‘Buyers Are Rushing In, But Inventory is a Problem,’ says NAR CEO

June was a record month for real estate, with 21% growth following a tumultuous few months.

That’s according to National Association of Realtors (NAR) CEO Bob Goldberg, who appeared on “Good Morning RE/MAX” to discuss the industry with RE/MAX Chief Customer Officer Nick Bailey.

“We call it a V economic factor where it was at a peak, dropped substantially and it’s come right back up,” Goldberg says. “Consumers are rushing back in, interest rates being historically low, and inventory being the problem. There is no magic answer to that because that is the biggest problem in the industry. If we had more inventory, we’d have even higher sales.”

Goldberg offered insights into how the future of real estate may look. Here are four things to know.

The real estate market is bouncing back nicely

“Our chief economist Lawrence Yun, who is one of the top economists in the country, has projected maybe upwards of a 7% to 10% decline for the totality of the year. Interestingly, a lot of that was driven by the inventory issue as much as the COVID situation because we’ve seen things bouncing back quickly – consumers jumping in and … multiple offers on properties. We’re still feeling very bullish about it for year-end. We’re projecting July and even August numbers being higher as well. And that bodes well for us as an industry.”

Commercial real estate is still an unknown

“The jury’s still out on what’s going to happen with commercial space, but invariably there’s going to be a lot of excess square footage out there. Some of you are seeing places where malls have actually closed and are being converted into retail space and residential space. I think that kind of thing may be a way to address the affordable housing and housing shortages.”

Interest rates will likely stay low

“We deal with the Fed regularly, and the driving factors right now of keeping interest rates low to help spur the economy, I don’t see that changing for a long, long time – certainly in the next six months to a year. I think, if anything, they’re going to continue to drop a little bit more from what we’ve been seeing.”

Real estate will be deemed essential

“I don’t see [governments] backtracking on [real estate being declared an essential business] because I think we as an industry responded the right way. We’ve shown how we can do electronic closings, virtual open houses, and virtual tours and showings. We’ve been able to show that we took the interest of the consumer and their safety in hand. If things get worse – as they appear to be spiking in a lot of areas of the country – I don’t see that pullback happening in real estate. [U.S. Department of Housing and Development Secretary Ben Carson] and [U.S. Secretary of the Treasury Steven Mnuchin] know with real estate being over 20% of gross domestic product, how important that is for our economy to keep that moving.”