Duncan Duo 6-23-24

Episode Transcript

(00:00):
Happy Sunday, Tampa Bay. We'rewith you for another week here on the
Duncan Duo Real Estate Show, talkingabout the Tampa Bay real estate market,
like we are every Sunday at tenam. I'm Andrew Duncan with the Duncan
Duo team at LPT Realty. Gota lot to talk to you about in
real estate today. So if you'vebeen paying attention, you know that the
real estate market is not as healthyas it was a few years ago.

(00:22):
But Tampa Bay is still doing prettywell. It's starting to cool a little
bit. But some positive news thatwe've seen recently is that mortgage rates have
now dipped below seven percent. Sothe inflation numbers aren't amazing, but and
the Fed hasn't cut rates. There'sa prediction or a possibility to cut rates,

(00:43):
you know, anywhere from zero tothree times through the rest of the
year. But mortgage rates have softeneda little bit and we're now seeing rates
below seven percent. So thirty yearrate mortgages average six point ninety five,
dropping from six point nine nine.A year ago, we were at six
point six. Mortgage rates control realestate, Let's just face it, that

(01:06):
is what people pay attention to.It's less about the price and more about
the payment. Our prices have obviouslyrisen, but rates have softened after having
hit, you know, a littlebit higher numbers a few months ago.
And it's a competitive market in alot of neighborhoods. But there are other
neighborhoods in Tampa Bay where buyers havea great opportunity to make a good deal,
where they can take advantage of gettinga better price in hopes that mortgage

(01:30):
rates soften even more, or there'sa period of time a year or two
down the road where we can seerates drop a little bit more. I
think most people are predicting that winrates because we have this pent up demand.
We have a lot of consumers thathave stayed in their properties that wouldn't
have normally because they're in a twoor three percent or in some instances,

(01:52):
four percent mortgage rate. They don'twant to move. They don't want to
move because if they go on buy, they're going to buy something at six
point eight, they're going to doubleThey're going to double their payment on the
same house, they're gonna double theirinterest rate, and they don't want to
do that, right, So peopleare staying put. Now If raids start
to soften, not quite to threepercent, we're not going to see that,

(02:12):
but if raids soften into the fiverange in a year or two,
a lot of people predict that we'llsee another surge because you have all this
pent up demand from people being saton the sidelines for years that if rates
get close enough to where people areout on their own their homes, then
they'll start to transact. They'll startto say, hey, I'm going to
sell and I'm going to buy,and we'll see some dramatic movement on appreciation

(02:32):
and an increase in home sales.Again, now, who knows if that
happens. A lot of economists arepredicting that it will. Some of it,
I'm certain will depend on the upcomingpresidential as well as Senate and Congress
elections for you know, for fiscalpolicy and you know, everything that has
an impact on our economy that couldimpact our mortgage rates. And of course

(02:54):
psychology of people affects markets as well. So that being said, smart money
right now is saying, you knowwhat, I'm I'm going to go ahead
and buy, and even if Ihave to eat this higher rate for a
year or two, if I goand buy when the rates drop. We
know what happens. Then we knowprices are going to rise. We know
what happened during the COVID years.Right, we saw how prices in Tampa

(03:16):
Bay Ros twenty seven to thirty percentwhen we saw a couple percentage drop,
a couple percentage point drop and interestrates. So if we see if this
seven you know, high sixes sevenpercent range has been our norm for the
last year or two, and wesee a drop to five, it's going
to have a similar impact on theeconomy and on house values and on the

(03:40):
real estate market. So a lotof smart people are saying, you know
what, I want to get aheadof that. I can refinance later,
but I want to buy now sothat when the prices start to spike,
I'm positioned well, not trying tochase the market and buy when a bidding
When bidding wars are happening again.So do we see bidding wars today?
Yes, their neighborhoods were see itis it common? Not that common?

(04:02):
Will it come back if we seeinterest rates with a five in front of
them again? Yeah, especially ifit's a five point zero. If we
get interest rates around five percent,there's no question. We'll see a spike
in prices, We'll see a spikein transactions. People that have been sitting
on the sidelines with a three anda half percent mortgage rate, We'll say,
you know what, five it's certainlynot three and a half, but

(04:25):
it's not seven either, and thatit's close enough to where I can make
these numbers work. So that's prettymuch where we are with the real estate
news related two mortgage rates. Whenwe are on air, make sure you're
following us on all of our socials. We are at the Duncan Duo,
Twitter, Instagram, YouTube, TikTok, Facebook, and so much more.

