Beyond Just a Place to Live: Real Estate as a Financial Market

The housing market has a profound effect on nearly every family, the economy, and the markets. 

In this special episode, Natalie Picha, CXO, is joined by Steel Door Group, Martha Turner Sotheby's International Realty's Brittany Waterman and Ashley Graves to break down Texas’s real estate market: what really shapes affordability, why pricing may normalize into 2026, and the areas where buyers hold leverage. Natalie, Brittany, and Ashley discuss:

• How the Texas market differs from other markets nationally

• Inventory psychology and how it differs for various areas

• Buyer behavior: later first purchases, family gifts, and mobility

If you enjoy our podcast, please take a moment to subscribe. We would love it if you would leave us a rating and a review, as it's the best way for us to reach other listeners. We'd also love it if you could share the podcast with your friends and family. You can find us on LinkedIn, Facebook and Instagram for additional content, or reach out through our website at royalharborpartners.com.

Experience the difference of working with a firm that empowers your life—a firm that focuses on what matters most—you.

Whether you are beginning your financial journey now or have already taken steps toward your ultimate life goals, we are here to guide you.

https://podcasts.apple.com/us/podcast/rhp-market-talk/id1538051530

Transcript

Introduction

Natalie Picha 0:09

Hello everyone, I'm Natalie Picha, Chief Experience Officer and Partner at RHP Wealth Management. And this is RHP Market Talk. In today's episode, we're diving into the Texas residential real estate market with a very local and very timely lens. I'm excited to welcome back special guests Britney Waterman and Ashley Graves with Steel Door Group at Martha Turner Sotheby. Britney and Ashley work extensively throughout Texas with a strong focus right here in the Houston metro area. And they bring real, on-the-ground insight into what buyers and sellers are experiencing today. Brittany Waterman is a proud native Houstonian whose passion is real estate in all its forms. A realtor since 2010, Brittany is a consistent top producer and holds the C and E and ABR designations. A graduate of the University of Houston, Britney's family owned a property management company, and real estate has always been in her blood. Brittany has also always served her community and currently she's involved with the Houston Livestock Show and Rodeo, the Junior League of Houston, and a Nativity Academy board member. When not working, Britney enjoys spending time with her husband and three children taking their dogs on long walks. Ashley is a sixth-generation Texan with over two decades of experience buying, selling, leasing, and investing in the Houston area. A proud graduate of the Texas Realtor Leadership Program, she continues to be a top producer year after year. With a deep commitment to her community, her involvement has ranged from positions on the board of directors for the Bay Area Transportation Partnership, the Bay Area Houston CBB, the Community Association for Nassau Bay Enhancement, as well as serving on the Nassau Bay City Council and the Executive Board for the Harris County Mayors and Councils Association. She believes staying informed and aware of the upcoming changes in our community is essential to being able to provide the best knowledge and service. She's a proud mother of two and understands the importance of the place we call home. We're excited to have the expertise of both Britney and Ashley on today's episode to discuss some of the most recent headlines on interest rates, housing affordability, and inventory. And as we know, this subject impacts all of our clients in many ways, and it's one aspect of a healthy economy. Brittany Ashley, thank you so much for being here with me today. And wow, a lot has changed since then. Tell me a little bit about you guys as a firm and Steel Door and your transition, and then we will jump right into what I know is a topic our listeners are really ready to hear.

Brittany Waterman 3:05

Yeah, absolutely. So Steel Door Realty transitioned to Martha Turner's Sotheby's International Realty in April of 2025 and have not looked back. It was a huge step up for us. Um, not only the resources and the backing that the brand has globally, so we can help not only the Houston area now, but also put you in touch with great agents globally. But it has just given our agents the ability to elevate their brand and better serve our clients.

