The CEO of Berkshire Hathaway HomeServices that has a footprint in Nevada, Southern California and Arizona said he doesn’t expect the results of Tuesday’s elections to have an impact on the housing market.
“Up to an election you will sometimes see positive changes for our industry,” said Troy Reierson. “You are definitely not seeing that for a midterm. I don’t think you will see much changes right now. It looks like rates are going to hold steady through next year. I don’t see significant changes yet. The economy is always a big topic, and inflation is still high right now. I think it will be bumping up to the presidential election where you might be seeing some change. There is a lot that has to happen with a lot of headwinds we are facing right now. It makes it difficult for those who want to buy and sell. But life will not stop. We will still have an industry, and it will just run at a little different pace for a while.”
The Las Vegas-headquartered firm operates throughout Arizona; operates in Riverside and San Bernardino counties in Southern California, Palm Springs and parts of Orange County; and operates in Las Vegas.
The brokerage is 48 years-old and was owned by Mark Stark before it was sold to Warren Buffet. It has about 2,000 agents spread equally in all three states.
Q: The Las Vegas median single-family price hit a record $490,000 this year and was $470,000 in September, flat from a year earlier. Are homes here overpriced?
A: I don’t think they are overpriced. We’re seeing inventory grow right now. Affordability is the big issue. We’re seeing less of the younger generation jump into homes like many of us did. It’s an incredible wealth-building tool. So many of our younger generation haven’t been educated on what they can build or a lot of them aren’t interested in learning more while investing in other areas. When you look at Las Vegas and everything it offers people that are moving into this incredible city we have from sports to entertainment to food, driveability and taxes, it’s one of the best-kept secrets.
Q: What about Southern California and Arizona?
A: We (in Nevada) have a great relationship with California. We are thrilled so many people in California are looking for that lifestyle change and moving to Las Vegas. There’s still high demand in California and in the markets we operate in homes are moving faster. It’s a larger population and generational wealth, and when you look at the greater Phoenix area it has so many different submarkets, and if you look at Scottsdale homes are sitting a little longer. However, that luxury market is moving pretty quickly.
Q: How do the three markets differ?
A: They differ significantly. Every market differs inside its own market. Arizona and Las Vegas are very similar and easy to watch because they react in a similar way. California is very different. It’s based on those pockets. Orange County is going to be different from Rancho Cucamonga. It’s all economy based. What is going on with inflation? Do people want more home, a different lifestyle or save on costs? We know credit card debt is at an all-time high. Are there areas I need to cut and is there a better place for me to live and not worry about the cost of gas for commuting too far? Our job is not to sell them a home but direct them in the best way possible for what they need and want. We have to walk away because it’s not the right time for that person to make a decision. We listen and let them tell us that to us. With the uncertainty in the economy today, you are seeing people make some financial changes. And oftentimes that means moving to other areas.
Q: What market is best positioned of the three?
A: I think Las Vegas is beautifully positioned because it’s a market that is continually evolving. Six years ago there was a new stadium called Allegiant and since that time we have a major baseball park that will almost be done. The NBA is coming in here. The Hard Rock hotel is taking beautiful shape. Las Vegas is so exciting and is an incredible draw for people. If you look at California, the ocean is right there and if you love the coast you can live an hour-and-a-half away and still get that nice coast. There’s a tremendous opportunity in California and a lot of business there. Phoenix has the same thing. There’s incredible opportunity in every market. It might take a little bit longer to sell a home due to affordability, but it doesn’t mean people aren’t looking and don’t want to do that. They are just trying to position the best time to do that.
Q: With mortgage rates still a hurdle, what would it take for prices to come down? Do you expect that to happen?
A: If we were under 6% we would see a light flood of people in the market but now that we’re over 7% I think you have to get in the low 6s to see a significant shift in the industry. If you think you can time the market, you can play with stocks as well. It’s just as difficult. There are oftentimes people that need to move or have a desire for a better lifestyle, but they are concerned about having a higher interest rate. You really need to look at what lifestyle you are looking to live in. Maybe you can live the lifestyle you are looking for in a less expensive home.
Q: Are prices an issue in all three markets?
A: Affordability is an issue nationwide.
Q: What markets are the values holding up best?
A: I would say all of them. If you have a great property, and it’s taken care of and perhaps it’s updated and priced right and strong professional to market a strategy, there’s a good market for a lot of homes. What we are seeing is the folks looking back to the COVID years saying my neighbor sold for this much, and I don’t know why I can’t get that. There’s more inventory and the question is what makes your home special and how well it is positioned. There are so many factors that go into holding price or going above price. In California, we’re still seeing multiple offers. In Las Vegas, if it’s a great property and priced right, we’re still seeing multiple offers as well.
