February 2, 2024 • 25 mins
Join us on Hudson Valley’s Real Estate Explained, as our host, Michael Kahns, invites veteran real estate broker Rik Brescia for a robust discussion on the evolution of Hudson Valley's property market. This episode offers an in-depth exploration of market trends from the past year, the impact of notable events on the property market, and prognosis for 2024. Venturing further in, we examine the present housing market, characterized by shrinking inventory and rising property values. We dissect the influencing factors and the subsequent implications for potential sellers. The episode promises enriching insights into divorce sales and the effects of low interest rates on the market.In the latter part of our discussion, we provide pertinent advice for homeowners contemplating property sales. From the importance of correct pricing factoring in location and timing to significant advice on home preparation for optimum pricing, this episode is a treasure trove of valuable advice.For prospective homebuyers, we assure you're not left out. We offer guidance on the best time to dive into the market, considering the ongoing inventory dip and the impending spring market boom. Furthermore, we touch on mortgage rate predictions for the rest of the year from reputable sources like the Mortgage Bankers Association, Realtor.com, Bloomberg, and Fannie Mae. Tune in to Hudson Valley’s Real Estate Explained for a comprehensive guide to the local property market, whether you are a first-time homebuyer, a seasoned investor, or simply real estate curious. This episode promises a wealth of knowledge as we transition into a new year packed with potential housing market trends and opportunities in 2024.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:05):
Welcome to Hudson Valley's Real Estate Explained, your getaway to understanding real estate.
Whether you're buying your first home, an experienced investor,
or just real estate curious, this is the place for you.
So dive in with us as we unravel the intricacies of property deals and investment
strategies guided by industry experts.
We're demystifying Hudson Hudson Valley Real Estate together. Let's go.
(00:27):
And welcome back everyone to another episode of Hudson Valley Real Estate Explained.
I'm your host, Michael Kahn.
And first things first, I would like to wish everybody a happy new year.
It has been a little while since I've been in the studio and have been able to put out a podcast.
And to all of my fans and those that have been waiting for this podcast,
(00:50):
I want to say thank you for waiting.
And I'm really looking forward to jumping back in in 2024.
The end of 2023 had a great deal of change for me and a lot of things going on.
So I'm looking forward to getting back into it. And part of those changes,
I have with me today, actually, a very close friend and mentor and collaborator, associate broker.
(01:15):
Previous vice president for another large brokerage here in the area, Mr.
Rick Brescia is now a member of Team Banks, and he's here with me today in the studio.
And we're going to be talking about the market, where it was,
where it is right now, and where it's going.
So, Rick, welcome to the show and welcome to the team.
Thank you so much, Mike, for having me. And I know this is probably breaking
(01:38):
all the podcast rules, but realistically, when you said my name,
don't we think maybe the clapping effect should have come into play somehow
after the introduction?
Hold on. I can do this. I can do this. I'm really not good. No pressure?
Is it this one? pressure no that's not it no
for those of you who can't see a green light came on when
he did press a button so i did press a button but it's not
(01:58):
all right i've already thrown my glove considerably no
nope that's probably super appropriate that is very there we go so just imagine
that when mike introduced me that that came in because how cool would that be
let's let's try it one more time mr rick brescia welcome to the show and welcome
to the team oh my god mike Thanks for having me.
(02:19):
And thank all of you out there that are currently applauding.
I'm greatly appreciative. Thrilled to be on the team. Thrilled to be on the podcast.
And just happy in general right now. So let's get to it, man.
Rock and roll. So, you know...
Real estate is a topic on everyone's mind right now because,
(02:40):
quite frankly, we're seeing things that we haven't seen in a very, very, very long time.
And as I said in the beginning of the show, this episode is all about where
we've been over the last year, what the heck happened in real estate.
I'd like to dissect that a little bit.
What's happening right now and where we're expecting 2024 to go.
And I want to start by reading just a little snippet from New York State Association
(03:05):
of Realtors, a report they released January 19th of 2024.
And it goes like this. As 2023 ended, inventory of homes across the Empire State
fell to the lowest recorded mark in history, according to the housing report
released today by New York State Association of Realtors.
Inventory of homes for sale across the state dropped to an all-time recorded
(03:28):
low of 24 24,000 units, 24 and change in December.
This represents nearly an 18% decline since 2022.
However, prices have continued to rise to close out 2023 with the median sales
price of homes escalating 10% to 380,000. This is across New York state.
(03:51):
If you're in the Hudson Valley, that number might seem very attractive,
but across the United States, 10% to 385, which is up from 345,000 in December of 2022.
So inventory remains to be a massive challenge locally as well as nationally,
but home values are not. What do you make of that? Are you seeing the same, same thing?
(04:13):
Yeah, I mean, I think we're all seeing the same thing, but I mean,
as a note to sellers, what I'd be looking at is if I was thinking about getting
out, knowing that we're at an all-time high, this might be the time to test it.
I think what happened was a lot of people heard that, you know,
with interest rates being up, that we were not going to have a hot selling market
anymore. It was going to decline a little bit.
(04:34):
And realistically, those prices just stayed right up there. there.
So if you're thinking about getting your house on the market,
anytime in the near future, especially with spring around the corner,
this might be the time to start preparing or at least consult an agent and say,
Hey, look, is this a good time to put my house out there?
Yeah. More specifically an agent on our team. Yeah. A team, a team banks agent
(04:55):
will happily help with that.