(04:46):
And I want to move forward nextand talk about Tampa Bay's luxury real estate
market. I was out this weekwith a client showing two million dollar homes.
A few weeks back, we solda two point one point seven.
We just recently sold a two pointfour, a three point three, and

(05:08):
a few months before that six pointnine million, So we've done a lot
of work in the luxury space rightnow. I want people to understand that
when you see the reality TV shows, they're not realistic in terms of what
happens in luxury real estate. Butthe second caveat to that is the financial
The financials of luxury real estate aremassively different than somebody that's buying a regular

(05:31):
home with a job, and themotivation of the home buyer and the financial
position of the home buyer aren't asimpacted by interest rates. So I want
to talk about how luxury people buyreal estate, but I want to talk
about the interest rate phenomenon first,because I think it's important for people to
know when they see, oh wow, Tampa Bay. You know, our

(05:53):
market in the four and five hundredrange seems to be maybe not as good,
but why do we continue to breaknumbers with luxury home sales? And
I don't just mean my team,I mean like in the marketplace. And
here's the reason why why interest ratesdon't impact the market, the higher end
market the same way they do theaverage home prices. The main reason is

(06:14):
because typically the Treasury re bond andsavings rates are a couple percentage points off
of the mortgage rates. Okay,when we saw mortgage rates around two and
a half and three, we sawsavings rates a couple percentage points below that
one or two maybe okay, youknow, two points down. So if

(06:36):
you're at three and a half bestsavings rates are getting probably one one and
a half, Okay, So there'sa two percent spread in a lot of
in a lot of you know,in the financial markets, in a lot
of years between mortgage rates and savingsrates. So most wealthy people that are
buying million dollar homes have a lotof cash. They have a lot of

(06:56):
money in the market, They havea lot of money invested, sometimes in
you know, mere safe savings accountsor safe treasury bonds. They have a
certain amount of cash that they say, this is the amount of cash that
I want to keep safe. Ifthat amount of cash is greater than,
or equal to, or slightly lessthan the amount of their mortgage, the
mortgage rate is really kind of irrelevant. Here's what I mean by that.

(07:19):
If I'm buying a house, atwo million dollar house, and I'm gonna
get a seven percent mortgage rate,and i have two million dollars in treasury
bonds, in cash and really safeinvestments, and I'm getting five percent on
those, it's a two point spreadbetween those two asset classes, okay,
between your mortgage rate and then whatyou're earning on your own money. So

(07:42):
the point is is that when interestrates are really really low. It's the
same thing that money that you wouldhave that's safe in the marketplace in savings
accounts or treasury bonds is earning areally really low number if mortgage rates are
really low. So the wealthy crowddoesn't get impacted as much by mortgage rates
actually when they have enough money investedin things that make that delta only a

(08:03):
couple points spread where mortgage rates reallyimpact, or in those average and below
average home prices, and in familiesthat are living paycheck to paycheck and they
have a payment that they have tomake, they don't have money invested in
anywhere, they don't have a networth, and that increase in mortgage payment
is a dramatic hit to them becausethey don't have assets earning money to offset

(08:26):
the higher interest rate on mortgages.So it's why are luxury real estate market
doesn't get hit as hard with mortgagerates. Now there is a domino effect
though, so it's not as ifhigh mortgage rates don't affect luxury real estate
sales, because it does, butjust not the same way, and it
doesn't have as much impact on thelower priced homes. So, for example,

(08:46):
the reason why the luxury real estatemarket could have even a slight impact
on mortgage rates is because of shrinkingthe buyer pool. So, for example,
someone might be looking to buy atwo million dollar house in South Tampa
and they're selling their five hundred thousanddollars house in South Tampa. If the
market isn't delivering them a buyer fortheir five hundred thousand, five hundred thousand

(09:07):
dollars house because of interest rates,and because that audience is more impacted by
the interest rate than the buyer doesn'tget, then the transaction doesn't get created
for that seller to sell their hometo someone so they can go and be
the two million dollar buyer. Sothere is a you know, kind of
a domino effect of high interest rateswhere it could reduce transactions on the high
end, but it's not an enormousimpact it certainly mortgage rates certainly are not

