August 2023

The real estate market has been all over the place lately. On the one hand, home prices have fallen year over year, while the number of homes for sale declined in July, according to Realtor.com’s latest housing data. Still, prices of homes remain near record highs, while mortgage rates have steadied slightly but are still hovering in the 6% to 7% range.

Some economists think that the housing market may be stuck in the in-between, with prices still rising despite an overall yearly decline coupled with a decline in inventory. 

So, what does that mean for real estate investors and the market overall? 

Why Are Real Estate Prices Still High? 

While the national median listing price declined slightly in July, mortgage rates have kept purchasing costs high, according to Realtor.com’s July housing report. The national median list price dropped to $440,000 in July from $445,000 the month prior. It’s also down 2% from a record high of $449,000 in June 2022.

But just because prices have dropped slightly, buyers haven’t felt much relief. That’s because mortgage rates have increased the monthly cost of financing a home by 17.5% compared to a year ago. This has outpaced both wage growth and inflation and has made it difficult for first-time homebuyers to afford to buy.

“High costs continue to be a stumbling block for some buyers, weighing overall demand,” Realtor.com chief economist Danielle Hale said in her analysis

And with the Federal Reserve raising rates in July, it’s likely it contributed to mortgage rates staying steady. However, the Fed has signaled it’s unlikely to increase rates again in 2023, so whether that will cause some relief for mortgage rates has yet to be seen.

Another factor driving home prices? The limited number of sellers on the market. With inventory falling, it’s led to “pricing power” for sellers, Hale said.

“With mortgage rates still high and buyers cost-sensitive, the limited number of sellers on the market may be sensing their advantage and pricing accordingly,” she said.

The Housing Stalemate

Housing inventory is also down, with new listings in the 50 largest metro areas in the U.S. falling 12% compared to last year and 46% below pre-pandemic levels. And while the supply of new homes has risen slightly, it’s still slumped year over year. 

With fewer homes, high real estate prices, and increasing mortgage rates, it means housing sales are stagnating. The typical home spent 45 days on the market in July, 11 days more than the same time last year. 

Still, homes are being sold faster than before the pandemic. Hale says it’s possible that this could change in the coming months, and homes start selling faster than they were a year ago.

“If so, that would mean that the market is settling into an in-between state, where homes sit on the market for fewer days than pre-pandemic but somewhat longer than was common during the height of the real estate frenzy,” she said. 

Where Is the Real Estate Market Heading? 

So where is the real estate market headed? It’s impossible to tell the future, but some real estate experts have made a few predictions. 

Dave Meyer, for example, thinks that the housing market will end the year mostly flat, or somewhere between 3% and -3%, due to a lack of economic incentive to sell. And with mortgage rates staying at their current rates, it’s likely that demand for housing will continue to stay flat as well. We’re seeing this flatness now with a decline in mortgage applications.

Of course, it’s possible prices decline steeply if there’s a massive shift in the economy, such as increased layoffs and unemployment, or if mortgage rates suddenly skyrocket due to rising bond yields. Another scenario is that housing prices continue to jump if the Federal Reserve pauses rate hikes and mortgage rates drop.

Overall, the housing market is expected to stay strong for the next few years, with Zillow forecasting prices will continue to rise due to a low housing inventory.

The Bottom Line 

Although housing prices have declined slightly in the last few months, rising mortgage rates have kept demand for real estate down. With inventory down as well, housing sales have stagnated and remain on the market longer than in 2022. 

While we have yet to see what the means for the future of the real estate market, it’s possible that prices will stagnate but remain strong in the coming years. 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Tim Ferriss’ book, The 4-Hour Workweek, was first published in 2007 and spent four weeks on the bestseller lists. Since then, it’s sold over 2 million copies, been translated into 40 languages and continues to change lives. The first foray into lifestyle design for busy professionals, Ferriss shared his experience and teachings in company automation and lifestyle development from working 14-hour days on his supplements company to being able to escape his workaholic lifestyle.