Steel Door’s Move To Sotheby’s

Natalie Picha 3:32

Well, I'm excited about this conversation because I know the last time we spoke, we were in a big real estate transition in the area, and you guys had a lot of insight, not just for the local uh real estate market, but also the state and now globally. So I think the move um lends itself well to our conversation today. There's so much noise in the headlines right now. My goal today really is to try to bring some clarity and context and some practical perspective. Real estate affects every family in some way. It also has a profound effect on the markets and our economy. I want to go ahead and just get it out of the way right now and address some of the big headlines that are out there so we can get that on the table. And really, you guys can speak to how much of an effect some of the things that are going on that I think is really loud uh in the media right now. So we've got a couple of big things, right? Um President Trump uh came out with um a ban on institutional investors from buying single family homes. Investors of all size account for about 30 percent of single family home purchases, uh, but small investors actually account for more than 90 percent of the market uh of investor owners, and larger investors refer for about 2% of single family rental housing stock. So curious as to hear what you guys think that is going to affect over time. Like, is it going to be a big effect, a small effect? Do you think it's gonna be a lasting effect? What are your thoughts?

Headlines: Investor Ban And Build‑To‑Rent

Ashley Graves 5:04

I well, first of all, Natalie, thank you for having us on again. It's always a pleasure to talk to you guys and for trusting us with uh this report. I know your listeners are anxious as well. Uh real estate does affect everybody, like you say, in particular with all these headlines buzzing around. I think people get really lost in what is important and what isn't important. As far as the institutional investors, what we're seeing, and Brittany can back me up here if it's true for her as well, are the small business uh investors. We're seeing a lot of people who want to start kind of getting into real estate investing. Those are the ones that are contacting us or myself on a regular basis for those houses that look like might be a good purchase to add to their portfolio. So I'm not seeing a lot from institutional investors. The other side of this that's a bit confusing for me is I am seeing uh communities that are being built or sections of larger, um like set up to be very various developers and things like that. I can't think of the name right now, but that those taking sections and they're building the entire section to be rental homes. So, how is that going to be infected? It affected it's not the same as going in and buying a single family home, or is it? Are we are we counting new builds because Texas leads the nation in new construction? So is this going to impact who gets to design these sections of these master built communities that are all for rentals? Is it going to affect that? If so, um, I do think that could have an effect down the line as far as you know what what we're able to just move into straight the buyer pool versus sectioning off for rentals. Um but it does pose an interesting question as to do do we want to allow the government to get involved in that level? Um and is it going to be good for um the things we are seeing as a challenge in the market, affordability, um, stability, you know, those type of things that we want to do.

Natalie Picha 7:06

Well, and you bring up a you bring up an interesting point. If Texas is one of the leaders in new builds, and we know we've been in an inventory crisis for for quite some time now on the housing side, does it slow actually slow down the building process? Are we gonna have less builds?

Ashley Graves 7:24

Right. If you don't have those institutional investors backing it, you you could see something like that. Although we're we're we're far in it now.

Natalie Picha 7:31

Yeah.

Brittany Waterman 7:31

Well, and I think that I mean, after everything Ashley said is absolutely correct in seeing the same thing here, but in Houston, and I that's you know, where our expertise is um hyper locally, this is kind of this points to the fact that headlines are headlines nationally, and we don't see that as a problem here in our area. So for this to be a big deal, I read I was reading like Missouri City, uh I'm sorry, Missouri. St. Louis, Missouri. Sorry, unless Missouri City is in our area. I can't think of a city. Um St. Louis, Missouri um has like 25% institutional investment buyers. And an institutional investor is considered like a hundred or more units. So that's gonna be, I think, dramatically affect those areas that have these high percentages. And in Houston, it's such a low percentage that could there be a small impact, yes, but is it gonna be seen by most of the um folks that are listening or that we're transacting with? I don't think that it's going to greatly affect.

Natalie Picha 8:22

So the other big headline that we're hearing, um, and again, I understand President Trump is trying to, you know, pull some levers here to make housing more affordable. And um, we're gonna talk a little bit about, you know, first-time home buyers and things here in just a minute, but the $200 billion in purchases in in mortgage bonds, in really, in our words, it's a it's another form of quantitative easing. So do you see that as making a big impact? Is that going to move the needle a lot on what's keeping uh really home buyers from being able to purchase homes?

