11-14-24 Interview - Ed Prather - Just How is the Real Estate Market Doing

JUST HOW IS THE REAL ESTATE MARKET DOING? Ed Prather joins me for the last real estate market checkup of the year at 12:30. We'll find out how the market is doing and if now is a good time to sell. If you need Ed's help, find him by clicking here.

Episode Transcript

Speaker 1 (00:00):
Is real estate guru Ed pra of the ed Pratherer Team, Ed,
welcome back, and I feel like even since the last
time we spoke, things are changing and the market is
in flux right now. So let's start with that big
picture view of where.

Speaker 2 (00:17):
The Denver metro market is right now.

Speaker 3 (00:19):
Well, absolutely, and thank you as always. I love being
on with you, Mandy, And you know I just sent
you that that latest report. We just got our October
data and it was really interesting because the last three
or four months we have seen declines in the median
close brights I mean values are coming down, mostly because
we see a flux of inventory and we see rates

(00:39):
remaining stubbornly high. During the month of October, though, we
saw an increase and not a small one at that
four point three percent increase in the meetiing close value
across the Denver metro area. And a big part of that,
I think is it's a good reminder of just how
rate sensitive we are and not just where it's are today,

(01:00):
but how we feel about where rates are going to
be in the future. Because we did see a dip
in rates in about mid September, which I think is
a big part of that surge and activity that we
saw in October, and along with that, price is going up.

Speaker 2 (01:12):
So you know, don't you think?

Speaker 1 (01:14):
And obviously this is what you do every day. I
think right now, especially people are buying a payment. They're
shopping for a house, but they're buying a payment, right
And when you've got interest rates that are hovering around
six and a little above, that payment becomes unmanageable for
some people. And I think, are you seeing that kind
of calculus?

Speaker 3 (01:33):
Absolutely, And it's always been that way, as you can imagine.
And it's a lot easier when we see values going
up so so fast to have a rate that's half
of what it is now, because at the end of
the day, it's how we feel about it. Hey, is
this something that feels like we can sustain in the
long run. And then, of course when we underwrite and
go through the lender, there's a debt to income ratio

(01:56):
and not to get too far in the weeds, but
you know, we don't want to be how support And
of course when we see values sort of remain where
they're at, you know we've taken some hits. Of course,
we got that push in October and rates remain high
it's harder and harder to get that equation to make sense.
But like you and I talked about, we've seen activity
really kick up even since October, with rates sort of

(02:18):
bouncing back to be higher they than they were at
least in that dip in September.

Speaker 1 (02:23):
Let's compare this year November to last year November. Just
give me your impressions in terms of the number of
homes on the market, how quickly homes are selling.

Speaker 3 (02:36):
Absolutely, we have seen sort of this not ceiling, but
this level of ten thousand active units on the market
is something that we haven't seen many years, you know,
since like twenty and fifteen. So right now, we did
we did have some improvement on absorption, but we're you know,
almost at eleven thousand homes you know, active inventory on

(02:57):
the market. If we rewind the year year, that's probably
two or three thousand less units.

Speaker 4 (03:04):
And so I think part it is.

Speaker 2 (03:06):
Really two thousand less last year or two thousand less
this year.

Speaker 3 (03:10):
No, no, no, November twenty twenty three, we would be
a couple of thousand, if not more, you know, around
that sort of eight thousand active inventory on the market,
say at the end of October, and so it's a huge,
huge difference. And of course if we're looking at supply
and demand, there's more to look at. You would think

(03:30):
that we would have a decrease in pricing like we did,
but now we have this search and I think it's
people wanting to take advantage of going out and finding
the house that works for them, in getting sellers in
many cases willing and able to help with the closing
costs and buying that rate down, coming right back to
that payment conversation to make it work on a monthly

(03:51):
and sustainable basis.

Speaker 1 (03:53):
So is this Are we in a buyer's market right now?
Is that what we're seeing so you can get some
of those concents sessions? Are you is because it's been
a seller's market. Three years ago it was a seller's market.

Speaker 3 (04:07):
Well, absolutely, and it's remain Technically speaking, what we want
to see is between four and six months of inventory,
and as crazy as it may sound, at the end
of October we are at like three point.

Speaker 2 (04:17):
Eight Oh wow, so we're not We're not.