Yeah. I think, you know, not to simplify it too much, but it's supply and demand, right?
I mean, And at the end of the day, it's supply and demand we saw throughout the year.
So here's another interesting, interesting number, and I'll try not to nerd
out too much on all my statistics, but I'll stop you when you do.
Thank you. I appreciate that. Stop.
(05:16):
I was practicing, but listen, 4.09 millions homes were sold last year across the nation.
4.09 million homes sold.
What does that mean? If we take a look back in 2008, where we had a housing
recession, a housing crisis that led to a recession of homes,
(05:37):
we sold more homes than that. We sold 4.12 million.
The last time we sold 4.09 million homes was back in 1995 or 96.
I can't remember which one it was. I know the 4.09 is accurate,
but it's 95 or 96 was the last time we sold that few homes.
By the way, I'm under the impression, I was told our population has increased
(05:58):
27%. So 27%, but we're selling the same homes that we did that time in 1995, we're selling the same,
Essentially, real estate went through its worst year last year,
even worse than the recession.
Well, even worse considering not only as a population increase,
but you're talking about basically the building boom in the United States was
(06:19):
between like the late 90s and the early 2000s or mid-2000s almost,
2003, 4, 5. That's sort of when it stopped or slowed down.
So imagine how many more homes there are in the United States.
I don't know if we have that stat, but that's probably a crazy number too.
And yet still we're down fairly dramatically. In unit sales.
So 2023, one of the slowest real estate years in recorded history,
(06:42):
even slower than our recession in 2008.
So what was the cause for that? Why weren't people selling?
Are you going to lay the entire question on me? Yeah. That's adorable.
Yeah. So what I think is you had a lot of people on the fence.
You had rising interest rates. You had people on the fence anyway.
You're heading into an election year where there's wars going on and people
(07:05):
are paused. They were concerned.
I think there's a little bit of just concern throughout the country.
I don't necessarily, you know,
consume all the media and believe everything I see on TV by any means.
But I think there was a little bit of just a cause of concern.
I don't think it's the only reason.
You'll be rattling those papers throughout the time I talk or no?
(07:26):
Okay, good. Good now. Oh, you're going to make, oh, Oregon.
Me beautiful you guys can't see this but it's like a dragon it's amazing i'm
gonna need to record that sound just in case i don't have papers with me one
day so i can just play it hopefully it's as timely as the applause sound.
Anyway yeah so i think i think that
(07:48):
was part of it i think consumer fears i also think that people you know you
also had it's it's a real estate point of view but i think you had people that
that bought at a price they were content with and they bought at an interest
rate that they were very happy with in, in the prior couple of years.
And generally people who buy their houses one or two years ago don't move anyway.
(08:11):
So I don't think that played as big an effect as a lot of agents will tell you. Yeah.
But a lot of people also took an opportunity to refinance during that time.
A lot of people refinanced when interest rates were super low as they wisely
should have. And I was just looking for my other statistic, which I don't have.
(08:33):
So don't quote me exactly on these numbers, but I know they're very close to being accurate.
As we went into 2023, over 70%, according to FHA, over 70% of mortgages were,
were sub 4%. And a lot of those were sub 3%.
So when you have a, call it a 3.5% mortgage, and you're looking at potentially
(08:57):
buying a house with a 7.5% mortgage.
That's creating this sort of lock-in effect where people are locked into their homes.
They're not going to trade out for such a high interest rate because financially
it's just a tough pill to swallow. Of course, unless they absolutely have to,
you know, retirement or moving out of the area or job change or something of that nature.
(09:19):
It's funny that you bring that up. Just about every, with the exception of one
transaction, and she owned her house in cash and she bought in cash.
With the exception of that one transaction, every one of mine was either a death
in the family, a departure, a divorce.
Divorce sales are really, really big. So I think you're spot on.
I think the only people selling last year were people that had to sell.
(09:40):
This is more of a social commentary, but do you think divorce sales were big
because during COVID, a lot of couples had to spend time in their home together?
I have heard a rumor that there was a divorce boom that kind of happened due
to COVID. I mean. People really got to know each other.
Yeah. I guess a long time ago, there was baby boom.
(10:02):
Nowadays, we have divorce booms. Absolutely.
What is this world coming to? to. So yeah, so people are locked in, people aren't selling.
However, at the same time,
we have a growing population, right?
So the average home buyer right now is 35, 36 years old, depending on what statistic you look at.
(10:25):
And if you look at the population density or the number of people that fall
in that population between say 25 to 37,
like in that area, it is the most densely populated generation we have right now.
So we have this enormous wave of people that want a part of the American dream.
They want to be homeowners.
They want to get their first home or upgrade their home or start a family or expand their family.
(10:51):
And they're looking for homes and nobody's selling.
And it's just creating this entirely competitive market where despite the fact
that interest rates are going up, prices are too.
Sorry. I know I made a statement.
I just paused on that for one sec because you ended with interest rates are going up.
(11:13):
Is that what you're actually seeing? Because I'm sort of seeing the opposite.
Or do you mean they've gone up in the past? They have gone up.
You're right. Great, great, great correction.
And as we get into where we are and where we're going, which we could use that as a perfect segue.
So last year they were going up, right? We saw them flirt with 8%,
which for the record, historically, it's not a very high interest rate.
(11:38):
It's not a very high interest rate. However, the way I described it,
if you are going from 120 to 130, it doesn't feel like a big difference in temperature.
But if you're at 60 degrees and you jump into something that's 130,
it could feel really, really, really painful.
