Episode Transcript
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Speaker 1 (00:04):
Good morning, and welcome to the Home Solutions Show. This
is your host Andy Keel with Epic Realty, and I
am joined today by Bob zach Meyer's special guest returning
to the show, and Jerry Sunt Good morning, guys.
Speaker 2 (00:19):
Morning Andy, morning.
Speaker 1 (00:21):
Well, we have a couple of announcements today's show, but
before we kick into that, I'd kind of just like
to start out with just a market update and what's
going on out there. So Jerry, can you give us
an update on what's happening in the world.
Speaker 3 (00:35):
Well, you know, it's funny this big this week. The
big news, of course, was the job support that came
out on Friday and was stronger than expected. Earlier in
the week we got reports that the GDP or grows
to meet. The domestic product for the first quarter of
the year came in negative, which is typically a sign
(00:56):
of the start of a recession. Now you have this
low out jobs number on Friday, but earlier in the
week saying the first quarter was weaker than expected, So
what is going on? And so I think there's these
cross currents that are happening in the economy, which and
how does that affect real estate? Well, it affects real
(01:16):
estate in the standpoint that real estate is based. One
of the key factors is consumer confidence. If consumers are
confidence in their jobs and their incomes and so forth
in the future, they buy, whether it be their new house,
whether it be a car or whatever. And I think
over the last few weeks, buyers have had their confidence shaken.
(01:40):
So even though this job's number that came out Friday
was strong, I think you're going to see weaker numbers
moving into the as we move into the summer months. Now,
if rates come down, I think that'll turn things around quickly.
But if rates stayed just under seven percent for the
(02:00):
next three or four months, I think you're going to
see the number or volume of units for real estate slow.
That doesn't mean values are going to come down or
anything else. It just means a number of units that
are actually sold each month will start to come down.
And I'm seeing it in my personal numbers of that.
You know, I track everything, and my leads, which are
you know, people that are looking to buy, you know,
(02:22):
in June or July have been has been slower the
last few weeks than I've seen over the last six months.
So maybe I'm a phenomenally. But from what I'm seeing,
it's at hunt people are are worried about the future.
So they're saying, maybe I'm not going to buy that
house now, and I'll put it off till third quarter
(02:45):
or later in the summer or end of the year
kind of thing. And people are just waiting to see
what happens. So that's my temperament. And again, if rates
come down, which I expect they will, I think we
may see lower rates by the summer, that may push
a lot of people into the into the market for buying,
you know, come late late summer, early early fall.
Speaker 1 (03:07):
Well I find that pretty interesting though, Jerry, that that's
really kind of the canary in the coal mine is
what is your future volume looking at? And that's the
first really strong indication we've had in quite some time
that that things are actually slowing down a little bit.
Speaker 3 (03:28):
So what's funny, Andy, if you look at April and
May numbers. For me personally, I'm coming off the two
best months as far as number of units closed in
volume of closing that I've closed in three years. So
I'm having a great April and a great May. And
it's like, well, wait a second, but then June is
(03:48):
going to be slower in July, which are normally the
busier months as compared to April and May. Yeah, I
mean it's it's a bit of a head scratcher.
Speaker 4 (03:56):
So well, how much of that you think has to
do with the stock market? And people just don't feel
as wealthy anymore because they lost a good chunk of
their and it's come back some, but it's still not
you know, this is what a lot of people mistakenly
think about the stock market. If it falls, like let's
just say you have a house worth two hundred thousand
and it falls by fifty percent, that takes the value
(04:17):
down to one hundred. Well, then if the market gives
fifty percent gain the next day, then now the house
isn't back to two hundred, it's that one fifty.
Speaker 2 (04:26):
So, you know, when you look.
Speaker 4 (04:28):
At the people that have a lot of their money
in the stock market, and I see just a lot
of my friends from high school and from work colleagues
and stuff posting on Facebook like what are they doing
to the economy? You know, Trump's killing the economy, and
it's like, no, this is a bubble that has been
going on far too long. Yes, that was lengthened by COVID,
(04:52):
and I don't think we're necessarily in a bubble, but
you know, in real estate, but you cannot have something
increase in value, you know, double digit returns year after
year after year. I mean over time that number is
somewhere between three and four. Possibly some markets. Five percent
a year is typical appreciation. When you have twenty five
(05:13):
percent in a year, or if you're like Boise, Idaho,
and he had two years in a row that was
fifty percent appreciated, I mean, figure that out with your
two hundred thousand dollars home. Fifty percent makes it worth
three hundred the next year, and then fifty percent more
on that is four fifty. So a house in Idaho
went you know, and Boise went from two hundred thousand
to four fifty and two years. And that, by any
(05:35):
stretch of the imagination, is not sustainable.
Speaker 3 (05:37):
And you're saying, I have to give it an anecdote there,
because okay, sure to say if you were to say,
not talk about housing, but explain, say I have an
asset class that went up by you know, fifty percent
in a year, two years in a row. The first
thing that came into my mind is you're talking about crypto,
not about.
Speaker 2 (05:55):
Real estate exactly.
Speaker 4 (05:57):
Yeah, but everybody thinks all fifty and fifty that it's
one hundred, No, fifty and fifty goes from two hundred
to four to fifty, So it's really one hundred and
twenty five percent because the second fifty percent is on
the gain of the first one. So and when it falls,
when things fall, just remember that dips in the market
are off of high prices going low, and gains on
(06:18):
the market are on low prices going high.
Speaker 2 (06:20):
And it's not the same number.
Speaker 3 (06:22):
Yeah.
Speaker 1 (06:22):
I found an article here that is actually from Zillow
Research dated April eighteenth, and it says Zillow's latest forecast
indicates the decline in home values and they're now saying
that they revised it up from previously a point six
percent decline in twenty twenty five to a point a
(06:43):
one point nine percent decline is their last revision. So
you know, Zillo is starting to predict that we're going
to have a little bit of a pullback here.
Speaker 3 (06:53):
So, I mean, everyone, when when you look at the
strength of the US economy, it is, you know, it
was this roaring bowl and it doesn't slow on a dime.
I think what has happened is again not to political
politicize things, but when you look at the press and
when we started talking about tariffs, everyone started throwing in
(07:15):
the recession. You know, oh, recession, recession. Look at the
stock market and we the doom and gloom that was
put in the press is is almost there to paralyze
buyers in a way. And it's the you know, when
you hear the administration talk, they're like, you got to
be patient. From what I understand, tariffs are going to
(07:39):
be resolved in the next couple of months. By June July,
this whole tariff thing will be over because all the
countries that were negotiating with that's happening as.
Speaker 2 (07:49):
We speak right and all their tariffs.
Speaker 4 (07:52):
I mean, that whole negotiation, that's what it really is,
is a negotiation. And it's what it has done is
it's gotten them to drop their tariffs on US goods.
So those are countries that are already charging a tariff
on our goods and it's an uneven playing field for
manufacturers in the United States.
Speaker 2 (08:09):
So basically, of course the.
Speaker 4 (08:10):
Jobs are going to be ramping up because we're driving
more more value home, and you know, we're gonna have
more jobs here to create more goods here, and so
everything isn't offshore to China or wherever else. And what's
really funny, I don't know if you guys saw the
article about Walmart and and Amazon this week. Oh yeah,
(08:30):
Walmart has adopted President Trump's approach and says, Okay, we're
going to try to you know, buy more American goods
and have more American goods for selling our on our website.
And Jeff Bezos at Amazon's did the opposite. He's like,
and there's actually if you go to buy something on Amazon,
there's actually a little a new, little little indicator of
(08:52):
how much of that price is tariff that you wouldn't
have paid before because most of the stuff on Amazon.
And so he's doubling down on China and Walmart is
an American company. He said, you know what, we should
go back to buy American. And I think it's going
to be very bullish long term for jobs. Short term,
anytime there's change, there's short term pain, but long term,
you know, it's just destruction.
Speaker 3 (09:14):
But again, the number that came out, you know on Friday,
the job support number where all the doom and gloom
over the last two to three weeks about the economy,
and then you have a job support that is a
solid number all across the board. And yes, the last
two months were revised lower by about fifty thousand jobs,
it still was a good number, and so it just
(09:36):
showed you the resilience of the US economy. But so
much is about perception and confidence, it really is. And
you know what I wish is that the situation with
tariffs gets over. We were able to finalize most of
the negotiations in the next thirty days and then it'll
be let's get back to normal, because I think what
(09:59):
we're going to find once we get through the doom
and gloom, there is going to be a rise in
the stock market, The economy is going to be doing well,
the jobs market's going to be doing well. You just
got to get through this noisy time.
Speaker 4 (10:13):
And Jerry, just from a real estate perspective, in Tucson,
we are approaching five thousand homes listed for sale on
the MLS.
Speaker 3 (10:21):
Wow, that's telling too right there.
Speaker 4 (10:23):
Because back in twenty twenty two we had one thousand
homes less than one thousand. We dipped under one thousand briefly,
and so right there is five hundred percent more homes
available for sale, and the numbers this year compared to
twenty two have been running about forty percent lower than
they were in twenty twenty two. So you have five
times more houses for sale and only sixty percent as
(10:46):
many buyers in the market. That is very telling, and
it has swung full full circle from a thirteen fourteen
year straight up buyer's market to depth or seller's market,
to now a very very strong buyer's market.
Speaker 3 (11:02):
It's a buyer's market that sellers don't know yet that
it's a buyer's.
Speaker 2 (11:05):
Market exactly exactly, And you have a.
Speaker 3 (11:08):
Direct example of that that happened this week.
Speaker 2 (11:11):
Yep.
Speaker 4 (11:12):
We actually had some clients from out of town past
clients they moved away but are coming back, and they
wrote an offer on a property and the owner of
the property had just done a twenty five thousand dollars
price reduction like two days earlier. So they wrote an offer,
and when you ran the comps, it wasn't overpriced, for
(11:34):
the house was overpriced and it was over way overpriced
before and still according to COMPS, is overpriced. So they
may offer ten thousand less than the asking price, and
the people ignored the offer, didn't respond to it. And
when you're negotiating, silence is by far the best negotiating.
Speaker 2 (11:51):
Tool you have.
Speaker 4 (11:54):
So then they then we called the agent and talked
to him and go, oh, that includes all the furniture. Well,
then the furniture they said, okay, well, if it includes
the furniture, then it is worth the amount you're asking.