The 308 pages hold a plethora of concepts to apply to your life and work. Here’s how to use ChatGPT to implement the most powerful five.

How to apply The 4-Hour Workweek to your work

Apply Pareto’s Principle

The Pareto Principle is named after the scientist Vilfredo Pareto, who found that approximately 80 percent of outcomes result from 20 percent of causes. This pattern repeats throughout nature and human behaviour. Ferriss applies the concept to entrepreneurs, suggesting ways they could do less to achieve the same in their business. Here’s how you use ChatGPT to assess your work and make personalized recommendations.

Copy and paste in and edit the square brackets. The more detail you include, the better the response: “I’m an entrepreneur looking to optimize my business operations. I’d like to perform a Pareto analysis to identify the 20% of activities that yield 80% of my desired outcomes. Can you help me identify which tasks or areas I should focus on to achieve the most significant impact with less time investment? My business is [describe your business], my goals are [outline your business goals] and each week I [outline how you spend your time each week].”

Join the new rich

A significant part of the book’s introduction is the definition of the “new rich”. This group, compared to the “old rich”, is described as being “rich in life, which is not related to being rich in dollars.” Becoming part of the new rich means, in part, that rather than deferring retirement to some unspecified time in the future, you enjoy mini-retirements throughout your career. A mini retirement could take many forms, so use ChatGPT to suggest what yours might be.

“I’m an entrepreneur striving to achieve a ‘new rich’ lifestyle where wealth is measured in experiences and freedom, not just finances. Inspired by the concept of mini-retirements from The 4-Hour Workweek, I want to design a life where I have the flexibility to enjoy extended breaks throughout my career. My business is [outline your business] and my role is [describe your role.] The experiences I value are [describe what you do outside work] and I enjoy spending time [outline other activities you enjoy doing]. Can you (1) define my version of the ‘new rich’ and (2) identify potential opportunities for mini-retirements I could take?”

Delegate, automate, eliminate

The acronym DEAL is used in The 4-Hour Workweek to represent: delegate, automate, eliminate, liberate. If you assess, outsource, and reduce your tasks down, you will be free. But many business owners aren’t free. They are trapped in meetings, admin and processes. They are doing things that could be done by someone else, and they don’t experience the benefits that entrepreneurship can bring. Here’s how to use ChatGPT to find out what you could change.

“Within my business I believe there are tasks I could delegate, automate and eliminate. Given that our revenue goal is [describe your revenue goal] and the activities that contribute towards this are [outline what contributes towards making sales], of which I am personally responsible for [say which you do yourself], can you identify tasks that could be delegated, automated or eliminated? For each one, say why, outline the next steps and explain how much time it could save.”

Cultivate selective ignorance

Chapter six of The 4-Hour Workweek is about cultivating selective ignorance which includes going on a “low information diet.” As Ferriss explains, “most information is time-consuming, negative, irrelevant to your goals, and outside of your influence.” So ignore the news and get more done. Not only that, but remove yourself as a source of information for your team. “Problems, as a rule, solve themselves or disappear if you remove yourself as an information bottleneck and empower others,” added Ferriss. Help them figure things out and feel happy about doing so. Here’s the prompt:

“Within any given day there are a lot of things that try to get my attention. These include people such as [describe the people who ask you for things and what they ask for] and websites [include the websites you are notified or distracted by]. Cultivating selective ignorance means being happy to let things slide in order to free up time and headspace for what matters. Imagine you’re a productivity expert, can you suggest (a) what processes I should put in place so my team can progress without my involvement and (b) what I should intentionally ignore in order to protect my headspace?”

Create your email autoresponder

Interruptions are the enemy. If someone can tap you on the shoulder at any moment, you can’t get deep work done and you can’t escape. The biggest culprits are time wasters, time consumers and “empowerment failures.” Take control of interruptions starting with email. Ferriss recommends you, “Limit email consumption and production,” “Never check email first thing in the morning,” and “Create an email autoresponse so people respect your new rule.” For some brilliant examples of autoresponders, see Ferriss’ blog. Ask ChatGPT to create yours based on information you provide.