(09:31):
as impactful on the high end ofour luxury real estate market in Tampa Bay
like they are our average. Andit's simply because of people with net worth
and of wealth have the ability tokind of play the game and move the
assets and money around to kind oftake advantage of whatever is going on in
the market, and mortgage rates tendto have a not an enormous delta between
what savings rates or treasury bond ratesare at. So if it's a two

(09:54):
point spread, it doesn't really matterthat much. You're earning less on your
money but you're having a low mortgagepayment, or you're earning more on your
money and you're having a higher mortgagepayment. It's, you know, really
just moving money from one side ofa balance sheet to another. So hopefully
that makes sense, but that's amajor misconception that people have about mortgage rates
and how impacts on the luxury sideof the market. And speaking of luxury

(10:18):
real estate, I'm out showing homesthis week in you know, this week,
I was in colbroth Asle Beach Parkshowed some homes on Bayshore with a
good friend that's looking to move fromSouth Florida, and I was amazed to
see how many homes in and aroundtwo million dollars still had the photos that
were taking that were being taken withthe agent's iPhone. I cannot believe in

(10:43):
this day and age that home sellersare trusting and believing in an agent that
is not hiring a professional photographer whenthe amount of commission that they're earning is
at stake. And again a coupleof years ago, that might have worked
because everything could have sold. ButI saw a lot of properties this week
where I was just really surprised athadn't sold, and it hadn't sold because
it looks it doesn't look good onlinewhen you have you know this, this,

(11:07):
you know property that's being showcased withan iPhone instead of a high end
camera and high end video. Soif you are a home seller, please
please if the realtor shows up totake pictures with their iPhone on a high
end home, and it's probably finein some instance on lower end homes,
but on a high end home,please run, please run. Please do
not believe that that is giving yourhigh end home the best international exposure to

(11:31):
find the buyer that's going to fallin love with the lifestyle that home creates
for them. It just isn't happeningwith iPhone cameras. I was amazed.
I can't even believe it. Idid a funny reel on Instagram even talking
about like just get out if that'syou, if that's your marketing plan and
you're selling on high in real estate. Just just get out, just stop.
It worked a couple of years ago, it ain't working anymore. It's

(11:52):
why some homes are sitting, becausethey're hiring agents that don't know how to
market. Take bad photos, usebad equipment, because it would have worked
a couple of years ago. Butnow the game has changed. It's not
as it's not as healthy of amarket. Certainly not terrible, but it's
not you know, it's not asrobust as it was a year or two
ago. It's very average. Andwhen it's average, you got to do

(12:13):
the above average in marketing. Whenthe market is above average, you can
do average or below our marketing andget a home sold. But above average
marketing is what is what is goingto work for a high end home sale
today. So hopefully that's been helpful. We've been talking about luxury real estate
and we're back. We're going totalk a little bit more about the Tampa
Bay real estate market after a quickbreak here on the Duncan Duo Show.
So we're back here on the DuncanDuo Show talking about the Tampa Bay real

(12:35):
estate market again. When we aren'ton air at the dunkin Dobo and all
the social channels Twitter, Instagram,YouTube, TikTok, Facebook, all of
them. At the Dunkin Duo geta free home value estimate at dunkin Duo
dot com. Again, free homevalue estimate duncan doo dot com. You
can also get an instant cash offera dunkin Duo dot com and talk to
our team about your home value tohelp point you in the right direction.

(12:58):
The next thing I want to talkabout really quickly, and I mentioned this
before the break when we were talkingabout the luxury market. If you do
use one of the automated websites forhome evaluation, if you go to our
website and I want you to testthis. Look, if you own a
home above a million dollars, okay, and you have a pretty good idea
of what it's worth, I wantyou to go to dunk and Duo dot

(13:18):
common type in your address and here'swhy. Okay. These algorithms, including
my own website, get better andbetter the more data they have. However,
automated home valuations for high end realestate are not very accurate. Okay,
So if you do go to anyof these websites and you have a
really high end several million dollar home, and you go to dunkin doo dot

(13:39):
com and you type it in andyou see the value is way off from
what you know it's worth. Luxuryreal estate requires a professional. Okay,
average real estate, you can probablyget away in some instances with using my
website, and the value is goingto be pretty close. The higher end
you go, the more off it'sgoing to be. And sometimes it's even
laughable. Like I've plugged my ownhome into this. I live in a