So they up the offer to the sale price that
they were asking. But then the counteroffer comes back from
the seller the sign instead of silence, and it was
(12:14):
I want you to pay the real estate agent on
your side, and also I want eleven thousand dollars more
than the asking price for the property. So basically that
seller is trying to get their twenty five thousand dollars
price reduction back.
Speaker 1 (12:27):
Well, and with that, we are coming up on a
break and we will be right back with the Home
Solutions Show on canistein Hi. And welcome back to the
Home Solutions Show. This is your host, Andy Keel with
Epic Realty and I can be reached at five two
zero five three nine nine five nine one and I'm
(12:49):
joined again with Jerry Sunt and Bob zach Myierk. Guys,
would you like to share your information for the audience please?
Speaker 2 (12:56):
Yes.
Speaker 3 (12:57):
My phone number is five to zero three seven zero
nine five seven six.
Speaker 2 (13:02):
And I'm Bob Zachmeyer.
Speaker 4 (13:04):
Five two zero three one four are sold and Andy,
let's continue with this vein of Jerry. You had a
comment right toward the end that I think it's worth
expanding on.
Speaker 3 (13:14):
Yeah. No, no, no, I mean when you have a disconnect
in the market where I think we clearly are moving
towards a buyer's market, and we're in that camp. But
if sellers aren't up to speed yet, what's going to happen.
That's just going to mean homes are going to be
sitting on the market longer. So you're going to see
right now, I think the average time on market is
(13:35):
about thirty one days from last month, maybe thirty two days.
That probably will expand out to forty to fifty days
and until everyone buyers and sellers get in tuned with
what's happening in the market.
Speaker 4 (13:48):
I want to clarify something there. That number you just
cited is correct. However, it's thirty days on market for
the homes that's sold. Right there's a whole bunch of
houses that aren't selling, that aren't getting offers, that aren't
even getting showings, that have way more days on market
than that.
Speaker 1 (14:04):
I actually wanted to clarify something too, Bob. You mentioned
that we're at five thousand homes on the market. I
believe was the number putting that into historic perspective. As
I remember looking at the data a couple months ago,
as we got into that five thousand number, we were
just edging into a buyer's market, which is really when
(14:26):
we were talking about about five months or so of inventory.
And I think that five thousand number puts us pretty
squarely into that category. Could you kind of fill us
in on that?
Speaker 2 (14:39):
Sure? So there's a few variables.
Speaker 4 (14:41):
I mean, if you look back into real estate data,
I've got, you know, MLS market data all the way
back to nineteen eighty two, and there were over two
hundred homes listed for sale in nineteen eighty two. And
you know what was the population of Tucson forty three
years ago. It's a lot less than it is now
five thousand back then. And then also what was the
(15:03):
reach of the Tucson MLS Because right now the MLS
numbers go all the way down to Nogallas, they go
all the way up to Globe, they go over to
past Saint David and Benson and all the way out
to Douglas now and so there's and almost all the
way to actually through Aho. So we are covering extremely way, way,
(15:23):
way more territory than we used to. And the number
is still five thousand, you know, and we haven't quite
hit it yet. It's getting up into the last I
saw it, and the numbers for this month I haven't
come out for last month, I should say now that
we're in May. But I think what's normal is about
to change. And we've been spoiled ever since really two
(15:45):
thousand and nine when all the houses came off.
Speaker 2 (15:47):
The market for airbnbs.
Speaker 4 (15:49):
That's what created the shortage of houses and the Great Recession.
All the hedge funds that came in and bought up
all the houses at bargain basement prices, you know, they
have basically turned them into rentals, so that diminished the supply.
So we're finally getting back. What's happening is a lot
of those airbnbs aren't being filled enough like they used
(16:11):
to be, and they're being converted back into long term
rentals and placed on the market for sale. So we're
finally seeing the return of those properties. And plus you
have a lot of people that are locked in on
their house. They couldn't afford to buy their own home
back at today's prices and today's interest rates, so there's
a shortage that way. But people aren't traveling. I think
(16:33):
the economy from the last four years is finally taking
hold and people are having to cut corners. And if
you look at a family's discretionable income, by far the
largest portion of that discretionary income is the summer vacation.
And people aren't traveling as much. They're choosing stay at
home options and cheaper driving vacations, and I think that's
(16:57):
weighing very heavily on the airbnbs, and I think that's
where this extra supply of houses is coming. And from
a market standpoint, it's an awesome thing. We're getting back
to a balanced market. Balance is good.
Speaker 3 (17:09):
So you know, guys, one thing I have noticed is,
and this started happening last year, is I get a
lot of calls for equity lines or fixed straight seconds,
much more so than ever in history, and the reason
being is people don't want to get rid of their
three percent mortgage rate, but they want to take tap
(17:31):
into the equity they have in their house. Now. Fixed
straight seconds are great alternative because their rates are in
the sevens Versus if you do an equity line of
credit which floats with prime rate, that is going to
be somewhere in the eight to eight and a half range, right, yep.
So the fixed rate second is really a great product.
But the conversations when people call me, it's almost like
(17:54):
people are a bit embarrassed. You know. They call say, oh,
I'm thinking about doing a second on my home because
I need to take out money for a business deal
i'm doing or this or that, and then I, you know,
we talk about it to see what option works best
for them, and then they you know, I pull credit
and I'm like, oh, wow, hey there is You've got
a lot of credit card debt that you've amassed here.
(18:14):
And it's like, what are you planning on doing with that? Oh?
I may take some of that you know second that
I'm doing and pay some of that off. It's like, well,
you don't qualify unless you pay it all off. And
then it's like they're free. Oh, my goal is to
pay this all that stuff off. I want to pay
everything off, get it out of my world quickly. And
it's like, if I add up to your credit card payments,
(18:35):
you're currently paying now, you're paying three grand in credit
cards every month, where the second, if you do a
fixed rate second or an equity line, you're going to
be paying eight hundred bucks. Right, And they just it's
like they were they open up at that point in time, like, yes,
my whole goal is I want to pay off all
this debt. And I just say, how many people are
living with that kind of debt on their back? Because
(18:57):
I'm getting a lot of calls for that, and it's
it's like freeing to them, like get this monkey off
my back as quickly as possible. So I think there's
a lot of people who are living in that situation
and which again goes back to them kind of being
paralyzed to be able to spend money because it's money
they don't have anymore because they all their credit cards.
Speaker 4 (19:19):
And Jerry, you know, it's been said the banks want
to give you money when you don't need it, but
when you need it, they don't want.
Speaker 2 (19:23):
To do the money.
Speaker 3 (19:24):
That's right.
Speaker 4 (19:25):
So just to be clear, if somebody does have a
bunch of that debt. Just because they have all this
credit card debt doesn't mean they can't get a loan.
It just means that at the closing table that has
to be satisfied. Can you use the funds from the
loan to satisfy the debt? That's what I thought. So
you can actually at the closing table make checks payable
from the title company to that credit card company.
Speaker 2 (19:46):
Pay this off, pay that off, pay that.
Speaker 4 (19:48):
Off, and then it's if you never had the debt.
So a lot of people think they have to pay
it off before they're eligible for the loan.
Speaker 3 (19:54):
No, it's paid off at closing, and so it's it's freeing.
And then, you know, the typical feedback is, well, how
quickly can I get this money? You know, the conversation starts, Oh,
I don't need it. Maybe I don't need it for
a couple months, and then by the at the end
of the conversation, it's like, can you close in two weeks?
You know, I want to get this off my books now.
(20:15):
So it is kind of kind of funny, but I
do feel a lot of us are living in that
situation and it's paralyzing and I just wonder how much
of that is you know, the average American is living
with that kind of debt because it may bee people
are one step close, you know, one step away from
(20:37):
I don't know, I wouldn't say bankruptcy, but one step
away from you know, missing payments on credit cards or
one paycheck away from that. And hey, if you've got
the equity in your house, use it. Don't get rid
of that three percent mortgage, but pay.
Speaker 4 (20:50):
I wants you go late on a payment, then you
lose the chance to finance that house for a year.
Speaker 3 (20:55):
Exactly.
Speaker 4 (20:55):
A guys, can I jump in here, I've got to
run to another appointment?
Speaker 2 (20:59):
Can I make one click?
Speaker 1 (20:59):
A yes?
Speaker 4 (21:02):
So, as Jerry alluded to it at the start of
the show, we have been on the air, and this
is our fourteenth year of broadcasting this show, and I
am slowing things way down. And I'm not retiring. I
mean old real estate agents never retire, They just slow down.
But anyway, Andy has taken this over and it just
(21:23):
I'll tell you, doing a radio show takes a lot
of time. I mean, these segments that you listen to,
they they are timed on and they play on a
computer that has to be to the second. And so
not only do you pull data to talk about on
the show, then you spend time recording the show. Then
you turn around and you have to edit the show.
And sometimes Andy can attest to this, sometimes you'll spend
four or five hours editing the segments to get things back.
(21:47):
So it ended, you know, being up an all day project.
And what we've talked about a lot a lot and
we finally have taken action they're going to do it
is we actually are going to have roll this show
into a podcast and that podcast will be available where
you can listen to it on your favorite Apple, Spotify,
(22:07):
Google Play, whatever you listen to podcasts on, and we
will have that available. It'll actually be hosted on my
existing website, nocarry dot com. But you can so just
be watching in the coming weeks that we will have
that show available and you can listen to it in
your car and at your own leisure where you don't
have to sit by the radio every Sunday. And you know,
(22:29):
KNST is in the business of selling airtime, so they
are going to you know, sell it to whoever wants
to take over the show. And I can't express you know,
I don't know anything about who that will be or anything,
but just we've built a lot of trust with this
program between Jerry and Andy and I over the over
the last fourteen years, and I want to transfer that
(22:51):
trust over to the webinar that we do a podcast
and it's going to remain the Home Solutions Po podcast
as we've had the name of the radio show. And
we'll get more information in the coming weeks. But just
if you want to write it down now in case
we you know, you miss a couple of shows, you're
going to be gone if you go to notecarry dot
(23:12):
com that is my coaching site, and there will be
a link on there for free access to listen to
that podcast. So note carry N O T E C
A R R Y dot com and that will be
the best way to access it.
