October 12, 2023 • 19 mins
Hi This is Brad Weisman - Click Here to Send Me a Text Message
Imagine if you could understand the real estate market better than ever before, unlocking the reality of rising interest rates and their impact. That's exactly what we're promising in this riveting exchange with my good friend, Pete Heim. We'll shatter misconceptions about current rates versus the 3.5-5% rates and explore how a combination of low inventory and higher interest rates can dramatically shift the property market. And if you're sitting on the fence about investing in real estate, waiting for lower rates, we have some compelling advice for you!!!
But we're not just focusing on the present. We're also journeying back to revisit the 2008 financial crisis and its profound effects on the real estate market. We recall some shocking tales of sellers coughing up $60,000 just to free themselves from their homes. Fast forward to today's scenario, we examine the current inventory levels, low foreclosure rates, and the role of new construction and investors in contributing to low inventory. And to top it off, prepare to be amazed by a success story - a humble townhouse, initially listed at $154,900 with no kitchen, selling for OVER Full Price, with ten cash offers. Join us for a conversation that offers invaluable insights and tips for anyone remotely interested in real estate.
#peteheim #bradweisman #thebradweismanshow #realestate #realestateandyou #marketupdate
We know self tanners. We love self tanners. To us, self-tanner for men are a necessary part of life. You see a pale dude on the street and he looks like a fish out of water. It's a real problem, bro. But this exact passion for self-tanner is why Bro Glo is so rad.
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Welcome to The Brad Weisman Show, where we dive into the world of real estate, real life, and everything in between with your host, Brad Weisman! 🎙️ Join us for candid conversations, laughter, and a fresh take on the real world. Get ready to explore the ups and downs of life with a side of humor. From property to personality, we've got it all covered. Tune in, laugh along, and let's get real! 🏡🌟 #TheBradWeismanShow #RealEstateRealLife
Credits - The music for my podcast was written and performed by Jeff Miller.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Hello, this is Brad Weissman.
You're listening to Real Estateand you we are back with a
repeat guest.
This guy just won't go away.
We actually might even changethe name of the podcast, just so
he maybe goes to the wrongstudio and we don't have to
worry about chasing Matt here.
Pete Heim, how are you doing?
Speaker 2 (00:21):
man, man I look great man.
Speaker 1 (00:23):
How are you doing?
I feel the love.
I love busting your butt, Ilove it.
Speaker 2 (00:28):
You never folks, you never know what he's going to
say do you, that's right, youdon't.
Because there's been norehearsal.
Speaker 1 (00:33):
No, we never rehearse .
Speaker 2 (00:34):
People are probably thinking maybe you should
rehearse, maybe that's theproblem with the show, or think
about what you're going to talkabout ahead of time.
Yeah, exactly, exactly.
Speaker 1 (00:43):
We kind of never know .
No, we chat a little bit.
You have your little pad ofpaper over there.
Speaker 2 (00:47):
Oh, I do, oh, yes, I do.
Speaker 1 (00:49):
So you know, the biggest thing that's obviously
in people's minds right now isthe interest rates.
I think is, and I think what weneed to look at is what's that
doing to the market?
Is it doing anything to themarket?
I like the little sneak thatHugo did there.
You see that.
Speaker 2 (01:02):
He thought he was sneaking, but he really wasn't.
Speaker 1 (01:04):
Yeah, yeah.
So what is it doing to themarket?
Is it making changes?
Are we losing values?
You know what's happening, sowhat do you see out there?
It's up.
I know I'm acting like I don'tknow, because we actually went
through this, but I just can'tbelieve that prices are still
going up.
Speaker 2 (01:23):
Yeah, and we say this almost every time.
So I'm kind of sick of sayingit yeah, what is that what?
Do we say we're comparing ourmarket to the unicorn years, the
anomaly that happened, and Ireally don't like doing that.
Now that we're out of that,though, I think, like by next
year, that's going to be a nicelittle memory and we're going to
get into some real life.
(01:45):
Real things, real numbers.
Speaker 1 (01:47):
Well, the rates are definitely a little higher,
though.
It jumped over a 20-yearaverage now, so we can't ignore
that.
It is definitely up higher.
And the reality is this if wedidn't have low inventory, it
wouldn't be good.
No, it wouldn't be good.
It wouldn't be good.
We'd definitely see someplummeting of values and things
like that because of what it'scosting.
(02:08):
But one of the things I wantedto bring up that I was talking
to somebody, one of our classeshere at Keller Williams, and I
think what we have to do withthe public, or with people to
help educate, is that we have toget out of our heads the 3.5 to
5% interest rate.
Just eliminate that from yourmind.
(02:30):
If you're a new buyer, it'shighly unlikely kind of like
when you're in a plane.
In the highly unlikely eventthat we plummet into the ocean,
you're going to need this thingunder your seat.
So it's highly unlikely that wewill see a rate from 3.5 to
4.5% anytime soon.
So we need to stop using thosenumbers to say, oh my gosh, if I
(02:55):
would have bought back, then itwould only be this payment.
Well, you know what that's goneand we all know the reason
that's gone is because when theytell you when should you buy
real estate, the answer is nowAlways now.
Yesterday was now Tomorrow.
It's going to be now, it's now,it's just now.
Right, and we're not sayingthat because we're realtors.
No, we're not.
That's just financial, that'sjust any financial person, I
(03:17):
mean anything.
It should be now.
It should be now, so let's goback.
So now, if we're going to showa difference of payment, let's
just say a $300,000 house what Ithink we should start showing
and I should have done thisnumbers before I brought it up
but, I, didn't Okay, but we'regoing to ask maybe Mike Bauer or
somebody like that to do thisfor us or Jack or something like
that.
Say, okay, what is thedifference between five and a
(03:40):
half and seven, and seven and ahalf for a $300,000 house, 5%
down.