And that's kind of what I think happened.
Sure. That being, sorry, go ahead. No, I just, I love, I love that we have this
(12:01):
rapport where I get to just jump in and ask questions and correct you at times. Yeah, correct me.
Where do you go where it's 130 degrees? Phoenix. Gotcha. Okay. Okay. Good to know.
Because it gets there. I've been there once. It was like 103,
but I'm sure it does reach 130. And that was uncomfortable.
I'm making it. I don't know. I think it gets pretty hot. I know that you're
(12:24):
making stuff up. I get that. That's what's going to make this fun.
I mean, we'll see if I'm still a member of Team Banks at the end of the podcast. cast.
So neither here nor there, the interest rates have gone up and compared to where they were, it hurt.
And when you add on top of that, the increase in home value,
(12:47):
I think this was the other really important factor to all of this.
If interest rates went up to 8%, but the prices were where they were in 2016
or 17 or 18 or even 19, it probably wouldn't have been as bad.
But considering we saw year over year growth of, you know, home values of 10%,
(13:08):
12%, 10%, like that made it, that just was compounded interest on top of what
you're going to pay on your interest rate. Of course.
So very, very challenging. However, we've seen some relief. So where do we stand right now?
Inventory is still at an all-time low, but interest rates are coming down. Absolutely. Right. So-
(13:28):
Excuse me, that's going to generate even more interest and maybe,
so another thing, and I'm going to get geeky for a second.
We started 2023 with close to 80% of homeowners sub 4% in interest rates.
We ended 2023 with 59% of homeowners sub 4%.
(13:51):
Okay. That attrition is working in our favor over time, right?
Over time, that number, that lock-in factor isn't going to be as big of a deal as it is right now.
So that's good news. I mean, granted, most of those are probably new homeowners
that came into the market. Sure.
But over time, I think as that number gets smaller, we're going to feel some relief.
(14:13):
But we're seeing a lot of great activity. I'm seeing some people,
you know, Team Banks has quite a few new listings going on. Right now we have
people calling us, asking us, you know, what can I get from my house?
I think we're seeing some pent up demand that, that, that's coming from 2023
and they just can't hold on any longer. They're like, I need to make a move.
(14:36):
What do you think? Sure. Which, which I think you'll also see in a,
in a natural spring market anyway, because we, as you've said before,
at least privately to me, we didn't really have one.
No. Last year in 2023, we didn't have a spring market.
This year we should have a decent spring market all around. We generally have
a natural one that ranges from late February, depending on weather, to May, essentially.
(14:58):
That's our big boom in the real estate market. And people do wait to put their
house on during that market.
And they want to make it look nice for the spring. And it's a lot to do with
the winter weather here, at least where we are.
But I think this year you're going to see a bit of a boom. I think we have to play catch up.
It's been building. And I think you're going to see the dam spill over quite
(15:19):
a bit as we get into the spring here.
I couldn't agree more. I love to show this graphic in team meetings,
and I should probably post it on social media so people can see it because it's such a great visual.
If you look at the number of homes listed every year over the last 10 years
on a little line graph, it's wave after wave after wave.
(15:39):
It's bump after bump after bump, year after year after year until last year.
The bump never came. The wave never came, right?
It just stayed low, and then it dropped even further.
Further we have less homes on the market as you just
heard from New York State Association of Realtors less homes on the market now
than we have in a very very very long time but I do agree with you I think that
(16:00):
is changing I think that people are going to start coming on to the market if
you are considering selling a home right now well well let's do this I'm going
to ask you two pieces of advice Rick if you're considering selling a home right
now what should you be thinking about I'm,
How do I get Rick Brush's phone number? Well, you can give that at the end of
the podcast. Plus, it'll be in the show notes.
(16:22):
But is there anything that they should be considering? Should they be watching
something? Should they be timing something?
Well, I mean, look, once again, timing is everything.
But realistically right now, with the amount of demand that is out there for
houses, because we're still seeing multiple offers on the homes that are out
there because there's so few.
You know i think i think the
(16:43):
people that jump a little bit sooner than later will probably
benefit more from this market but we cannot predict
the future yeah so we don't know exactly what's going
to happen in april and in may you know it's hard to tell we can guess by looking
at stats from the past and everything else but realistically you know there
are some variables right now we know that interest rates are coming down a bit
(17:05):
buyers are still out there and it's hot and it's a decent in time to put your
home on the market. Absolutely.
Especially if you're relocating, because you know, we are, we are a hotspot.
We have been, we're, we're an hour and change North of New York city.
So some of this is very localized, you know, as we speak, you know,
not every market is seeing exactly the same thing we're seeing,
which, which never happens, but real estate does run in cycles. It always will.
(17:28):
Yeah. So that's one of the things is maybe not wait for the middle of that market
when there are a tremendous amount, there is more inventory available to people.
Sellers would be best to put their homes on when there's not as much inventory available.
Yeah, you don't have as much competition right now. And with the equity that a lot of people have.
(17:50):
Those that might want to sell fast, might price aggressively,
you don't want, you know, right now you have the opportunity to put yourself
on the market in a position where you'll be competing against very few other
homes where to your point in the spring, it could be a lot more competitive.
Yeah, and you mentioned something in there about pricing too,
and I think that's appropriate.
(18:11):
I think you have to have somebody advise you on the pricing of the home because
realistically you can't just say, well, in 2021 my neighbor's house sold for this,
so I think I should get this much more now.
