Orlando Housing Market

Week Ending August 1st, 2022

 

 

Transcript:

Bam, good morning. Good morning. How are you doing? I'm doing well, this morning. We're going to go over numbers again and the new housing market, which is a normal market. It's a normal market is, is the new Norm. They'll ignore. The new Norm is the old norm, so let's get ready. We are We're at the Orlando Real Bstate Buzz, Brenden Rendo with the Homes In Orlando Team at NextHome Neighborhood Realty and of course joined again with Joseph Dionne of Appli Home Loans, good morning. Good morning, good morning, good morning, good morning, good morning. You have nothing like my studio area, and we're like, redoing it also. It's all everything's moved around all over the place. But yeah, you mean I kind of like mine. I was going to shift it around this weekend and I'm just like, yeah, I'm too tired. Hey it works. Yeah. Yeah. They impose important.

 Not how messy my my back desk is here. It's nice. Not too bad. It's a comes in. White comes in and straighten it out for me. So, anyways, new week, new numbers and we are Annoying to follow a trend, which is home sales are down. Price price, reductions are up, inventory. Continuing to go up. We had was a little stagnant last week, but I took a nice jump this week, almost 200 units, and we've got a lot of people sitting on the fence. Yeah, I think one of the big things we saw is after the FED came out, the mortgage Market took a really nice dive. Down to roughly. What was it about 5%? Hmm and then the past two days you got hit again, tell me to back up to, like five point five. Yeah, just just like that. And the funny part is, it's all just off of comments. Like there's no, like, you know, there's nothing really happening. You know, in the sense of like, great rank grandiose data that's coming out, it's just kind of like any time the FED talks. We can either get a positive reaction over again, a stupid negative reaction, its nature, both ways and past couple days was total nature the wrong way.

 Wrong way go through, what what Kyle said I think it was was yesterday or day before that made everybody so happy. Yeah. So is kind of funny is we just had such a simple comment, comment, comment, commentary, that kind of came out and what Has basically said was hey a lot of a lot of market makers, a lot of bonds, a lot of unit pricing action, you know, they're they're expecting to see rates go down in 2023 but they're probably factoring into aggressively. But it was kind of like, what does that mean? So all the bomb makers. Like what does that mean? Wait, we gotta change everything which means that they were being aggressive with their Progressive, you know, there's no indication that were not going to see rates go down. Like I think there is a little bit of expectation and even in the commentary that occurred, they were speaking about that. But I think what he said was kind of being said, was simply hey, like it's going to happen but it might not happen. As quickly as everybody thinks. Yeah. Yeah. And and that was we saw rates worsen probably on Tuesday. I want to say a quarter percent on Tuesday alone. Yeah. I think Wednesday followed up with another quarter. Yeah.

 But you you look at the economic data and I can understand why Bond bond market people have been. So aggressive is debt for consumers. His show. Shot through the roof. We get up to like 16 trillion dollars of credit card debt. The savings has basically dwindled away this inflation that were having. It's forcing a lot of people to dip into their savings. You know. And that's that's always a nerve-wracking and then you look at delinquency numbers and rentals and Nationwide. You know you normally A 3% we've jumped about a 13% delinquency rate and Reynolds. Hmm, the rents just too damn High. I mean that guy has a right it's just too damn High. Yeah. And then you are starting to see, you know, what's the worst thing you can see in a recession? You start to see some layoffs. Mmm. You know and it's not just a mortgage industry of the Housing Industry anymore. Yeah. You're seeing you're seeing others I think Ford. Laid off like 8,000 employees last week. Yeah but I do understand that that some of that has to do with retooling, you know, updating for the new Our years and stuff like that, but they're not planning on bringing them all back. Yeah, so that's I think that's the big thing. We kind of have to watch over the next couple months is, how does that Employment Number? Stay? Yeah. Overall, but when you look at that, you say, okay, we're definitely in a recession, mmm, you know, normally in a recession, the feds going to lower rates. You know, I, my gut was a Probably probably pushed to like 2.25 that was going to be about the highest they could ever that they can get Mmm. Yeah, because one is National debts, how do you pay that? You get to a point where we can't pay our debt and, you know, they're both arrows, our whole, our whole country. And so, you know, you look at that and it's like, yeah, they kind of that, they kind of can't push it. You know, too much more. Hmm. Yeah. I you know, and that point 75 last week kind of said the same thing to me is, okay, they weren't as aggressive as we all thought they were going to be. Mmm. And they've got what, they got two more meetings this year. Yeah, right. So I think I'm actually going to say they may go another half a point and that's it. Yeah. Everything I think they stopped. I think it where my mind kind of is leaning toward is I see them, maybe gone, half a point at the next and then maybe a quarter and most on the last one. But I feel like I already feel like there's a little bit of shift of how aggressive they are going to be.