(14:01):
luxury several million dollar house, andI've plugged it in and I've just laughed
because i know what it's worth.I've had people try and buy it even
though I'm not even interested in selling. So if you're a luxury homeowner and
you use these sites to address yourvalue, they're going to be so far
off. You really do need totalk to a professional. And it doesn't
mean you need to hire an appraiser, but fill out the form and then

(14:24):
talk to our team and let themknow what you have, because valuing luxury
real estate requires human interaction. There'stoo many features, there's too many extra
things, there's too many things thatan online evaluation can't see. The online
evaluation can't tell whether or not theproperty has an elevator, or you know
how good the view is compared tothe view of the house next door,

(14:46):
or the finishes on the inside insome instances, if it's never had photos
online or been on the market.So again, online luxury real estate online
values aren't going to be great.Even at my side at dunkin doo dot
com. If you go into type, it's probably going to be way off.
Okay, there's way that it's evergoing to be that accurate for luxury
real estate. It's why you needhuman interaction. It's why you still need
a real estate agent to be ableto look and understand and look at the

(15:09):
data and look at the values andsay, okay, you know, sir,
this is what your property has.This is what the comps look like.
The comp that some of the automatedwebsites of this neighborhood, that's not
an accurate comp It's just really challenging. So we love when clients plug their
luxury properties in there because it cangive us a feel and we can understand
it. But it also gives usthe human element where we can say,

(15:30):
look, we need to have aconversation with you. We need to talk
to you and learn about the featuresof the home, because no online website
is going to is going to doa good job. You know, I'm
a big car guy, and thesame thing happens with cars. The higher
end of the car and the higherthe grade of the spec, you can
see the same car sell for thirtyor forty percent more simply because of the

(15:52):
spec or the condition. And it'sreally hard the online sites that give you
these offers. That's why you seeCarvon or any of these other sites that
buy cars. They don't buy stuffin the high end because it can't be
valued very easily and it can't bescaled. They can't use a website to
value your Ferrari F forty that's gotnine hundred miles. They can't use a

(16:14):
website to, you know, tovalue your you know, R thirty four
gtr inspect Nerror that's got one hundredmiles on it because there's no other comparables.
Luxury real estate gets that same wayyou reduced to there's a dramatic reduction
in the number of comparables based onhow unique the property is. So don't
if you're thinking about some a luxuryhome when you go to our website and
you fault the address, talk toour team and they'll be able to dial

(16:37):
in a better value for you,and they'll be able to help you understand
your equity position more than if youjust go to the online website and they
get upset. Again, it's thesame thing. High end, high end
cars, high end real estate.The algorithms and the online sites are always
meant to serve the masses. They'realways meant to scale, They're always meant

(16:59):
to value the easiest value properties andcars. So when you have something that
doesn't fit that algorithm because it's soluxurious, or because it's so large,
or because it's so unique, theonline evaluators are never going to do a
justice. So if you go ontoa website and you have a high end
home and the value isn't right,let us talk to you and let us
coach you through it, and wecan give you a better understanding of your

(17:22):
equity position and what your home isworth than any online website is going to
be able to do. Because youdon't fit. You know, you don't
fit the majority of the transactions.There's not a lot of there's not as
many comparables, and even some ofthe comparables are so uniquely different that it
doesn't value the same. So again, like I said that the car von
end, the online car buyers arethe same thing. It's why they don't

(17:42):
touch high end cars because there canbe such a variable indifference and there aren't
enough of the transactions to really understandthe uniqueness and the condition of that home,
of that home or that car thatmakes it so much more valuable than
another one. So luxury home sellers, we get the messages this is not
even close to my value that youronline website is. It's never going to

(18:03):
be. It's just never going tobe because there's not enough of them.
And that's not the You're not thetarget audience that the online evaluator systems are
targeting. They're targeting the masses.You're the unique, you're the one percent.
You're going to need some human interactionand some people looking at features photos.
You're going to need some human interactionand some eyes of a professional on

(18:26):
that property to they I'll help youvalue. So hopefully that helps. And
if you are a luxury seller,go to Duncan Duo dot com. We'd
love to test it out with you, even if you have no interest in
selling. We'll at least break itdown for you and explain, Hey,
look here's where the value of yourproperty is and here's why the online evaluator
is off. So hopefully that's help. Well,'m be back. We're
going to continue this conversation after aquick break here on the Duncan Duo Show.
So back here on the Duncan DuoShow, talking about the Tampa Bay
real estate market. I'm Andrew Duncanwith the Duncan Duo at LPT Realty.

