Did I Miss The Top Of The Market To Sell?
Good morning Brenden Rendo here with The Homes Orlando Team and of course we're joined again by Joseph Dionne of Appli Home Loans and we are The Orlando Real Estate Buzz. This morning, we're gonna get into the biggest question we're getting from a lot of people.
Did I miss the top of the market?
Did we think it's starting to get interesting?
It's starting to get interesting. I definitely think we've missed, you may have missed the hype train. Yeah.
Yeah, I mean it was another one of those weeks where the headlines really just kind of knock the heck out of us.
You know, look at them and the hard part about these headlines is their brutal and most people don't read beyond the headline.
Yeah, it's to catch you and not read the details of it and the details weren't much fun anyway, so why read it?
You know, I mean these these are ones, this is from realtor dot com, Well America's housing market just hit a speed bump that could completely change the whole buying game, agree More.
This one really hit you, mortgage application volume remains at a 22 year low. Right. Ouch.
And then cliff diving continues for new home sales now down to 2016 levels.
I mean, and these are just three.
I could have easily pulled out another 20 that, that were exactly the same.
Yeah, it's it's it's, it's so interesting too when you see a lot of this because it's like 22 year lows for mortgage applications, it's like, well like it's a lot of times like when you go into the data, it's not exactly a 22 year low, it might be a 22 week over week percent drop.
Like it feels like the largest drop.
Like for us, I feel like, You know, as a company, we haven't seen a slowdown, but we definitely see the changing of the guard and you're not gonna hit, you're not gonna hit numbers from like 20, and 2020 and because the reality is, is that was the best time in the history to refinance a home.
Yeah, that's, that's one of things always misleading is if you're, if you're working numbers off your peak, you're never gonna look as good as that.
Yeah. And I think we've had that discussion as, you know, are we pulling back into more of a normal market.
Um, I gotta say right now we're really pushing into a buyer's market. It really is.
Um, and we're going to the numbers you're, you're gonna see that, that we really are pushing into into a buyer's market that we haven't seen in a long time.
And one thing we gotta be careful of is which market are we looking at because when we look at numbers, we're looking at, you know, all of, all of Orlando regional, which is really a five county, five county area.
You know, you've got orange Seminole Lake Osceola evolution.
Yeah, I think you can throw maybe six actually, I think you can throw polk county in there and When you look at it overall, you know, from that, from that 10,000 ft view, You know, it's, it's, you know, we're holding steady.
But then as you zoom in just different areas then and I'll show you one in particular, we'll show you one in particular a little bit later how that market has completely flipped and it's a total total buyer's market.
So, I mean, that's just, it's, it's, it's one of those where you, you know, if you're a buyer, the hard thing I think and you've seen that again, we've gone through this several times over the past, um, several months, is that jump that roller coaster ride of interest rates?
Yeah, it's, it's, and, and that's the hard part is, you know, we talk about, you know, we're talking about these changes and everything and all this craziness.
But you know, one week, it's rates next week, it's market and you know, and it's like, all right, what are rates going to do?
Are they gonna stabilize? And it's like every time it's like you feel like you get a pulse and here's the funny part is, you know, I spent thousands of dollars a year paying to be a part of services to have people that are a lot better at predicting where the market's going for interest rates and everything and they're getting it wrong, like, you know, so it's like, hey, these are people that, you know, yeah, you're exactly the weatherman center, right?
It's like, like, and I always joke, I'm like, it's a flip of the coin rates are gonna go up where they're gonna go down.
Like, you know, you're guessing it's a little bit of a guest and you're hoping like, hey, where's the data pulling me?
But there's so many things that are happening outside of just basic economics that are, there's so much, I feel like a motion on a, on a policy level, on a, on a national level, even the economics are putting so much emotion in what's happening.
We're not getting a lot of like statement of facts.
We're getting like, we're not getting that, we're not getting just, here's the data, here's what we're looking at.
And You know, when you, when you start looking at numbers, you can kinda understand why, when you, when you've got, you know, polls showing that 75% of Americans say that we're headed in the wrong direction.
You know, that's, that's bleak. That's, that's not a good feeling.
And then You know, you look at, you know, consumers and only 17% are saying it's a good time to buy a home.
So you're looking at, you're looking at those, those items and then you're looking at the rates going up and down and you do you feel like you're, you're on a, on a roller coaster ride and you're holding on, I love roller coasters.