 But with that conversely and that's the hard part is like, you know, we always joked we're like, you know, being a Fed needs Never Win, Win scenario for them. It's like you no matter what they do, they're going to be criticized and some way but They have the responsibility of trying to help with all these your the inflation and this and all that. Like they're trying to help in all these areas and create policy that doesn't completely shifted from one area to the other. You know but the reality is is they've got to continue to do something and they're working to be creative and how they handle that. You know, the plan that I think is really funny is is really and you don't really see the FED saying this too much, but you see kind of media saying this is we're not in a recession like I've been completely shocked at how much media has kind of taken this proponent of like let's change the definition of what a recession is all of a sudden you know we're not a true definition of everything these days it's like you know and I think that's the hard part is it puts, you know, these policymakers and tough positions because if everybody's saying we're not and they try to take policy and and put policy to say Like no we are like we need to shift out of this. Now the narrative is more so of like we did they cause this you know and I don't think I think there's a lot of factors that builds into this and it wasn't, you know, it wasn't, you know, the policy making that played every part of this, it does have an impact.

 Why do I think it creates this kind of lose-lose? We're now mass media is going to have a bigger impact on what the feds do because of how they're dictating or redefining what Is, or is in a recession? Yeah. Yeah. And what is it? A recession is when your friend loses their job and depressions when you lose yours and old adage? Wow, I don't think I've ever heard of what one. But uh, you had his that 10, you know. That's it. So it's, it's just something you have to watch. I think one of the hardest things That I know I'm sure you you have the same conversation with your clients that I have of mine which is all the fat just jumped rates. All the mortgage rates are going to go through the roof. It's like now. Hold on, hold on. No, that's not necessarily true, and it wasn't true last week, you know, and you have to explain to them that know, the FED really doesn't push the mortgage rates too much. Watch, the 10-year T10. Unity going up and down that will that will do it. You know and that's that's one of the things you have, you know, a lot of people you have to talk them back is like well I'm just worried about rates like well here watch this you can see we've been in a Range you know me? So you just want to catch it on the dip. I know one of the advantages. You have being a broker over over a straight lender is. When you see these kinds of dips, you've got the ability to to move loans.

 A little bit very easily compared to What a straight-up lender can do with, who's got it. They've got their line in. That's it. Yeah. No. And it really plays a big part because we have a lot of investors that you know they met and I know we always call like by the market, they'll get more aggressive on pricing because they want to and it's like we can shift if you're if you're not retail shop or something like that, you only have your product. Like your your bank is your bank, that's it. And if they they buy By the market crate, like they bought the market for a little bit, your love and life, but then it shifts and they're no longer capable because they were at a loss on those loans, just to drive deals into the, you know, into the pipeline. And then you may not see rates be super competitive for the remainder of the Year. May have had one month or two months, you know. Now for us it's like we have you investors that compete with each other. It's like. All right, well now this person dropped their rates and then you watch like 5 others. They start dropping their rates because they're all trying to compete with each other and that this investor picks their rate up. But somebody else drops the rate again. So we're able to shift where we send our loans for our consumers because you know our goal is to get them to Best Rate, best rate, best experience like will control the experience of will help find them the best rate. Yeah. Which is I love because you do, you know, like, like we've seen the past week, you get those large ships and your hope, your client. You hope your client isn't at that. Hitting that peek at that 5.5, you know, imagine the next couple days we'll probably see. Dip maybe quarter point again. Yeah. So you want to be able to take advantage of that dip. You have to score points of quarter-point Long Haul. It's a lot of money and ads on. 

 

I think the other thing we've been talking about is still because values are still high and we're going to go into the numbers here in a minute and you're starting to see the discounts increase on the Holmes is changing the way you negotiate on a home and taken advantage of the by Downs. You know, if if I can get my clients, a 2%. Yeah, you know to do go by down what might that decrease the rate by roughly just you know I mean we do is we get a lot is let's say you have 2 percent increase seller credits. We could do like a full by down, you know, of the rate. Wait. And that may get you, you know, a half percent lower rate potentially? Yeah. I could be that and it really depends on the loan product, the scenario where everything is, but it could be pretty significant, might be even a little bit more with with 2% now. Conversely, we could look at and we've seen a lot of people talk about like that 2/1 by down where it's like you go to lower for 1st year, one than 1% lower for year 2 and then you're back to the departure rate or whatnot in year three. That's Creative solution, you're using solution, you know? If you use seller credits to do that, it really works and that's really kind of what that's doing, is kind of like gambling on the market of saying, hey, like rates are going to considerably drop, you know, in a year or two. I, and we think that doing this 2/1 by down, makes sense, because we're going to be able to refinance in two years. 