(18:49):
If you are a real estate agentand you have not heard about LPT,
I promise you it is coming.Robert Palmer has built an incredible business.
We're calling it the Mountain. Wedidn't come to climb the mountain, we
came to be the mountain. Eleventhousand agents now. In a couple of
year period, we were the secondlargest brokerage with in terms of number of

(19:11):
mega teams in the state of Florida, which is the state that we've been
in the longest. We are growingmassively. Our founder is pushing the right
buttons and this will be one hundredthousand plus agent company in a few years
with amazing resources. I'm so happy. I brought my team over and if
it's something you're thinking about doing,you can set up a consultation with me.
You can go to join the Duodot com and at that website you

(19:33):
can either register for our LPT realtorrally, you can register for the Duncan
Duo Team Career and I, oryou can set up a confidential consultation directly
with me and my team where we'regoing to talk to you about your real
estate business and the pros and consof joining LPT and how we can help
you get to the next level.It's a company that has revenue share,
stock options, incredible tools for agentsto get back to the grind. This

(19:59):
is the grind market. The easinessof real estate is gone. There are
going to be a lot of peoplegetting out. They might keep their license,
but they're going to go get anotherjob or a side gig and not
really be full time. There's goingto be a lot of people just not
being successful with the changes in themarket. You need the right tools around
you. You need the right growthoriented company, and that's what we believe
we have on my team and that'swhat we believe we have with LPT.

(20:21):
So I'd love to talk to youmore. If you're a realtor again,
you can simply go to join theduo dot com. I've got a couple
of other websites. If you're realtor, do Over Movement Duo, Doovermovement dot
com and then Andrew Duncan dot LPTdot com. Any of those websites,
you can get a ton of informationabout LPT and I would love the opportunity
to personally help guide you in thedirection of making the right move with your

(20:42):
real estate career. So a bigmistake home buyers are making with their mortgages
that can save one hundred dollars onehundreds of dollars a month is a simple
task, that one housing expert says. So rates are once again moving above
seven percent. They go above andbelow, and I think this past week
they finished a little bit below,but they but they bounce back and forth

(21:04):
between the high sixes and low sevensrecently, but slightly more than half of
recent buyers took out a mortgage saythey only gathered one quote from a lender.
It does not take that much toshop around, you know, there
are online lenders that offer things thatthey can't follow through with there are local
lenders that can match programs or bringyou down payment assistance or grants. And

(21:30):
I would strongly encourage you shopping aroundfor a mortgage. Okay, it's not
out of the realm of possibility topick the thing with the lowest rate to
save you hundreds or thousands of dollarsa month, and you can and do
that. Study from Freddie Mack foundthat borrows to receive the multiple lender rate
quotes, say between six hundred andtwelve hundred annually, on their home loans,

(21:51):
just like insurance, just like mortgages, just like anything else where you
have the ability to shop around,please talk to more than one lender.
Twenty two percent of recent home buyersgathered from two lenders, and what's amazing
is how many people didn't. Youreally do need to shop around and look.
I recommend some lenders that we workwith that do an incredible job for

(22:14):
our clients. But if you're notshopping around, then you can't unfortunately,
put them against each other, askthe questions to say, hey, they're
willing to do this, but youneed to be able to compare apples to
apples and not apples to oranges.So you know, we had something recently
where we had a client come inand say, hey, I got this
incredible rate. They're beating you guys'slender. This is such a better rate
for me. Well, when welooked at it, the ray really wasn't

(22:37):
any better. They had just bumpedup the person's closing costs in origination fees
and lender fees to a higher numberto buy the rate down, and in
fact, knowing the owner only plannedto be in that home a couple of
years, they were going to endup losing money by paying a lot more
in closing costs. Another common tacticof lenders that buyers make the mistake of
misunderstanding is they'll have one They'll havetwo different lenders send them a good faith

(23:02):
estimate, and the lenders might bethe same or slightly different on mortgage rates,
but one of the payments is dramaticallylower, and the buyer will do
We'll look at it and say,well, this payment is way lower than
these people, but the interest rateisn't that much different. What's going on
here? I'm going to go withthe lower person. Well, the lower
person simply quoted much lower than realistictaxes and insurance. We see it happen

(23:25):
all the time. They decide togo with this online lender that doesn't know
our local market, that doesn't knowwhat taxes and insurance are going to be,
doesn't average them, or doesn't doa good enough job of explaining to
the consumer that those things are guestimatesand that they need to go to the
property appraiser website and they need toget a direct insurance quote with their own