Speaker 1 (23:27):
Yep. And then guys, would you mind sharing your phone
numbers one more time as we're coming up on the
end of the segment.
Speaker 2 (23:34):
Sure, Bob, Sure, go ahead.
Speaker 4 (23:37):
Jerry as Bob Zachmeier five to zero three one four
sold And Jerry.
Speaker 3 (23:45):
My number is five two zero three seven zero nine
seven six.
Speaker 1 (23:51):
And this is Andy Keel with Epic Realty. My number
is five two zero, five three nine nine one. And
although we're coming up to the end of this almost
fifteen year run on the show again, please take the
notes on and join us on our podcast coming up.
(24:13):
It'll be on Bob's Siteanoecarrie dot com and we will
continue doing this in the form of a podcast coming up.
So it's been truly a joy doing this show for
about the last year. And Bob and Jerry, you've been
doing this a long time prior to me, so.
Speaker 2 (24:31):
Twenty twelve January twenty twelve we started.
Speaker 1 (24:34):
Yeah, wow, it's it's been quite a run. So this
isn't the last show. We'll be doing a few more here,
but we are coming up closer to the end. And
with that, we are coming up on a break. So
this is Andy Keel with the Home Solutions Show on
KNST and we will be right back. Good morning, and
welcome back to the Home Solutions Show. I'm joined again
(24:56):
with Jerry sent Cross Country Mortgage and Bob had to
run off tune upppointment for the last half of the show,
but we were talking a little bit about interest rates
on the last break. Jerry I wanted to kind of
continue on that path. Well, one of the thoughts that
I had is as we see the market shifting a
(25:16):
little bit towards more of a buyer's market, which of
course means that there should be some better opportunities for
buyers out there. I've noticed something that I haven't seen
in a good number of years, and that is what's
referred to as a short sale, and I'm starting to
see those pop back up in a little bit more frequency.
(25:38):
And for those of you out there that aren't familiar
with what a short sale is, that is basically when
the market it's usually when the market ticks down a
little bit, not always, when a seller of a house
gets into trouble, they get under water and they need
to go back to the lender and ask the lender
to take less than what's oh, so they can sell
(26:01):
the house, generally because they're behind on payments and such
and ran into some financial difficulty.
Speaker 3 (26:07):
And Andy, it's funny because you know, before twenty two
thousand and eight, I had never heard the term short sale.
Before you know that it wasn't even part of my vocabulary,
and then by two thousand and eight, you know, it
was one of the most common words in my in
my vocabulary, and it is funny, and now we're starting
(26:28):
to see, you know, a rise in short sales. It's
it's interesting, right. I mean again, immediately people love to
jump and you know, oh there is there housing crash coming.
There is not a housing crash coming. There is more equity.
People have more equity in their more equity in their
(26:50):
homes than they've ever had in history. So it is
just the fact that short sales are starting to come
online a little bit more are probably people that bought
in the last few years. But for the most part,
it is that a housing crash is not coming. In fact,
I predict that housing is going to increase on a
percentage basis later this year as rates start to fall.
Speaker 1 (27:15):
I agree with you on that, yere don't. I don't
see any kind of gloom and doom. I don't think
we're heading for any kind of serious correction or anything
like that. I do think we're probably going to slow down.
We might see some single digit pullbacks and pricing and such.
I think we are. I'm really starting to feel that
we're heading in towards a buyer's market, and the prices
(27:37):
might get a little bit soft, But I don't think
it's going to be anything like a free fall or
anything like that. We still have a very big supply
problem in this country in general, but also in Tucson.
I completely agree. I don't think we're going to see
any kind of gloom and doom or a big fearful thing,
but we are getting some softness out there.
Speaker 3 (27:57):
So yeah, no, I mean, there is a little bit
of a part of this happened in the last couple
weeks and months is simply because rates have not fallen.
Everyone and when I say everyone, all of Wall Street economists,
most people have been predicting rates are going to come
down since late twenty twenty two, and we've all been wrong.
(28:19):
But there does see seem to be a momentum shift
that rates will start coming down later this year. And
early predictions, you know, even going back to December and
January of twenty twenty five, is that we would see
lower rates by May June. But then you have this
jobs data that comes out Friday that was stronger than expected.
(28:41):
So mortgage rates are just hanging in there right below
seven percent, six point eight seven five. When are they
going to six point five to six which is kind
of what people the mortgage bankers Association, the National Association
of Realators. Some of the big banks like Wells, Fargo,
and Chase are all predicted rates to end the year
(29:01):
right around six percent for a conventional thirty year fixed
And when will that When will that you know slides
start to happen. I personally believe it's going to start
happening in July. I think, you know, again, I think
a lot of people got very spooked in in April
with the stock market volatility and with tariffs and the
(29:22):
news jumping on it like, oh, everything's going to come
more expensive. So now people are worried that what, you know,
everything that they're going to be buying in the future
is going to cost more money. So they just freeze
because they're they're concerned, and confidence gets shook. And that's
if this continues for another thirty to sixty days, what's
(29:43):
going to happen is you're going to see money plow
into US treasuries and that will bring mortgage rates down.
Speaker 2 (29:49):
Yeah.
Speaker 1 (29:50):
I'm still kind of scratching my head to your point, Jerry.
On Friday, the some of the market data came out
and the jobs number was good, but it's almost like
the market shrugged off this point three percent decline in
the GDP, like just wave it on tariffs and shrugged
it off completely, And that to me was kind of
(30:11):
a shocking number.
Speaker 3 (30:13):
Yeah, no, it's and there are specific points about that,
and I can look up as to why the GDP
did shrink in the first quarter. But again, the economy
overall is strong, and you know there is employment is
you know, you're our unemployment rates four point two. Now,
(30:35):
I from what I from what I hear is that
if you lose a job, or if you quit and
you try and look for a new job, it's much
more difficult. But if you're staying at your current job,
things are solid. As we work through this tariff situation,
and again, hopefully it all ends in the next thirty
to sixty days, because if it goes beyond that, then
(30:56):
I think you're going to see because if consumers really
tighten their belt, that's the way I believe they are
doing now, if that continues for thirty to sixty days,
that will have a huge ripple effect, not throughout the
US economy, but through the world economies.
Speaker 1 (31:11):
Yeah, I wanted to ask you another question that was
brought up by one of the listeners. This week. I've
been hearing some things that I haven't had a whole
lot of chance to dig into it. That some of
the changes that this administration is having on FHA loans
in particular. But what has changed out there insofar as
(31:32):
FHA VA and conventional loans with this administration, that's worth mentioning. Jerry.
Speaker 3 (31:38):
You know, there have not been many changes. There's little
tweets all the time, but it is there's no major changes.
I mean, I think the big one for a lot
of people asked to do with student loans and how
student loans will be calculated in how the debts will
be you know, how a lender is supposed to calculate that,
(31:59):
and those changes did happen not too long ago, how
those debts are supposed to be calculated when someone's buying
a house. But other than that, I don't see many changes.
Speaker 1 (32:09):
Andy, Okay, that's kind of interesting. I've been hearing some things,
but I hadn't validated it one way or the other.
So you're not really seeing any rule changes with Fitch eate.
Speaker 3 (32:21):
No now, I mean it's still three and a half
percent down and the dead TA Income Ray show is
still you can go up to fifty seven, so I
haven't seen many changes on that front now. But going
back to interest rates, it is frustrating that rates are
still hanging in there right below seven percent, and we
(32:41):
think shoot rates should be lower than that now. But
I do think we are right on the doorstep of
rates starting to come down, and I think the data
will follow, and it may take thirty to sixty days,
but as the data starts to follow, you know, when
(33:01):
we get into late May and June, it's going to
you know, right now, I think the Federal Reserve is
expected to cut twice this year the second half of
the year. Are they going to push one of those
cuts up if we see unemployment really increase, or if
you know, or if we start to see massive shifts
(33:23):
and worry about the economy. I just think we're going
to see lower rates, but it may take through the
end of summer, which would be a great refinance opportunity
for anyone who's bought in the last two years. Yeah.
Speaker 1 (33:36):
So what are we looking at for current rates with
FHA and v A during Yeah, about.
Speaker 3 (33:41):
Six point twenty five to six point six point four,
So where a conventional rate is at six point eight
seventy five six point nine as of the move on Friday.
So again it's it's when you read in the newspapers
about oh, interest rates they're looking with stuff that's printed
(34:01):
is typically a week old. You really need to go
to websitesite mortgage news daily, things like that to get
you know, up to the minute or up to the
day where interest rates are because a lot of the
stuff that's printed in the news is from data from
a week ago. And again, rates moved higher on Friday
because of this job support that came in really strong.
Speaker 1 (34:25):
I've got a question for a Jerry. When do you
typically do a rate lock for a customer. Do you
generally just do that pretty much as soon as they're
in the and ready to go, or do you ever.
Speaker 3 (34:38):
Try to Yeah? Great, great question, And I mean it's
really up to the borrow or the consumer themselves of
when they want to lock the rate. But a lot
of times barbers say, well, I'm not the expert. You
tell me when to lock the rate, and I like
to lock rates, you know, at thirty to forty five
days out. If the market gets really volatile, I would
(35:00):
lock at application right when they go under contract. But
if it seems like rates are improving, you know, let's
let's float for a little bit and hopefully we'll catch
it on the downside and get a lower interest rate.
So it just depends on the situation. But I always
ask a borrower do you want to lock or not?
And if you want to float, here the risks. Here's
(35:21):
my opinion of what we're going to see over the
next thirty to sixty days, and you know, I'll let
them decide what they want to do.
Speaker 1 (35:29):
I'm a little curious. How often do you have a
buyer that a borrower that wants to let it float?
And are they usually pretty astute with locking it in
or would they have been better off just say lock
it now?
Speaker 3 (35:42):
Well? Yeah, I mean that's the part about data that
you know, we we we get instantaneously from our phones
and from the you know, our computers and so forth.
Everyone becomes an expert in everything. And the reality it
is is that, oh, rates are coming down. I don't know.
I I tell people it's been really volatile the last
(36:02):
few months. You know, you could be at six point six,
two five, you could be at seven. It all depends
on I mean, especially with tariffs being announced, we saw
rates at one point jump up to north of seven
and they were down as low as six point six
two five. We had a half a percent swing in
a week. When things are that volatile, you got to
(36:23):
lock in and uh and just hey, we'll refinance when
rates are lower later this year, because who knew if
it rates were going to go higher than where they did.