Ashley Graves 8:56

When you say a lot, I think that's maybe uh too much. I don't think it will move the needle a lot. Uh we've we're all over the shock of the doubled interest rates that happened a few years back, right? But years have resolved that this is just the new norm. And we've come down a bit from, you know, the mid-sevens and we're just creeping down and creeping down and creeping down. Uh, I don't think that this is going to broaden the buyer pool in the sense that all of a sudden it's going to make homes affordable for folks that it didn't before. But I do think it will ease the burden of being on the fence, is it the right time to buy or not? Uh, those folks that are kind of wondering or waiting, you know, sometimes it's just a matter of getting that sign, oh, the interest rates are coming down. Great. This is gonna help me make that decision. But chances are they were already in the buyer pool and then they're able to maybe get a little bit more of a house than they thought they would. Of course, there's other things that greatly affect affordability beyond the interest rate. As Brittany pointed out when we were speaking earlier, that loan you get at that rate, that's a set thing. That is a set price you're gonna pay every month. When we look into things as that affect affordability in our area specifically, insurance is huge. Insurance is constantly going up. And then, of course, with all the new construction going on in Texas, a lot of these are built inside of a MUD district, municipal utility district. That's an added tax. Those tax burdens, uh, as you buy a home that you hope is going to appreciate in value, the burden of the is going to increase. You know, the the insurance we're seeing is a big increase. So while the interest rate ease is going to help some, it's not the magic, uh, the magic wand to help buyers all of a sudden be able to afford a home that they maybe couldn't have afforded. There's just too many other uh elements and aspects that go into it to create the total affordability affordability package.

Natalie Picha 10:53

So you said that um we've kind of gotten over the shock of the double-digit interest rates, right? Have you seen an uptick in inventory coming online? Because I know for a long time people are like, I'm never selling this house because I've got a 3% interest rate. I'm never moving. I can never move, right? And the the opposite of that for a lot of our clients who were younger, they're like, well, I can never buy a home because I'm not gonna pay 7% or 6% interest rates, right? Has that psychology changed?

Brittany Waterman 11:22

No. Um, I should say. I think 2025, for example, just to kind of put the most recent history in it, um, I think we saw, you know, a low inventory. We saw a lot of sellers that were putting their homes on the market, but for more unrealistic number. Well, we'll sell it, we'll get rid of this 3% interest rate if we can sell it for this amount. And so we're gonna try. Um, and so what we what we anticipate and what all the experts are saying for 2026, and I feel like I'm already kind of seeing it, is that everyone's saying, uh, you know, I'm gonna take it off. We didn't sell it. Of course, we weren't gonna sell it that number. It was an unrealistic number. And we're gonna put it back on in 2026 now that we see you know interest rates are coming down. Hopefully, we'll get to more of a balanced market. And that's what we anticipate happening in 2026. So there are people are starting to let go of it. Like Ashley said, we've you kind of we've talked about other things. You quickly forget, and we've kind of gotten over the fact that um we are where we are on interest rates. We just hit below six. Um, and like I said in our last podcast, our you know, people bought it 13, 14 percent, even higher. So this is still this is the I think Glenn said on the last time we talked, and I don't think I knew the statistic, but the 40-year average of loans was five point something percent. So we're right there.

QE, Rates, And Real Affordability

Natalie Picha 12:30

Right. We're back to what the average is. And I I I mean, I reminded our clients quite a bit over the years is that interest rates were never supposed to be zero, money's not free. And so going back to really kind of a normalized interest rate environment is good in the long run. It's healthy. And for, you know, those first-time homebuyers maybe in their late 20s, early 30s that have an expectation that they can pay 3% interest rate for a home, just not, just not realistic. So that kind of brings me to a topic that I wanna, I really wanna hit on is has the average have you guys seen in the local market and across Texas, has the average age of a first-time home buyer buyer really gone up? And is has that affected how your business is run and who you look at as, you know, potential clients?