(23:45):
credit profile and their own deductibil deductiblesto be able to fine tune and have
those numbers be more accurate. Soconsumers will often go with the one that
shows the lower payment taxes insurance.Mortgage lender doesn't have anything to do with
either one of those things, okay. The taxes are determined by the county
or the city, depending on whereyou're at in the country. Here it's

(24:07):
the county and the insurance is determinedby the insurance carrier out to mortgage lender.
So we unfortunately see consumers pick thewrong lender sometimes. So if you
are going to shop lenders, pleasecompare apples apples, Okay, make sure
the closing costs and origination fees arecomparable before you compare the rate and don't
let a lender's quote of taxes andinsurance lead you to believe that those are

(24:33):
actual numbers other than just guesses fromthe lender look at. Only measure the
lenders by the listed mortgage payment andthe listed interest rate. Everything else is
a guess. Everything else you're gonnafind out they're wrong. On the insurance
they're high or low, generally they'relow. They're wrong. On the taxes,
they're high or low. Generally they'regonna show it low because it makes

(24:56):
the payment look lower and makes youthink. And then you get through the
process and you find out your payment'sfive hundred dollars more than the lender quoted
you because they didn't know what theywere doing with insurance and taxes. So
be very very careful when you doshop lenders that you're comparing apples to apples,
Ask the questions, Hey, whyis your rate lower? Okay,
why is your rate higher? Whyis why do you show this insurance number?

(25:18):
Where did you get these tax numbers? Ask the questions. Way too
many consumers look at that payment andthen they make the decision and say,
oh, I'm going with these guysbecause the payment's lower, And then you
find out that they kind of luredyou in with this fantasy land payment that
was geared around taxes and insurance thatare just not accurate. So again you're

(25:41):
listening to the Duncan Duo Real EstateShow when we aren't on air, make
sure to follow us at the DunkinDuo. Also go to Duncan Duo dot
com for your free home value estimateand on all the socials. Were on
Twitter, Instagram, YouTube, TikTok, Facebook, and so much more.
We're always talking about the real estatemarket on all our socials, so if
you want to stay up to datewith what is going on, please follow

(26:03):
us again at you know, atthe Duncan Duo. We're strying to hear
some rumors of prices softening in TampaBay. We really had a good run
where even when the market turned,we were starting to see, you know,
these these values still rising. Now, we weren't to see them rise

(26:26):
dramatically, but if you look atthe appreciation curve from the last year,
we've still seen appreciation in most monthsannually. I think a lot of people
were saying it was three four fivepercent appreciation, where at peak we were
seeing like thirty but Yahoo came outwith an article this week and said that
San Antonio and Austin, Texas,and Tampa, Florida are among the most

(26:48):
popular cities. That's all, thebiggest during the pandemic are now seeing some
price declines. The shift comes asthese markets recalibrate. Home sellers and home
builders are adding more listings. Justthere's this fewer Americans, we're starting to
see a little bit of a dropin relocation. So monthly home prices dropped
point one six percent in Tampa.So I want you to understand that.

(27:12):
Okay, that's over a one monthperiod. When I saw this article and
I saw the headline, I thoughtto myself, this is going to lead
people to think that there is somesort of underlying, massive problem in Tampa,
and it's simply just a little bitof cooling. Point one six percent

(27:32):
monthly drop in one month. Thatcould be a couple of I mean,
realistically, that could be a varietyof things where you know they're they're negligible
in their actual impact. It willbe interesting to see what happens the next
couple of months, now that we'rein the summer. Maybe interest rates offten
a little bit, but point onepercent. Point one six percent is really
not something to be super spooked about. So the cool downs again, we

(27:56):
were seeing We saw Tampa rise sixtypercent between twenty twenty and twenty twenty two,
so of course we're softening and we'renot at that same pace anymore.
But that doesn't mean we're seeing drasticdepreciation in Tampa. We're seeing some price
cuts, we're seeing prices soften alittle bit, We're seeing homes take a
little longer to sell. Our marketisn't as hot as it was a year

(28:17):
or two ago. But again,that doesn't mean it's crashing point one six
percent. To give you guys someperspective, this is my twentieth year in
real estate. I was full timein real estate during the Great Recession,
the short sell foreclosure years. Wewere seeing several percentage point drops monthly,
several percentage point drops. So pointone six percent is really more of a