Speaker 1 (36:33):
Yeah, And that's kind of my philosophy is, you know,
if you can afford it now, why risk it. Just
lock the rate and don't try to be greedy and
get a you know, an eighth of a percent better
or something when it could go just as easily the
other way. So probably not a good game to play.
But with that, we are coming up on another break.
This is Andy Keel with the Home Solutions Show and
(36:55):
we will be right back. Good morning, and welcome back
to the Home Solutions Show. This is your host, Andy
Keel with Epic Realty, and I'm joined again by Jerry
Sunt with Cross Country Mortgage. And before we went into
the break, we were talking a little bit about interest
(37:16):
rates economy that kind of sparked something that came up
this week for me is a house that we had
just recently purchased from a seller that I don't know
the full details, but it was a house that they
wanted to sell because they had a roof that was
going bad, and they had a fair amount of equity
(37:39):
in the property and just it was time for them
to move on. To a bit of my shock and surprise,
they were working with one of the agents on my
team to buy another property and then at the last
minute they decided to change their mind and said, no,
We're going to hold off in rent for a year.
(37:59):
I kind of wanted to address that because the feeling
is that they thought it would be better to rent
because their belief was Again I think they were talking
about the market pulling back and hoping to wait a
year and getting better pricing in a year. So I'd
like to talk a little bit about the risks and
repercussions of timing the market and what your thoughts are
(38:22):
on that.
Speaker 3 (38:22):
Yeah, again, I go back to the consumer confidence. When
people get nervous, they do not spend money, they tighten
their belt and they freeze. And I think so much
of what has come out over the last three weeks
from the press, and again I'm not politicizing this. I
just people get nervous when the stock market is a
(38:44):
roller coaster when you know, oh, tariffs are going to
cause massive run up in inflation. No it's not. It'll
all be over in thirty days. This is going to
be great for the economy long long term. When people
start hearing all these noises from different different angles, I
think they just freeze and the result is, you know,
(39:05):
I'm just gonna rent for another year because I don't
know if now's the time. Really, If mortgage rates are
lower than where they are now, I think that would
cut through a lot of that confidence and would help
build more confidence. That's why I think we're going to
see in about a few months, I think we're going
to see lower interest rates, which is really going to
(39:25):
cause a lot of demand for housing. So people that
sign a new lease now I think are going to
be are going to be regretting that by July August.
That's my two cents, But who knows.
Speaker 1 (39:40):
Yeah, it always makes me a little bit nervous when
when I hear that type of thing, because it's market
timing rarely works out for the person doing the timing,
especially when you're trying to predict something a year into
the future. I mean, if you're in the stock market
and trying to predict something minutes into the future. You
can't even do that, let alone well.
Speaker 3 (40:00):
And I always tell people that because people ask me
where are mortgage rate's going to be in a year's time?
And then I say, you know, if I was really
good at these predictions, i'd be working on Wall Street.
Speaker 1 (40:09):
Yeah, because I mean, if you knew what was going
to happen even a few seconds, you could be very,
very wealthy. You'd be training Marcus instead of trying to
make predictions on a radio show.
Speaker 3 (40:20):
No, but you know, I mean, this is what we
do here to help with people that have anxiety about
buying right now. And it's like, ooh, you know, seem
the market seems a little you know, there's a lot
of there's some volatility, Mortgage rates haven't dropped, you have
what should I do? I'm like, you know, if you
buy now, we will as long as the loan amounts
over two hundred and fifty thousand, we are going to
(40:43):
be paying the lender fees and the title fees for
your refinance when rates actually fall, and whether that's later
this year into twenty twenty six, we're going to do
that for you. So we have your back. We're going
to take care of you, even though your your rate
may be higher in the short term, you know, in
then over the next six months or something like that.
Because rates are hired today, we will take care of
(41:05):
you and get you that lower rate when rates do
fall later this year into twenty twenty six. And the
momentum of people predicting that rates will be lowered by
the end of this year is overwhelmingly that resemblingly all
in the same page that rates are going to be
closer to six percent by the end of the year.
Speaker 1 (41:25):
Yeah. I think that's part of the point that I
wanted to make is for anyone that's, you know, thinking
is now a good time to buy or not, the
question probably should be more along the lines, especially if
you're talking about a primary residence. Can I afford the
payment now? And that should probably be your decision maker.
(41:45):
From an investment perspective, it's a little bit different because
now we're looking at rates of return and certain calculations
like that, so there's a little bit more going into
the calculations. I mean, when we're buying an investment property,
we want to make sure sure that we're going to
hit a rate of return in a monthly income to
justify the placement. But you know, when I see someone
(42:08):
that's holding off buying a primary resident because they're afraid
that the market might pull back, I'm almost afraid for
the opposite of that is, what if it doesn't pull back?
Speaker 3 (42:17):
Are you correct?
Speaker 1 (42:18):
Are you going to be anchored to Well? I could
have bought this house at two point fifty and now
you're just literally not going to buy anything for the
next number of years because you you anchored yourself to
a price and missed it.
Speaker 2 (42:31):
You know.
Speaker 3 (42:31):
And it's a great point because you go back just
to the basics of what is my house? By buy
a primary residence, what will it appreciate over time? In
PMA County houses have appreciated three point seven percent going
back to World War Two. If you bank on that,
which is about as much as you can, you know,
history tells us a lot. If that is your calculation,
(42:54):
a three hundred thousand dollars home today will be worth
three fifty and five years using that same calculation. By
the way, if that's what you use, you will not
be disappointed, because that is what will happen if we
go back to normalcies. And what is expected that is
a good benchmark. If you're looking for a ten percent
(43:17):
return per year on your house, you're going to be
disappointed because that's not sustainable.
Speaker 1 (43:23):
Agreed. And some of us got a little bit too
spoiled here in the last few years. But what we've
seen is just to your point, it's it really is
just not sustainable.
Speaker 3 (43:36):
It just isn't And that is so you know, I
do believe that that in the month of April, we
will when it comes out, when the data comes out,
which we'll see later this month and into June, that
the number of purchases locally in nationwide I think is
going to slow down and we're going to see that
really in the June numbers. This will be one of
(43:59):
the predictors for mortgage rates to fall. And as mortgage
rates fall, you will see more buyers jump into the market,
which will push up prices and push up demand. And
you know, unfortunately, I think your friend is going to
be kicking themselves at the end of the year, going, shoot,
I shouldn't have waited, I should have bought. But who knows?
(44:20):
Right time will tell the right answer?
Speaker 1 (44:22):
Yeah, I mean, and then too, you're locked into a
year lease. So I mean, if they if they do
that the way I would suspect they do it, they're
going to wait the full year and then here we
are in the June market next year. So are we
timing it for the worst possible time a year from
now too? So that's another factor to keep in mind.
(44:44):
Or I guess you could start the process maybe in
the winter time and knowing you're going to be moving,
but again, in.
Speaker 3 (44:50):
The winter time is actually one of the best times
of a year to buy exactly if your buyers are
in the market exactly.
Speaker 1 (44:57):
So I think what we're trying to prove here is
that none of us really know what's going to happen.
I know I'm still in the market to buy investment
properties at the right price. I don't personally have any
kind of gloom and doom feeling like, oh gosh, I'm
going to stop buying it, the market's going to crash
or anything like that. I feel like it might be
(45:17):
a little soft here. And we talked about the previous
segments of the show, You're seeing your business your leads
kind of slowed down a little bit, so there's some
indications that we were heading into a buyer's market were
possibly even Like we said earlier, Zillow is predicting a
bit of a decline. But does that mean it's a
(45:39):
good time to buy. Well, maybe it still is, and
perhaps that's where the opportunity is is the next couple
of months.
Speaker 3 (45:47):
Well, and I think it'll be. You know, when Bob
was talking about his clients and that the sellers were
just so unrealistic about the market, and it sounds like
they were almost living in twenty twenty one, you know,
where you know there's ten buyers and you can, you know,
charge whatever you want to for the sale of the
(46:08):
home and expect people are going to line up out
the door to pay for it. That is not this market.
Speaker 1 (46:15):
No, And Bob hit the nail on the head with
that one. I think there's a lot of sellers out
there that still believe that we are in a seller's market,
and that's really not the case from what I'm seeing.
If it's a very desirable house and it's priced right,
sure it'll probably sell fairly quickly. But we're not in
the days of throw it on the market at any
(46:37):
price and it'll sell. That's just not the way the
market's reacting. Right now, we're seeing a fair number of sellers,
and from my side of the world with investments, I'm
seeing a lot of wholesalers that are offering out I mean,
my phone just won't stop ringing during the days. I'm
getting calls left and right for Hey, do you want
(46:59):
to buy this house? You want to buy that house?
Do you want to buy this property? This property? And
the numbers that they're throwing out there are just so
unrealistic most of the time that it's like, can anybody
tell these guys that we've slowed down?
Speaker 3 (47:13):
Yeah? Well too, funny, Well, you know again, it'll be
as we move forward. One of the things that you
and I were talking about on the break is what
we're one of the big changes that's happening and for
guidelines for mortgages and is that going to cause us
slow down for people being able to qualify? A big
one is student loans. Now this has not been decided,
(47:34):
it's just being debated on Capitol Hill, but there is
debates about having shorter term repayment for student loans. And
if that's the case, a lot of people that have
student loans, if it passed. It has not passed, but
if it does pass, it would make the payment on
those student loans that much greater, which means a buyer
(47:55):
would could afford less than a house. Now, I don't
think this is going to have a big impact on
how housing, but it's one of those noisy topics you
hear about or read about in the news, and you know,
going on to that and and I just want to
kind of we talked about this and Bob made the announcement,
but you know, I think it goes repeating that we
are going to be ending the show after fourteen years
(48:18):
over you know, Memorial Day weekend here in a few
weeks and moving over to a podcast format. So we
will talk more about that next week and the following week,
but just want to let everyone know that, you know,
we're going to be changing formats and moving moving into
the podcast world.
