Predictions

2025 crushed agents. 100,000 quit. 7 out of 10 didn't sell a single house.

If you're buying or selling in 2026, that stat should scare you. Hiring the wrong agent costs you in price, stress, and regret.

This episode draws a line in the sand. No fluff. No headlines. No hopium. Just what we're seeing on the ground after 1,500+ transactions and $125M+ in annual production.

What we cover:

→ Why waiting for rates to drop is a losing strategy (and what smart buyers are doing instead)

→ The expectation gap that's killing deals before they start

→ Why six-month-old comps are sabotaging your pricing strategy

→ Where buyer leverage actually exists right now

→ The one question every buyer and seller needs to ask before hiring an agent

The "part-time easy money" era is dead. 2026 belongs to agents who are active, sharp, and honest. And clients who know how to find them.

Listen now and stop guessing.

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Transcript

Transcript

Mike Novak:

[0:33] Alright, we are back and today we are talking about 2026 predictions for the housing markets

and there's going to be a perspective here that's relevant to agents and also to buyers and sellers

as well. Like these definitely really kind of match up between those two different audiences that we

have. I know a lot of agents follow us and listen to this. I also know a lot of buyers and sellers listen

to this as well. They want kind of the inside scoop on what agents are thinking and maybe what

they should be asking their agent about, you know, as well. So, but let's jump right into it. just brutal

hard truth 2025 was tough it.

Rachael Novak:

[1:06] Was so tough.

Mike Novak:

[1:07] Yeah it felt like a lot of work it felt like doing like three or four times amount of work for the

same amount of money or for even less money maybe i guess a hundred thousand agents quit the

industry and as you shared today 71 percent of agents didn't even sell a single freaking house not

even one not even one house.

Rachael Novak:

[1:26] So the the way that the stats broke down, there's 130, no, 1,300,000 real estate agents in the

US. And they kind of broke it down. And agents who sold zero homes was literally 71, almost 72%

of those agents. So contrast this with five years ago, four years ago, where we had a huge influx of

agents come into the market, and everybody was selling a house. Like anybody could sell a house,

The market was easy. We are now like this is a very telling statistic showing that we are now in a

market of grit, of resiliency and of skills.

Mike Novak:

[2:06] If you're a buyer or a seller, what question should you ask to figure out if you're interviewing

one of these 71% of agents? Because I don't think anyone wants to get that agent who was

completely out of the game for a year.

Rachael Novak:

[2:18] Right. And that's what's really tough because I'm going to get your question here in just a sec

because a lot of buyers and sellers like, OK, so you've been in the industry for X amount of time.Great. But the real question is, how many transactions have you been a part of in the last 12 to 24

months? because the market changes almost weekly, some months. And if you do not have an

agent who is actively in the market, a part of transactions, even if they're just mentoring other

people, if they're actively investing, maybe they didn't personally, you know, actually be the real

estate agent in the transaction, but they're a part of things still, they're active in it. That is incredibly

important because people navigating in this market, we talk a lot about that every single week,

different tactics, different negotiation tactics, all these things. But as a buyer-seller, you need to be

asking, have you been a part of, or how many transactions have you been a part of in that time

frame?

Mike Novak:

[3:10] Yeah, I think we've all had those conversations with grandma, real estate agent, who's like,

I've been in this business for 42 years. Like, okay, cool. Well, I pulled your stats and you sold zero

houses last year.

Rachael Novak:

[3:21] Or you've sold 30 houses in the last 20 years.

Mike Novak:

[3:24] Right.

Rachael Novak:

[3:24] Like, I mean, literally.

Mike Novak:

[3:25] And before that, there was no computers. Yeah. So, yeah, I guess market relevancy would be

something that you maybe want to be thinking about if you're a buyer or seller and you're talking to

one of these agents that hasn't sold anything in a year. Like, it's kind of a big red flag.

Rachael Novak:

[3:40] Exactly. And I would have to say that we knew a couple of years ago that the emergence of

teams, large teams or team ridges or brokerages who have a high level of support for their agents,

there is a huge insurgence of this in the market. And it's very necessary. If you're brand new to the

industry, it's very difficult to just break in on your own in this kind of a market. You need to go in and

be able to utilize the brokerage. Experience the track record the expertise of people in your office

or on your team in order to actually learn at the speed you need to to serve people in the right way

so.