(28:41):
stabilizing It's just a hit piece,and it sounds really great to say that
we're losing value. We are seeinghomes set on the market a little longer,
we are seeing inventory rise, andwe're seeing prices soften a little bit.
But point six percent is a monthis no reason to raise the red
flag or get panicked or spook aboutit. It could simply be a monthly

(29:03):
anomaly. When we've seen three orfour months in a row of that,
then that's a trend and that's somethingyou can hang your hat on. But
for the first time, we sawsome priced appreciation month over month, and
it's and it's realistically nothing to betoo spooked about until we've seen a few
months run of it and then wecan say it's a trend. But as
of right now, it's more ofa stabilizing thing where values rose so much
that they're just going to taper offa little bit and kind of stabilize for

(29:26):
a while and stay where they're at. And again, it remains to be
seen. It'll be interesting to seeas a few months come down the road,
but we're nowhere near a market crash. The reason why our real estate
market won't crash, I'm going togive you after the break, and there
are five of them, and Iwant you guys to understand this because some
of it is, you know,if you're a conspiracy theorist, some of

(29:51):
it could be argued as a littlebit of a of a governmental protection on
the real estate market. But we'renot going to see a market crash.
Are we seeing prices saw often?Are we seeing a stabilization of prices?
Did we see the first month ina really long time where we've seen depreciation.
Yes, But until it happens overa long period of time, it
could be simply a blurp on theradar. It doesn't mean it's a trend

(30:11):
until you've seen it a few monthsin a row. But I want to
talk to you next about why thereal estate market, not just in Tampa
Bay, but really why the realestate market anywhere residentially is not going to
crash based on what's going on.So, now that doesn't mean it's not
going to forever change. It doesn'tmean there isn't a lot of change going

(30:33):
on in real estate. It's justa crash means massive drop in real estate
values. Okay, massive loss ofequity, massive amounts of foreclosure. That's
what causes it. That will nothappen again. I don't believe it'll happen
in my lifetime no matter the economy. And I'm going to explain why after
a quick break, So stay tuned. On the other side, I'm going
to give you the main reasons whywe won't see a real estate crash nationally

(30:53):
or in Tampa Bay After a quickbreak here on the Duncan Duo Show,
So why aren't we going to seea real estate crash? Back here on
the Duncan Duo Shoe Show. I'mAndrew Duncan, and I get this question
a lot because people, you know, they see an article and said,
oh, Tampa values for the firsttime dropped over a month. Our market
is gonna crash. Look, everyone'sfearmongered today and everyone's motivated by fear,
and fear spreads more than faith.So I want to explain why the housing

(31:18):
market is not going to crash.First, it's not two thousand and eight.
Okay, You're not in a marketwhere people got adjustable rate mortgages,
they got liar loans, they weremerely speculating, and there was a lot
of bad debt out there. Okay. Is there some yes, nowhere near
the number of adjustable rate mortgages outthere now where mortgage is ballooned and it
caused this massive wave of foreclosure.Number another reason, over forty percent of

(31:44):
consumers the own real estate. Okayor no, excuse me, over forty
percent of the properties out there don'thave a mortgage. Okay, that's two
out of every five homes do nothave a mortgage. If someone doesn't have
a mortgage, it isn't going topromote promote a crash. Sixty two percent
of the people that do have mortgages. Okay, so not sixty two percent

(32:05):
of the market, but sixty twopercent of the people that have mortgages have
a rate at four percent or lowerbased on rental rates today. The reason
those homes are safe and won't endup being foreclosures because let's face it,
how the real estate market crashes thisforeclosures. Foreclosures bring values down. They
become the new Norman a neighborhood.They become the it factor that drives real
estate values down. Every single crashour real estate market has ever seen has

(32:30):
been driven by foreclosures. Four percentmortgage rates aren't going to foreclose because when
it gets desperate, those owners coulddownsize and move into something else and be
able to rent those for what thepayment is. Okay, they would be
able to cover their cost by rentingthe property. Okay, something that couldn't
have happened in the past. Whenduring the you know, the Great recession,

(32:52):
that wasn't the case. Number four, institutional investors. The majority of
the real estate being owned and boughtin a man Erica is being bought by
large hedge funds, large institutional companies. And some people would argue that the
government wants this because the government wantsyou to own nothing and enjoy it.
But institutional investors are buying up alot of the real estate. And guess