“I want to create a [tone, for example friendly and direct] email autoresponder that will be sent to everyone that emails me and serve the purpose of [purpose, for example them being directed elsewhere to have their problem solved and not expecting an immediate response from me]. People usually email me about the following items, and I respond with the following answers: [list common topics people email you about the corresponding answer]. Can you create an email autoresponder that politely directs people to visit the appropriate web page or how-to video to solve their problem, so they are not waiting on me for a response? Use the style of this one: [paste an example of which you like the style and tone, perhaps from Ferriss’ blog].”

Use ChatGPT to apply The 4-Hour Workweek to your work

Get help implementing the methods of everyone’s favourite lifestyle design book with these five simple prompts and ChatGPT. Apply Pareto’s Principle, join the new rich, delegate, automate and eliminate your way to freedom, go on a low media diet and create an autoresponder that releases your inbox’s hold. Escape the 9-5 and do more by doing less. Take control of your work and live by design.

One major benefit of real estate investing concerns the various tax deductions available. While homeowners’ insurance premiums for your residence are not tax-deductible, as a real estate investor, you are able to deduct homeowners insurance premiums on a rental property as a business expense.  

What Is Home Insurance?

Homeowners insurance, or property insurance, covers damage to the home and protects homeowners from liability if someone is injured on the property.

If you own a property outright, homeowners insurance is not required, although carrying it is certainly advisable. While homeowners insurance costs are rising, home insurance offers compensation if disaster strikes and offers liability protection.

If you have mortgage debt on the rental property, the lender will require that you carry sufficient homeowners insurance. Lenders are protecting their investment in your property.

Personal Residence vs. Rental Property Home Insurance

When it comes to your personal residence, the IRS does not permit you to deduct your home insurance premiums on your federal tax return. When it comes to business purposes, the ability to deduct insurance premiums is completely different.

The entire amount of homeowners insurance premiums on a rental property is tax-deductible.

Landlord Insurance

Homeowners insurance may prove sufficient if you only receive rental income on your property occasionally. That’s the case if a big event is coming to your town and you rent your home out to guests attending. Most homeowners insurance covers that exception, but if you are self-employed as a landlord, you need homeowners insurance tailored to small business owners.

A landlord policy is also known as a dwelling form 3 policy. Unlike dwelling form 1 or 2 policies, a dwelling form 3 policy covers the home for full replacement value rather than the depreciated value.

Besides property damage and liability, landlord insurance can protect you from rental income lost due to the dwelling’s temporary lack of habitability after a fire or similar issue.

Renters Insurance

As a landlord, it is wise to require that your tenant carry their own renters insurance policy to safeguard their own possessions. Your homeowners insurance does not cover damage or loss of a tenant’s belongings.

Such an insurance policy is not expensive. This requirement can lower the landlord’s home insurance premium.

What Does Your Homeowners Insurance Policy Cover?

It’s vital to read your homeowners insurance policy thoroughly to understand what it does and does not cover. Look at the declarations page of the homeowners insurance policy.

Look at what is excluded from your homeowners insurance. As noted, you must purchase additional coverage and pay more for separate insurance premiums for earthquake or flood insurance.

The same holds true for mudslides, landslides, or sinkholes, although there are exceptions for the latter in Florida. Some policies may exclude other natural disasters, such as tornadoes or hurricanes, when high winds are involved. If these conditions are common in your region, you can purchase condition insurance, also known as gap insurance, from your insurer.

How to Classify Home Insurance Repairs

Knowing how to classify rental business property repairs is essential. For example, say a tornado strikes your property and you need a new roof. How would that affect your taxes?

You can take tax deductions on repairs made after a federally recognized disaster for your own home. However, for rental business property, the casualty damage from a sudden, unexpected event is not subject to whether it is located in a federally declared disaster area.

The key word here is “sudden.” You can’t take a tax deduction for the slow deterioration of your business property over time.