Mike Novak:

[4:20] Yeah what went through my mind when i saw this was the 80 20 rule because you just it

applies to every area of life and you know that that rule is very simple that 20 agents do 80 of the

business which is crazy that's just the reality so anyways the good news talking back to you agents

now is if you're here and you're still here and you're still selling houses, 2026 should be at least a

little bit easier.Rachael Novak:

[4:42] Yeah, I think so.

Mike Novak:

you're putting in.

[4:43] Like, I think that this might feel like the year you actually start getting paid again for the work

Rachael Novak:

[4:48] There's been a tangible shift in the amount of work required and not as much payoff, like you

mentioned earlier. Like, a lot of the transaction, like, you just had to pull multiple transactions over

the line this last month, actually, that were on the verge of death, right? You were resuscitating

these things and getting very creative with the other agents. But we've been involved in, what, over

1,600 real estate transactions just in the last eight or nine years. And so we've seen a lot, right? So

people on our team, people in our network, people with us at Real who we mentor, the goal is to

really be in business, not necessarily doing business with directly, but in business with people who

have seen things. And that's also why we're not really worried. We're not guessing when it comes

to kind of what we're seeing and forecasting here. And even headlines, I would say, they're going to

be meant to scare you. They're going to be meant to scare you out of the industry. They're going to

be meant to scare you into getting another job. Let's jump in.

Mike Novak:

[5:51] Yeah, let's hit right to the predictions now for 2026. The first one I've got for you is that rates

won't drop that fast. But there's one thing that matters a lot more than what the rates are. So we've

all been waiting for rates to come down since 2022. It's now 2026. So it's time to move past this

like, hey, let's just pray that they come down because they have come down and they've come

down to what is really the new norm.

Rachael Novak:

[6:17] Yep.

Mike Novak:

[6:17] Okay. So it's the perspective of what the norm is that hasn't necessarily caught up to that. So

the sooner you catch up to that as the agent, the sooner you can guide your buyers and sellers to

catching up to that as consumers as well. Like if you got people holding out for 3% rates, they're

not ever going to buy a house, you know, or it's going to be 40 years before you see that climate

again, you know, so, but the days of free money are long gone. And if you haven't gotten past that,

you're going to have a really, really big problem. So the much more important thing that matters so

much more than that is your ability to put really creative financing packages together.

Rachael Novak:

[6:50] Yep.

Mike Novak:

[6:50] So when I say that, like, how do you structure your deal? If I tell you like, hey, we got to do a

zero down first time buyer, they have like $2,000 to their name. They don't have any money for

closing costs. Can you get that deal done? You know what I mean? Can you package that in a waythat makes sense? Can you understand, articulate to your buyers why maybe doing a rate buy

down makes more sense than getting dollars off the house? Things like this, What is your

understanding of really creatively putting deals together? Because we got lots of great deals done

in 2025. In fact, the best deals that I've seen since 2017 for buyers, including $50,000 in closing

costs. $25,000 in closing costs, interest rates that started with a four, you know, using two one buy

downs, like there's just a lot of really good opportunity that I can already feel is sliding out of the

market as the market picks back up.

Rachael Novak:

[7:36] Exactly right. Yeah. I mean, we watched, you know, multiple families get into properties in the

$700,000, $800,000 range with almost zero down, right, in this market. And while that is likely

behind us, as we're already seeing a huge pickup in our market, we are seeing, you know, the

inventory is low because a lot of things came off the market over the holidays and buyers are back

to getting deals quickly. Like we've just listed a couple of homes and they are moving very quickly.

There's active buyers out. But like you said, being able to understand and put together good

financing packages, you know, working with the lender on like what that particular buyer needs and

versus what a seller is going to be willing and able to do, right? We are still, I think, in a window

when we're talking mid-January right now, we are still in a window that there's opportunity for things

that have been on the market over the last couple of months, right? If something's still on the

market right now over the last couple of months, there's still opportunity. And even homes that

maybe have come off the market and come back on, it's very likely that those sellers are going to

be willing to negotiate because they're still very motivated to get that thing sold. But very quickly

over the next two, three, four weeks, literally weeks, we are going to see the market change in real

time. Right.

