Big tech's office exodus explained 🏙️

Today’s top stories…

• Big tech's office exodus is shaking up the real estate world

• Social media is now the frontier for real estate marketing

• Is a mass agent exodus on the horizon?

• 💰 Deal of the Day!: 5 bd | 3 ba | Big Bear Lake, CA

Today’s mortgage rate (30 Yr. Fixed): 7.50% 😱

The Big Tech Exodus: A Seismic Shift in Office Real Estate

Big tech giants are bidding adieu to their sprawling office spaces, leaving landlords with empty buildings and steep losses.

• Amazon, Google, Meta, and Salesforce are among the tech titans ditching leases and halting expansions.

• Salesforce's San Francisco office space shrunk from 1.6M sq. ft. in 2022 to just 900K sq. ft. in 2023.

• Subleased office space in 30 tech-heavy cities has tripled since 2019, hitting a decade-high of 168.4M sq. ft. in Q1 2024.

The impact? Plummeting property values and a blow to city economies.

• Seattle's 1800 Ninth Avenue, once a prime Amazon location, is expected to sell for 75% less than its 2019 price of $206M.

• San Francisco's office vacancy rate skyrocketed from 3.6% in 2019 to a record 36.7% in Q1 2024.

Some say the AI boom is sparking new leases in San Francisco and beyond. We’ll see.

(source)

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Screen appeal is the new curb appeal

Zillow senior economist Orphe Divounguy says, "Screen appeal is the new curb appeal." Realtor James Savereux emphasizes the importance of social media for networking with appraisers, contractors, and other realtors. Savereux's most successful posts are simple 30-second chats about Zillow listings.

Zillow data reveals the power of enhanced media packages. Listings with interactive floor plans, high-res photos, and 3D tours capture more views. Homes listed with Zillow's Listing Showcase platform sell for 2% more on average (over $9,000 on a typical U.S. home). Showcase listings are 20% more likely to secure an accepted offer within 14 days.

The Zillow Gone Wild Instagram account, created by Samir Mezrahi, showcases "the most interesting homes across America." A $6.2M floating home with a fireman pole and stunning views was featured but later relisted at $5.8M. Mezrahi notes that people "really love libraries," making homes with impressive libraries an automatic post.

As TikTok reports a 40% increase in #RealEstate posts in early 2024, more agents are likely to chase social media clout.

(source)

Trouble on the Horizon: Is a Mass Agent Exodus Imminent?

The real estate industry finds itself at a critical juncture, grappling with the aftermath of the NAR settlement, persistently sluggish home sales, and high interest rates. Amidst this tumultuous landscape, brokerages face the daunting challenge of maintaining their agent counts and preventing a potential mass exodus.

To shed light on the current agent recruitment climate, we delved into data spanning from 2009 to 2023. Our analysis revealed a striking correlation between national real estate transactions and agent movement between brokerages. As transactions increased, so did the number of agents transitioning to different firms, suggesting a propensity to seek new opportunities during periods of heightened market activity. Conversely, during market downturns, agent mobility decreased, indicating a preference for stability in challenging times.

Examining NAR membership trends over the same period, we observed a pattern consistent with conventional wisdom: when national transactions decline, agent departures follow suit. However, a notable one-year lag exists between the lowest point of transactions and the peak of agent departures, as agents often attempt to weather the storm or await the expiration of dues obligations before making their exit.

Alarmingly, our analysis of the NAR Membership trend line suggests that agent departures have yet to fully align with the trajectory of home sales, pointing towards a potential surge in departures in 2024. With national transactions remaining low and the NAR settlement fueling long-term uncertainties, the industry is poised for a significant agent exodus.

The prevailing climate of market volatility may further deter remaining agents from changing brokerages, compounding the difficulties faced by real estate firms seeking to bolster their ranks through traditional or passive recruitment efforts.

The trials of 2024 present a unique opportunity for brokerages to differentiate themselves and emerge victorious in the fiercely competitive recruitment arena. By adapting and prioritizing agent recruitment, firms can navigate this challenging landscape and secure their position in the new world of real estate.

(source)

💰 Deal of the Day!

Price: $1,325,000

Address: 850 Menlo Dr, Big Bear Lake, CA 92315

With its stunning panoramic views, secluded tree-house feel, and luxurious amenities, this custom log-style home would make an ideal vacation rental for those seeking a perfect balance of privacy and convenience in the heart of Big Bear's ski country.

Airdna data:

Estimated monthly payment: $8,789/month (if financed)

Estimated monthly revenue: $9,616/month

Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.

Thanks and see you tomorrow!

✍️ Brett