That's not necessarily the case. Are we comparing apples to apples?
And in some parts of 2021, people were literally fleeing New York City and throwing
(18:36):
their wallets on the lawns to get homes.
You're not seeing that right now. We're not in, thankfully, that pandemic stage anymore.
So things are a little bit different. You need to just be advised properly and
take the advice of your real estate counsel properly.
Because realistically, we know we want you to get the most for your home too,
but pricing it out of range does not always get the most for your home.
(19:01):
It sometimes may be detrimental.
Agreed. So that being said, should buyers be out looking right now or should
they be waiting for the influx of inventory? Yeah.
I mean, I think realistically you can always be out looking,
but if I'm being honest, if I was out there trying to buy right now,
depending on whether I had something to sell or not, I may pause a little bit
(19:24):
and wait and see what's going to happen in the springtime.
And I don't think I'm being detrimental and killing the buyer's market by saying
that if anyone's heeding my advice, um, because, because essentially you may get a better deal.
It's just a matter of need though, once again, because everything,
as you said before, is supply and demand. That's what this entire business is.
And most, you know, commerce is, is essentially supply and demand.
(19:47):
Real estate's not that much different.
That's why diamonds are so expensive. Have you heard this story?
De Beers just owns all the diamonds and just lets them out little by little
to keep supply low and demand really high.
It's like 90% of the world's diamonds is owned by one company and they have them in barrels.
I've heard this over and over and over again to the point where I believe it's true.
(20:08):
I don't know if it is, but I'm pretty positive it is. I'm going to believe it
is because you told me that there you go. I like the way you think, Rick.
I like the way you think. So let me get last time getting nerdy.
Real estate interest rates, mortgage rate predictions for the rest of the year.
Mortgage Bankers Association predicts that interest rates, I'm having a hard
(20:31):
time reading this. I need glasses, man.
Predicts that interest rates will go to 6.1%.
Realtor.com predicts 6.5%. Bloomberg is very bullish and believes that they'll
go to 5.5% by the end of 2024.
And Fannie Mae predicts 6.7%. Obviously, nobody can predict the future.
(20:54):
These are all just guesses, right? But based on their collective knowledge and
research and their intuition and their experience, they're kind of all,
in my opinion, saying a very similar thing.
Don't expect rates to go up dramatically.
Don't expect them to go down dramatically, maybe down a little bit.
But we're not waiting for the rates to crash.
(21:17):
They're not going to fall sub-4 again. They're not going to fall.
And those rates that you mentioned before on all those guesses,
so to speak, are manageable interest rates.
You know, they're, they're not crazy high. They're not super low.
They're, they're manageable and probably even average if you go back over time.
So, and there's nothing wrong with being average. Should I say that? I don't believe that.
(21:41):
I don't want to be average, Mike. No, no, I certainly don't like average.
I like extraordinary. There you go.
So listen, I, any, any other last words of wisdom?
I think we covered a great deal today. I think we covered, you know,
where, what happened in 2023.
So we kind of understand, you know, the temperature that we're at right now,
(22:03):
as well as what to expect in the next year.
Anything else you want to share for the audience before we get out of here?
I think 2024 is a little bit of guesswork. As you heard, we never gave a definitive
answer to anything because, well, let's face it, Even the two of us aren't that smart,
but I will say this, if you are going to be putting a home on the market,
(22:24):
make sure that you're, you're giving it its best shot.
Not only with the agent you select, because of course I'm going to be biased
and talking about that, but with what you do to prepare your home for the market,
you know, don't consider it just like a something on a whim.
It's got to be calculated.
It's got to be done smartly. It's got to be done professionally. professionally.
(22:45):
And I think a lot of times people rush because they all of a sudden get the
idea they're going to move and they throw their home up there.
And if it's done too quickly and not done in a professional fashion, I think it shows.
I think we see things all day on the MLS that look like they were rushed and
hurried and not necessarily ready. And then you get there and sometimes it's even worse than that.
(23:09):
So, so make sure you're, you're, you know, you're dealing with a,
an absolute professional and make sure you listen to that person who's,
who's helping you put that house on the market.
Because realistically you will get more money for it in the long run.
It's totally worth it to, to wait, to time it right, to maybe stage it,
to, to just get some handyman work done that should be addressed.
(23:30):
Perhaps sometimes it's not necessary. A lot of times it is, you can still garnish
more. What happened was when the real estate market was so good,
people were putting houses on the market without having to do anything.
And as a business, I think we all got accustomed to that a little bit where
I think we should be dedicating maybe a little more time to preparation and
timing and other things.
I could not agree with you more. Thank you. An ounce of effort is worth a pound
(23:55):
of, I don't know, money later.
Should I write that one down or no? No, that one's not a good one.
Okay. Okay, so for those of you who don't know, Mike uses these quotes consistently,
and I've been keeping track of them on my phone.
One day we'll do a podcast that will just be me reading Mike quotes,
and he'll react to each and tell us what they mean.
(24:16):
Oh, I'm looking forward to that. God, me too. And it won't be long because it's
already quite a list. Yeah.
Yeah, so I completely agree with you, Rick. And I think for those of you that
are considering you sell your home, obviously, we're here to help you locally in the Hudson Valley.
But yes, you know, no matter where you're listening, find a professional real
estate agent that is going to give you good guidance, good advice,
(24:39):
that's going to give you good pricing recommendations, that's going to be a professional.