You know, you're, you're holding on, you're trying to get to, you know, stay steady, get through it and you know, our job is, is to help our clients understand and hold their hand through this thing, you know, and we've, you know, we've put ourselves out sometimes and like, you know, this is, this is my gut, you know, when you're talking to a client, you know, whether or not you should lock a rate.
Yeah. You know, you know, I mean we had a client like, you know that I went in, I couldn't get the client to answer the phone and I was like, I gotta lock it and I locked it, you know, on Tuesday and then markets worse than significantly from Tuesday to Wednesday.
We saw some neutral and it's like, you know, it was the right decision.
But it's like I had to explain to the client hey, like now, hey, this is why, hey, here's what's going on and like explain it because you know, but in that moment, the hard part that a lot of bars don't realize is that and this is the crazy part like and you get it and you know this because we're in the industry at any given moment, I can tell and this is like if we talk to our clients and I tell them, I was like, look like I can tell you something right now and I could be like, this is the rate, it's, it's X and it's costing this and in 10 minutes from now, I might not be able to give you
that like because we're seeing the market now, there's times where I can be like, hey your rate is gonna be this and it's gonna cost this and that might be valid for like two weeks.
There's times when the market just doesn't move, but right now we're seeing so much movement and anytime you have uncertainty, the people that are on the back end saying, hey, here's the right we're offering, they're gonna be more conservative.
So they're gonna be like, we're gonna do this for the pricing because we think it's gonna continue to get worse.
And we're like, hey but the market shows it's improving their like we've seen this swing really, really quick.
So then they don't they don't give us that improvement because they know that it will swing right back down.
But then the market gets slightly worse and they're like, oh well we're gonna make the we're gonna drop a rate again, right, we're gonna do a little bit worse rate.
So it's like I always tell people, it's like, you know what is it the the 22 steps forward, one step back type thing that you know, that's kind of like with rates like when rates go up they only if they start getting better, even if they've gotten all the way back to where they were a week prior, we may only be halfway back at the rate that we were?
Because if there's a lot of volatility, a lot of these investors on the back end are gonna hold up on how quickly they go back to that positive rate for that lower interest rate.
Because there is that they're afraid of getting burned. Yeah.
And I think one thing we we got to warn people about and you know, you and I've run into this is with the volume dropping in the more in in in mortgage originations.
You're gonna start seeing a lot of companies trying to quote by the market where they're going to give you their people, people shop.
People should great shop and It is not all about rate service matters so much and that comfort of knowing that the people I'm working with you and get you to the closing table and get you to the closing table on top that that that is that's worth so much more 25 years.
I've had so many headaches. I was on your side and I know all the things that can go wrong and you learn who's good, who's bad you're comfortable working with and and knowing that when someone tells you something, hey this is good, this is gonna happen.
So people gotta be worried because they they will, they'll all of a sudden, well I just called and I got a quarter point lower than what you're putting me?
It's like, what aren't they telling you telling you?
How are they telling you how many points you're gonna have to buy Now?
Are you gonna get that surprise at the closing table that all of a sudden you've got to bring an extra $6,000 because they had to float that rate and and their yield spread went went away and now they've still got to make their money.
You know, be very careful with that and ask a lot of questions and then use you know ui um the real professionals to go through it and go through it in detail.
So um well let's hop into the local numbers because we're just we're staying in that consistency.
Again We're seeing, we're seeing and I and I'll let you run that price like that top.
But there's some numbers that are jumping out right off the board. I'll let you run away with it though.
The biggest one that jumped out at me when I was looking at the report this week.
Original list to sales price last week we were at $13,000. You know, off we've jumped to 21,000. Yeah.
People are getting nervous, sellers are getting nervous And they're willing to discount now when you go to you know where the main sales are which are in that $300-$400,000 range.
Look at this. I mean you're you're basically seeing roughly, you know, 4% discount.
Yeah you and I can testify to that.
We got one under contract in Deltona earlier this week, started out at $320,000.
We got it under contract for 300,000 and we got the buyer $5,000 in closing costs.
You know, we haven't seen closing cost contributions in a long time. Yeah.
And and and it wasn't a one or the other, right?
Like it was both you got money off the asking and closing cost credit.
Like that's a that's a shift right there. Yeah. Yeah.
And you're what we're watching and a client I met with yesterday I said to him, you know, we went and looked at a house just came on the market and it's like watch it goes what watch it don't don't put in an offer right now because it just went on the market so they're not gonna want to want to move.