That's what I think we need tolook at.
Okay, because the reality is itmight go, or it will most
likely go, back down to five anda half, six percent at some
point in the next two to threeyears.
Speaker 2 (03:56):
That's right, right, and it's a couple.
Speaker 1 (03:57):
you're talking a couple hundred bucks, yeah but
if you started three and a half,that's the wrong Delta, that's
a place.
Speaker 2 (04:03):
That's the wrong Delta.
It's the unicorn thing, exactlyit's.
Just don't do it.
Speaker 1 (04:07):
All you can do is piss yourself off.
Yeah because you're gonna be.
Speaker 2 (04:09):
You're gonna be mad that you didn't buy then, and
you should have that's right,right, and you're gonna have to
and you're gonna just succumb tothe fact that you're gonna rent
the for the rest of your lifeat Increases and no control and
all that stuff.
Yeah, exactly.
So at least you get insomething and fix a payment.
Yes, exactly, fix your payment.
Rents not fixed.
Speaker 1 (04:26):
No, it's not.
And and here's, and that's thesame when we always say it's not
fixed for one thing and alsothe money you're putting out is
going nowhere, nowhere, yeahit's going to our children's
college education, yeah, sothank you very much.
Yes, thank you appreciate that.
Thank you and good night for agood night, I'm thinking you go
as she goes, he goes, so he'shappy now because he's a
homeowner.
Speaker 2 (04:45):
Yeah he's like yeah, I'm not renting anymore From
Guatemala to Berks County,that's right.
I tell you what.
Speaker 1 (04:52):
Welcome all.
Speaker 2 (04:54):
We were laughing about that.
I didn't want to say it.
I'm glad you did he's allowedto say anything you want.
If you saw his shirt, you'dthink you understand why he's a
light green.
Speaker 1 (05:01):
He's got a light green shirt for Newcastle.
I mean one.
You can't, can't, go any wrongwith that?
Speaker 2 (05:06):
That's right.
Looks like guacamole to me.
Yeah, yeah it's funny.
Speaker 1 (05:10):
So yeah, so going back, so just rates everything.
So tell me some of thesenumbers, because I was blown
away when you told me some ofthese numbers.
Speaker 2 (05:15):
Yeah, so we're active at 403 today which we'd hover
around that for mark.
Take out the city, take out thenew construction.
Resale in the county is 262.
Speaker 1 (05:24):
Okay, that's good.
We were in the 170s at onepoint for that we were.
I remember that.
Speaker 2 (05:29):
so it's a tad up, yeah, which is good.
Which is good?
Absorptions at point nine stillamazing yeah.
Days on market, three weeks Yepafter.
These are averages.
Speaker 1 (05:40):
Yeah, you know, I saw somebody make a mistake on
something recently with this.
It said point six and theperson then said so we have a
six month inventory.
I'm like no, no six is lessthan a month.
Yeah, I was, I was, I didn't.
I didn't get a chance tocorrect the person.
But point six is not six months.
Point six is Less than a month,you know so if you're that
(06:02):
person.
I'm so.
I don't remember who it was,but I did see that go back to
math class, yeah anyway, becausewe're all about numbers on the
show.
Speaker 2 (06:10):
Oh, absolutely, yeah, that actually bothers me right
here.
Speaker 1 (06:13):
Look, so we have an eight, we have an eight ball.
We have an eight ball righthere.
Speaker 2 (06:16):
See that point six Anyway yeah, so the average
price right now, with the cityincluded, is 284, 245.
Okay, at the same time lastyear that was 264, 129.
Well, so, but yeah, you takethe city out 318 509 right now.
(06:36):
Last year it was 294.
We just figured it out waspublic seven point four percent
seven point four percent growthgrowth Appreciation sorry year
over year.
Now I'm talking.
No wait, I'm talking year todate.
Speaker 1 (06:49):
You're the date.
Speaker 2 (06:49):
Okay, that's from January 1 to today.
We are at seven point fourpercent appreciation.
Speaker 1 (06:55):
Yeah, it's amazing.
Well, you saw everybody.
We predicted exactly.
We said five to seven.
We did five to seven, sevenpoint four, so we might be wrong
.
Speaker 2 (07:02):
Could eight, I don't know.
It could go to a and everyone'sgone.
Yeah, how?
Speaker 1 (07:06):
is that happen?
I don't know how.
I said how is that?
Speaker 2 (07:09):
happening.
Speaker 1 (07:10):
Yeah, the rates are where they are well, I'm gonna
tell you how it's.
Speaker 2 (07:12):
How is it happening?
Tell me that we have graphics.
I think I forgot them.
Oh, you did.
I did Okay, okay.
Speaker 1 (07:16):
You go put those up.
It's all magic, it's all donewith magic these days.
Speaker 2 (07:21):
It's, it's really about the inventory and yeah,
and once again we're just gonnakeep saying it, but here's the
reasons for the low inventory.
Yeah okay, lack of newconstruction builds over the
last 14 years.
We're not talking.
We're not talking.
I saw that 22 or 23, 14 yearsof low construction starts.
Speaker 1 (07:40):
What was 14 years and what was that?
Was that?
What year was that?
I wonder.
How many years to the math?
Speaker 2 (07:45):
Yeah, you guys remember 2008, 2008, baby, you
got it and that shut those poorguys down like no tomorrow.
Speaker 1 (07:52):
Many of them, not a lot of them, this area never
came back.
Speaker 2 (07:55):
Yep, yep, so they're starting to build it back?
Yep, however, that's really oneof the three reasons why
inventories low?
Yes, not many new constructionoptions?
No, I agree.
Mortgage rate lock in effect.
What's that called is themortgage rate lock effect is
that they're locked?
Yeah, like 65% of the mortgagesout there in the United States
(08:16):
are under 4%.