You know, going with the cheapest broker, the one that's going to save you the
most, or the one that tells you that your house is worth the most is not necessarily
always the right choice, right? Go with somebody that's going to be fair and
honest and give you good, good, solid advice.
(25:00):
And get more than one opinion. Yeah, absolutely. Much like you would if you had to get surgery.
You get more than one opinion to make sure that you're fit with the correct person.
Unless it's me, then just get that opinion and that's it. And then you just go with it.
I could not agree with you more, Rick. I made it into a commercial for me, didn't I?
A little bit, but that's okay. He's playing me out. You hear my playing out music?
(25:24):
That means Mike's had enough of me. Thank you, everybody in the Hudson Valley. I'll see you next time.
Later. Thanks so much.
Music.
Welcome to Hudson Valley's Real Estate Explained, your getaway to understanding real estate.
Whether you're buying your first home, an experienced investor,
or just real estate curious, this is the place for you.
So dive in with us as we unravel the intricacies of property deals and investment
strategies guided by industry experts.
We're demystifying Hudson Hudson Valley Real Estate together. Let's go.
(00:27):
And welcome back everyone to another episode of Hudson Valley Real Estate Explained.
I'm your host, Michael Kahn.
And first things first, I would like to wish everybody a happy new year.
It has been a little while since I've been in the studio and have been able to put out a podcast.
And to all of my fans and those that have been waiting for this podcast,
(00:50):
I want to say thank you for waiting.
And I'm really looking forward to jumping back in in 2024.
The end of 2023 had a great deal of change for me and a lot of things going on.
So I'm looking forward to getting back into it. And part of those changes,
I have with me today, actually, a very close friend and mentor and collaborator, associate broker.
(01:15):
Previous vice president for another large brokerage here in the area, Mr.
Rick Brescia is now a member of Team Banks, and he's here with me today in the studio.
And we're going to be talking about the market, where it was,
where it is right now, and where it's going.
So, Rick, welcome to the show and welcome to the team.
Thank you so much, Mike, for having me. And I know this is probably breaking
(01:38):
all the podcast rules, but realistically, when you said my name,
don't we think maybe the clapping effect should have come into play somehow
after the introduction?
Hold on. I can do this. I can do this. I'm really not good. No pressure?
Is it this one? pressure no that's not it no
for those of you who can't see a green light came on when
he did press a button so i did press a button but it's not
(01:58):
all right i've already thrown my glove considerably no
nope that's probably super appropriate that is very there we go so just imagine
that when mike introduced me that that came in because how cool would that be
let's let's try it one more time mr rick brescia welcome to the show and welcome
to the team oh my god mike Thanks for having me.
(02:19):
And thank all of you out there that are currently applauding.
I'm greatly appreciative. Thrilled to be on the team. Thrilled to be on the podcast.
And just happy in general right now. So let's get to it, man.
Rock and roll. So, you know...
Real estate is a topic on everyone's mind right now because,
(02:40):
quite frankly, we're seeing things that we haven't seen in a very, very, very long time.
And as I said in the beginning of the show, this episode is all about where
we've been over the last year, what the heck happened in real estate.
I'd like to dissect that a little bit.
What's happening right now and where we're expecting 2024 to go.
And I want to start by reading just a little snippet from New York State Association
(03:05):
of Realtors, a report they released January 19th of 2024.
And it goes like this. As 2023 ended, inventory of homes across the Empire State
fell to the lowest recorded mark in history, according to the housing report
released today by New York State Association of Realtors.
Inventory of homes for sale across the state dropped to an all-time recorded
(03:28):
low of 24 24,000 units, 24 and change in December.
This represents nearly an 18% decline since 2022.
However, prices have continued to rise to close out 2023 with the median sales
price of homes escalating 10% to 380,000. This is across New York state.
(03:51):
If you're in the Hudson Valley, that number might seem very attractive,
but across the United States, 10% to 385, which is up from 345,000 in December of 2022.
So inventory remains to be a massive challenge locally as well as nationally,
but home values are not. What do you make of that? Are you seeing the same, same thing?
(04:13):
Yeah, I mean, I think we're all seeing the same thing, but I mean,
as a note to sellers, what I'd be looking at is if I was thinking about getting
out, knowing that we're at an all-time high, this might be the time to test it.
I think what happened was a lot of people heard that, you know,
with interest rates being up, that we were not going to have a hot selling market
anymore. It was going to decline a little bit.
(04:34):
And realistically, those prices just stayed right up there. there.
So if you're thinking about getting your house on the market,
anytime in the near future, especially with spring around the corner,
this might be the time to start preparing or at least consult an agent and say,
Hey, look, is this a good time to put my house out there?
Yeah. More specifically an agent on our team. Yeah. A team, a team banks agent
(04:55):
will happily help with that.
Yeah. I think, you know, not to simplify it too much, but it's supply and demand, right?
I mean, And at the end of the day, it's supply and demand we saw throughout the year.
So here's another interesting, interesting number, and I'll try not to nerd
out too much on all my statistics, but I'll stop you when you do.
Thank you. I appreciate that. Stop.
(05:16):
I was practicing, but listen, 4.09 millions homes were sold last year across the nation.
4.09 million homes sold.
What does that mean? If we take a look back in 2008, where we had a housing
recession, a housing crisis that led to a recession of homes,
(05:37):
we sold more homes than that. We sold 4.12 million.
The last time we sold 4.09 million homes was back in 1995 or 96.