I'm tell telling you most everything is sitting 14-30 days now.
And at that between that 10 and 14 day mark is when you're starting to see sellers sweat it out.
And that's when you're, you know, you're gonna see that price reduction.
And even even on those houses that are that are $300,000.
You're seeing, you know like a 3% 4% price drop and then you can still negotiate.
I just don't want that. Yeah.
So now it turns into a patient a game of patience and I'm like I told, I told my client where we were we were negotiating.
If they if you don't get what you want, walk away, Walk away because we can always go back chances are nine times out of 10 that house is still gonna be on the market next week so we can go back to sharpen our pencil again.
And let's see how how, how much pain that seller is feeling.
And if that seller is feeling that pain, he may he may jump at that.
And then you see our days on market were consistently holding up So we go back into our sales prices.
Um the average jump just a hair but our median, it's still holding down here I think 400 roughly $415,000.
And I'm actually expecting this over the next couple of weeks to drop a little bit with this additional discounts that you're seeing people coming off.
I think we're going to start seeing the medium price dip And why we see a dip.
Here's a good reason. Look at our sales the past three weeks, we are just sitting right at that roughly 450 mark.
So from a year ago, you know, that's 5 60-450.
That's that's what's that 20% drop in sales roughly. Yes sir.
Then we go to our our next graph which is our average days on market and again, You know, we jumped 24, This is kind of holding steady, you know, continuous days on markets holding in that 28.
So this, this is continue to push up and our inventory is continuing to go up more houses, less sales, higher rates.
It's for sellers.
It's, it's, it's a shifting, it's, it's a totally shifting market from where it was in March.
I don't think I have ever seen a market do a 180 this quickly ever in the heart.
The hard part about this is is it still not horrible?
But it's like when you had such a high peak, It feels so so massive and it is a big adjustment but it's like, it's almost like if you were to sit there and take the last two years out of the equation, let's look at 20, you know, 2019 to now what's really the difference between those two?
Not much but the crazy part is, is 2020 and 2021 was just so insanely stupid.
I say, you know, it's like, you know, so much fomo so much like price gained, like so much all these things just compound and compound and compounding that the moment that stops, there's that little bit of panic and it's like what's going on and that's the great part for a buyer right now is there is that panic on the seller side, What what the sellers have to realize their, their gain is still in the 20, 30% range over the past couple of years.
Maybe they're not getting the 35% you're gonna walk with a 30% gain you bought basically you know was it 2019 and before You know you've still gained roughly a 30% increase in the value of your home.
And that's that. And and and here's the part like you know I was talking to a client of mine um and I say client is actually a good buddy of mine.
He bought an investment property in 2021 for $103,000 And he just sold it for 245,000.
But he was complaining because here's here's here's the thing like the shift right?
He was upset because he wanted to 60 And he's like I had to come off my price $15,000.
He's like this is like the market is so crazy like he's like we lost so much and he was and and I say this because this is what a lot of people are doing like and I'm like You you gained 130% on your investment in one year and you're upset because of the mentality the market, everybody got so hyped about what what the market was doing that that everybody's losing sight of what's really like what really transpired the last two years.
It's like anything with statistics, I can make anything look good and statistics.
You know it's all how you look at the numbers. What numbers are you looking at?
I can paint any narrative with the numbers that I grab like. Yeah we can make it look horrible.
We can make it look great yep. Exactly. Exactly. It's just how you how you present the numbers.
So now we're just we're just we're giving the numbers like this is just data.
Um You know that but that's the key is like you know if we go over a year over year and it's like alright great like you and I and I say this like we look at this original list of sale price this doesn't mean that these homes are selling and people are losing money.
You know what it means is that you know I hate to say it like the the agent the seller like everybody that was in the decision making of where to list that property at.
They were just overzealous. Yeah it's perceived value.
Yeah people you know when you when you got inflation rate this high you got rates going up this high you know people have to feel the value and they're not feeling that value anymore.
We the client I looked at we were in that $300,000 range.
And and this is one thing I wanted to show this morning is we're looking in the Deltona area.
Deltona the land which is a good good place for.
Um For starters um And you know six months ago I couldn't find anything under $300,000.
Anything And we probably looked at close 20-25 homes under $300,000.
And this is what I wanted to show with.
When I say when I say we gotta look at the Go from the $10,000 or 10,000 ft view down closer to the ground because here's our numbers in Deltona.
