Bay Area realtors are doing ‘whatever it takes’ to sell homes

When Redfin real estate agent Alex Sobieski meets with a potential client about selling their home, he knows there is competition to represent the listing. Typically, Sobieski said, he’s up against one or two other agents, and the client ultimately chooses who they think will fetch them the highest price. Lately, however, Sobieski isn’t just jockeying against another agent — he’s in a race with four or five of them. 

The number of new homes coming on the market in the Bay Area is down 32% compared with last year, according to recent Compass data — that’s 22,000 fewer properties for sale across the seven counties the data includes (San Francisco, Marin, San Mateo, Alameda, Contra Costa, Santa Clara and San Benito). With limited inventory comes increased competition among agents; some say the horse race is the fiercest they’ve ever seen it. 

“Realtors competing for listings feels like it’s at a record high, as they are more limited,” Sobieski said. “Realtors are cutting commissions, paying for staging and promising the world in terms of sales price and service.”

Sobieski has seen Bay Area agents reduce their typical commission from 2.5% of the transaction down to 2% or even 1.75%, depending on the home price. Agents should be ready to pay for staging, photos and even more “gimmicky stuff,” he said. One agent he knows will hire a taco truck for his open houses to attract buyers to homes over $2 million. “They’re doing whatever it takes. … The sellers expect that kind of stuff now too,” he said. “… They’re very anxious.”

Lower commissions and more money spent on marketing mean agents are working harder than ever while earnings shrink. “Pretty much every agent out there is making 25%-40% less income than they used to,” Sobieski said. “Sellers more than ever are looking for value, and that means less commission. They know their homes are worth 8%-10% less because of the [interest] rate increase.”

In San Francisco, new listings are down 17% year over year, and the volume of sales was down 22% in July, according to Compass. There’s usually a midsummer slowdown before a more robust fall selling season, but it’s unclear if that trend will continue this year. 

Meanwhile, potential sellers have gotten used to hearing about the ruthless battle among buyers for homes, especially during the uptick in home buying during the pandemic. Alexander Fromm Lurie, a luxury real estate adviser in San Francisco, said it takes a lot to educate a prospective client on the current real estate market and prime them it could take longer to sell their home. “We just have to, you know, we have one chance at a first impression. We just have to really knock it out of the park now more than we did before,” Lurie said.

Lurie said he’s yet to reduce his commissions or try new approaches to lure clients, but he’s still working harder than ever. “It requires more strategic marketing, guerrilla marketing. It’s demanding more from me to get my clients at the high end of what’s possible,” Lurie said. “The amount of thought and meticulousness required to do that now is even more important than it was before the interest rates started going up.”

Potential sellers got used to a certain kind of market — but so did real estate agents. When agents compare this year with the previous two, it’s not an analogous scenario. Compass agent Nina Hatvany said competition among realtors has definitely grown in recent months, and it’s piling on a feeling of doom, even though it may just be a reset. “Everyone I talk to says they’re having a horrible year,” Hatvany said. “But if our team looks back at our numbers, we just got really spoiled.”

She said 2021 and 2022 were “epic” years, and especially when put against the backdrop of the pandemic, agents need to remember that this is closer to normal. “We’re back to something like 2018, and in 2018 we thought we were doing pretty well,” she said. “We’re in a market that’s moving. We’re doing transactions. It’s just not as fantastic as it was.”