I can't remember which one it was. I know the 4.09 is accurate,
but it's 95 or 96 was the last time we sold that few homes.
By the way, I'm under the impression, I was told our population has increased
(05:58):
27%. So 27%, but we're selling the same homes that we did that time in 1995, we're selling the same,
Essentially, real estate went through its worst year last year,
even worse than the recession.
Well, even worse considering not only as a population increase,
but you're talking about basically the building boom in the United States was
(06:19):
between like the late 90s and the early 2000s or mid-2000s almost,
2003, 4, 5. That's sort of when it stopped or slowed down.
So imagine how many more homes there are in the United States.
I don't know if we have that stat, but that's probably a crazy number too.
And yet still we're down fairly dramatically. In unit sales.
So 2023, one of the slowest real estate years in recorded history,
(06:42):
even slower than our recession in 2008.
So what was the cause for that? Why weren't people selling?
Are you going to lay the entire question on me? Yeah. That's adorable.
Yeah. So what I think is you had a lot of people on the fence.
You had rising interest rates. You had people on the fence anyway.
You're heading into an election year where there's wars going on and people
(07:05):
are paused. They were concerned.
I think there's a little bit of just concern throughout the country.
I don't necessarily, you know,
consume all the media and believe everything I see on TV by any means.
But I think there was a little bit of just a cause of concern.
I don't think it's the only reason.
You'll be rattling those papers throughout the time I talk or no?
(07:26):
Okay, good. Good now. Oh, you're going to make, oh, Oregon.
Me beautiful you guys can't see this but it's like a dragon it's amazing i'm
gonna need to record that sound just in case i don't have papers with me one
day so i can just play it hopefully it's as timely as the applause sound.
Anyway yeah so i think i think that
(07:48):
was part of it i think consumer fears i also think that people you know you
also had it's it's a real estate point of view but i think you had people that
that bought at a price they were content with and they bought at an interest
rate that they were very happy with in, in the prior couple of years.
And generally people who buy their houses one or two years ago don't move anyway.
(08:11):
So I don't think that played as big an effect as a lot of agents will tell you. Yeah.
But a lot of people also took an opportunity to refinance during that time.
A lot of people refinanced when interest rates were super low as they wisely
should have. And I was just looking for my other statistic, which I don't have.
(08:33):
So don't quote me exactly on these numbers, but I know they're very close to being accurate.
As we went into 2023, over 70%, according to FHA, over 70% of mortgages were,
were sub 4%. And a lot of those were sub 3%.
So when you have a, call it a 3.5% mortgage, and you're looking at potentially
(08:57):
buying a house with a 7.5% mortgage.
That's creating this sort of lock-in effect where people are locked into their homes.
They're not going to trade out for such a high interest rate because financially
it's just a tough pill to swallow. Of course, unless they absolutely have to,
you know, retirement or moving out of the area or job change or something of that nature.
(09:19):
It's funny that you bring that up. Just about every, with the exception of one
transaction, and she owned her house in cash and she bought in cash.
With the exception of that one transaction, every one of mine was either a death
in the family, a departure, a divorce.
Divorce sales are really, really big. So I think you're spot on.
I think the only people selling last year were people that had to sell.
(09:40):
This is more of a social commentary, but do you think divorce sales were big
because during COVID, a lot of couples had to spend time in their home together?
I have heard a rumor that there was a divorce boom that kind of happened due
to COVID. I mean. People really got to know each other.
Yeah. I guess a long time ago, there was baby boom.
(10:02):
Nowadays, we have divorce booms. Absolutely.
What is this world coming to? to. So yeah, so people are locked in, people aren't selling.
However, at the same time,
we have a growing population, right?
So the average home buyer right now is 35, 36 years old, depending on what statistic you look at.
(10:25):
And if you look at the population density or the number of people that fall
in that population between say 25 to 37,
like in that area, it is the most densely populated generation we have right now.
So we have this enormous wave of people that want a part of the American dream.
They want to be homeowners.
They want to get their first home or upgrade their home or start a family or expand their family.
(10:51):
And they're looking for homes and nobody's selling.
And it's just creating this entirely competitive market where despite the fact
that interest rates are going up, prices are too.
Sorry. I know I made a statement.
I just paused on that for one sec because you ended with interest rates are going up.
(11:13):
Is that what you're actually seeing? Because I'm sort of seeing the opposite.
Or do you mean they've gone up in the past? They have gone up.
You're right. Great, great, great correction.
And as we get into where we are and where we're going, which we could use that as a perfect segue.
So last year they were going up, right? We saw them flirt with 8%,
which for the record, historically, it's not a very high interest rate.
(11:38):
It's not a very high interest rate. However, the way I described it,
if you are going from 120 to 130, it doesn't feel like a big difference in temperature.
But if you're at 60 degrees and you jump into something that's 130,
it could feel really, really, really painful.
And that's kind of what I think happened.
Sure. That being, sorry, go ahead. No, I just, I love, I love that we have this
(12:01):
rapport where I get to just jump in and ask questions and correct you at times. Yeah, correct me.
Where do you go where it's 130 degrees? Phoenix. Gotcha. Okay. Okay. Good to know.
Because it gets there. I've been there once. It was like 103,
but I'm sure it does reach 130. And that was uncomfortable.
I'm making it. I don't know. I think it gets pretty hot. I know that you're
(12:24):
making stuff up. I get that. That's what's going to make this fun.
I mean, we'll see if I'm still a member of Team Banks at the end of the podcast. cast.
