RealEstateNews 3.3.25

Weekly News Roundup

• Home Buyers Gain Leverage
• AI Agent Sells $100m in Real Estate
• DOGE Targets Office Buildings

Home Buyers Gain Leverage

Home buyers have the most leverage over sellers in years. The bidding wars of the past half decade are fading in many parts of the country. Instead, today’s buyers say they are finding sellers willing to lower prices or throw in extras to sweeten the deal. The average home is now changing hands for 2% less than the price on the listing, according to real-estate brokerage Redfin.

Behind the shifting power balance is a growing supply of homes on the market. New listings increased in January by almost 5% versus last year, according to Redfin. By one measure, there is more for-sale homes than at any point in six years. New homes completed rose nearly 10% in January compared with a year ago, according to the Census Bureau. At the same time, demand is easing because many would-be buyers are deciding not to purchase at today’s prices, which are up sharply from a few years ago. A dearth of buyers has slowed down the housing market. 

U.S. existing-home sales fell 4.9% in January from the prior month to a seasonally adjusted annual rate of 4.08 million, the National Association of Realtors said Friday. Last year, home sales fell to the lowest level since 1995 for the second straight year. And prices continue to trend higher. The national median existing-home price in January was $396,900, up 4.8% from a year ago. Mortgage rates are just below 7%, adding hundreds or thousands of dollars to the monthly cost of homeownership from just a few years ago. The costs of insurance, property tax and homeowners association fees have all been rising briskly in many parts of the country. Source: Wall Street Journal

AI Agent Sells $100m in Real Estate

Real estate brokerage firm Porta da Frente Christie’s has implemented eSelf AI’s technology and has seen $100M in sales based on leads the AI agent has generated.  “We have more than 5,000 properties currently in our portfolio. It is impossible for a physical person to know all of the information regarding these 5,000 properties, but it’s not impossible for an AI agent to do so,”  said Porta da Frente Christie’s CEO João Cília. “So, you as a customer are going to get, probably and most likely, a much better service right away than you will have with a physical commercial consultant because she knows — the AI agent knows — everything about all the properties.”

When first interacting with the AI agent for Porta da Frente Christie’s, customers will be asked for basic information, including desired city, budget and number of bedrooms. From there, the agent can search for listings and take prospective buyers on virtual tours, giving detailed information about the space. In addition to helping Porta da Frente Christie’s customers find what they’re looking for faster, the AI agent is also allowing consumers in different time zones to get their questions answered when it’s convenient for them. 

The AI agent not only takes the burden off the company, as far as overnight staffing, but it also allows customers to do much less looking. Cília told Fox Business Digital that the technology “in a certain way replaces the search that they have online” thanks to the AI agent’s vast knowledge. Cília believes AI agents will have a revolutionary impact on how real estate is sold, saying that “If we can use it a large scale in the long-term future or in the medium-term future, I would say, it can replace a lot of the physical commercial consultants, and in this sense make the operation of selling these properties much [cheaper].” Source: FoxBusiness

DOGE Targets Office Buildings

The Trump administration’s move to terminate millions of square feet of federal leases and sell government buildings threatens to weaken a fledgling recovery in the U.S. office market, from California to Washington, D.C.
Elon Musk’s Department of Government Efficiency has targeted nearly 100 leases at government agency offices for termination or consolidation. The Trump administration is also considering selling two-thirds of the federally owned office buildings that are empty or underused.

While DOGE is focusing on federal buildings throughout the country, Washington, D.C., is in the bull’s-eye. The District faces the greatest number of closures, with 11 leases totaling 1.4 million square feet, according to a Barclays analysis released last week. That is just the first wave of cuts in a city where the federal government is the primary employer. The federal government typically isn’t able to end property leases before their maturity dates, so DOGE is focusing on leases with near expirations or those that include options to get out of leases early.

The District’s office market has been one of the hardest hit in the country, with a vacancy rate peaking at nearly 23% last year, according to CBRE Group. It started to show signs of stabilization last year, but a fresh wave of closures would renew pressure on the market. In total the federal government leases about 150 million square feet of office space and owns over 450 million square feet. A large amount of the owned space is underused and badly in need of maintenance. Source: Wall Street Journal