Yeah, and people are frozen onthat?
Yeah, okay, so that plays in arole inventory down if you need
a mortgage.
Yep, most people are going.
I am going to pay double on myinterest rate and that freezes
some people Okay, not everybody.
Speaker 1 (08:30):
Yeah.
Speaker 2 (08:31):
And the third one is people actually are staying in
their homes longer.
Did you see that one?
Speaker 1 (08:36):
Yes, I did.
It's much longer.
Speaker 2 (08:37):
It's nine, it's almost 10 years.
Speaker 1 (08:39):
I remember we, for when I first got a business it's
just not too much longer afteryears.
It was, it was, believe or not,it was five to seven years, I
think it was five, seven, whichis crazy.
And now it's like what?
Seven to ten?
It's nine, point three no way,see, that's another reason,
right there.
Yeah, that's why we have lessinventory because, think about
it, if people are moving less,you know you're gonna have less
(09:00):
inventory.
Yeah, so put all that togetherwith the building for 14 years,
we're in the negative forbuilding as far as keeping up
with population.
You know I.
This is why, when people cometo me and say you know, they'll
comment on on my Facebook andsay I think you're wrong about
that.
It's gonna start.
This is gonna be the bubble.
It's gonna be.
This is not gonna change untilwe have more homes, that's it.
(09:21):
It won't change.
Nothing can change because westill have more people than we
have houses.
Speaker 2 (09:26):
Yeah, you know, I had a client ask me about a very
rare foreclosure I just saw.
Oh, I'm not if you saw the sameone, it's pending now how is?
Speaker 1 (09:35):
anybody foreclosing today.
Speaker 2 (09:37):
All right, and I looked up the the owner and it
was.
It was Bank of America, and,and I was like I'm gonna.
America's foreclosing.
Yeah, no, well, that was theowner.
So they obviously the ownerforeclosed got you and I and I I
researched how far back theyactually went to the foreclosure
and it was before COVID oh wow,wow so the banks had this
(09:58):
property that long.
I mean four years.
Does that mean that?
Speaker 1 (10:03):
they couldn't, they weren't allowed to sell it.
Yet I don't know that's crazy.
Speaker 2 (10:07):
I thought that was weird because the actual
foreclosure date was pre-COVID.
Oh wow, and they just sold theproperty and which keeps telling
me no one's foreclosing freshlyright now.
Speaker 1 (10:17):
I don't know how, In fact, we should do.
If you are in a situation rightnow where either A you lost
your job or you're gettingdivorced, or whatever the
situation is, please talk to arealtor before you go the route
of walking away.
Don't put up your hands andjust walk away.
Speaker 2 (10:35):
Yeah, you can have a mark on your record now for a
while and there's no money there.
Speaker 1 (10:38):
The only time you walk away is when there's no
money there and you're outsidedown.
And even then you try not to,but if you have to, you do it.
We had that, we didn't havethat 2008,.
Speaker 2 (10:48):
It started and 9 and 10 is the effect of that, and we
had clients come into theclosing table.
Sellers now come into theclosing table of 50, 60 grand to
get out from under their house.
We are completely flipped over.
Speaker 1 (10:58):
I remember those days .
I remember people writingchecks.
Speaker 2 (11:01):
Yeah, I do remember that my record.
I remember God love them.
It was 60 grand.
Yeah, it came to the closing.
Speaker 1 (11:05):
Can you imagine that?
Speaker 2 (11:07):
Yeah, coming to the table $60,000 just to get out of
your house.
Speaker 1 (11:10):
You would have better off just throwing the keys on
the table.
Yeah, exactly, that's a lot ofmoney.
Yeah, a lot of money, but theywere good people.
But that's the thing is, wedon't have that now, now we have
60,000 in equity you know inthat situation and don't let it
foreclose.
Speaker 2 (11:23):
Brad, that was great advice, because there's
absolutely no way you can't tellme that the house is upside
down.
Speaker 1 (11:28):
Yeah, he must be getting an important phone call.
What do you think?
You got a call, go ahead, youcan take it.
Oh, wait, wait.
Well, guess what His wife isdue?
Speaker 2 (11:35):
So yeah, so no wonder he's the answer on the phone.
Speaker 1 (11:37):
I'd be answering the phone too.
Yes, Hugo's expecting anotherchild.
Speaker 2 (11:41):
That's right.
Speaker 1 (11:42):
I forget Boy or girl, I forget Another boy, yeah,
another boy, another boy, am Iallowed to say this stuff, do
you mind?
Yeah, no, that's fine.
We're pretty open on this show,pretty open.
Speaker 2 (11:49):
We're ready to go help deliver.
Speaker 1 (11:51):
We'll go, I delivered my last one on the bathroom
floor.
He has, he has.
Speaker 2 (11:58):
I don't recommend it, but sometimes you got to do
what you got to do.
Speaker 1 (12:01):
See, this show is all about real estate.
It's all about having your babyinside your own real estate.
Oh, my gosh Looking back on.
Speaker 2 (12:09):
It was a wonderful experience, but at the time it
sucked.
But did you drop?
Speaker 1 (12:13):
Chris on his head, your son.
Chris, I think he Is that whathappened, I thought so yes, oh,
so poor Chris, poor Chris, yeah,poor Chris, that's what we got.
Speaker 2 (12:23):
So, going on the vein of the foreclosure thing and
why this crash won't happenagain, I have We've been talking
about this crash isn't going tohappen, right, it's up to you.
Speaker 1 (12:31):
So, if it happens, our show's done, it's done,
that's right.
We will stop for the show.
Actually, if it happens, I quityeah exactly.
Speaker 2 (12:36):
Yeah, I'm done, but no, it is updated.
We've been saying why the crashwasn't going to happen and it's
an inventory thing.