So neither here nor there, the interest rates have gone up and compared to where they were, it hurt.
And when you add on top of that, the increase in home value,
(12:47):
I think this was the other really important factor to all of this.
If interest rates went up to 8%, but the prices were where they were in 2016
or 17 or 18 or even 19, it probably wouldn't have been as bad.
But considering we saw year over year growth of, you know, home values of 10%,
(13:08):
12%, 10%, like that made it, that just was compounded interest on top of what
you're going to pay on your interest rate. Of course.
So very, very challenging. However, we've seen some relief. So where do we stand right now?
Inventory is still at an all-time low, but interest rates are coming down. Absolutely. Right. So-
(13:28):
Excuse me, that's going to generate even more interest and maybe,
so another thing, and I'm going to get geeky for a second.
We started 2023 with close to 80% of homeowners sub 4% in interest rates.
We ended 2023 with 59% of homeowners sub 4%.
(13:51):
Okay. That attrition is working in our favor over time, right?
Over time, that number, that lock-in factor isn't going to be as big of a deal as it is right now.
So that's good news. I mean, granted, most of those are probably new homeowners
that came into the market. Sure.
But over time, I think as that number gets smaller, we're going to feel some relief.
(14:13):
But we're seeing a lot of great activity. I'm seeing some people,
you know, Team Banks has quite a few new listings going on. Right now we have
people calling us, asking us, you know, what can I get from my house?
I think we're seeing some pent up demand that, that, that's coming from 2023
and they just can't hold on any longer. They're like, I need to make a move.
(14:36):
What do you think? Sure. Which, which I think you'll also see in a,
in a natural spring market anyway, because we, as you've said before,
at least privately to me, we didn't really have one.
No. Last year in 2023, we didn't have a spring market.
This year we should have a decent spring market all around. We generally have
a natural one that ranges from late February, depending on weather, to May, essentially.
(14:58):
That's our big boom in the real estate market. And people do wait to put their
house on during that market.
And they want to make it look nice for the spring. And it's a lot to do with
the winter weather here, at least where we are.
But I think this year you're going to see a bit of a boom. I think we have to play catch up.
It's been building. And I think you're going to see the dam spill over quite
(15:19):
a bit as we get into the spring here.
I couldn't agree more. I love to show this graphic in team meetings,
and I should probably post it on social media so people can see it because it's such a great visual.
If you look at the number of homes listed every year over the last 10 years
on a little line graph, it's wave after wave after wave.
(15:39):
It's bump after bump after bump, year after year after year until last year.
The bump never came. The wave never came, right?
It just stayed low, and then it dropped even further.
Further we have less homes on the market as you just
heard from New York State Association of Realtors less homes on the market now
than we have in a very very very long time but I do agree with you I think that
(16:00):
is changing I think that people are going to start coming on to the market if
you are considering selling a home right now well well let's do this I'm going
to ask you two pieces of advice Rick if you're considering selling a home right
now what should you be thinking about I'm,
How do I get Rick Brush's phone number? Well, you can give that at the end of
the podcast. Plus, it'll be in the show notes.
(16:22):
But is there anything that they should be considering? Should they be watching
something? Should they be timing something?
Well, I mean, look, once again, timing is everything.
But realistically right now, with the amount of demand that is out there for
houses, because we're still seeing multiple offers on the homes that are out
there because there's so few.
You know i think i think the
(16:43):
people that jump a little bit sooner than later will probably
benefit more from this market but we cannot predict
the future yeah so we don't know exactly what's going
to happen in april and in may you know it's hard to tell we can guess by looking
at stats from the past and everything else but realistically you know there
are some variables right now we know that interest rates are coming down a bit
(17:05):
buyers are still out there and it's hot and it's a decent in time to put your
home on the market. Absolutely.
Especially if you're relocating, because you know, we are, we are a hotspot.
We have been, we're, we're an hour and change North of New York city.
So some of this is very localized, you know, as we speak, you know,
not every market is seeing exactly the same thing we're seeing,
which, which never happens, but real estate does run in cycles. It always will.
(17:28):
Yeah. So that's one of the things is maybe not wait for the middle of that market
when there are a tremendous amount, there is more inventory available to people.
Sellers would be best to put their homes on when there's not as much inventory available.
Yeah, you don't have as much competition right now. And with the equity that a lot of people have.
(17:50):
Those that might want to sell fast, might price aggressively,
you don't want, you know, right now you have the opportunity to put yourself
on the market in a position where you'll be competing against very few other
homes where to your point in the spring, it could be a lot more competitive.
Yeah, and you mentioned something in there about pricing too,
and I think that's appropriate.
(18:11):
I think you have to have somebody advise you on the pricing of the home because
realistically you can't just say, well, in 2021 my neighbor's house sold for this,
so I think I should get this much more now.
That's not necessarily the case. Are we comparing apples to apples?
And in some parts of 2021, people were literally fleeing New York City and throwing
(18:36):
their wallets on the lawns to get homes.
You're not seeing that right now. We're not in, thankfully, that pandemic stage anymore.
So things are a little bit different. You need to just be advised properly and
take the advice of your real estate counsel properly.
Because realistically, we know we want you to get the most for your home too,
but pricing it out of range does not always get the most for your home.
(19:01):
It sometimes may be detrimental.
Agreed. So that being said, should buyers be out looking right now or should
they be waiting for the influx of inventory? Yeah.
