Steve Murray on inflation and brokerage valuation

Today’s HousingWire Daily features a crossover episode with RealTrending, a podcast that focuses on interviewing the brightest minds in real estate and the housing market. In this episode, Steve Murray, RealTrends advisor and industry stalwart, discusses inflation’s role in the housing market and an often overlooked key component to real estate success.

Additionally, he discusses the shift in how investors are valuing brokerages for the first time in over 20 years. 

Here is a preview of the topics Murray discussed. The transcript below has been lightly edited for length and clarity:

Steve Murray on the market shift: Based on talks with brokers around the country, they’re seeing buyers reluctant to get into bidding wars on listings and to bid over listing price. We’re starting to see the number of showings and people submitting offers slightly decline. It wouldn’t mean much if it were one or two markets, but it’s across almost all markets according to input from leading brokers over the past week.

Success secrets: We’ve reported earlier this year on the outstanding performance of the RealTrends 500. Brokers on the rankings gained ten times the market share in 2020— more than they ever gained before in any single year, going back 26 years. The major change was the amount of time that leaders spent with their agents and staff through Zoom or Google Meet or other means. How does that translate going forward?

Fundamental shift in how investors are looking at brokerage firms: For the first time in over 20 years, we have seen a fundamental investor shift in the way purchasers or investors are looking at brokerage companies. Due to the explosion in results in 2020 for many brokers, the best year in their histories in terms of profit or EBITDA, purchasers are pulling back from just applying the same multiples to 2020 results, or even trailing 12 month results through say, April, May or June of 2021. Let’s talk about the investor shift and what they’re looking at.

HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsrooms that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Elissa Branch.