Look at this july you had a ton of closings way over but look at AARP endings way down way down, way down And this is your average five years listings which averages 254.
We're at 306. Mhm.
So there's more houses on the market again in our average um months of supply Is 1.1.4 months were up to 1.6.
So this is how different different markets within the Orlando market very greatly.
And this this I'm looking at this going okay I need to show this to my buyers so they understand the market, it's like, hey take we can take our time and find the house we want.
You know it's it's just it's it's done a total 1:50 and look at, I mean look at the number of new listings their way up.
Mhm. And then let's see medium days on market, this used to be zero actually used to be zero.
So we've gone up on this, you know average market has gone from 14 last year to 25 this year again shift in the market and understand understanding that shift.
Those are the things, you know, I go and I look at when, when I'm getting ready to work with a client, getting ready to work, work with with a seller on a listing because you've got to show him, Hey, I know.
Well you know, my friend back in March sold his house in a day, had 15 offers, you know, six of them over over list price.
Yeah. That he probably did almost guarantee you he did this is the market today and this is this is where we're heading.
And I think that's the hardest part that we've got going right now is helping people understand the shift in the market because quite frankly it's, it's kind of blown me away how how it's shifted so quickly.
I think, I think you hit it on the dot right there and it is, it is tough.
Like we're, you know, you've been in the industry a long time. I've been in the industry a long time.
We've seen changes in market. We've been a part of these changes in the market, you know, But what we're seeing today isn't really like what we've seen in the past just isn't we?
We've never had a 2021 2022 to the level that we had a lot of people go back and they're like, oh the heyday the market, you know, the 2004, 56 what not like.
And they go and they say like, hey, those like this is just very similar.
And I was like, no, 2021 2020 you know, 2020 2021 was not like the only thing similar is that prices were going up, but they were going up at a much faster rate this last and, and they were going up, you know, the amount of people willing to pay over and pay cash and like that was, it was unreal.
It just, it was, it was, it was unreal.
And you know, the thing we didn't have in 2004 or five, you know, six, we didn't have the investors that we have today didn't have the open doors, they offer pads and you're seeing and you're actually starting to see a lot of them pull out was American homes for rent.
You know, big, Big Wall Street firm. Um, there they said they're, they're cutting their, their purchases by 80%.
But that's again, that's good, it's again, it's good news for the buyers.
You're not competing against open door right now.
My gosh, the emails, I get bonuses, the bonuses are paying the price cuts that, that their offering, they, you know, they, they lost 250 million last quarter said they're projected to lose 135 million.
Oh, I bet you it's 2 50 to $300 million is what they're gonna that's a big that's a big number you know and how long can continue to do it.
Yeah. How long can you like how and they made money but you know and like you said like OpenDoor, like that model, a lot of OpenDoorall these I buyers, all these companies that were doing this, they were being very strategic.
They were helping propel cost up like values because of how they were doing it and what's unfortunate is they're gonna help propel the cost down.
Yeah we looked at a house that was in um Open door house that they had bought for 382 in a flood zone needs a new roof And they put it on the market at $450,000.
They're down to 390 right now. Yeah taking the commission closing costs, all that stuff proposition.
But then you look at our numbers here, that house is in those numbers, there's a lot of open door offer pad houses in those numbers.
So you got, so you gotta look at that.
It's like oh that's kind of exaggerating our numbers too and it's all over the country.
They're doing it all over the country.
So definitely some interesting stuff this week, definitely really interesting on some of these trends that we're continuing to see.
Um and just you know, I hate to say it like, you know, as much as I pride myself in being an expert, you know, when it comes to all this stuff, I still feel like I'm playing a game of darts right now.
Like there's just, it's just really, really hard to pin exactly where everything's gonna go.
I feel much more confident with the long term, like saying where we're going to be a year to two years from now than where we're gonna be next month if that makes sense?
Yeah, it does, it does. Yeah, you just, you get up, you look at the numbers, you know, because you're trying, you know, for me when we're trying to figure out negotiation-wise, you know, where we want to be things like that and you know, It hurts my virus when you see that jump from the five to the 5.875.
You know, we also have to change our, our model, you know, maybe just go from 350 down to 300.
So yeah, well we hope we hope you all enjoyed this morning and you're watching on Facebook, please hit the thumbs up.
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Thank you so much, joe, I appreciate it very much.
And we'll see you next Thursday sounds good guys, take care, bye