Bryan

Hello and welcome back to Change and the Market, your weekly look at the changing real estate market. I'm your host, Bryan, joined as always by the other host, our resident real estate expert, Mr. Chris Masiello. Chris, how are you doing this morning?

Chris

Hey Bryan, how are you? Good to see our community, and good to be with you.

Bryan

I'm doing good as well. And I said this morning, but it's actually this afternoon. I've got my schedule all mixed up, but we're going to get right into it.

Chris

So yeah, I'm going to kind of shamelessly read from my notes because there's a lot of good data in the last week. And I'll start with the fact that our internal sales numbers are ticking up pretty significantly for both incoming new listings and under-agreements. So, you know, not a big surprise. It's the middle of April and it's kind of as we would expect—the market has, you know, come back to life.

Some really interesting points, though, came up in the last week, because people are trying to—within the industry and outside of the industry—are trying to make sense of this environment. And a number that I thought was really fascinating, which I think speaks to the stability in sales prices that we have, because even though our unit count has gone down in the last year, you know, with rates going up—sales prices have not.

And that's never happened. We don't have declining sales and increasing prices. That's really just never happened for a sustained period of time. And this number I got just from my weekly research. So in the last ten years, we've built 40% fewer homes than we had in the comparative period, which went from 1960 to 2007.

So between 1960 and 2007, we built roughly a million homes a year. And over this last cycle that they're referencing—the last ten years—we've built about 650,000. You have to think about that. This is a big country. If you ever fly or if you ever fly across the country and you look down, all you see is green. And there are 340 million people here, and to build 650,000 new homes—that's it?

I think that speaks to why we're seeing the inventory and the prices being so buoyant even though the market's fluctuating, because—like we've talked about many times in past episodes—we have more people than we have places to put them. And that trend continues, and that's why pricing is so buoyant.

Reading Bank Rate Monitor—which is a pretty widely distributed publication—they were talking about today being the best time in the last couple of years to get into the market, even though rates are a little bit higher now. They're referencing the fact that prices are not—you know, they're stable. They're going up a little bit every year, but they're not going up in high double digits, which is what you and I were talking about. So that was good. And that all speaks to the fact that the constriction on the inventory is keeping prices buoyant.

The other piece to it right now is that there is not as much buyer competition on the market. So there's this little state of equilibrium that we're in, where we've got rising inventories, rates are coming down a little bit, and there's not as much competition in the market. There's still multiple offers and all that, but there's not that kind of a frenzy. Yet. I think that's to come this summer.

And so there's this kind of in-between state that we're in right now and people would be wise to really take advantage of it. The other thing is that interest rates have gone down for the fifth straight week in a row and mortgage applications in the last week have gone up 8%.

Typically, when mortgage applications go up, that's a precursor to the fact that people are going to be in the market. So, I think all those things really add up to what could be a pretty active spring and summer, with a little bit more inventory coming on the market.

And if you're on the fence right now, and there are a lot of really good reasons to be on the fence—except that you're not sure. "Not sure" wouldn't be the best reason, because all the indicators are that now is the time to go.

Bryan

So bouncing off that and taking all that information that you already hit on a little bit—it's time to get off the fence. But let's round that out to your advice for anybody else. What should people be doing right now as we're moving forward into this market, the way it's been progressing, over the next few weeks?

Chris

All markets, I don't care what type of market you're in—could be stocks, it could be housing, it could be cars. I don't know, pick any market, gold, whatever it is. All markets are very elusive when you're trying to time the top and the bottom of the market. It's virtually impossible. And by the time you know that you've either hit the top or the bottom of the market, it's too late.

So you have to follow your instincts and understand what your personal condition is, whether your personal finances or your emotional condition. With housing, for example—is now the right time to make a move based on how we're feeling about it emotionally, what our financial condition is as an individual or a family, or whatever the case may be.

And if you're in that position where there really isn't any good reason to hold you back, well then you should go. Because by the time you get empirical information that now's the time to go, you've missed it. And that's true of every single market. It really doesn't matter what type of product or commodity.

Bryan

So kind of taking that and spinning it a little bit for realtors right now. Should they be trying to gently coax the people they're working with—now is the time.

Chris

Absolutely. Yeah, absolutely, and I would even be... I would even be more direct about it.

Bryan

Maybe not so gentle, a little more forceful?

Chris

Well, we're always gentle. But, you know, I think sometimes being plain-spoken is beneficial. Where we're kind of stripping away, and we're not relying on nuances. Like, "Okay, well, here's the data." And when this video goes out—when it goes out internally in our organization—what goes with it is all the data that I cite from the research that goes on in between our episodes.

You know, we employ professionals—whether it's our attorneys or accountants and things like that—to advise us as we run the organization. When there's something that we need to know and they want to be really clear that we understand it, there's not a lot of mincing words. It's
"Okay, look, this is what you need to know. This is what you need to do."

And I think we're in one of those periods because it's a little counterintuitive, with rates going up and housing prices kind of modestly going up. You know those things don't happen together.

So I think all of us are in this process, Bryan, of making sense of the market. This is a sense-making exercise. And every week when I start preparing for us to be together, I take a look at last week's notes, this week's notes, and there's always a lot of overlap because you only do a week—you know, not a lot of drastic things happen from one week to the next.

But patterns build up. As I go through my notes, I can see the patterns quite clearly, and I think that right now, if you have the ability and the desire and the need to be in, you need to be in.

Bryan

Fantastic stuff, as always. Excellent advice, Chris. That's going to do it for this week's episode of Change and the Market. As always, if you're enjoying listening or watching the show, make sure you like, subscribe, and follow us on whatever platform you're joining the show on, and make sure you join us back here next week for another brand-new episode of Change and the Market.

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