Speaker 1 (48:35):
Yep. So we'll have more on that in the next
couple of weeks. And with that we are coming up
on the end of the show. So again, thanks for
joining us on this Sunday. This is Andy Keel and
Jerry sent with the Home Solutions Show. Thank you
Good morning, and welcome to the Home Solutions Show. This
is your host Andy Keel with Epic Realty, and I
am joined today by Bob zach Meyer's special guest returning
to the show, and Jerry Sunt Good morning, guys.
Speaker 2 (00:19):
Morning Andy, morning.
Speaker 1 (00:21):
Well, we have a couple of announcements today's show, but
before we kick into that, I'd kind of just like
to start out with just a market update and what's
going on out there. So Jerry, can you give us
an update on what's happening in the world.
Speaker 3 (00:35):
Well, you know, it's funny this big this week. The
big news, of course, was the job support that came
out on Friday and was stronger than expected. Earlier in
the week we got reports that the GDP or grows
to meet. The domestic product for the first quarter of
the year came in negative, which is typically a sign
(00:56):
of the start of a recession. Now you have this
low out jobs number on Friday, but earlier in the
week saying the first quarter was weaker than expected, So
what is going on? And so I think there's these
cross currents that are happening in the economy, which and
how does that affect real estate? Well, it affects real
(01:16):
estate in the standpoint that real estate is based. One
of the key factors is consumer confidence. If consumers are
confidence in their jobs and their incomes and so forth
in the future, they buy, whether it be their new house,
whether it be a car or whatever. And I think
over the last few weeks, buyers have had their confidence shaken.
(01:40):
So even though this job's number that came out Friday
was strong, I think you're going to see weaker numbers
moving into the as we move into the summer months. Now,
if rates come down, I think that'll turn things around quickly.
But if rates stayed just under seven percent for the
(02:00):
next three or four months, I think you're going to
see the number or volume of units for real estate slow.
That doesn't mean values are going to come down or
anything else. It just means a number of units that
are actually sold each month will start to come down.
And I'm seeing it in my personal numbers of that.
You know, I track everything, and my leads, which are
you know, people that are looking to buy, you know,
(02:22):
in June or July have been has been slower the
last few weeks than I've seen over the last six months.
So maybe I'm a phenomenally. But from what I'm seeing,
it's at hunt people are are worried about the future.
So they're saying, maybe I'm not going to buy that
house now, and I'll put it off till third quarter
(02:45):
or later in the summer or end of the year
kind of thing. And people are just waiting to see
what happens. So that's my temperament. And again, if rates
come down, which I expect they will, I think we
may see lower rates by the summer, that may push
a lot of people into the into the market for buying,
you know, come late late summer, early early fall.
Speaker 1 (03:07):
Well I find that pretty interesting though, Jerry, that that's
really kind of the canary in the coal mine is
what is your future volume looking at? And that's the
first really strong indication we've had in quite some time
that that things are actually slowing down a little bit.
Speaker 3 (03:28):
So what's funny, Andy, if you look at April and
May numbers. For me personally, I'm coming off the two
best months as far as number of units closed in
volume of closing that I've closed in three years. So
I'm having a great April and a great May. And
it's like, well, wait a second, but then June is
(03:48):
going to be slower in July, which are normally the
busier months as compared to April and May. Yeah, I
mean it's it's a bit of a head scratcher.
Speaker 4 (03:56):
So well, how much of that you think has to
do with the stock market? And people just don't feel
as wealthy anymore because they lost a good chunk of
their and it's come back some, but it's still not
you know, this is what a lot of people mistakenly
think about the stock market. If it falls, like let's
just say you have a house worth two hundred thousand
and it falls by fifty percent, that takes the value
(04:17):
down to one hundred. Well, then if the market gives
fifty percent gain the next day, then now the house
isn't back to two hundred, it's that one fifty.
Speaker 2 (04:26):
So, you know, when you look.
Speaker 4 (04:28):
At the people that have a lot of their money
in the stock market, and I see just a lot
of my friends from high school and from work colleagues
and stuff posting on Facebook like what are they doing
to the economy? You know, Trump's killing the economy, and
it's like, no, this is a bubble that has been
going on far too long. Yes, that was lengthened by COVID,
(04:52):
and I don't think we're necessarily in a bubble, but
you know, in real estate, but you cannot have something
increase in value, you know, double digit returns year after
year after year. I mean over time that number is
somewhere between three and four. Possibly some markets. Five percent
a year is typical appreciation. When you have twenty five
(05:13):
percent in a year, or if you're like Boise, Idaho,
and he had two years in a row that was
fifty percent appreciated, I mean, figure that out with your
two hundred thousand dollars home. Fifty percent makes it worth
three hundred the next year, and then fifty percent more
on that is four fifty. So a house in Idaho
went you know, and Boise went from two hundred thousand
to four fifty and two years. And that, by any
(05:35):
stretch of the imagination, is not sustainable.
Speaker 3 (05:37):
And you're saying, I have to give it an anecdote there,
because okay, sure to say if you were to say,
not talk about housing, but explain, say I have an
asset class that went up by you know, fifty percent
in a year, two years in a row. The first
thing that came into my mind is you're talking about crypto,
not about.
Speaker 2 (05:55):
Real estate exactly.
Speaker 4 (05:57):
Yeah, but everybody thinks all fifty and fifty that it's
one hundred, No, fifty and fifty goes from two hundred
to four to fifty, So it's really one hundred and
twenty five percent because the second fifty percent is on
the gain of the first one. So and when it falls,
when things fall, just remember that dips in the market
are off of high prices going low, and gains on
(06:18):
the market are on low prices going high.
Speaker 2 (06:20):
And it's not the same number.
Speaker 3 (06:22):
Yeah.
Speaker 1 (06:22):
I found an article here that is actually from Zillow
Research dated April eighteenth, and it says Zillow's latest forecast
indicates the decline in home values and they're now saying
that they revised it up from previously a point six
percent decline in twenty twenty five to a point a
(06:43):
one point nine percent decline is their last revision. So
you know, Zillo is starting to predict that we're going
to have a little bit of a pullback here.
Speaker 3 (06:53):
So, I mean, everyone, when when you look at the
strength of the US economy, it is, you know, it
was this roaring bowl and it doesn't slow on a dime.
I think what has happened is again not to political
politicize things, but when you look at the press and
when we started talking about tariffs, everyone started throwing in
(07:15):
the recession. You know, oh, recession, recession. Look at the
stock market and we the doom and gloom that was
put in the press is is almost there to paralyze
buyers in a way. And it's the you know, when
you hear the administration talk, they're like, you got to
be patient. From what I understand, tariffs are going to
(07:39):
be resolved in the next couple of months. By June July,
this whole tariff thing will be over because all the
countries that were negotiating with that's happening as.
Speaker 2 (07:49):
We speak right and all their tariffs.
Speaker 4 (07:52):
I mean, that whole negotiation, that's what it really is,
is a negotiation. And it's what it has done is
it's gotten them to drop their tariffs on US goods.
So those are countries that are already charging a tariff
on our goods and it's an uneven playing field for
manufacturers in the United States.
Speaker 2 (08:09):
So basically, of course the.
Speaker 4 (08:10):
Jobs are going to be ramping up because we're driving
more more value home, and you know, we're gonna have
more jobs here to create more goods here, and so
everything isn't offshore to China or wherever else. And what's
really funny, I don't know if you guys saw the
article about Walmart and and Amazon this week. Oh yeah,
(08:30):
Walmart has adopted President Trump's approach and says, Okay, we're
going to try to you know, buy more American goods
and have more American goods for selling our on our website.
And Jeff Bezos at Amazon's did the opposite. He's like,
and there's actually if you go to buy something on Amazon,
there's actually a little a new, little little indicator of
(08:52):
how much of that price is tariff that you wouldn't
have paid before because most of the stuff on Amazon.
And so he's doubling down on China and Walmart is
an American company. He said, you know what, we should
go back to buy American. And I think it's going
to be very bullish long term for jobs. Short term,
anytime there's change, there's short term pain, but long term,
you know, it's just destruction.
Speaker 3 (09:14):
But again, the number that came out, you know on Friday,
the job support number where all the doom and gloom
over the last two to three weeks about the economy,
and then you have a job support that is a
solid number all across the board. And yes, the last
two months were revised lower by about fifty thousand jobs,
it still was a good number, and so it just
(09:36):
showed you the resilience of the US economy. But so
much is about perception and confidence, it really is. And
you know what I wish is that the situation with
tariffs gets over. We were able to finalize most of
the negotiations in the next thirty days and then it'll
be let's get back to normal, because I think what
(09:59):
we're going to find once we get through the doom
and gloom, there is going to be a rise in
the stock market, The economy is going to be doing well,
the jobs market's going to be doing well. You just
got to get through this noisy time.
Speaker 4 (10:13):
And Jerry, just from a real estate perspective, in Tucson,
we are approaching five thousand homes listed for sale on
the MLS.
Speaker 3 (10:21):
Wow, that's telling too right there.
Speaker 4 (10:23):
Because back in twenty twenty two we had one thousand
homes less than one thousand. We dipped under one thousand briefly,
and so right there is five hundred percent more homes
available for sale, and the numbers this year compared to
twenty two have been running about forty percent lower than
they were in twenty twenty two. So you have five
times more houses for sale and only sixty percent as
(10:46):
many buyers in the market. That is very telling, and
it has swung full full circle from a thirteen fourteen
year straight up buyer's market to depth or seller's market,
to now a very very strong buyer's market.
Speaker 3 (11:02):
It's a buyer's market that sellers don't know yet that
it's a buyer's.
Speaker 2 (11:05):
Market exactly exactly, And you have a.
Speaker 3 (11:08):
Direct example of that that happened this week.
Speaker 2 (11:11):
Yep.
Speaker 4 (11:12):
We actually had some clients from out of town past
clients they moved away but are coming back, and they
wrote an offer on a property and the owner of
the property had just done a twenty five thousand dollars
price reduction like two days earlier. So they wrote an offer,
and when you ran the comps, it wasn't overpriced, for
(11:34):
the house was overpriced and it was over way overpriced
before and still according to COMPS, is overpriced. So they
may offer ten thousand less than the asking price, and
the people ignored the offer, didn't respond to it. And
when you're negotiating, silence is by far the best negotiating.
Speaker 2 (11:51):
Tool you have.
Speaker 4 (11:54):
So then they then we called the agent and talked
to him and go, oh, that includes all the furniture. Well,
then the furniture they said, okay, well, if it includes
the furniture, then it is worth the amount you're asking.