Usually, you can deduct such losses in the year in which the casualty took place. If you are in a presidentially declared disaster area, you have the option of deducting the loss from your prior year’s tax return. You should receive a prompt tax refund, as you will receive funds from part of the previous year’s taxes.

Other factors which reduce tax deductions for repairs for business rental property include:

• Receiving a federal disaster loan that is forgiven
• Value of repairs provided by a relief agency
• Any tenant repairs you did not pay for

Note that cleanup costs are not tax-deductible.

Finding a Homeowners Insurance Agent

If you have a good insurance agent for your primary residence, they may be able to provide homeowners insurance for your rental property. You can also ask your real estate agent for recommendations.

For best results, interview at least three agents and ask them to run a sample property.

Whether you have one rental or several properties, ask the insurance agent the following questions regarding homeowners insurance:

What comprehensive coverage is offered?

Comprehensive coverage covers not only the home but all buildings on the property and your personal belongings. While this is the most type of homeowners insurance, specific exclusions may apply.

You may have to purchase additional insurance to fill those exclusionary gaps.

Is the property in a flood or earthquake zone?

Just because your property is not near water does not mean it isn’t located in a flood zone. If that is the case, protect your investment property by purchasing flood insurance, or earthquake insurance if such land movements are common in your area.

What information does the insurance company need?

To determine your coverage quote, the insurance agent needs the following information about the property:

• Year built
• Total square footage
• Construction type: Wood, brick, concrete, etc.
• Roof condition
• Age of mechanicals
• If and when major upgrades were made

How to Save Money on Homeowners Insurance Premiums

As a landlord, expect to pay about 25% more on a business policy than the policy covering your own home.

You can save money on your homeowners insurance by increasing the amount of your deductible. That’s the amount you must pay out of pocket after a claim before your homeowners insurance kicks in.

If you own multiple properties, you can reduce your homeowners insurance premiums by having them all insured under one policy. Ask your agent about discounts.

Keep your properties well-maintained and safe. That not only attracts good tenants but keeps you in good stead with insurers. Make sure your properties are well-lit, clean, and have working smoke detectors and fire alarms, as well as security cameras.

Homeowners Insurance is Vital for Investors

Homeowners insurance for investment properties is essential but also complicated. Consult a certified public accountant or similar tax professional to guide you in matters pertaining to your insurance costs and federal taxes. Should disaster strike, knowing your business property is properly insured makes a huge difference.

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Bess Freedman, Brown Harris Stevens CEO, and Don Peebles, The Peebles Corporation chairman and CEO, join ‘Last Call’ to talk sky high rent prices in NYC and across the country.

The topic of diversity, equity and inclusion tops the priority list of major organizations’ strategic plans. However, there’s more to DEI than gender and ethnicity. An inclusive workplace also means your organization is welcoming and well-suited for individuals with disabilities, too.

While social consciousness is reason enough for companies to hire disabled employees, there’s another one these profit-seeking entities will find compelling: an improved bottom line. Companies that onboard team members with disabilities benefit from special skills, improved collaboration capabilities and increased marketability. When looking to add to your roster, consider these three ways employees with disabilities can give your business a competitive leg up.

1. You’ll Get Better Work From Team Members With Special Strengths

Job satisfaction is key to employee productivity, but satisfaction is more than just job fit based on one’s education. Job fit encompasses natural tendencies, preferences and the unique way an individual thinks and experiences the world.

Individuals with disabilities learn how to navigate a landscape that doesn’t often keep their needs in mind. However, it’s that type of adaptability that can enable them to fulfill business needs in better ways. For example, Harvard Business Review reports that companies are finding customer service reps with disabilities well suited to soothing angry customers. Their distinctly empathetic approach and problem-solving savvy leads to higher customer satisfaction compared to typically abled CS agents.

Beyond empathy and adaptability, other disability-related skills are worth noting. A person who is blind or has low vision may be well-suited for roles requiring mastery of other senses. Individuals with autism often excel in jobs that demand pattern recognition, extensive focus and attention to detail. Technology roles like cybersecurity and software testing need people whose vigilance stands at the ready.