I mean, I think realistically you can always be out looking,
but if I'm being honest, if I was out there trying to buy right now,
depending on whether I had something to sell or not, I may pause a little bit
(19:24):
and wait and see what's going to happen in the springtime.
And I don't think I'm being detrimental and killing the buyer's market by saying
that if anyone's heeding my advice, um, because, because essentially you may get a better deal.
It's just a matter of need though, once again, because everything,
as you said before, is supply and demand. That's what this entire business is.
And most, you know, commerce is, is essentially supply and demand.
(19:47):
Real estate's not that much different.
That's why diamonds are so expensive. Have you heard this story?
De Beers just owns all the diamonds and just lets them out little by little
to keep supply low and demand really high.
It's like 90% of the world's diamonds is owned by one company and they have them in barrels.
I've heard this over and over and over again to the point where I believe it's true.
(20:08):
I don't know if it is, but I'm pretty positive it is. I'm going to believe it
is because you told me that there you go. I like the way you think, Rick.
I like the way you think. So let me get last time getting nerdy.
Real estate interest rates, mortgage rate predictions for the rest of the year.
Mortgage Bankers Association predicts that interest rates, I'm having a hard
(20:31):
time reading this. I need glasses, man.
Predicts that interest rates will go to 6.1%.
Realtor.com predicts 6.5%. Bloomberg is very bullish and believes that they'll
go to 5.5% by the end of 2024.
And Fannie Mae predicts 6.7%. Obviously, nobody can predict the future.
(20:54):
These are all just guesses, right? But based on their collective knowledge and
research and their intuition and their experience, they're kind of all,
in my opinion, saying a very similar thing.
Don't expect rates to go up dramatically.
Don't expect them to go down dramatically, maybe down a little bit.
But we're not waiting for the rates to crash.
(21:17):
They're not going to fall sub-4 again. They're not going to fall.
And those rates that you mentioned before on all those guesses,
so to speak, are manageable interest rates.
You know, they're, they're not crazy high. They're not super low.
They're, they're manageable and probably even average if you go back over time.
So, and there's nothing wrong with being average. Should I say that? I don't believe that.
(21:41):
I don't want to be average, Mike. No, no, I certainly don't like average.
I like extraordinary. There you go.
So listen, I, any, any other last words of wisdom?
I think we covered a great deal today. I think we covered, you know,
where, what happened in 2023.
So we kind of understand, you know, the temperature that we're at right now,
(22:03):
as well as what to expect in the next year.
Anything else you want to share for the audience before we get out of here?
I think 2024 is a little bit of guesswork. As you heard, we never gave a definitive
answer to anything because, well, let's face it, Even the two of us aren't that smart,
but I will say this, if you are going to be putting a home on the market,
(22:24):
make sure that you're, you're giving it its best shot.
Not only with the agent you select, because of course I'm going to be biased
and talking about that, but with what you do to prepare your home for the market,
you know, don't consider it just like a something on a whim.
It's got to be calculated.
It's got to be done smartly. It's got to be done professionally. professionally.
(22:45):
And I think a lot of times people rush because they all of a sudden get the
idea they're going to move and they throw their home up there.
And if it's done too quickly and not done in a professional fashion, I think it shows.
I think we see things all day on the MLS that look like they were rushed and
hurried and not necessarily ready. And then you get there and sometimes it's even worse than that.
(23:09):
So, so make sure you're, you're, you know, you're dealing with a,
an absolute professional and make sure you listen to that person who's,
who's helping you put that house on the market.
Because realistically you will get more money for it in the long run.
It's totally worth it to, to wait, to time it right, to maybe stage it,
to, to just get some handyman work done that should be addressed.
(23:30):
Perhaps sometimes it's not necessary. A lot of times it is, you can still garnish
more. What happened was when the real estate market was so good,
people were putting houses on the market without having to do anything.
And as a business, I think we all got accustomed to that a little bit where
I think we should be dedicating maybe a little more time to preparation and
timing and other things.
I could not agree with you more. Thank you. An ounce of effort is worth a pound
(23:55):
of, I don't know, money later.
Should I write that one down or no? No, that one's not a good one.
Okay. Okay, so for those of you who don't know, Mike uses these quotes consistently,
and I've been keeping track of them on my phone.
One day we'll do a podcast that will just be me reading Mike quotes,
and he'll react to each and tell us what they mean.
(24:16):
Oh, I'm looking forward to that. God, me too. And it won't be long because it's
already quite a list. Yeah.
Yeah, so I completely agree with you, Rick. And I think for those of you that
are considering you sell your home, obviously, we're here to help you locally in the Hudson Valley.
But yes, you know, no matter where you're listening, find a professional real
estate agent that is going to give you good guidance, good advice,
(24:39):
that's going to give you good pricing recommendations, that's going to be a professional.
You know, going with the cheapest broker, the one that's going to save you the
most, or the one that tells you that your house is worth the most is not necessarily
always the right choice, right? Go with somebody that's going to be fair and
honest and give you good, good, solid advice.
(25:00):
And get more than one opinion. Yeah, absolutely. Much like you would if you had to get surgery.
You get more than one opinion to make sure that you're fit with the correct person.
Unless it's me, then just get that opinion and that's it. And then you just go with it.
I could not agree with you more, Rick. I made it into a commercial for me, didn't I?
A little bit, but that's okay. He's playing me out. You hear my playing out music?
(25:24):
That means Mike's had enough of me. Thank you, everybody in the Hudson Valley. I'll see you next time.
Later. Thanks so much.
Music.
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