Ashley Graves 13:22

Uh yeah, I mean, I think the average price of a first-time home buyer has definitely gone up. The other interesting aspect of it is how first-time homebuyers are getting into home buying, right? A lot of them kind of need a nudge in a way to get beyond the just the rental aspect of having more to worry about in life, right? If you're renting, you don't have all of these extra things that you have to worry about. So to take that plunge, and I think it's really still motivated by life changes. So as people are getting married later in life, part of that kind of goes hand in hand with maybe buying your first house. And we're we are seeing an increase in gifts. I think the older generations want this for their grandkids, for example. I have some first-time homebuyers who are receiving a very generous gift from their grandparents. And so those are the types of things I see fueling that first-time homebuyer choice. Um, it but it definitely is happening at a later stage in life. I would say it's not the typical progression it was, especially, you know, 30, 40 years ago, of this is just what you do. In addition to that, something that's fueling it is the the idea of this kind of uh digital nomad world that we're all leaning into a little bit. You know, you and I are doing this in so many various places for all the people that are on the screen right now. And I just think it speaks to the fact that there is a level of mobility that younger folks still want to have. And so the idea of being in one place and having that maybe even a home office is just not as appealing as it once was back in the day. So these are the factors that tie into the decision to buy your home. Um, and it really leans into when you're ready to kind of lay down those roots and have a sense of community. And we do see that happening later in life for sure.

Natalie Picha 15:09

That's a great point. And I think of, I just think of like my nieces and nephews and where they are. Um, a lot of them are choosing very non-traditional living type of range arrangements and ownership just isn't that isn't that important to them.

Brittany Waterman 15:26

And so choosing lifestyle. It seems like this this you know, this generation that is in entering the buying age um is choosing lifestyle and vacations and certain things over ownership. Absolutely. It's interesting.

Natalie Picha 15:37

Although if you're in a traditional apartment, I know what the inner loop rent looks like these days. I just think, oh my gosh, how can you afford to pay that? And I can you buy a house with that rent, that monthly rent? Because it's rent is just through the roof, too. That's crazy.

Brittany Waterman 15:53

Yeah. Preaching to the choir over here, we say that all the time. Don't throw it away.

Natalie Picha 15:58

So are you guys um uh specifically with your industry? Do you see uh realtors uh as a whole still doing okay as a career? Because when inventory got so very, very low and it seemed like everything just stopped. You know, what was that for you guys personally like?

Brittany Waterman 16:20

You know, being a realtor is not for the faint at heart, and you have to be able to ride the roller coaster and you have to to know that you need to save. And I call myself a cash hoarder sometimes, but you have to be able to save to know that for the downtimes. And there's a uh, you know, there's a certain percentage percentage of us that you know last through these these uh ebbs and flows in the market and um you know continue to do well because you still have life changes, you still have so much industry that happens in Houston. Um we'll get we can get into that later, but that is what really keeps us going. So while the headlines, let's go back to that, the headlines are saying that it was a tough, you know, a tough year, a tough couple years for real estate. Um, for those of us that really have made it a career, um, it doesn't have to be tough, if that makes sense. You still have all the connections and all of the relocation and things that are happening that um it's out there that people are starting with.

Natalie Picha 17:16

So you may go through a slow period, but there's never really a stop. It's not like it comes to a complete halt. You still got a lot to do.

Brittany Waterman 17:22

Right. We catch up with the other things that we needed to get done that we didn't do in a in a busy year. Right, right, right, right.

Natalie Picha 17:28

Do you see pricing right now with where we are, particularly in Houston, but maybe you can speak to the broader trends. Do you see pricing stability finally starting to happen in the market? Because for the longest it felt like real estate pricing was just through the roof, right? Lots of speculation, lots of flipping, lots of things like that.