We have a graphic on that.
It's a 3.3 months nationally ofsupply, which, nationally, is
really good.
Yeah, we have 4 points andstuff like that.
What did I say?
Point nine was our absorption,so we're point nine.
The average in the nation is3.3, which means Brooks County
(13:01):
again, great deal.
We have an awesome place tolive.
Speaker 1 (13:04):
Well, and you got to think too, like you're nothing
against San Francisco, new YorkCity, those are in the mix to
make that average.
That's true, you know what?
Speaker 2 (13:11):
I'm saying and like some of the bigger cities are
having a lot of issues right nowthat people are moving out.
Speaker 1 (13:17):
They're getting moved out and what ends up happening
is in this property sit and addsto the whole thing.
We're bringing the average down.
Speaker 2 (13:26):
We're bringing it down, dude.
That's awesome.
Yes, if you're going to besubstandard on something, that's
the one you want.
Speaker 1 (13:31):
That's right, good old Brooks County.
Oh, special, yeah, that's right, it's good, it's good.
Speaker 2 (13:38):
The second one was the new construction we talked
about earlier, low starts andthe foreclosures.
I mean, I think it said so farthis year no, it was.
Oh, yeah, it was up to August.
It was August to August.
Okay, what was it?
300,000 nationally?
Yeah, that's what was.
And if you look at the graphic,there was a period where it was
moratoriumed.
Speaker 1 (13:55):
Yeah, yeah.
So that's why it was down tonothing, almost nothing.
Speaker 2 (13:58):
So again, if it goes like this and comes up a little
bit and over here it's like woo,it's way up here when it was in
the millions.
Speaker 1 (14:04):
Yeah, and.
I said, the news will say itdoubled from last year.
If it's 150 last year the 300,the foreclosures have doubled
since last year.
That's fake news.
Yes, exactly.
Speaker 2 (14:15):
But no, listen, guys, that's national.
Brad and I were just talkingabout the like, the rare
foreclosure we just saw inmulti-lays.
I can't tell you the last timeI saw one.
It's not, it's just nothappening, it was pre-COVID had
to been.
Speaker 1 (14:27):
Yeah, here's a and this just shows you how.
How there's so many investorstoo.
This is another reason why wehave low inventory.
We have investors that are outthere buying up.
Thank goodness they are.
So listing I just got okay.
It was a situation wherethere's there's really no
kitchen in the house.
The kitchen is gone.
Okay, it's gone.
And this is a townhouse inY-Missing right.
(14:48):
Put it on the market at 154.9,.
I can tell you the list price.
I won't tell you what Iactually got.
I got 38 showings, 10 over fullprice offers, cash.
So that shows you how many.
And I put in the listing thatmust be cash because there's no
kitchen and I'm not.
When I say there's no kitchen,there's no kitchen.
Speaker 2 (15:10):
No cabinets, no, nothing.
There's nothing.
Speaker 1 (15:11):
it's completely ripped out there was a water
issue when the person left andit just it got in the whole
kitchen.
So but think about that.
And they made out 38 peoplethat were ready to buy cash on
an investment property.
We're talking flippers.
Oh yeah, so this property endedup getting considerably over
full price by four of the offers.
(15:32):
What's why I'm missing and it'sas is.
It's all that, actually.
Yeah, it's amazing Totallyamazing right.
You had 10 cash offers 10 cashoffers ready to go, Did you?
Speaker 2 (15:39):
hear that people Did.
You hear that that's incredible.
So that shows you there's a lotof money in the investment side
of things too.
Speaker 1 (15:44):
Oh my goodness, yeah.
So once again, don't let yourhouse foreclose, that's right.
This person still had equity inthe house, right?
You know, even the kitchen'sgone or whatever, there was
still some equity out there.
That person could have said ohmy gosh, no kitchen, I gotta go.
Speaker 2 (15:57):
That's right.
Well, they had to go.
He's on the kitchen wall, youcan't put.
Yeah, you can't put he's on thecounter either.
Speaker 1 (16:01):
Well, there's somebody, a banker called me, a
lender called me, and said, hey,do you mind if I put any
highlight sheets on the counter?
I said that's gonna be reallytough to do because there's no
counter.
So that was kind of funny,that's great.
But I said thank you anyway.
But yeah, so no, that justshows you.
Speaker 2 (16:17):
And the seller's thrilled.
Speaker 1 (16:18):
Seller's thrilled and the buyer's thrilled.
Absolutely.
Speaker 2 (16:21):
Because now they got a project they can work on and
flip it or do whatever.
Speaker 1 (16:23):
It's awesome.
Yeah, rent it or flip it,whatever, probably rent it
actually yeah.
Speaker 2 (16:26):
And another point, though, on that is you still can
overprice your home today.
Oh, absolutely can.
If it's overpriced, it'll set,yep, okay.
So just make sure your realtordoes a good job doing analysis
for you, cause stuff will set.
Speaker 1 (16:40):
Marketing price is way different than the sales
price Exactly, and that's a very, very important.
So that's a good good stuffthere.
Speaker 2 (16:46):
Anything else you have no.
Speaker 1 (16:48):
All right, you want to ask the eight ball anything?
Yeah, what do?
Speaker 2 (16:50):
you want to do.
Speaker 1 (16:51):
What do you want to ask?
You go oh.
Why don't we say, oh, is shegoing to have the baby today?
Speaker 2 (16:56):
Is she going to have the baby?
Speaker 1 (16:57):
today it says guacamole.
I don't know why it said that.
Speaker 2 (17:04):
It's that pregnancy craving thing.
Speaker 1 (17:05):
I guess that's what it is.
I don't know why it said thatBetter go home make some guac.
It said no.
It said no, so we'll see.
Maybe it won't be today, whoknows.
But what?
If you want to know when yourbaby is going to be born, you
just call us.