Mike Novak:

[8:46] And it's important to remember what comes with low interest rates. And I'll just remind you of

2020, 2021, we saw the craziest price escalations we've ever seen. I mean, a hundred thousand,

$200,000 over list price. And so that was like real dollars getting tacked onto people's payments.

So low interest rates is not everything it's cracked up to be. It creates a frenzy buying environment,

whereas right now it's more of a cautious buying environment. So really think through what it is that

you really want.

Rachael Novak:

[9:12] Exactly. Yep.

Mike Novak:

[9:12] So prediction number two, expectation setting will determine everything. We did a podcast on

this last week. Go back and watch it if you want. I think we were talking about seven ways to keep

deals together because the contract fallout rate is so severe last year, and I'm sure it's going to be

for the first part of this year as well, where there's just a misalignment of expectations between

buyer and seller, and the deal falls apart, and typically pretty early on.

Rachael Novak:

[9:35] Absolutely. And I think this really comes down, like when we say expectation will determineeverything, it's that expectation will determine the client experience and the contract going all the

way to closing, right? Like, that's really what the goal is. So, you know, if you're a buyer agent, and

I think we talked a little bit about this in the last one, but if you're a buyer's agent, and you're

working with these buyers, and they're very uncertain, just talking them into the contract without

setting clear expectations and having them be on board is not a win for them. And it's not going to

be a win for you when they get nervous and want to back out. So really, being clear about what it is

and almost taking the stance of talking them out of certain things, right? Making sure that they are

in this, making sure that this is really what they want and then running the numbers like we had

talked about. Making sure they understand their exact payment commitment. That is going to be

incredibly important as we go into this new market in 26.

Mike Novak:

[10:29] Right. A lot of this is really about uncertainty. Like when people feel uncertain, they don't like

to move forward with things. And so the question needs to be for you as an agent, how do you

remove uncertainty? The easiest way to do that is to make sure people know what to expect before

it's going to happen. Now they feel very confident all of a sudden. Okay. And that's just huge. So

your buyer presentation, your listing presentation, all those things you've got to get totally dialed in

and make sure that you take the time to walk people through what that process is going to look like

it can be really tempting especially with like your your sphere or a repeat client To just gloss over

what the process looks like, you know, and just sign them and move on to your next appointment.

But you really got to slow down and make sure you explain everything to every client and treat

every client on their own like as if they've never bought or sold a home before.

Rachael Novak:

[11:14] This is incredibly important, especially in a market like this, where we likely, and we already

have, are starting to see some of the people that purchased in the last five to eight years feeling

comfortable enough to have the conversation about an upsize or about a downsize, about actually

selling the house and moving into something because the payment is going to be within a little bit

closer range, right? And what most people miss, and we've talked about this before, most people

miss, most agents miss, is if those people have only ever purchased a house, they've never sold a

home, those people are first-time home sellers. They don't know the process from the sales side,

from the listing side. So again, making sure they understand the process. Don't assume just

because they own a home, they know what it takes to sell. They know what it takes. This is where

you step in as a professional, I would say, especially with past clients, with Sphere, with people that

you know, like, and trust already.

Mike Novak:

[12:10] Good friends.

Rachael Novak:

[12:10] Yeah, good friends. Do not assume that they know. Walk them through it very carefully, very

strategically. They will appreciate more than you know being led through by a true educator and

guide and consultant and not assuming that they know what they're doing.Mike Novak:

[12:25] Yep, totally accurate. prediction number three elevated inventory means you must master

pricing strategy always um this is a really big one and again we've done a podcast on how to price

your listings, The big mistake that I continue to see agents make, especially the ones like those

ones that haven't sold a home in like a year or so, is they keep basing their pricing guidance off of

closed comp from six months ago. Like that just does not mean anything right now. So it's

important to look at, but it really shouldn't determine what your list price is or what your offer price

is. You should really get active competition and see how you stack up to that.

Rachael Novak:

[13:00] That's exactly right.

Mike Novak:

[13:01] So that's just going to position your clients a lot better. and you know there's a chance you

may lose some listings over that because in some areas the market has gone down from what it

was six months ago but at least you're being honest and upfront with people you know you're not

telling them a number that you can't actually fulfill which is just setting them up to fail later exactly.

Rachael Novak:

[13:19] Right yeah i mean the worst thing the worst thing that you can do is quote unquote buy a

listing by telling them that you can get a certain number that you are not 100 confident you can get

so very much very good point.