Inventory Psychology And 2026 Outlook

Ashley Graves 17:49

We've definitely been in a very, I would say, volatile market that since COVID. It's just been up and then, you know, down and back and forth, and nobody really knows where it's going to land. One of the things Britney and I were discussing is our hope for just stability and normalization in 2026. And I think we are getting there for several reasons. Uh, sellers were pricing high and they were able to do it and get away with it because that's what was, you know, we had such a low inventory, as you pointed out before. Now we're seeing the opposite. We're seeing sellers having to lower the price, not in every area. There are specific areas that are still highly desirable and they can kind of name their price. But I would say overall in the suburbs uh specifically, uh, we are seeing, you know, eight, 10, sometimes 15% price drop before you can move your house. Um and that's the folks that choose to, you know, stay on the market for over the three, four, five, sometimes six plus months that it does take to sell the house, right? Just because our inventory is so high. It and they're not um maybe they're not able to say, oh, forget it, we'll wait until the price is right and sell it, you know, withdraw. But, you know, I think pricing is the number one thing that sellers have to be realistic about if they want to move their house and it's finally happening. I think there's just an exhaustion for several things. I think there's an exhaustion of the up and down, there's an exhaustion of having to show your house constantly. And so eventually, you know, this idea that your house is worth more because X, Y, and Z goes away and you get really practical and you say, okay, I need to sell. And so we're seeing it across the board and what that ultimately hopefully will do is cause normalization, um, which is the best thing for everybody, right? But until then, if you if you have a good buy, a buyer in a buyer's market, um, you know, you just switch over to buyer buyer side and you um you coach your clients through that and what that looks like, how to do business in a buyer's market, which is different than a seller's market. But hop hopefully we move to normalization. Prices have come down because they've had to. That's the beauty of the market. It's gonna tell you what it needs. Be successful. So are are we solidly in a buyer's market? That's a very good question. I would tell you yes. I would absolutely tell you yes. Um, you know, we have in in most cases well over the three months of inventory that they say would be a neutral market. Um I see constantly uh price reduction, price reduction, price reduction um to in order to move a house. Um I think that when I'm writing contracts now, I'm much more willing to put in uh buyer incentives, uh write the contract very buyer heavy and just kind of see where that goes doesn't necessarily mean it's going to be uh accepted by a seller. Um and I think that with the idea and the headlines that you say play into um, you know, the the um increase in construction, it I think normalization is our best hope for 2026. I don't think we're going to move back into a seller's market anytime soon. So I would say yes. Again, Brittany can speak a little more to inner city markets, which I think um are dictated more by uh desire and sometimes a smaller amount of inventory just based on their desirability.

Brittany Waterman 21:13

Yeah, and I'll yeah, I'll add to that because we do kind of work and play in different areas. Um, Ashley does a lot down south in the Bay Area, um, and she works everywhere. But inner city, um, I think we're we're closer to more of that normalization and that stabilization. And while we do still see price reductions, it's not on every home. Um, there are a lot of hyper, hyper focal neighborhoods that I mean, there's a neighborhood that I work in often that I won't name specifically, but you do not buy a house in that neighborhood without offering 100,000 with a kicker over asked price. So there's we still see that. So it's it's interesting that we have these pockets, but buyers right now tend to be more confident and wanting to send these low ball offers in. Um, it's not gonna work. Sellers are coming down to realistic list prices later in 2025 and then into 2026. I've already seen it. And when we can be in that, and we're kind of already seeing that here, when we can be in that normalization, what I think is very exciting for me is that we can just do our job again, like our normal job, not like how much over do you have to ask, or when you're on the seller side just having no control and there's no buyers out there. So we've we've getting to this normalization, which I'm already seeing in the city is exciting because like I get to do my job and do normal negotiation, not give away a kidney or a firstborn child, and you know, our alternatively not have the seller feel like they completely walked away with nothing. And I think that, you know, we've definitely left the time the era of 10 to 15% appreciation over one year. But I still think that, you know, Houston will see uh one to two to five percent appreciation this year, even on a year. So Ashley says, you know, go down. And I'd say I wouldn't necessarily say down, it's just not as up as we used to be, if that makes sense. Right. Um appreciation is still there and it still makes sense to buy a home at that point.