(33:15):
what, institutional investors, They're notgoing out and get mortgages. Okay,
they're not getting foreclosures. The otherreason is qualified buyers. There are enough
people specifically still moving to Tampa Bayfrom other parts of the country that see
Tampa Bay prices as attractive that canqualify and have a six figure salary and
can afford and qualify to buy house. So another thing that I want to

(33:35):
talk to you about is it relatesto foreclosures, and this is more of
a bigger economic picture than just outtrickles down to real estate. We won't
and I can't say we won't seeforeclosures because we will. The biggest risk
in foreclosures are the people that havebought in the last year or so,
where we haven't seen rising prices okay, and they have high rates and they've

(33:58):
overleveraged themselves. Those folks are thebiggest risk for foreclosure. That's where we
could see some foreclosure activity in ourmarket, but there's not enough of those
people to shock and drive prices down. Okay. So here's where the federal
government figured out about the real estatemarket and not one need to go through
what we went through before. Foreclosuresdramatically drop prices in neighborhoods. When that

(34:20):
foreclosure hits, it becomes a newcomp and it's a domino effect, and
banks and these institutional investors need tohold values up so they can continue to
loan. So now that homes getin default, there's a lot of tools
that the lender has to try andkeep people in their house. Because we
had such a record run up onprice, a lot of lenders will allow
people to kick the can down theroad until they fix their problems gone over

(34:45):
the years. When a bank justwants to jump on it and foreclosure,
a bank wants to keep that personin there and will let them kick the
can down the road and add themissed payments to the principal balance. And
if they've got fifty percent equity.The bank will let them stay in that
property for a really long time becausethey don't want to closed. And the
reason they don't want to foreclose isn'tit because that specific asset, but it's
because it drives the entire asset classdown. If they foreclose and drop values

(35:07):
in the neighborhood by one hundred grand, now they've eliminated the value on the
other properties in their neighborhood, andthey've eliminated their ability to loan and get
sales to happen. So banks,in essence, they are kind of in
cahoots. They want to not haveforeclosures, so they allow for parents that
kicks the can down the road.That allows people to stay and just kind
of eat their equity while they continueto live in the home. And the

(35:29):
other thing that happens is because somany of these institutional investors have relationships with
these banks, what ends up happeningwith bad debt or people that go behind
is a trading of assets they don'tever want it to get to turn into
a foreclosure towards recorded what that propertyis bought for. But you'll see these
bulk sales and these bulk trades thesebulk transactions and where people and mortgage lenders

(35:49):
will trade mortgages. Hey, letme give you my bad win. You
give me your bad ones, oryou give me a certain number of good
ones, and we'll take a certainnumber of your bad ones. And then
they work out deals with the homeownerto not actually ever show it as a
closure, but allow the homeowner todo a deed in lou and then they
can turn on that property around andrent it. A hedge fund doesn't put
it back on the market for sale. They just want to keep buying homes
and renting them. So the pointis is we're just not the inside track

(36:14):
to buy those assets from bank tobank, are from institutional investor to bank
prevents them from ever hitting the marketand driving that price down and showing an
actual sale. If a bank tradesassets or trades and mortgages, there's no
sale that gets recorded, there's noprice that get there was no price determined
by that it was one lender sellingalan to another lender. So they play

(36:34):
these shadow games in essence to keephomes from ever going to foreclosure. So
the idea that the real estate marketis going to crash, it just isn't
reality. That doesn't mean that therewon't be some ups and downs. It
doesn't mean there won't be some foreclosures, specifically the people that recently got seven
and eight percent mortgages and then overleverage themselves. But the crash just isn't
coming for all of those reasons.So hopefully that makes sense for you and
it helps you understand what is goingon in our government, helps you understand

(36:58):
what's going on in the mortgage andthe real lift state world. That will
continue to keep values from having massivedrops. Doesn't mean we won't see some
depreciation, but we won't see rampup foreclosures hitting the market for regular consumers
to have an opportunity to buy andregular consumers to see the price exchange of
what that property ends up selling atforeclosure. There just won't be enough of
them to drive the market down enoughto cause a crash. So hopefully that

(37:19):
makes sense. When we aren't onair, hit us up at the duncan
Duo dot com, follow us atthe Dunkin Duo all the socials and get
your home value estimate at dunkin Duodot com. Thanks so much for tuning
in, and have an awesome restof your Sunday, Tampa Bay