Speaker 3 (04:20):
We're still not quite there. And there is certainly a
narrative of a housing shortage. It is very very real.
But certainly, as we jump back two or three years ago.
It vastly, vastly is a better environment for buyers because
once again, you know, you get a lot more to
choose from, and with that, there's a much better likelihood

(04:41):
that you're going to get a seller that's able to
help you with some of those costs. And especially because
we're all looking at that same thing, it is that
price point and as it equates to the payment, though,
we need to make that work, especially as rates have
kicked up. But I'll tell you what you know, since
the rates have dipped, you know, they've bounced back up
on us a little bit. But we've seen that that

(05:02):
activity continue. More people in the market, more showings being
set up, more offers going out, and I think a
big part of that is having some certainty, you know,
the election just behind us. We have an idea of
what the future is going to look like. And although
rates have kicked up on us now that the VET
is in a cutting cycle, we absolutely believe, even though
it may take longer than we want, the rates are
going to come down.

Speaker 2 (05:23):
Let me ask you this.

Speaker 1 (05:23):
If somebody is and I'm thinking of so many young
people that I know that will say some variation of
I can't afford to buy a house.

Speaker 2 (05:30):
I'm never going to be able afford to buy a house.

Speaker 1 (05:32):
And I always wonder how you really investigated it, because
I know for a fact that there are deals to
be out in the condo market right now, and that's
entry level housing for a lot of people. And so
what would you say to those people listening that think, oh,
I could never buy a house, there's no point in
even paying attention.

Speaker 3 (05:52):
I'm so glad you brought this up, because we just
came across there's a lot of builders and in the
old days. The old day is meaning to say, in
the last five years, most of the time when you
put a builder of property a new property under contract,
it was yet to be built. Well, now there's extra inventory.
And the reason I bring up builders specifically is recently,
I mean within the last couple of weeks, we saw

(06:13):
the starting rate with the builder at two point ninety nine.
That's a buydown, but it's only going up to four
point nine to nine. So if we look at some of.

Speaker 4 (06:22):
Those first time home buyers or folks that just look
at what values have done, there's a lot of ways
to approach this, and especially with the builders have more
of the ability a capability to buy down that rate,
and of course they're incentivized to get rid of their
existing inventory, so they're doing that. They're heavily, heavily incentivizing

(06:42):
buyers throwing in upgrades and not that that's where you
need to start and finish, but it's just an example
of sort of the pain in the market as far
as extra inventory sellers in general, and just trying to
incentivize folks to take advantage. So it takes a lot
less money need to get into a property like that,
and of course that monthly payment is much different than

(07:05):
you might expect when you're listening to the news and
what's going on with race.

Speaker 1 (07:08):
It sounds like you just need to people need to
just ask the questions because it's one of the things
that is always going to be true is that when
you're paying rent, you are buying property, you're just buying
it for someone else.

Speaker 2 (07:21):
And uh yeah, I mean that's that's the reality of it.
It's it's just that's what it is.

Speaker 1 (07:27):
At Brather is the guy I always recommend because he's
smart and are there any deals to be had right
now in the Denver Metro I'm.

Speaker 3 (07:34):
So glad that you brought that up, man, because you
and I talked about that a lot. Yeah, and I
really like I mean, gosh, with the inventory where it's at,
you can look all over the places there are deals, Okay,
but I really like this little pocket called three More
and it's right around Wadsworth and Yale on the Denver
side of wads and really nice homes, bigger lots, very

(07:59):
cool in fa to my wife and I are looking
at a couple of rentals over there as you see
older folks that are you know, the the properties are
changing hands. Just really nice neighborhood. So I really like that.
And again, like you and I talked about so many times,
you know, neighborhoods, micro markets that are near adjacent to
some of the amenities that our metro area offers, and

(08:21):
so you know, from there, it's easy to get downtown,
easy to get to the mountains, and I think it'll do.

Speaker 4 (08:27):
Well in the long run.

Speaker 3 (08:28):
All right.

Speaker 2 (08:28):
That's Ed Prather.

Speaker 1 (08:29):
Go to Edprather dot com if you want to talk
to him about what that would look like as the
first time HomeBuy Are you ready to downsize?

Speaker 2 (08:36):
Whatever? Atpraither dot com. And I appreciate you, man, always

Speaker 3 (08:40):
Mandy, thank you