First‑Time Buyers, Gifts, And Delayed Ages

Natalie Picha 22:55

So that's interesting too, is so do you guys see migration trends? Well, certainly we know that we're still we're Texas is still a hot place to be, right? Yeah, from industry to individuals, a lot of people still moving to Texas continually, which of course gives us a different housing market than maybe what the rest of the country is experiencing. But also the difference between suburbia and maybe a more urban environment. Are we trending more back towards going into the city versus out of the city? And I also know um myself living in a more rural space now, that there are those people that are like, I've got to get out. There's just too much uncertainty in the world. I want to get as far away from everything as I can. What do you guys see in trends in that particular area? Because I do think that is an indication of where our economy and where the thought process is with individuals, which overall affects our markets.

Ashley Graves 23:50

That's an interesting topic to discuss. I feel like it's so real estate is, you know, residential real estate is so person-specific. And Houston being as big as it is and having anything from a very rural feel, if you really wanted to be in the outskirts of Houston, you could all the way to incredibly high density in a in a high rise. Um and and because there are so many people here, you find it all. You you really do find it all. And I think we're we're not seeing the exodus that we saw during COVID that was prompted by a global pandemic. Um, and we are still seeing people move here, but we're seeing people move here for business reasons on the whole, and also affordability. And I think that diversity in housing style and structure is what is allowing all of that to happen, all of that growth to happen, because it's not just, oh, everybody that wants to live in dense, a very dense place is going to move here, or very urban place, or rural place, or suburban place. You kind of get it all. So we do see it all. Um and the fact that Brittany and I can speak to how all of those different tiny markets are changing. Um, you know, whether it's more of a buyer's market over here, a seller's market over here, that I mean, that's why you need an expert on your side, right? That's why you need because Houston is so vast and so big, you need somebody that knows, well, this area is experiencing this and this area is experiencing this. I don't see folks, you know, trending more towards buying in the city versus trending more towards buying in the suburbs necessarily. I think that as Britney alluded to earlier, it's really about lifestyle choices. And and some folks are just putting that at the heart of their intention of buying. And so when you do that, you you discover all kinds of things. It's not like it was in the, you know, some decades of time where everybody wanted to move out to the suburbs, or other times where everybody wanted to be closer to uh the hustle and bustle of the city, regentrification and all that stuff in certain areas that kind of didn't allow them to be in there before. Um so you it real estate's always a surprise every day. Um there there's all kinds of buyers, all kinds of trends out there. I'm not seeing anything that's pointing one direction or the other as far as what people are thinking or the area that they want to be in in particular. It's it's very much about intentional lifestyle living. Um, and it's it's all over the place. But I don't know, Brittany may have a different perspective than me on that.

Brittany Waterman 26:18

Very similar. What I think is interesting, and you know, making this move over to Martha Turner, we now have a relocation department. And it's interesting, like just you know, in Chevron or when a big company makes an announcement that they're, you know, moving their headquarters here, we obviously see um, you know, people from all walks of life coming from all parts of the country, not all, you know, not always just from that main central hub where they were moving from before. And that person may have young children, they may be empty nesters, they may not have kids at all. And so we still find the gambit. And then, you know, schools coming into play. And then the biggest thing really is commute. Like if you know, you do want a good school for your kids. So do you think you need to go to the suburbs, but then do you want to drive an hour each direction to work? Or do you want to spend a little bit more money and or less money and buy in the city but go private school or whatever it is that every family is so different? So the migration is still happening, but what their needs are still vast, I think is exactly what Ashley just said in a maybe a little shorter way. But um Houston is just so diverse in so many ways and industry, people and everything else that that is exactly what we see in real estate and what their needs are.