We'll use the eight ball.
This is our new way of doingthings, pete, and we don't
deliver anymore.
People go no, he normally goesto deliver.
(17:27):
But this time you have acatcher's mitt, that's good,
that's good.
Salad spoons too, that's good,excellent, excellent.
Thank you so much for coming in, pete for getting us up to date
.
By the way, real quick.
This is the 150th show for realestate in you.
So, Hugo, thank you.
Thank you, Confetti coming down.
You can't really see it.
It's just it.
Just it looks that way, but no150th show, Thanks for being
(17:49):
here for the 150th.
Speaker 2 (17:51):
It's awesome, very cool Honour man, seriously.
Speaker 1 (17:53):
All right, there we go.
Pete Heim, back in the studiogetting us all up to date on
some real estate here,delivering babies using the
eight ball.
Whatever we're doing, this iswhat we do.
All right, that's it.
We'll see you next Thursday at7 pm.
All right, take care.
Hello, this is Brad Weissman.
You're listening to Real Estateand you we are back with a
repeat guest.
This guy just won't go away.
We actually might even changethe name of the podcast, just so
he maybe goes to the wrongstudio and we don't have to
worry about chasing Matt here.
Pete Heim, how are you doing?
Speaker 2 (00:21):
man, man I look great man.
Speaker 1 (00:23):
How are you doing?
I feel the love.
I love busting your butt, Ilove it.
Speaker 2 (00:28):
You never folks, you never know what he's going to
say do you, that's right, youdon't.
Because there's been norehearsal.
Speaker 1 (00:33):
No, we never rehearse .
Speaker 2 (00:34):
People are probably thinking maybe you should
rehearse, maybe that's theproblem with the show, or think
about what you're going to talkabout ahead of time.
Yeah, exactly, exactly.
Speaker 1 (00:43):
We kind of never know .
No, we chat a little bit.
You have your little pad ofpaper over there.
Speaker 2 (00:47):
Oh, I do, oh, yes, I do.
Speaker 1 (00:49):
So you know, the biggest thing that's obviously
in people's minds right now isthe interest rates.
I think is, and I think what weneed to look at is what's that
doing to the market?
Is it doing anything to themarket?
I like the little sneak thatHugo did there.
You see that.
Speaker 2 (01:02):
He thought he was sneaking, but he really wasn't.
Speaker 1 (01:04):
Yeah, yeah.
So what is it doing to themarket?
Is it making changes?
Are we losing values?
You know what's happening, sowhat do you see out there?
It's up.
I know I'm acting like I don'tknow, because we actually went
through this, but I just can'tbelieve that prices are still
going up.
Speaker 2 (01:23):
Yeah, and we say this almost every time.
So I'm kind of sick of sayingit yeah, what is that what?
Do we say we're comparing ourmarket to the unicorn years, the
anomaly that happened, and Ireally don't like doing that.
Now that we're out of that,though, I think, like by next
year, that's going to be a nicelittle memory and we're going to
get into some real life.
(01:45):
Real things, real numbers.
Speaker 1 (01:47):
Well, the rates are definitely a little higher,
though.
It jumped over a 20-yearaverage now, so we can't ignore
that.
It is definitely up higher.
And the reality is this if wedidn't have low inventory, it
wouldn't be good.
No, it wouldn't be good.
It wouldn't be good.
We'd definitely see someplummeting of values and things
like that because of what it'scosting.
(02:08):
But one of the things I wantedto bring up that I was talking
to somebody, one of our classeshere at Keller Williams, and I
think what we have to do withthe public, or with people to
help educate, is that we have toget out of our heads the 3.5 to
5% interest rate.
Just eliminate that from yourmind.
(02:30):
If you're a new buyer, it'shighly unlikely kind of like
when you're in a plane.
In the highly unlikely eventthat we plummet into the ocean,
you're going to need this thingunder your seat.
So it's highly unlikely that wewill see a rate from 3.5 to
4.5% anytime soon.
So we need to stop using thosenumbers to say, oh my gosh, if I
(02:55):
would have bought back, then itwould only be this payment.
Well, you know what that's goneand we all know the reason
that's gone is because when theytell you when should you buy
real estate, the answer is nowAlways now.
Yesterday was now Tomorrow.
It's going to be now, it's now,it's just now.
Right, and we're not sayingthat because we're realtors.
No, we're not.
That's just financial, that'sjust any financial person, I
(03:17):
mean anything.
It should be now.
It should be now, so let's goback.
So now, if we're going to showa difference of payment, let's
just say a $300,000 house what Ithink we should start showing
and I should have done thisnumbers before I brought it up
but, I, didn't Okay, but we'regoing to ask maybe Mike Bauer or
somebody like that to do thisfor us or Jack or something like
that.
Say, okay, what is thedifference between five and a
(03:40):
half and seven, and seven and ahalf for a $300,000 house, 5%
down.
That's what I think we need tolook at.
Okay, because the reality is itmight go, or it will most
likely go, back down to five anda half, six percent at some
point in the next two to threeyears.
Speaker 2 (03:56):
That's right, right, and it's a couple.
Speaker 1 (03:57):
you're talking a couple hundred bucks, yeah but
if you started three and a half,that's the wrong Delta, that's
a place.
Speaker 2 (04:03):
That's the wrong Delta.
It's the unicorn thing, exactlyit's.
Just don't do it.
Speaker 1 (04:07):
All you can do is piss yourself off.
Yeah because you're gonna be.
Speaker 2 (04:09):
You're gonna be mad that you didn't buy then, and
you should have that's right,right, and you're gonna have to
and you're gonna just succumb tothe fact that you're gonna rent
the for the rest of your lifeat Increases and no control and
all that stuff.
Yeah, exactly.
So at least you get insomething and fix a payment.