So they up the offer to the sale price that
they were asking. But then the counteroffer comes back from
the seller the sign instead of silence, and it was
(12:14):
I want you to pay the real estate agent on
your side, and also I want eleven thousand dollars more
than the asking price for the property. So basically that
seller is trying to get their twenty five thousand dollars
price reduction back.
Speaker 1 (12:27):
Well, and with that, we are coming up on a
break and we will be right back with the Home
Solutions Show on canistein Hi. And welcome back to the
Home Solutions Show. This is your host, Andy Keel with
Epic Realty and I can be reached at five two
zero five three nine nine five nine one and I'm
(12:49):
joined again with Jerry Sunt and Bob zach Myierk. Guys,
would you like to share your information for the audience please?
Speaker 2 (12:56):
Yes.
Speaker 3 (12:57):
My phone number is five to zero three seven zero
nine five seven six.
Speaker 2 (13:02):
And I'm Bob Zachmeyer.
Speaker 4 (13:04):
Five two zero three one four are sold and Andy,
let's continue with this vein of Jerry. You had a
comment right toward the end that I think it's worth
expanding on.
Speaker 3 (13:14):
Yeah. No, no, no, I mean when you have a disconnect
in the market where I think we clearly are moving
towards a buyer's market, and we're in that camp. But
if sellers aren't up to speed yet, what's going to happen.
That's just going to mean homes are going to be
sitting on the market longer. So you're going to see
right now, I think the average time on market is
(13:35):
about thirty one days from last month, maybe thirty two days.
That probably will expand out to forty to fifty days
and until everyone buyers and sellers get in tuned with
what's happening in the market.
Speaker 4 (13:48):
I want to clarify something there. That number you just
cited is correct. However, it's thirty days on market for
the homes that's sold. Right there's a whole bunch of
houses that aren't selling, that aren't getting offers, that aren't
even getting showings, that have way more days on market
than that.
Speaker 1 (14:04):
I actually wanted to clarify something too, Bob. You mentioned
that we're at five thousand homes on the market. I
believe was the number putting that into historic perspective. As
I remember looking at the data a couple months ago,
as we got into that five thousand number, we were
just edging into a buyer's market, which is really when
(14:26):
we were talking about about five months or so of inventory.
And I think that five thousand number puts us pretty
squarely into that category. Could you kind of fill us
in on that?
Speaker 2 (14:39):
Sure? So there's a few variables.
Speaker 4 (14:41):
I mean, if you look back into real estate data,
I've got, you know, MLS market data all the way
back to nineteen eighty two, and there were over two
hundred homes listed for sale in nineteen eighty two. And
you know what was the population of Tucson forty three
years ago. It's a lot less than it is now
five thousand back then. And then also what was the
(15:03):
reach of the Tucson MLS Because right now the MLS
numbers go all the way down to Nogallas, they go
all the way up to Globe, they go over to
past Saint David and Benson and all the way out
to Douglas now and so there's and almost all the
way to actually through Aho. So we are covering extremely way, way,
(15:23):
way more territory than we used to. And the number
is still five thousand, you know, and we haven't quite
hit it yet. It's getting up into the last I
saw it, and the numbers for this month I haven't
come out for last month, I should say now that
we're in May. But I think what's normal is about
to change. And we've been spoiled ever since really two
(15:45):
thousand and nine when all the houses came off.
Speaker 2 (15:47):
The market for airbnbs.
Speaker 4 (15:49):
That's what created the shortage of houses and the Great Recession.
All the hedge funds that came in and bought up
all the houses at bargain basement prices, you know, they
have basically turned them into rentals, so that diminished the supply.
So we're finally getting back. What's happening is a lot
of those airbnbs aren't being filled enough like they used
(16:11):
to be, and they're being converted back into long term
rentals and placed on the market for sale. So we're
finally seeing the return of those properties. And plus you
have a lot of people that are locked in on
their house. They couldn't afford to buy their own home
back at today's prices and today's interest rates, so there's
a shortage that way. But people aren't traveling. I think
(16:33):
the economy from the last four years is finally taking
hold and people are having to cut corners. And if
you look at a family's discretionable income, by far the
largest portion of that discretionary income is the summer vacation.
And people aren't traveling as much. They're choosing stay at
home options and cheaper driving vacations, and I think that's
(16:57):
weighing very heavily on the airbnbs, and I think that's
where this extra supply of houses is coming. And from
a market standpoint, it's an awesome thing. We're getting back
to a balanced market. Balance is good.
Speaker 3 (17:09):
So you know, guys, one thing I have noticed is,
and this started happening last year, is I get a
lot of calls for equity lines or fixed straight seconds,
much more so than ever in history, and the reason
being is people don't want to get rid of their
three percent mortgage rate, but they want to take tap
(17:31):
into the equity they have in their house. Now. Fixed
straight seconds are great alternative because their rates are in
the sevens Versus if you do an equity line of
credit which floats with prime rate, that is going to
be somewhere in the eight to eight and a half range, right, yep.
So the fixed rate second is really a great product.
But the conversations when people call me, it's almost like
(17:54):
people are a bit embarrassed. You know. They call say, oh,
I'm thinking about doing a second on my home because
I need to take out money for a business deal
i'm doing or this or that, and then I, you know,
we talk about it to see what option works best
for them, and then they you know, I pull credit
and I'm like, oh, wow, hey there is You've got
a lot of credit card debt that you've amassed here.
(18:14):
And it's like, what are you planning on doing with that? Oh?
I may take some of that you know second that
I'm doing and pay some of that off. It's like, well,
you don't qualify unless you pay it all off. And
then it's like they're free. Oh, my goal is to
pay this all that stuff off. I want to pay
everything off, get it out of my world quickly. And
it's like, if I add up to your credit card payments,
(18:35):
you're currently paying now, you're paying three grand in credit
cards every month, where the second, if you do a
fixed rate second or an equity line, you're going to
be paying eight hundred bucks. Right, And they just it's
like they were they open up at that point in time, like, yes,
my whole goal is I want to pay off all
this debt. And I just say, how many people are
living with that kind of debt on their back? Because
(18:57):
I'm getting a lot of calls for that, and it's
it's like freeing to them, like get this monkey off
my back as quickly as possible. So I think there's
a lot of people who are living in that situation
and which again goes back to them kind of being
paralyzed to be able to spend money because it's money
they don't have anymore because they all their credit cards.
Speaker 4 (19:19):
And Jerry, you know, it's been said the banks want
to give you money when you don't need it, but
when you need it, they don't want.
Speaker 2 (19:23):
To do the money.
Speaker 3 (19:24):
That's right.
Speaker 4 (19:25):
So just to be clear, if somebody does have a
bunch of that debt. Just because they have all this
credit card debt doesn't mean they can't get a loan.
It just means that at the closing table that has
to be satisfied. Can you use the funds from the
loan to satisfy the debt? That's what I thought. So
you can actually at the closing table make checks payable
from the title company to that credit card company.
Speaker 2 (19:46):
Pay this off, pay that off, pay that.
Speaker 4 (19:48):
Off, and then it's if you never had the debt.
So a lot of people think they have to pay
it off before they're eligible for the loan.
Speaker 3 (19:54):
No, it's paid off at closing, and so it's it's freeing.
And then, you know, the typical feedback is, well, how
quickly can I get this money? You know, the conversation starts, Oh,
I don't need it. Maybe I don't need it for
a couple months, and then by the at the end
of the conversation, it's like, can you close in two weeks?
You know, I want to get this off my books now.
(20:15):
So it is kind of kind of funny, but I
do feel a lot of us are living in that
situation and it's paralyzing and I just wonder how much
of that is you know, the average American is living
with that kind of debt because it may bee people
are one step close, you know, one step away from
(20:37):
I don't know, I wouldn't say bankruptcy, but one step
away from you know, missing payments on credit cards or
one paycheck away from that. And hey, if you've got
the equity in your house, use it. Don't get rid
of that three percent mortgage, but pay.
Speaker 4 (20:50):
I wants you go late on a payment, then you
lose the chance to finance that house for a year.
Speaker 3 (20:55):
Exactly.
Speaker 4 (20:55):
A guys, can I jump in here, I've got to
run to another appointment?
Speaker 2 (20:59):
Can I make one click?
Speaker 1 (20:59):
A yes?
Speaker 4 (21:02):
So, as Jerry alluded to it at the start of
the show, we have been on the air, and this
is our fourteenth year of broadcasting this show, and I
am slowing things way down. And I'm not retiring. I
mean old real estate agents never retire, They just slow down.
But anyway, Andy has taken this over and it just
(21:23):
I'll tell you, doing a radio show takes a lot
of time. I mean, these segments that you listen to,
they they are timed on and they play on a
computer that has to be to the second. And so
not only do you pull data to talk about on
the show, then you spend time recording the show. Then
you turn around and you have to edit the show.
And sometimes Andy can attest to this, sometimes you'll spend
four or five hours editing the segments to get things back.
(21:47):
So it ended, you know, being up an all day project.
And what we've talked about a lot a lot and
we finally have taken action they're going to do it
is we actually are going to have roll this show
into a podcast and that podcast will be available where
you can listen to it on your favorite Apple, Spotify,
(22:07):
Google Play, whatever you listen to podcasts on, and we
will have that available. It'll actually be hosted on my
existing website, nocarry dot com. But you can so just
be watching in the coming weeks that we will have
that show available and you can listen to it in
your car and at your own leisure where you don't
have to sit by the radio every Sunday. And you know,
(22:29):
KNST is in the business of selling airtime, so they
are going to you know, sell it to whoever wants
to take over the show. And I can't express you know,
I don't know anything about who that will be or anything,
but just we've built a lot of trust with this
program between Jerry and Andy and I over the over
the last fourteen years, and I want to transfer that
(22:51):
trust over to the webinar that we do a podcast
and it's going to remain the Home Solutions Po podcast
as we've had the name of the radio show. And
we'll get more information in the coming weeks. But just
if you want to write it down now in case
we you know, you miss a couple of shows, you're
going to be gone if you go to notecarry dot
(23:12):
com that is my coaching site, and there will be
a link on there for free access to listen to
that podcast. So note carry N O T E C
A R R Y dot com and that will be
the best way to access it.