Natalie Picha 27:18

Right.

Ashley Graves 27:19

Yeah, I mean I would um add to that too, you know, Houston isn't just oil and gas anymore. It's not just oil and gas and medical anymore. And, you know, now we've got a huge play in the space industry with Ellington becoming, I think it was the 14th spaceport, uh, right to be recognized. And we're seeing a lot of growth over uh by NASA. They're building a huge complex to bring in folks that support the uh commercial spaceflight industry. So it's a really neat thing to see because I do think it solidifies and shores up the real estate market in those areas that you're not just dependent on one type of industry. And that's another diversification that Houston has, that we are able to continue to see buyers of all kinds and people moving in from all places, not just that influx from California and New York that we saw for a little while. Um, but actually, you know, folks from everywhere doing all kinds of things. And it just it helps things stay more steady and stable.

Natalie Picha 28:19

So I have to ask the big question where do you think real estate points us in the overall economy? So just thinking about the levels of activity, movement, what people can spend, what people won't spend. Um, as a financial advisor, we see every day how much someone's, whether it's the family home, maybe it's a second home, maybe it's real estate investment, but how much it may affect a family's overall wealth. So it is a significant part of the financial planning process, um, at least on our side of the industry, but I do think it also points to the health of an overall market. So what do you guys think about 2026 and our economy and how real estate sort of points or it can be a compass uh telling us how how we're doing? I know that's a big question. That's a big question.

Brittany Waterman 29:16

You know, I don't know if it's exactly answering your question, but what is recently in the last few years, you know, kind of post-COVID, but the age or the first time home buyer um attainability to buy at a certain price range. And I think that might lend into a little bit of the they're they're buying later in life, and so they've just been saving this whole time. But it blows my mind how much this, like somebody's buying their first home and it's in Houston, we're very affordable. So I'll throw out at this number and I'll be like, it's over a million dollars. And this is their first home. And we are in a city where you could buy a four or five hundred thousand dollar home, even in the city, um and have that affordability. So they're they're more than doubling sometimes, you know, what they could be happy in, but they're buying their first home at this crazy level. But what I found interesting and I didn't know until recently when I called my trusted lender to kind of get some stats to help with this podcast, and she said, you'd be surprised at how many, and Ashley already kind of alluded to it, gifts that are given. So you're saying, you know, generational wealth and things like that. And as a realtor, we don't always know if somebody's given a gift. It's on the lender side of things, and it's not a, you know, we've kind of liked that you don't have we don't have to know all your finances and you don't feel like you can tell us your life story. But um she it was a very high percentage of of how many, and I wrote it down, I'll have to go back and find it, but it was like 70 or 80 percent of people are getting gifts in their in their the first time home buyers in that process.

Natalie Picha 30:36

And so we're seeing generational wealth transfer is happening. And they're doing it real estate. I say earlier, but yep. Yeah, they're doing it on the real estate side.

Brittany Waterman 30:44

Yeah. Um, you know, it was exciting when we were getting that 13 to 15 percent appreciation, but it's still at two, two to five percent. And you have to buy a home, or you need to be in a home anyways, to see that appreciation and build that equity.

Natalie Picha 30:55

Exactly.

Brittany Waterman 30:56

Is is huge. Um, so I'm not sure exactly if I'm answering your original question, but it is something that um I think is worth you know pointing out.

