Why This Real Estate Pro Thinks The Days Of Selling Six Million Homes Per Year Are Gone Forever

If you work long enough in any business sector, some things you remember from your early years will inevitably fade away and become part of what you recall as the "good old days." Mitch Roschelle, Managing Director of Madison Ventures, which finances several real estate investments nationwide, knows the feeling. After several decades of a booming national real estate market, he believes the days of selling six million homes yearly are gone forever.

Roschelle’s comments came during an appearance on Fox Business' Varney & Co., where he opined on the most recent data about America's housing market. The stats indicated that America is on track to sell 4.15 million homes this year. The show's host, Stewart Varney, was underwhelmed by those numbers and asked Roschelle what they revealed about the housing market.

Don't Miss:

• If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?
• During market downturns, investors are learning that unlike equities, these high-yield real estate notes that pay 7.5% – 9% are protected by resilient assets, buffering against losses.

Roschelle answered, "I think this is sort of the new normal for housing. The days of selling six million homes a year are behind us and I think we're going to be at this level for quite some time." Roschelle was also pessimistic about lower interest rates sparking a resurgence, adding, "Relying on interest rates to be a catalyst for people who aren't sellers or aren't buyers is, to me, a fool's errand."

He reiterated his belief that there will be no return to the days of two and three percent interest rates. "If you're in the market or not in the market, you just have to sort of learn to live with the current interest rates." Varney then pivoted to the slowdown's effect on the real estate industry and asked Roschelle point blank, "The Realtors must be in despair. To be in an industry that's moving so slowly is not good news, is it?"

See Also: Unlock the hidden potential of commercial real estate — This platform allows individuals to invest in commercial real estate offering a 12% target yield with a bonus 1% return boost today!

Roschelle largely concurred with Varney's analysis, but he also offered some hope that the thinning of the herd may eventually help the real estate industry's most dedicated professionals. "I think the slowdown is absolutely separating those Realtors who truly work with their customers, whether their customer is a seller or a buyer, to try to create opportunities, to create value, to find properties that may be off the market," Roschelle said.

He elaborated further by saying, "I think when they really work for their clients, they can make a difference. But I think there's a good chunk of the industry that was just tapping into a fee stream without working too hard at it." Roschelle believes that the slowdown's most prominent effect on the industry will be the rise of a smaller, more client-oriented group of Realtors.

Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100 for properties like the Byer House from Stranger Things.

He ultimately sees that as a good thing for the real estate industry. Roschelle closed the interview by saying, "At the end, I think this is going to be better for the customers. The Realtors who are going to survive this slower volume are the ones that are going to be the difference makers." At first blush, it's a logical take on today's housing market. 

Unfortunately for prospective homebuyers, the increased quality of Realtors is unlikely to result in faster deals or lower prices. That said, if there is one constant in every market cycle, consumers eventually adjust to the current market conditions. After a few more years of six percent interest rates, more people will probably view 4.15 million homes sold yearly as a "good year" for the real estate industry.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Interest Rates Are Falling, But These Yields Aren't Going Anywhere

Lower interest rates mean some investments won't yield what they did in months past, but you don't have to lose those gains. Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities.

Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.