Yes, exactly, fix your payment.
Rents not fixed.
Speaker 1 (04:26):
No, it's not.
And and here's, and that's thesame when we always say it's not
fixed for one thing and alsothe money you're putting out is
going nowhere, nowhere, yeahit's going to our children's
college education, yeah, sothank you very much.
Yes, thank you appreciate that.
Thank you and good night for agood night, I'm thinking you go
as she goes, he goes, so he'shappy now because he's a
homeowner.
Speaker 2 (04:45):
Yeah he's like yeah, I'm not renting anymore From
Guatemala to Berks County,that's right.
I tell you what.
Speaker 1 (04:52):
Welcome all.
Speaker 2 (04:54):
We were laughing about that.
I didn't want to say it.
I'm glad you did he's allowedto say anything you want.
If you saw his shirt, you'dthink you understand why he's a
light green.
Speaker 1 (05:01):
He's got a light green shirt for Newcastle.
I mean one.
You can't, can't, go any wrongwith that?
Speaker 2 (05:06):
That's right.
Looks like guacamole to me.
Yeah, yeah it's funny.
Speaker 1 (05:10):
So yeah, so going back, so just rates everything.
So tell me some of thesenumbers, because I was blown
away when you told me some ofthese numbers.
Speaker 2 (05:15):
Yeah, so we're active at 403 today which we'd hover
around that for mark.
Take out the city, take out thenew construction.
Resale in the county is 262.
Speaker 1 (05:24):
Okay, that's good.
We were in the 170s at onepoint for that we were.
I remember that.
Speaker 2 (05:29):
so it's a tad up, yeah, which is good.
Which is good?
Absorptions at point nine stillamazing yeah.
Days on market, three weeks Yepafter.
These are averages.
Speaker 1 (05:40):
Yeah, you know, I saw somebody make a mistake on
something recently with this.
It said point six and theperson then said so we have a
six month inventory.
I'm like no, no six is lessthan a month.
Yeah, I was, I was, I didn't.
I didn't get a chance tocorrect the person.
But point six is not six months.
Point six is Less than a month,you know so if you're that
(06:02):
person.
I'm so.
I don't remember who it was,but I did see that go back to
math class, yeah anyway, becausewe're all about numbers on the
show.
Speaker 2 (06:10):
Oh, absolutely, yeah, that actually bothers me right
here.
Speaker 1 (06:13):
Look, so we have an eight, we have an eight ball.
We have an eight ball righthere.
Speaker 2 (06:16):
See that point six Anyway yeah, so the average
price right now, with the cityincluded, is 284, 245.
Okay, at the same time lastyear that was 264, 129.
Well, so, but yeah, you takethe city out 318 509 right now.
(06:36):
Last year it was 294.
We just figured it out waspublic seven point four percent
seven point four percent growthgrowth Appreciation sorry year
over year.
Now I'm talking.
No wait, I'm talking year todate.
Speaker 1 (06:49):
You're the date.
Speaker 2 (06:49):
Okay, that's from January 1 to today.
We are at seven point fourpercent appreciation.
Speaker 1 (06:55):
Yeah, it's amazing.
Well, you saw everybody.
We predicted exactly.
We said five to seven.
We did five to seven, sevenpoint four, so we might be wrong
.
Speaker 2 (07:02):
Could eight, I don't know.
It could go to a and everyone'sgone.
Yeah, how?
Speaker 1 (07:06):
is that happen?
I don't know how.
I said how is that?
Speaker 2 (07:09):
happening.
Speaker 1 (07:10):
Yeah, the rates are where they are well, I'm gonna
tell you how it's.
Speaker 2 (07:12):
How is it happening?
Tell me that we have graphics.
I think I forgot them.
Oh, you did.
I did Okay, okay.
Speaker 1 (07:16):
You go put those up.
It's all magic, it's all donewith magic these days.
Speaker 2 (07:21):
It's, it's really about the inventory and yeah,
and once again we're just gonnakeep saying it, but here's the
reasons for the low inventory.
Yeah okay, lack of newconstruction builds over the
last 14 years.
We're not talking.
We're not talking.
I saw that 22 or 23, 14 yearsof low construction starts.
Speaker 1 (07:40):
What was 14 years and what was that?
Was that?
What year was that?
I wonder.
How many years to the math?
Speaker 2 (07:45):
Yeah, you guys remember 2008, 2008, baby, you
got it and that shut those poorguys down like no tomorrow.
Speaker 1 (07:52):
Many of them, not a lot of them, this area never
came back.
Speaker 2 (07:55):
Yep, yep, so they're starting to build it back?
Yep, however, that's really oneof the three reasons why
inventories low?
Yes, not many new constructionoptions?
No, I agree.
Mortgage rate lock in effect.
What's that called is themortgage rate lock effect is
that they're locked?
Yeah, like 65% of the mortgagesout there in the United States
(08:16):
are under 4%.
Yeah, and people are frozen onthat?
Yeah, okay, so that plays in arole inventory down if you need
a mortgage.
Yep, most people are going.
I am going to pay double on myinterest rate and that freezes
some people Okay, not everybody.
Speaker 1 (08:30):
Yeah.
Speaker 2 (08:31):
And the third one is people actually are staying in
their homes longer.
Did you see that one?
Speaker 1 (08:36):
Yes, I did.
It's much longer.
Speaker 2 (08:37):
It's nine, it's almost 10 years.
Speaker 1 (08:39):
I remember we, for when I first got a business it's
just not too much longer afteryears.
It was, it was, believe or not,it was five to seven years, I
think it was five, seven, whichis crazy.
And now it's like what?
Seven to ten?
It's nine, point three no way,see, that's another reason,
right there.
Yeah, that's why we have lessinventory because, think about
it, if people are moving less,you know you're gonna have less
(09:00):
inventory.