Speaker 1 (23:27):
Yep. And then guys, would you mind sharing your phone
numbers one more time as we're coming up on the
end of the segment.
Speaker 2 (23:34):
Sure, Bob, Sure, go ahead.
Speaker 4 (23:37):
Jerry as Bob Zachmeier five to zero three one four
sold And Jerry.
Speaker 3 (23:45):
My number is five two zero three seven zero nine
seven six.
Speaker 1 (23:51):
And this is Andy Keel with Epic Realty. My number
is five two zero, five three nine nine one. And
although we're coming up to the end of this almost
fifteen year run on the show again, please take the
notes on and join us on our podcast coming up.
(24:13):
It'll be on Bob's Siteanoecarrie dot com and we will
continue doing this in the form of a podcast coming up.
So it's been truly a joy doing this show for
about the last year. And Bob and Jerry, you've been
doing this a long time prior to me, so.
Speaker 2 (24:31):
Twenty twelve January twenty twelve we started.
Speaker 1 (24:34):
Yeah, wow, it's it's been quite a run. So this
isn't the last show. We'll be doing a few more here,
but we are coming up closer to the end. And
with that, we are coming up on a break. So
this is Andy Keel with the Home Solutions Show on
KNST and we will be right back. Good morning, and
welcome back to the Home Solutions Show. I'm joined again
(24:56):
with Jerry sent Cross Country Mortgage and Bob had to
run off tune upppointment for the last half of the show,
but we were talking a little bit about interest rates
on the last break. Jerry I wanted to kind of
continue on that path. Well, one of the thoughts that
I had is as we see the market shifting a
(25:16):
little bit towards more of a buyer's market, which of
course means that there should be some better opportunities for
buyers out there. I've noticed something that I haven't seen
in a good number of years, and that is what's
referred to as a short sale, and I'm starting to
see those pop back up in a little bit more frequency.
(25:38):
And for those of you out there that aren't familiar
with what a short sale is, that is basically when
the market it's usually when the market ticks down a
little bit, not always, when a seller of a house
gets into trouble, they get under water and they need
to go back to the lender and ask the lender
to take less than what's oh, so they can sell
(26:01):
the house, generally because they're behind on payments and such
and ran into some financial difficulty.
Speaker 3 (26:07):
And Andy, it's funny because you know, before twenty two
thousand and eight, I had never heard the term short sale.
Before you know that it wasn't even part of my vocabulary,
and then by two thousand and eight, you know, it
was one of the most common words in my in
my vocabulary, and it is funny, and now we're starting
(26:28):
to see, you know, a rise in short sales. It's
it's interesting, right. I mean again, immediately people love to
jump and you know, oh there is there housing crash coming.
There is not a housing crash coming. There is more equity.
People have more equity in their more equity in their
(26:50):
homes than they've ever had in history. So it is
just the fact that short sales are starting to come
online a little bit more are probably people that bought
in the last few years. But for the most part,
it is that a housing crash is not coming. In fact,
I predict that housing is going to increase on a
percentage basis later this year as rates start to fall.
Speaker 1 (27:15):
I agree with you on that, yere don't. I don't
see any kind of gloom and doom. I don't think
we're heading for any kind of serious correction or anything
like that. I do think we're probably going to slow down.
We might see some single digit pullbacks and pricing and such.
I think we are. I'm really starting to feel that
we're heading in towards a buyer's market, and the prices
(27:37):
might get a little bit soft, But I don't think
it's going to be anything like a free fall or
anything like that. We still have a very big supply
problem in this country in general, but also in Tucson.
I completely agree. I don't think we're going to see
any kind of gloom and doom or a big fearful thing,
but we are getting some softness out there.
Speaker 3 (27:57):
So yeah, no, I mean, there is a little bit
of a part of this happened in the last couple
weeks and months is simply because rates have not fallen.
Everyone and when I say everyone, all of Wall Street economists,
most people have been predicting rates are going to come
down since late twenty twenty two, and we've all been wrong.
(28:19):
But there does see seem to be a momentum shift
that rates will start coming down later this year. And
early predictions, you know, even going back to December and
January of twenty twenty five, is that we would see
lower rates by May June. But then you have this
jobs data that comes out Friday that was stronger than expected.
(28:41):
So mortgage rates are just hanging in there right below
seven percent, six point eight seven five. When are they
going to six point five to six which is kind
of what people the mortgage bankers Association, the National Association
of Realators. Some of the big banks like Wells, Fargo,
and Chase are all predicted rates to end the year
(29:01):
right around six percent for a conventional thirty year fixed
And when will that When will that you know slides
start to happen. I personally believe it's going to start
happening in July. I think, you know, again, I think
a lot of people got very spooked in in April
with the stock market volatility and with tariffs and the
(29:22):
news jumping on it like, oh, everything's going to come
more expensive. So now people are worried that what, you know,
everything that they're going to be buying in the future
is going to cost more money. So they just freeze
because they're they're concerned, and confidence gets shook. And that's
if this continues for another thirty to sixty days, what's
(29:43):
going to happen is you're going to see money plow
into US treasuries and that will bring mortgage rates down.
Speaker 2 (29:49):
Yeah.
Speaker 1 (29:50):
I'm still kind of scratching my head to your point, Jerry.
On Friday, the some of the market data came out
and the jobs number was good, but it's almost like
the market shrugged off this point three percent decline in
the GDP, like just wave it on tariffs and shrugged
it off completely, And that to me was kind of
(30:11):
a shocking number.
Speaker 3 (30:13):
Yeah, no, it's and there are specific points about that,
and I can look up as to why the GDP
did shrink in the first quarter. But again, the economy
overall is strong, and you know there is employment is
you know, you're our unemployment rates four point two. Now,
(30:35):
I from what I from what I hear is that
if you lose a job, or if you quit and
you try and look for a new job, it's much
more difficult. But if you're staying at your current job,
things are solid. As we work through this tariff situation,
and again, hopefully it all ends in the next thirty
to sixty days, because if it goes beyond that, then
(30:56):
I think you're going to see because if consumers really
tighten their belt, that's the way I believe they are
doing now, if that continues for thirty to sixty days,
that will have a huge ripple effect, not throughout the
US economy, but through the world economies.
Speaker 1 (31:11):
Yeah, I wanted to ask you another question that was
brought up by one of the listeners. This week. I've
been hearing some things that I haven't had a whole
lot of chance to dig into it. That some of
the changes that this administration is having on FHA loans
in particular. But what has changed out there insofar as
(31:32):
FHA VA and conventional loans with this administration, that's worth mentioning. Jerry.
Speaker 3 (31:38):
You know, there have not been many changes. There's little
tweets all the time, but it is there's no major changes.
I mean, I think the big one for a lot
of people asked to do with student loans and how
student loans will be calculated in how the debts will
be you know, how a lender is supposed to calculate that,
(31:59):
and those changes did happen not too long ago, how
those debts are supposed to be calculated when someone's buying
a house. But other than that, I don't see many changes.
Speaker 1 (32:09):
Andy, Okay, that's kind of interesting. I've been hearing some things,
but I hadn't validated it one way or the other.
So you're not really seeing any rule changes with Fitch eate.
Speaker 3 (32:21):
No now, I mean it's still three and a half
percent down and the dead TA Income Ray show is
still you can go up to fifty seven, so I
haven't seen many changes on that front now. But going
back to interest rates, it is frustrating that rates are
still hanging in there right below seven percent, and we
(32:41):
think shoot rates should be lower than that now. But
I do think we are right on the doorstep of
rates starting to come down, and I think the data
will follow, and it may take thirty to sixty days,
but as the data starts to follow, you know, when
(33:01):
we get into late May and June, it's going to
you know, right now, I think the Federal Reserve is
expected to cut twice this year the second half of
the year. Are they going to push one of those
cuts up if we see unemployment really increase, or if
you know, or if we start to see massive shifts
(33:23):
and worry about the economy. I just think we're going
to see lower rates, but it may take through the
end of summer, which would be a great refinance opportunity
for anyone who's bought in the last two years. Yeah.
Speaker 1 (33:36):
So what are we looking at for current rates with
FHA and v A during Yeah, about.
Speaker 3 (33:41):
Six point twenty five to six point six point four,
So where a conventional rate is at six point eight
seventy five six point nine as of the move on Friday.
So again it's it's when you read in the newspapers
about oh, interest rates they're looking with stuff that's printed
(34:01):
is typically a week old. You really need to go
to websitesite mortgage news daily, things like that to get
you know, up to the minute or up to the
day where interest rates are because a lot of the
stuff that's printed in the news is from data from
a week ago. And again, rates moved higher on Friday
because of this job support that came in really strong.
Speaker 1 (34:25):
I've got a question for a Jerry. When do you
typically do a rate lock for a customer. Do you
generally just do that pretty much as soon as they're
in the and ready to go, or do you ever.
Speaker 3 (34:38):
Try to Yeah? Great, great question, And I mean it's
really up to the borrow or the consumer themselves of
when they want to lock the rate. But a lot
of times barbers say, well, I'm not the expert. You
tell me when to lock the rate, and I like
to lock rates, you know, at thirty to forty five
days out. If the market gets really volatile, I would
(35:00):
lock at application right when they go under contract. But
if it seems like rates are improving, you know, let's
let's float for a little bit and hopefully we'll catch
it on the downside and get a lower interest rate.
So it just depends on the situation. But I always
ask a borrower do you want to lock or not?
And if you want to float, here the risks. Here's
(35:21):
my opinion of what we're going to see over the
next thirty to sixty days, and you know, I'll let
them decide what they want to do.
Speaker 1 (35:29):
I'm a little curious. How often do you have a
buyer that a borrower that wants to let it float?
And are they usually pretty astute with locking it in
or would they have been better off just say lock
it now?
Speaker 3 (35:42):
Well? Yeah, I mean that's the part about data that
you know, we we we get instantaneously from our phones
and from the you know, our computers and so forth.
Everyone becomes an expert in everything. And the reality it
is is that, oh, rates are coming down. I don't know.
I I tell people it's been really volatile the last
(36:02):
few months. You know, you could be at six point six,
two five, you could be at seven. It all depends
on I mean, especially with tariffs being announced, we saw
rates at one point jump up to north of seven
and they were down as low as six point six
two five. We had a half a percent swing in
a week. When things are that volatile, you got to
(36:23):
lock in and uh and just hey, we'll refinance when
rates are lower later this year, because who knew if
it rates were going to go higher than where they did.