2. You Can Improve Your Company Culture in Profit-Yielding Ways

Company culture can be a nebulous concept, but business leaders know how essential a good one is to achieving high performance. That same HBR report notes that employing individuals with disabilities can improve company culture in three key respects: collaboration, motivation, and retention.

Collaboration is vital to team success, but achieving it is no cakewalk. Healthy collaboration requires people to keep their egos in check; it also demands psychological safety. Employees with disabilities appear to encourage both. By occasionally requiring additional support, they prompt their fellow team members to offer help more frequently. Furthermore, they make it more acceptable to ask for help, fostering a more cooperative environment overall.

When it comes to motivation, it’s not the needs of disabled team members but rather their strengths that make the difference. Until they work with colleagues with disabilities, many people aren’t aware of the obstacles these individuals routinely overcome. Seeing their co-workers excel despite the barriers in their way can motivate typically abled employees to up their game.

Finally, there’s the matter of retention. Business leaders know that frequent turnover is both costly and bad for team morale. Perhaps because of their sadly high historic unemployment rate, disabled individuals make very loyal employees. Once you hire them, you’re likely to benefit from their skills and collaborative capabilities for a long time to come.

3. Disabled Employees Help You Reach More Customers and Cement Their Loyalty

A diverse team naturally brings in different perspectives and lived experiences, and employees with disabilities can offer valuable insights. An individual who uses a wheelchair might mention that your recent marketing campaigns have inadvertently skewed ableist. She could offer ideas to develop more inclusive and appealing campaigns that just might change the game.

Simple representation matters, too. People with disabilities and their friends and family form a sizable market segment. Companies have discovered that a visible commitment to hiring disabled employees attracts customers with disabilities—and their loved ones. When a disabled customer is served by someone who faces some of the same issues they do, it creates a lasting bond with a brand.

Nor are these bonds limited to those in the disabled community. Experiments by London Business School researchers showed that hiring people with disabilities can become a strong selling point for a business. When consumers learned that a product was made by disabled employees, they liked the company more. That, in turn, made them inclined to pay a premium for the product and more apt to give the company repeat business.

Creating a High-Performing Team of Diverse Players

Your business has a variety of unique needs, and your team’s makeup should be just as unique. With all the competitive advantages employees with disabilities offer, they need to be part of your talent mix.

Make a concerted effort to enhance your recruitment approach to attract individuals with disabilities and modify your business processes as necessary to meet their needs. Show up at targeted hiring events and network with those in the disability community, building relationships and sharing opportunities. By recruiting diverse talent, upgrading your operations and nurturing your people, your diverse team will give you the competitive advantage you seek.

Claiming tax deductions on homeowners association fees allows property investors to reduce the amount they pay on taxes. But you may wonder if all HOA fees are tax deductible on your primary residence or second home, or if you own an investment property.

Some HOA fees qualify as a tax deduction, but only if HOA dues relate to a business expense.

Are HOA fees tax deductible for your home? This article explains when homeowners can deduct fees paid on their investment properties, second homes, and rental properties.

What Are HOA Fees?

Homeowners associations charge fees to cover expenses relating to the maintenance and upkeep of communal areas. Therefore, homeowners of properties in an HOA community must pay regular dues to the association.

Typically, HOA fees cover the following expenses:

• Trash removal
• Landscaping
• Security in multifamily properties or gated communities
• Utility bills for communal areas
• Snow removal
• General upkeep
• Insurance policy for common areas
• Cleaning
• Building maintenance

Additionally, part of the HOA fee may go toward a fund for emergency expenses, capital improvements, and planned upgrades.

Sometimes, a special assessment may be required in case of unexpected expenses. For example, this commonly happens if the homeowners association lacks sufficient funds to complete a project. Other situations when special assessments are necessary include unforeseen emergencies, major repairs, and capital improvements.

Is It Possible to Deduct HOA Fees From Your Taxes on a Private Home?