Mike Novak:

[13:31] Number four buyer leverage is here to stay for now. We have seen the most buyer leverage,

like I said a few minutes ago, in eight years. I mean, if not longer. Buyers are all of a sudden, able

to negotiate, which is actually a really good thing. You know, again, back to like, what do you want

in the market? When you have really low interest rates, sellers really have all the leverage, right?

We experienced that during the COVID market and it kind of fundamentally changed expectations

for sellers. Like they feel like they have all the cards and the reality is you don't. Like as there's

inventory that comes up, as there's other options beyond your home, your leverage goes down and

goes down significantly. So I'm not saying it's the buyer's market. Like in our market, it's actually

quite neutral. And it's quite sub-market and listing dependent because some like are definitely

seller market, some are definitely buyer's market. But it's just something you got to think about, you

know what I mean? And don't just run with this mindset that 2021 is still what it is because it's not.

Rachael Novak:

[14:27] Yeah. Well, and I think the shift that's happened, right, like because it went so far the other

way this last year where buyers had a lot of negotiating power. Like we've talked about, buyers

were able to get a lot of closing costs or negotiate through inspection items and really get things

addressed that in a market years prior to that. would have never been able to do. So I think what

that has done and what that's going to do this next year going into 26, even if the market does

speed up, right, because it does every spring, even if the market does come back a little bit and

swing back toward the sellers, what the buyers in the market and savvy agents have learned is the

discernment. And so now buyers are going to be going in much more discerning, much morecautious, and not rushing in emotionally in to get homes, there's still going to be that discernment of

the have these things been addressed i'm going to get an inspection you know we're going to begin

negotiating through some of these items as they should right because like you mentioned that real

estate is is meant to be a two-way negotiation it's not meant to be one side gets to like pound the

other side and absolutely take over the castle yeah.

Mike Novak:

[15:31] It's a good thing for sure like a lot of these things are good things you know and prediction

number five the basics will continue to separate the pros from the amateurs When you look at the

people, those 71% of people that are not selling homes versus the ones that are, A lot of that

comes down just to doing the work, like day to day, knowing what are those two or three things you

have to do and doing them, whether you feel like it or not. Like if you can do that one thing as a real

estate agent, you're going to succeed.

Rachael Novak:

[15:55] That's exactly right. And then this, this kind of ties back to being in an environment of people

who have experience, right? Especially if you're newer into the industry and you're trying to figure

out how do I break in? How do I get business? How do I do this? You need to put yourself in

environments of people who are doing it, who have built something, who know what to do, who can

give you that specific guidance and do the things. It's very, very difficult. And I think the COVID

market, the unicorn years brought in such a huge influx of part-time agents who could just sell

houses on the side and make a bunch of money still with their full-time jobs. And if you it's getting

back to the truth about real estate and this profession is that full time real estate agents have to

treat it like a full time career.

Mike Novak:

[16:40] Yeah. Yeah. Like the freedom of real estate is awesome. It's also extremely dangerous.

Rachael Novak:

freedom.

[16:46] And it's and it's heavily earned. Like you have to spend years and years grinding to earn that

Mike Novak:

[16:54] For sure so there's our five predictions for you if you've got your own predictions love to hear

about them you can send some message on instagram post it wherever you hear this whether it's

on youtube or on itunes but i'd love to hear what your thinking is going to happen you know like

obviously things are already very dynamic you know like trump is doing a 200 billion dollar

mortgage-backed security purchase with fannie mae and freddie mac which is very interesting

that's going to infuse a lot of liquidity in the market very fast could drop rates faster than we

thought. So there's just a lot of like possible things that could happen and maybe things that people

aren't even thinking could happen that may.

Rachael Novak:

[17:29] Exactly right. Yeah. Yeah. I'd be curious too, like if other agents have, have other predictions.I think, I think these five are kind of the core. Um, but yeah, if you have something to share, tag us,

let us know. Or if you think we're wrong on any of them, Hey, hit us up, let us know. I want to know.

Mike Novak:

[17:46] You better tell us while we're wrong. And you better not be one of those 71% agents.

Rachael Novak:

[17:51] Yeah, you better have sold the house in the last 12 months.

Mike Novak:

[17:53] All right. We'll see you next week, guys.