Yeah, so put all that togetherwith the building for 14 years,
we're in the negative forbuilding as far as keeping up
with population.
You know I.
This is why, when people cometo me and say you know, they'll
comment on on my Facebook andsay I think you're wrong about
that.
It's gonna start.
This is gonna be the bubble.
It's gonna be.
This is not gonna change untilwe have more homes, that's it.
(09:21):
It won't change.
Nothing can change because westill have more people than we
have houses.
Speaker 2 (09:26):
Yeah, you know, I had a client ask me about a very
rare foreclosure I just saw.
Oh, I'm not if you saw the sameone, it's pending now how is?
Speaker 1 (09:35):
anybody foreclosing today.
Speaker 2 (09:37):
All right, and I looked up the the owner and it
was.
It was Bank of America, and,and I was like I'm gonna.
America's foreclosing.
Yeah, no, well, that was theowner.
So they obviously the ownerforeclosed got you and I and I I
researched how far back theyactually went to the foreclosure
and it was before COVID oh wow,wow so the banks had this
(09:58):
property that long.
I mean four years.
Does that mean that?
Speaker 1 (10:03):
they couldn't, they weren't allowed to sell it.
Yet I don't know that's crazy.
Speaker 2 (10:07):
I thought that was weird because the actual
foreclosure date was pre-COVID.
Oh wow, and they just sold theproperty and which keeps telling
me no one's foreclosing freshlyright now.
Speaker 1 (10:17):
I don't know how, In fact, we should do.
If you are in a situation rightnow where either A you lost
your job or you're gettingdivorced, or whatever the
situation is, please talk to arealtor before you go the route
of walking away.
Don't put up your hands andjust walk away.
Speaker 2 (10:35):
Yeah, you can have a mark on your record now for a
while and there's no money there.
Speaker 1 (10:38):
The only time you walk away is when there's no
money there and you're outsidedown.
And even then you try not to,but if you have to, you do it.
We had that, we didn't havethat 2008,.
Speaker 2 (10:48):
It started and 9 and 10 is the effect of that, and we
had clients come into theclosing table.
Sellers now come into theclosing table of 50, 60 grand to
get out from under their house.
We are completely flipped over.
Speaker 1 (10:58):
I remember those days .
I remember people writingchecks.
Speaker 2 (11:01):
Yeah, I do remember that my record.
I remember God love them.
It was 60 grand.
Yeah, it came to the closing.
Speaker 1 (11:05):
Can you imagine that?
Speaker 2 (11:07):
Yeah, coming to the table $60,000 just to get out of
your house.
Speaker 1 (11:10):
You would have better off just throwing the keys on
the table.
Yeah, exactly, that's a lot ofmoney.
Yeah, a lot of money, but theywere good people.
But that's the thing is, wedon't have that now, now we have
60,000 in equity you know inthat situation and don't let it
foreclose.
Speaker 2 (11:23):
Brad, that was great advice, because there's
absolutely no way you can't tellme that the house is upside
down.
Speaker 1 (11:28):
Yeah, he must be getting an important phone call.
What do you think?
You got a call, go ahead, youcan take it.
Oh, wait, wait.
Well, guess what His wife isdue?
Speaker 2 (11:35):
So yeah, so no wonder he's the answer on the phone.
Speaker 1 (11:37):
I'd be answering the phone too.
Yes, Hugo's expecting anotherchild.
Speaker 2 (11:41):
That's right.
Speaker 1 (11:42):
I forget Boy or girl, I forget Another boy, yeah,
another boy, another boy, am Iallowed to say this stuff, do
you mind?
Yeah, no, that's fine.
We're pretty open on this show,pretty open.
Speaker 2 (11:49):
We're ready to go help deliver.
Speaker 1 (11:51):
We'll go, I delivered my last one on the bathroom
floor.
He has, he has.
Speaker 2 (11:58):
I don't recommend it, but sometimes you got to do
what you got to do.
Speaker 1 (12:01):
See, this show is all about real estate.
It's all about having your babyinside your own real estate.
Oh, my gosh Looking back on.
Speaker 2 (12:09):
It was a wonderful experience, but at the time it
sucked.
But did you drop?
Speaker 1 (12:13):
Chris on his head, your son.
Chris, I think he Is that whathappened, I thought so yes, oh,
so poor Chris, poor Chris, yeah,poor Chris, that's what we got.
Speaker 2 (12:23):
So, going on the vein of the foreclosure thing and
why this crash won't happenagain, I have We've been talking
about this crash isn't going tohappen, right, it's up to you.
Speaker 1 (12:31):
So, if it happens, our show's done, it's done,
that's right.
We will stop for the show.
Actually, if it happens, I quityeah exactly.
Speaker 2 (12:36):
Yeah, I'm done, but no, it is updated.
We've been saying why the crashwasn't going to happen and it's
an inventory thing.
We have a graphic on that.
It's a 3.3 months nationally ofsupply, which, nationally, is
really good.
Yeah, we have 4 points andstuff like that.
What did I say?
Point nine was our absorption,so we're point nine.
The average in the nation is3.3, which means Brooks County
(13:01):
again, great deal.
We have an awesome place tolive.
Speaker 1 (13:04):
Well, and you got to think too, like you're nothing
against San Francisco, new YorkCity, those are in the mix to
make that average.
That's true, you know what?
Speaker 2 (13:11):
I'm saying and like some of the bigger cities are
having a lot of issues right nowthat people are moving out.
Speaker 1 (13:17):
They're getting moved out and what ends up happening
is in this property sit and addsto the whole thing.
We're bringing the average down.
Speaker 2 (13:26):
We're bringing it down, dude.
That's awesome.
Yes, if you're going to besubstandard on something, that's
the one you want.
Speaker 1 (13:31):
That's right, good old Brooks County.