Most homeowners cannot deduct HOA fees for their main residence on their tax returns. Even though the HOA fee adds to your monthly housing payments, the IRS views the payment as a personal expense to a private entity. Unlike property taxes, mortgage interest, and medical-related home improvements, you cannot use the homeowners fee to reduce the amount you pay in taxes.

However, a few exceptions exist when HOA fees classify as tax-deductible expenses.

When Are HOA Fees Tax-Deductible?

HOA dues are tax-deductible when you can write them off as a business expense. For example, fees associated with an investment vacation property are tax-deductible. Additionally, you may claim a portion of HOA dues if you work from home.

At what other times are HOA fees tax-deductible? Here are circumstances when lowering your tax bill by deducting HOA fees may be possible.

You run a business from home

You can deduct HOA fees if you are self-employed and work from home. The size of the deduction is based on the percentage of space your home office or store inventory occupies. For example, suppose your office takes up 20% of your home. In that case, you can deduct 20% of your HOA dues.

However, there are a few caveats when making a home office deduction. Here are a few things to keep in mind:

• Your home must be the primary place of business, where most of your administrative tasks occur.
• The space you use for a home office must be the entire room or a dedicated space. A kitchen counter or couch doesn’t count as a dedicated workspace.
• HOA costs are nondeductible if a company employs you to work remotely from home.

Therefore, when tax season comes along, be sure to include the appropriate portion of your homeowners fee in your tax return. However, it’s always a good idea to consult a tax professional when including expenses connected to running a business from home.

Tax-deductible HOA dues on a rental property

HOA fees are deductible if you use your home as a rental property. When you own an investment asset you rent out, the IRS considers all expenses—including HOA fees—as a rental expense. Therefore, you can claim 100% of HOA costs if the property is exclusively a rental unit.

HOA dues are also tax-deductible if you rent out a portion of your home. For example, suppose you rent a basement apartment or a bedroom to tenants. In that case, you can deduct a portion of the HOA costs proportionate to the rented space.

Apart from the deduction for homeowners association fees, you can also write off the following expenses on a rental property:

• The cost of home repairs
• Real estate taxes
• Mortgage interest
• Depreciation
• Advertising
• Most other operating expenses

Deduct HOA fees if you have a vacation home

Certain rules apply if you own a vacation property that you rent out occasionally. You can deduct fees in line with the percentage of time the property is used as a rental home.

For example, suppose you live in your vacation home for five or six weeks of the year. That means you can deduct 90% of the expenses because you only occupy the property for 10% of the year.

Tax-deductible condo fees

Condo fees work on the same principle as HOA fees. In this case, the condo owners association (COA) is the private entity that charges membership fees. Typically, COA fees are used like dues paid to a homeowners association. Additionally, the same rules apply for condo fees as for HOA charges.

Are HOA Dues Tax-Deductible for Special Assessments?

HOA capital improvement assessments are nondeductible for many homeowners. Capital improvements are expenses to increase the overall value of the homeowners association’s assets. They can include energy-efficient upgrades, construction of new amenities, or major renovations.

As a general rule, you cannot deduct these expenses unless the home is a rental home, or you have a home office.

Of course, capital improvements to the HOA assets will have a positive knock-on effect on your home’s value. Therefore, you may be liable for less in capital gains taxes when you sell your home.

How to Deduct HOA Fees?

The way to deduct fees paid to an HOA depends on your circumstances. Landlords list rental income, property taxes, and HOA dues in Part 1 of the Schedule E. Most homeowners who want to deduct payments to their HOA based on a home office include the amount on Form 1040, Schedule C and Form 8829.

Deducting HOA fees for landlords

The IRS views HOA fees on investment properties as maintenance costs. Therefore, you can deduct 100% of the total amount paid to the homeowners or condo association. When submitting your tax return, you include the total in Schedule E (form 1040).

If the rental property is a vacation home, you can deduct the proportion of fees when you rent the property. For example, suppose you rent it out for nine months of the year. You can write off 75% of the HOA fees in that case.