Speaker 1 (36:33):
Yeah, And that's kind of my philosophy is, you know,
if you can afford it now, why risk it. Just
lock the rate and don't try to be greedy and
get a you know, an eighth of a percent better
or something when it could go just as easily the
other way. So probably not a good game to play.
But with that, we are coming up on another break.
This is Andy Keel with the Home Solutions Show and
(36:55):
we will be right back. Good morning, and welcome back
to the Home Solutions Show. This is your host, Andy
Keel with Epic Realty, and I'm joined again by Jerry
Sunt with Cross Country Mortgage. And before we went into
the break, we were talking a little bit about interest
(37:16):
rates economy that kind of sparked something that came up
this week for me is a house that we had
just recently purchased from a seller that I don't know
the full details, but it was a house that they
wanted to sell because they had a roof that was
going bad, and they had a fair amount of equity
(37:39):
in the property and just it was time for them
to move on. To a bit of my shock and surprise,
they were working with one of the agents on my
team to buy another property and then at the last
minute they decided to change their mind and said, no,
We're going to hold off in rent for a year.
(37:59):
I kind of wanted to address that because the feeling
is that they thought it would be better to rent
because their belief was Again I think they were talking
about the market pulling back and hoping to wait a
year and getting better pricing in a year. So I'd
like to talk a little bit about the risks and
repercussions of timing the market and what your thoughts are
(38:22):
on that.
Speaker 3 (38:22):
Yeah, again, I go back to the consumer confidence. When
people get nervous, they do not spend money, they tighten
their belt and they freeze. And I think so much
of what has come out over the last three weeks
from the press, and again I'm not politicizing this. I
just people get nervous when the stock market is a
(38:44):
roller coaster when you know, oh, tariffs are going to
cause massive run up in inflation. No it's not. It'll
all be over in thirty days. This is going to
be great for the economy long long term. When people
start hearing all these noises from different different angles, I
think they just freeze and the result is, you know,
(39:05):
I'm just gonna rent for another year because I don't
know if now's the time. Really, If mortgage rates are
lower than where they are now, I think that would
cut through a lot of that confidence and would help
build more confidence. That's why I think we're going to
see in about a few months, I think we're going
to see lower interest rates, which is really going to
(39:25):
cause a lot of demand for housing. So people that
sign a new lease now I think are going to
be are going to be regretting that by July August.
That's my two cents, But who knows.
Speaker 1 (39:40):
Yeah, it always makes me a little bit nervous when
when I hear that type of thing, because it's market
timing rarely works out for the person doing the timing,
especially when you're trying to predict something a year into
the future. I mean, if you're in the stock market
and trying to predict something minutes into the future. You
can't even do that, let alone well.
Speaker 3 (40:00):
And I always tell people that because people ask me
where are mortgage rate's going to be in a year's time?
And then I say, you know, if I was really
good at these predictions, i'd be working on Wall Street.
Speaker 1 (40:09):
Yeah, because I mean, if you knew what was going
to happen even a few seconds, you could be very,
very wealthy. You'd be training Marcus instead of trying to
make predictions on a radio show.
Speaker 3 (40:20):
No, but you know, I mean, this is what we
do here to help with people that have anxiety about
buying right now. And it's like, ooh, you know, seem
the market seems a little you know, there's a lot
of there's some volatility, Mortgage rates haven't dropped, you have
what should I do? I'm like, you know, if you
buy now, we will as long as the loan amounts
over two hundred and fifty thousand, we are going to
(40:43):
be paying the lender fees and the title fees for
your refinance when rates actually fall, and whether that's later
this year into twenty twenty six, we're going to do
that for you. So we have your back. We're going
to take care of you, even though your your rate
may be higher in the short term, you know, in
then over the next six months or something like that.
Because rates are hired today, we will take care of
(41:05):
you and get you that lower rate when rates do
fall later this year into twenty twenty six. And the
momentum of people predicting that rates will be lowered by
the end of this year is overwhelmingly that resemblingly all
in the same page that rates are going to be
closer to six percent by the end of the year.
Speaker 1 (41:25):
Yeah. I think that's part of the point that I
wanted to make is for anyone that's, you know, thinking
is now a good time to buy or not, the
question probably should be more along the lines, especially if
you're talking about a primary residence. Can I afford the
payment now? And that should probably be your decision maker.
(41:45):
From an investment perspective, it's a little bit different because
now we're looking at rates of return and certain calculations
like that, so there's a little bit more going into
the calculations. I mean, when we're buying an investment property,
we want to make sure sure that we're going to
hit a rate of return in a monthly income to
justify the placement. But you know, when I see someone
(42:08):
that's holding off buying a primary resident because they're afraid
that the market might pull back, I'm almost afraid for
the opposite of that is, what if it doesn't pull back?
Speaker 3 (42:17):
Are you correct?
Speaker 1 (42:18):
Are you going to be anchored to Well? I could
have bought this house at two point fifty and now
you're just literally not going to buy anything for the
next number of years because you you anchored yourself to
a price and missed it.
Speaker 2 (42:31):
You know.
Speaker 3 (42:31):
And it's a great point because you go back just
to the basics of what is my house? By buy
a primary residence, what will it appreciate over time? In
PMA County houses have appreciated three point seven percent going
back to World War Two. If you bank on that,
which is about as much as you can, you know,
history tells us a lot. If that is your calculation,
(42:54):
a three hundred thousand dollars home today will be worth
three fifty and five years using that same calculation. By
the way, if that's what you use, you will not
be disappointed, because that is what will happen if we
go back to normalcies. And what is expected that is
a good benchmark. If you're looking for a ten percent
(43:17):
return per year on your house, you're going to be
disappointed because that's not sustainable.
Speaker 1 (43:23):
Agreed. And some of us got a little bit too
spoiled here in the last few years. But what we've
seen is just to your point, it's it really is
just not sustainable.
Speaker 3 (43:36):
It just isn't And that is so you know, I
do believe that that in the month of April, we
will when it comes out, when the data comes out,
which we'll see later this month and into June, that
the number of purchases locally in nationwide I think is
going to slow down and we're going to see that
really in the June numbers. This will be one of
(43:59):
the predictors for mortgage rates to fall. And as mortgage
rates fall, you will see more buyers jump into the market,
which will push up prices and push up demand. And
you know, unfortunately, I think your friend is going to
be kicking themselves at the end of the year, going, shoot,
I shouldn't have waited, I should have bought. But who knows?
(44:20):
Right time will tell the right answer?
Speaker 1 (44:22):
Yeah, I mean, and then too, you're locked into a
year lease. So I mean, if they if they do
that the way I would suspect they do it, they're
going to wait the full year and then here we
are in the June market next year. So are we
timing it for the worst possible time a year from
now too? So that's another factor to keep in mind.
(44:44):
Or I guess you could start the process maybe in
the winter time and knowing you're going to be moving,
but again, in.
Speaker 3 (44:50):
The winter time is actually one of the best times
of a year to buy exactly if your buyers are
in the market exactly.
Speaker 1 (44:57):
So I think what we're trying to prove here is
that none of us really know what's going to happen.
I know I'm still in the market to buy investment
properties at the right price. I don't personally have any
kind of gloom and doom feeling like, oh gosh, I'm
going to stop buying it, the market's going to crash
or anything like that. I feel like it might be
(45:17):
a little soft here. And we talked about the previous
segments of the show, You're seeing your business your leads
kind of slowed down a little bit, so there's some
indications that we were heading into a buyer's market were
possibly even Like we said earlier, Zillow is predicting a
bit of a decline. But does that mean it's a
(45:39):
good time to buy. Well, maybe it still is, and
perhaps that's where the opportunity is is the next couple
of months.
Speaker 3 (45:47):
Well, and I think it'll be. You know, when Bob
was talking about his clients and that the sellers were
just so unrealistic about the market, and it sounds like
they were almost living in twenty twenty one, you know,
where you know there's ten buyers and you can, you know,
charge whatever you want to for the sale of the
(46:08):
home and expect people are going to line up out
the door to pay for it. That is not this market.
Speaker 1 (46:15):
No, And Bob hit the nail on the head with
that one. I think there's a lot of sellers out
there that still believe that we are in a seller's market,
and that's really not the case from what I'm seeing.
If it's a very desirable house and it's priced right,
sure it'll probably sell fairly quickly. But we're not in
the days of throw it on the market at any
(46:37):
price and it'll sell. That's just not the way the
market's reacting. Right now, we're seeing a fair number of sellers,
and from my side of the world with investments, I'm
seeing a lot of wholesalers that are offering out I mean,
my phone just won't stop ringing during the days. I'm
getting calls left and right for Hey, do you want
(46:59):
to buy this house? You want to buy that house?
Do you want to buy this property? This property? And
the numbers that they're throwing out there are just so
unrealistic most of the time that it's like, can anybody
tell these guys that we've slowed down?
Speaker 3 (47:13):
Yeah? Well too, funny, Well, you know again, it'll be
as we move forward. One of the things that you
and I were talking about on the break is what
we're one of the big changes that's happening and for
guidelines for mortgages and is that going to cause us
slow down for people being able to qualify? A big
one is student loans. Now this has not been decided,
(47:34):
it's just being debated on Capitol Hill, but there is
debates about having shorter term repayment for student loans. And
if that's the case, a lot of people that have
student loans, if it passed. It has not passed, but
if it does pass, it would make the payment on
those student loans that much greater, which means a buyer
(47:55):
would could afford less than a house. Now, I don't
think this is going to have a big impact on
how housing, but it's one of those noisy topics you
hear about or read about in the news, and you know,
going on to that and and I just want to
kind of we talked about this and Bob made the announcement,
but you know, I think it goes repeating that we
are going to be ending the show after fourteen years
(48:18):
over you know, Memorial Day weekend here in a few
weeks and moving over to a podcast format. So we
will talk more about that next week and the following week,
but just want to let everyone know that, you know,
we're going to be changing formats and moving moving into
the podcast world.
Speaker 1 (48:35):
Yep. So we'll have more on that in the next
couple of weeks. And with that we are coming up
on the end of the show. So again, thanks for
joining us on this Sunday. This is Andy Keel and
Jerry sent with the Home Solutions Show. Thank you
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