My recommendation typically is I would lean more to, let's do the permanent by down. Yeah, you know because what if rates dropping the only drop you know, they don't drop a massive amount, they drop a little bit. You know what you party got it. Now you're not paying more cost to do a refinance you know for which is piping out part of that savings you know, if the market you know. So that's where it kind of really shifts. And it's all about risk adversity. I like to take the stance of you've got a fixed rate. You're comfortable with that payment, you're not going to have to Stress about that payment, you know, and it's going to be the same. So that's kind of the recommendation around I go, but I can both scenarios.

 Jack Roddy. I mean we look at if you plan on being in that house you know ten years Mac. Look at that. Half a point savings over the 10 years. That's a big chunk of change. Yeah, we if you look at that compared to Bilk, am going to ask for eight thousand dollar. Price reduction, you're more likely going to make have a heck of a lot more savings than half a point. Then you are just getting straight up eight thousand dollar price reduction. Yeah, That's that's something I'm trying to try to educate my clients on a regular basis. It's one of those it's look at every scenario and figure out what's the best one? Don't don't just give one scenario for being. Yeah, let's hop into some numbers. Okay, let's see how the market is looking. So this week, let me I got to blow this up because I'm old and I can't see anymore. So this week we saw this. We saw a continuation of the decline so when we get here and you look at the original to final list price. Yep. We drop to an average of 16 thousand dollars discount and I think the big one is right here, the original list to sales price. We're down to only two below, ninety six percent of the original list price and wow yeah five hundred thousand dollar home. 

You know, you're you're getting down, you're looking almost 20,000 dollars savings over the original list price. Hmm. And that's I think that's a perfect example where okay, if I can get a little discount and get 2% to buy down my rate that that's like you've done it. You've done a good deal, you know. You've really done a good deal. And then let's hop back into our charts. See our sales price and medium price went up just a hair is about $1000 in the medium price. Yeah, so you think from the Peaks, you know, we're back down, we're staying consistent, you know, pretty much on that on the medium value. And then our sales did go up a little bit, but we're still back behind where we've been for the past year and a half. Yep. Year, which is, you know, holding that that 600 above So there again, there's less, there's less buyers out on the market. People are taking longer to make the decision. They don't feel the urgency that they've had in the past years. Yeah, I was looking at zillow's numbers, I was looking at Red fins numbers of traffic traffic across all the major portals is down anywhere from 25 to 35 percent. That's a big, big drop. Yeah. Which is probably, I mean everything we've been saying for the past Several weeks is hey there's less buyers, you know there's more opportunities. Take your time do it right? Yep. And then this is what I've been expecting. Is we are, you know, since the end of June, we are really starting to see the days on Market, go up. Hmm.

 You know, since the end of June which was our lowest 18, we've jumped Six Days on Market. It doesn't seem like a lot, but to a seller that's an internat e these days. Yeah, that is an absolutely eternity. And I think we're going to, I think we're going to continue to see this jump up. And I would expect probably by October November time frame. We're going to see at least 30 days to 31 days. Yeah. On the market, which when you look historically, and that's why I'm worried that's normal, that's totally normal. Yeah. So that's where we're working again with the sellers setting back that, that level of expectation. That hey, yeah, and they're starting to get it to they're seeing a lot of the news articles out there. Yeah. Hey, you know, there's there's less buyers of the markets really slowing down. You know, I listen to a bunch of people on YouTube and, you know, sometimes those thumbnails are hilarious. Yeah. Because they got the bomb going off in the which you sent me the other day. Thank you. Go back, you know, it's like no we're doing we're holding, we're holding. And then that one but this one, we're again, we're seeing off-market people taking things off. The market has jumped. You know, the early. What's that? About? 25% from the low of 50 and we're seeing her with Ron's up again, as well. Yeah. Because the houses are selling as quickly. Yeah. So, you know, it's it's just, it's a, we're back into a consistency. I apologize. I just want to go back to this one and then, of course, going back into the inventory numbers. Yep. I mean you, we are off a hundred and forty seven percent since the beginning. Yeah, we're all, we've got almost 5,000 homes and inventory. Mhm. 