Deducting HOA fees for homeowners with a home office

Working out tax-deductible HOA dues based on home office space can be tricky. First, determine if you qualify for a home office tax deduction. If eligible, you can write off expenses equivalent to the percentage of space your home office occupies.

In addition to HOA charges, you can typically include a percentage of the following expenses on your Schedule C form:

• Interest on mortgage payments
• Utilities
• Home repairs (but not home improvements)
• Property taxes

Additionally, you must determine if you want to use the regular method or the simplified method to claim a deduction. Here’s what each means:

• Regular method: You must divide the home office expenses between business and personal use.
• Simplified method: This is calculated at a rate of $5 per square foot up to 300 square feet. It reduces the paperwork and recordkeeping for small businesses.

Are HOA Fees Tax Deductible? A Takeaway

Depending on your circumstances, you can claim HOA expenses from your taxes. If you own a rental property or have a home office, you can claim some of these expenses as deductions on your tax return.

Reducing your tax liability is one of the key advantages of investing in real estate. Investment property owners can take advantage of many tax breaks while, at the same time, enjoying passive income and property appreciation.

When considering whether to claim HOA fees on your tax return, it always pays to get personalized advice from a tax professional.

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The work world looks vastly different from what it did just a few years ago—with the pandemic forcing many employees and employers to adapt to remote work or else shut their doors potentially for good. And while some companies have made attempts to return their work environments back to a pre-pandemic office structure, many employees have come to appreciate the benefits of a remote-work lifestyle and have shifted their expectations around what they will and will not accept in the workplace.

This evolving attitude, as well as a number of other factors, has made it difficult for some companies to find the talent they need to continue prospering in the market. Here, eight members of Young Entrepreneur Council elaborate on these factors and discuss what employers can do to not only make finding talent easier but also retain that talent once they’ve been brought on board.

1. Ensuring Value Alignment

The hardest thing about finding talent is making sure that the talent aligns with your company values and that people really understand the value you add to the market. That’s why having a great careers page on your website is really important—though most companies completely ignore this. Having a great careers page can help potential employees understand how they fit in and make it more likely that you will connect. – Joe Apfelbaum, Ajax Union

2. Adapting To Shifting Expectations

Finding good talent today is challenging due to shifting job seeker expectations regarding work-life balance, culture and social responsibility. To attract talent, companies should align with these values, offer flexible work conditions and demonstrate commitment to social causes. Leveraging digital recruitment strategies can also widen the talent pool and connect you with like-minded candidates. – Kyle Goguen, Pawstruck

3. Connecting With Candidates Directly

The hardest part about finding good talent is being able to connect with candidates directly. Often, candidates don’t update their online profiles or actively check messages recruiters use to reach out. Companies can do their part to make it easier for candidates by not using complicated portals that require both an engaging online presence and personal information that must be entered twice. – Jack Perkins, CFO Hub

4. Earning Employee Loyalty

The hardest part about finding good talent today is meeting the expectations of the workforce. Loyalty to the company is almost nonexistent, as employees are highly likely to switch companies as soon as they get a better offer. However, one way to find talent easily is to have flexible working hours. Allowing people to work at their own pace to ensure work-life balance is a highly valued perk today. – Stephanie Wells, Formidable Forms

5. Navigating Entrepreneurship Culture

I’d say the hardest part about finding good talent today is navigating the entrepreneurship culture, as the industry’s top talent often prefers to work on their own gig rather than work for someone else. In this scenario, offering an option to work remotely may help you find the right fit for the job, as you get to leverage their skills and they’ll have the freedom to work on their side hustle. It’s a win-win situation. – Chris Klosowski, Easy Digital Downloads

6. Competing With Other Hiring Businesses

The most difficult aspect of discovering good talent nowadays is the intense competition in the employment market. Outstanding candidates are in high demand, making it difficult to attract and retain them. Businesses should prioritize developing a great employer brand, delivering competitive compensation and benefits packages and cultivating a good and inclusive work culture. – Sujay Pawar, CartFlows