Q: Which parts of Las Vegas and Henderson are holding value best, and where are sellers having to cut prices?
A: Ultra luxury is going to get multiple offers. Henderson and Summerlin are still holding strong. The whole west side is still holding strong. The high rise is taking more of a hit than single family. In California, there are areas that are quite affordable, and they are doing quite well too. Real estate is so local. One neighborhood right next to the other one can be substantially different in price points.
Q: What should an agent tell a seller who's priced too high or a buyer who's afraid of overpaying?
A: It is having a frank conversation that it is priced too high, but you have to back all of that with facts and show them what is selling in the area and what unique features that are selling. You need to show them what their home looks like compared to other homes on the market. So much is basic real estate. It’s important to back all of this up with facts. You need someone highly qualified to understand the nuances of each home, what it takes to sell a home and stage a home. That’s what is going to move properties today. It’s all about the strategy and time you take into that so it’s marketed effectively to the right people.
Q: What advice do you have for Realtors?
A: Be diligent. A lot of real estate professionals are scratching their head saying it’s harder than it’s ever been. It is because there’s so much uncertainty out there. The advice we are giving our real estate professionals is to communicate more. If there is bad news, communicate it early and often. Start with the facts and knowing your market inside and out and know everything that is going on. When you do that you become the expert in the market, and when you are the expert they will trust and respect you.
Q: Compass bought Anywhere in a deal valuing the combined company at more than $10 billion. What has that changed for you in Nevada, Arizona and Southern California?
A: It has been great for us. Anytime a competitor makes a purchase of that magnitude adds more real estate agents. It doesn’t do anything for the consumer but causes a lot of confusion. They are operating a lot of different brands, and they don’t know exactly where their lanes are going to be or if they are going to have different software. The good news is we know where we are going. We’re reinventing the inside of our company. We are doing more with technology on administrative stuff that doesn’t matter to the consumer so we can focus more on the consumer. When other companies like ours are making business decisions that just affect them, they are missing what is most important. We are in the business to help consumers create one of the most magical days in their lives. That’s our focus.
Q: Are your agents worried about all this consolidation? What do they ask you about it?
A: It comes up all of the time. It’s in the news nonstop.
Q: Are bigger brokerages recruiting your agents harder since the Compass deal? How do you keep your top producers?
A: A lot of bigger brokerages are recruiting less because they are trying to figure out what their lane is. We keep our top producers by education, training and innovation. It’s helping them become the best version of themselves. We have a lot of coaching and push out information to them to be better stewards of the brand and better advisors to their clients.
Q: Is a smaller independent brokerage still able to compete or will more of them have to sell or merge?
A: There has been a lot of consolidation out there. If they still have their offering and are a well-run organization they will be just fine. But it’s a lot more expensive to be in the industry than it’s ever been.
Q: Are you looking to acquire local brokerages or teams, or expand into new markets?
A: We are always open to conversations, but I’m not looking to spend a lot of money. If we find a brokerage with a similar culture to ours and similar fit to who we are we would welcome those conversations all day long. I am always open to expanding to new markets. Reno would be a great market to service, but I would not want to encroach on Berkshire Hathaway HomeServices territory. If something were to change there, I would be open to that. We are open to California as well.
Q: Compass just announced a merger with Rate to combine their mortgage ventures. How important are mortgage, title and escrow to your business today?
A: They are very important to our business. We believe in the consumer experience. We know the majority of consumers would like a one-stop shop. We have all of those pieces in place. Any real estate company should look into doing it because it will be a lot more difficult with the bigger brokerages that have all of this infrastructure.
Q: Two of the MLSs fighting Compass, CRMLS and Arizona's ARMLS, are in markets where you operate. How is this affecting your agents and clients there?
A: It is not affecting us at all.
Q: Is it better for a seller to put a home on the MLS right away or should sellers have the option to market it privately first?
A: There is a big battle. My personal belief is if you are looking to sell your home you want to get as many eyeballs on that as you can. There are some cases if you are a celebrity or well-known athlete you may not want their home in the MLS. I understand that. It’s not typical to get your asking price or more unless you get it out to more. It is straight marketing.
Q: Compass and NWMLS settled through a new status that lets agents pre-market without being fined. Would something like that work in Las Vegas?
A: Yes. I don’t see why it wouldn’t but it would depend on the rules around it.
Q: Have private or office-exclusive listings become an issue in Las Vegas? Are your buyers missing homes because of them?
A: In Vegas, maybe, but in other parts of the country yes there are missed opportunities.
