political — are always a wild card for U.S. economic growth and consumer confidence. In addition, foreign demand plays a huge role in some U.S. housing markets, such as midtown and lower Manhattan, oceanfront Miami and Los Angeles’s west side.
Will mortgage rates go up or down next year?
Mortgage rates are likely to rise in 2015, especially from the low level they reached at the end of 2014. Both the strengthening economy and Fed actions should lift rates. However, we all expected rates would rise in 2014, and look how wrong that prediction turned out!
Will home prices appreciate next year?
Home prices will rise in most markets in 2015, though slower than in 2014 or 2013. In the markets that bubbled, crashed and rebounded sharply — like Las Vegas, Phoenix and inland California — prices will rise modestly as the rebound effect fades. Yet prices could accelerate in markets that avoided the worst of the housing bust and have strong job growth. Overall, though, home prices nationally now look roughly in line with long-term fundamentals, which means fewer bargains for investors, a lower risk of price declines, and slower, more sustainable price gains.
Will agents be more productive next year?
Yes, I think they will be.
Why? Or why not?
Simply put, they will have better tools. Agents have a difficult job that pulls them in many different directions. As more agents adopt tools that help them manage their time, respond quickly to leads and thoroughly follow up over time, they will be more successful.
Will the portals play a bigger role in real estate next year?
You could easily argue that I’m a bit biased answering this question. But, the portals will continue to play a bigger role as more consumers use mobile devices to access real estate information and insights. For example, Trulia has invested heavily in this area, and during the third quarter of this year we experienced more traffic from mobile compared to desktop devices for the first time with 29.9 million unique visitors. This was an increase of 89 percent, from 15.8 million in the same period last year. I expect mobile will continue to be an important trend in 2015 and beyond.
What will be the biggest source of real estate leads next year?
The three most important methods for generating leads will continue to be referrals, repeat business and the Internet. Agents have an opportunity to use new tools this year, such as Trulia One, our comprehensive mobile and desktop CRM app that we are rolling out to derive more value from the leads they are already generating.
Are you making plans to expand, contract or maintain your business this year?
Trulia plans to continue to expand the business in 2015. As I’m sure your readers are well aware, Trulia is planning to merge with Zillow, pending regulatory approval. Together with Zillow, we can unlock even more innovation and invest our time, energy and resources into building even better consumer and agent experiences.
What is the biggest challenge for the industry in the coming year?
Despite all the progress that the industry has made, the experience for home buyers and sellers still needs to be better. Buying a home can be a painful, confusing process, especially for people doing it for the first time. That’s the biggest challenge for all of us as we look ahead. Not only will it require continued focus on the consumer, it also requires many different players to work together.