7. Sifting Through The Fluff

In my opinion, the hardest part about finding good talent is recognizing whether someone is adding fluff to their resume or whether they are actually as skilled as they claim. An easy way for companies to sort through applications and discover talented individuals is to give applicants paid tests to complete before they’re hired so you can assess their skills. – Daman Jeet Singh, FunnelKit

8. Navigating A Global Talent Pool

The hardest part about finding good talent today is navigating the vast talent pool that has expanded globally due to remote work models. Companies can simplify this process by using artificial intelligence and data analytics in recruitment, building a strong employer brand and leveraging networking and employee referrals. – Vikas Agrawal, Infobrandz

It’s common knowledge that there’s been a shortage of homes for sale for some time. Part of it is due to chronic underbuilding in the days since the housing crash, but lately, higher mortgage rates, which now hover just below 7%, according to Freddie Mac, are also an issue.

It all boils down to the record-low interest rates that most homeowners are holding on to. According to Zillow, a whopping 80% of homeowners currently have rates under 5%, and 1 in 3 even have rates below 3%. 

For those homeowners, selling a home in today’s market means trading up for a much higher interest rate—and likely giving up a big chunk of their sale profits in the process. In fact, the premise is so unappealing that a recent Zillow survey shows that homeowners with rates under 5% are half as likely to sell their home in the next few years. Of those with rates over 5%, though, nearly 40% say they have plans to sell soon. 

“These homeowners face no or relatively little financial disincentive to trading their current mortgage for a new one,” wrote Zillow’s Treva Tam. “On the flip side, homeowners already paying a lower interest rate may be reluctant.”

What It Means for the Market

The Zillow findings aren’t too surprising, but they don’t bode well for the market’s inventory problem—nor for home prices, both now and later (depending on what side of the closing table you’re on). 

According to the survey, a mere 23% of all homeowners are considering selling their home in the next three years—and that includes people who already have their homes listed right now. 

Though new home construction has picked up steam in recent months, the lack of existing inventory hitting the market—both now and presumably down the line—will likely keep home prices elevated for some time.

Of course, if mortgage rates ever come down, then the listings will follow. Once rates dip below that 5% mark—as Zillow’s data suggests—more homeowners will be more willing to put their house on the market. 

Rates that low probably aren’t in the cards anytime soon, however. Though the Mortgage Bankers Association’s current forecast does call for a 4.9% average 30-year mortgage rate by the end of 2024, they’re an outlier—and both Fannie Mae and the National Association of Realtors think rates will be much higher. 

Even Zillow doesn’t expect it any time soon. As Orphe Divounguy, senior economist at Zillow Home Loans, put it, “We expect mortgage rates may notch down slightly as inflation comes under control, but they are unlikely to return to 5% in the near future.”

Adjusting to Higher Rates

Not all consumers have the luxury of waiting around for rates to drop. Job changes, new babies, and major life events will still push some consumers into selling their properties or buying new ones—even with today’s higher rates. 

As that happens, it could bring things more into balance. Fewer homeowners will have those bargain-basement rates, and existing inventory will, therefore, be more likely to hit the market. This could potentially keep home prices (which jumped steadily over the last four months) from rising or even begin to fall. 

The real key factor will be how inventory shakes out. And with the market currently 4.3 million homes short of demand, according to Zillow, there’s a lot of progress to be made.

“Over time, homeowners will likely accept higher rates as the new normal,” Divounguy says. “But until then, the market could remain challenging for home shoppers, who will see fewer options and higher prices.”

Final Thoughts

What is important to note is that the answers to this survey indicate that the number of homeowners willing to list their property on the market is growing, even with the context that rates will potentially stay in similar territory. Could that mean that the “lock-in” effect could come to an end sooner than later? The reality is that people will adjust to the economic environment, and if that means giving up a lower rate for the sake of moving, they might just do that. But does that mean a growing share of listings, coupled with demand still being suppressed by mortgage rates, equals another correction?

It’s way too early to tell, but it’s possible.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.