That's it's great for the buyers need, besides, I'll show ya options, options, options. I looked at one yesterday with a client and beautiful home, well, maintained really taken care of, but she just didn't want to go the price that they were offering. It's been on the market now. Today will be 14 days and I'm looking at our well, we can do one. Two things we can go in, put in an offer but be aggressive. You know, because more than likely you get that feeling more likely, they're probably going to come with a price reduction within the next, I'd say probably week. Yeah. And I'll bet you that price reduction is going to be at least you know 25 30 thousand dollars because all the price reductions were seeing right now are huge. You know it's you got a six hundred thousand dollar house in your seeing a thirty thousand dollar price reduction. Now, forty thousand dollar price reductions. Mmm. So if you know, that's that just shows when people like were nervous. Yeah. And we got to do something to get this thing sold. Yep. Absolutely. You know, so that's where that's where those numbers. And I just want did this because we did this last week and I wanted to show this again. Is this is two weeks ago, original two finalists price. We're about 300, mmm. Last week, we're at 7300 this week 16,000. Yeah. It's yeah. I mean, the numbers speak for themselves in that situation. Yep. Yeah it shows you how we're shifting and it's shifting, pretty, pretty consistently and pretty heavy to the buyer. 

So, and then the other another article, I was reading this week. We all know how, you know, earlier this year. It was multiple offers multiple offers multiple offers? Yeah. Orlando. In July dropped about ten percent in the number of homes in multiple offers, is that it was about 47 percent. Felt that was a little high, but, you know, but we react seeing those multiple offer situations anymore. But and this is what I think is important. People have to realize is like, we've been saying, Orlando, has a much steadier Market than a lot of other areas in the country. Hmm, these are the declines in multiple offers in other parts of the country. Yeah, yeah, Tampa is number one. Tampa saw 25% reduction in multiple offers. That's a huge drop. That's a lot of people pulling up market and what's bugging people imitate, a lot of competition, right there. A lot of it. Then, you know, these are the other hottest markets in the nation, Nashville down, 21. Las Vegas down, 20, they've gotten water Miami, you know, which quite honestly has been the hottest Market in the nation, you know, for the past two and a half years, you know, they're down 90% a multiple offer situation, so we've taken a dip but we're still again Orlando's much more consistent. I think part of that is that we're more of a family Oriented yeah. Situation you know environment than other environments but it's a good feeling to see it go that way. You know that that we're not we're not taken as big a hit as a lot of these other areas are. Yeah, right now. Yeah, I think you're right in that and it's it's, you know, the ones like I noticed, like, you mentioned Tampa and you saw Miami. 

These were some of the areas when we were booming, like and it Is just going absolutely nuts. I'd be like, oh my gosh, it's nuts here. And then I talked to friends in the Tampa market, and I was like oh like we, what's going on over there? Like they were some of the things happening in Tampa were significantly wider margins, you know, offers you know absolutely stupid offers over and above asking and get it and now you're seeing that back off and you're seeing it consistent, you see multiple offers because it's like, you know, once the market cools off, the ones that had the biggest rocket up or going to be the ones that You know, and I think we were very, we had a great and very fast incline. It we were one of the hottest and, but we still were always kind of steady and how we saw that incline like yeah, I didn't go from, not a hot Market to Crazy. Stupid Hot Market overnight, you know, we were, hey, we're a hot market now are a little bit sexier like when our now we're really sexy now we're, you know, we're optimistic. See, you know, like Joey, Yeah and now it's like, you know, now we're just, you know, we're going back to Dad bod. Yeah. You know, I think we're going to be really good. I think we're going to see kind of this, like you said, like we're seeing this new norm and the new Norm is really the old norm and the old Norm wasn't a bad Norm, you know, it Yep. And it's a nice feeling because you know, you get up in the morning and do your work, do your calls following people and you're going to stay consistent. Yeah, it was actually kind of nice chill, you know. I had phenomenal, you know, June and July. I was able to like, okay I gotta Catch My Breath. I've been running for six months. Yeah, I'm not as young as I used to be. And it was nice to be able to like, okay, I need to take a breath. Let me get some stuff straightened up,and get ready for the second half of the year. Yeah, and it's, you know, and I've got I've got clients who are okay at the markets seem to be settling down a little bit. Like, let's start looking again. 

 

So well, those are our numbers for the week. Thank you again. Any questions always feel free to reach out to Joe and I, that's what we're here for. Is to help make this whole home buying purchase as easy as we can for you. If you're watching on Facebook, please hit the thumbs up and same thing. On YouTube. Thank you all so much Joe. Take care have a fantastic rest of your week and you look talk to you again soon. Bye, bye.