Oh, special, yeah, that's right, it's good, it's good.
Speaker 2 (13:38):
The second one was the new construction we talked
about earlier, low starts andthe foreclosures.
I mean, I think it said so farthis year no, it was.
Oh, yeah, it was up to August.
It was August to August.
Okay, what was it?
300,000 nationally?
Yeah, that's what was.
And if you look at the graphic,there was a period where it was
moratoriumed.
Speaker 1 (13:55):
Yeah, yeah.
So that's why it was down tonothing, almost nothing.
Speaker 2 (13:58):
So again, if it goes like this and comes up a little
bit and over here it's like woo,it's way up here when it was in
the millions.
Speaker 1 (14:04):
Yeah, and.
I said, the news will say itdoubled from last year.
If it's 150 last year the 300,the foreclosures have doubled
since last year.
That's fake news.
Yes, exactly.
Speaker 2 (14:15):
But no, listen, guys, that's national.
Brad and I were just talkingabout the like, the rare
foreclosure we just saw inmulti-lays.
I can't tell you the last timeI saw one.
It's not, it's just nothappening, it was pre-COVID had
to been.
Speaker 1 (14:27):
Yeah, here's a and this just shows you how.
How there's so many investorstoo.
This is another reason why wehave low inventory.
We have investors that are outthere buying up.
Thank goodness they are.
So listing I just got okay.
It was a situation wherethere's there's really no
kitchen in the house.
The kitchen is gone.
Okay, it's gone.
And this is a townhouse inY-Missing right.
(14:48):
Put it on the market at 154.9,.
I can tell you the list price.
I won't tell you what Iactually got.
I got 38 showings, 10 over fullprice offers, cash.
So that shows you how many.
And I put in the listing thatmust be cash because there's no
kitchen and I'm not.
When I say there's no kitchen,there's no kitchen.
Speaker 2 (15:10):
No cabinets, no, nothing.
There's nothing.
Speaker 1 (15:11):
it's completely ripped out there was a water
issue when the person left andit just it got in the whole
kitchen.
So but think about that.
And they made out 38 peoplethat were ready to buy cash on
an investment property.
We're talking flippers.
Oh yeah, so this property endedup getting considerably over
full price by four of the offers.
(15:32):
What's why I'm missing and it'sas is.
It's all that, actually.
Yeah, it's amazing Totallyamazing right.
You had 10 cash offers 10 cashoffers ready to go, Did you?
Speaker 2 (15:39):
hear that people Did.
You hear that that's incredible.
So that shows you there's a lotof money in the investment side
of things too.
Speaker 1 (15:44):
Oh my goodness, yeah.
So once again, don't let yourhouse foreclose, that's right.
This person still had equity inthe house, right?
You know, even the kitchen'sgone or whatever, there was
still some equity out there.
That person could have said ohmy gosh, no kitchen, I gotta go.
Speaker 2 (15:57):
That's right.
Well, they had to go.
He's on the kitchen wall, youcan't put.
Yeah, you can't put he's on thecounter either.
Speaker 1 (16:01):
Well, there's somebody, a banker called me, a
lender called me, and said, hey,do you mind if I put any
highlight sheets on the counter?
I said that's gonna be reallytough to do because there's no
counter.
So that was kind of funny,that's great.
But I said thank you anyway.
But yeah, so no, that justshows you.
Speaker 2 (16:17):
And the seller's thrilled.
Speaker 1 (16:18):
Seller's thrilled and the buyer's thrilled.
Absolutely.
Speaker 2 (16:21):
Because now they got a project they can work on and
flip it or do whatever.
Speaker 1 (16:23):
It's awesome.
Yeah, rent it or flip it,whatever, probably rent it
actually yeah.
Speaker 2 (16:26):
And another point, though, on that is you still can
overprice your home today.
Oh, absolutely can.
If it's overpriced, it'll set,yep, okay.
So just make sure your realtordoes a good job doing analysis
for you, cause stuff will set.
Speaker 1 (16:40):
Marketing price is way different than the sales
price Exactly, and that's a very, very important.
So that's a good good stuffthere.
Speaker 2 (16:46):
Anything else you have no.
Speaker 1 (16:48):
All right, you want to ask the eight ball anything?
Yeah, what do?
Speaker 2 (16:50):
you want to do.
Speaker 1 (16:51):
What do you want to ask?
You go oh.
Why don't we say, oh, is shegoing to have the baby today?
Speaker 2 (16:56):
Is she going to have the baby?
Speaker 1 (16:57):
today it says guacamole.
I don't know why it said that.
Speaker 2 (17:04):
It's that pregnancy craving thing.
Speaker 1 (17:05):
I guess that's what it is.
I don't know why it said thatBetter go home make some guac.
It said no.
It said no, so we'll see.
Maybe it won't be today, whoknows.
But what?
If you want to know when yourbaby is going to be born, you
just call us.
We'll use the eight ball.
This is our new way of doingthings, pete, and we don't
deliver anymore.
People go no, he normally goesto deliver.
(17:27):
But this time you have acatcher's mitt, that's good,
that's good.
Salad spoons too, that's good,excellent, excellent.
Thank you so much for coming in, pete for getting us up to date
.
By the way, real quick.
This is the 150th show for realestate in you.
So, Hugo, thank you.
Thank you, Confetti coming down.
You can't really see it.
It's just it.
Just it looks that way, but no150th show, Thanks for being
(17:49):
here for the 150th.
Speaker 2 (17:51):
It's awesome, very cool Honour man, seriously.
Speaker 1 (17:53):
All right, there we go.
Pete Heim, back in the studiogetting us all up to date on
some real estate here,delivering babies using the
eight ball.
Whatever we're doing, this iswhat we do.
All right, that's it.
We'll see you next Thursday at7 pm.
All right, take care.
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