Ashley Graves 31:05

Well, to piggyback on that, Brittany, I think you you made a good point. Like home buying is so much more than just buying a home. And so when you talk about wealth and your ability to gain wealth, um when you buy a home, you are are putting yourself into a community. And through that community, uh maybe you're able to grow your business or to start a business or to have the support you need to invest in other businesses. So you know, those are things that you can't necessarily do if you're just renting um, or at least not in the same way, right? I and I do think people are still intentional about buying a home, which means it's it hasn't totally gone away. Um, and I think one of the interesting things to see psychology-wise in 2026 is that what held back the market, in my opinion, in 2025 was so much economic uncertainty. Uh, you know, we we had um so many headlines like you talk about, right? And things like, you know, words like tariffs and um people didn't know what to do about that. And then there was all these changes over here and changes over there, and you kind of woke up every day and there was this new headline that you were grasping to understand. And and I think at a certain point people just get fatigued while it's in, you know, but I think it works both ways, right? You're you're you get fatigued also not making a decision, putting it off, right? It's with like waiting. Um, so then you take action, which which I think 2026 is gonna be fueled uh somewhat by just people being tired of waiting and waiting, you know, tired of of things making change or knowing if they're making the right decision or what lies ahead for the for the city, state, country, you know, what whatever. Um, and they're just gonna move forward uh with a little more uh intent on just making the life they want to make, which which is really the pattern that we're seeing when it comes to home buying. It people are uh I've got clients now that are first-time homebuyers, I've got clients now that are um they're actually upgrading, you know, for their they're paying cash to get the house they want to be in that's a newer, nicer house so uh they can pass it on to their children. Um I've got clients that are moving from one suburb to another sub suburb just because they want to be, you know, closer to family. So uh people are are not necessarily putting off moving anymore for those kind of more or less arbitrary decisions, right? If you if you get transferred to you know Washington, DC, you're gonna have to move and sell your house. But if you're just thinking about it, I think the economic uncertainty was holding people back from those more emotional moves uh in 2025. And now people are just tired. They're they're they're tired of second guessing or waiting to see what happens. And so I think I think we'll see more movement in 2026 simply because of the the need to do what you really want to do and other people you live.

Natalie Picha 33:57

And then I mean that's that's uh if if you work with our team, um our our thing with RHP is living an empowered life. And we don't believe in just piling in the cash and you know, really amassing all your assets, but actually living a full and empowered life. And so I think that's a really great point that in 2026 it might be time to just go ahead and and make the moves that you want to make because your life, it's your life and and we don't we don't know how long we've got, right?

Brittany Waterman 34:27

You can't take it with you when you go, but I I have a I guess a fun story that I had a house that re clients that recently closed, like recently closed. And um I think this could relate to a lot of people listening. So they reached out years ago and you know, we were about to list their house, they decided to choose remodel over listing the house a little bit post-COVID. Um, he kept thinking that he was smarter than all the experts, that he was gonna wait till it goes down, the interest rate needs to come down. I'm not gonna buy, I'm not gonna buy. Um kept sending me all these, you know, stats and all the things. So fast forward, they got tired of the four walls around them, had you know, kids are getting bigger, need more space. We ended up, they just pulled the trigger very quickly. It was just like a whirlwind, everything happened. They ended up with multiple offers, good scenarios on both sides. But ironically, the house that they bought, the last owner had bought it the right when we first started to do their transition the first time. And if he had paid that versus what he paid for that house, despite my good negotiation power, that interest rate would have been nothing. So if you're on the fence, just you know, just do it. Um you can't also, you know, can't put money on happiness either. And there's something that they would have been in this home for the last four years in a much happier position, walking to school versus driving. A lot of things that came into this change for them, and they could have done it then just because you're waiting, you know, and you can always refinance. If you know, if you think it's gonna get better, then you know, right. We can put pen to paper, we can sit and talk to the lender to show you kind of like what that looks like and let us talk you through it versus just watching those headlines and um thinking you're the expert. Call you guys and call me.

Natalie Picha 36:01

Well, and I had some of the I, you know, and I think you've kind of answered this. Our last three questions were really like heavy hitters. Like one myth buyers should stop believing.

Ashley Graves 36:13

Oh, this this was an interesting topic of conversation. Um and it kind of plays into this too. I think buyers think they need to start looking for this perfect house that they're never gonna find because there's no such thing. But they they feel like if they don't start months and months and months in advance that they're somehow going to miss out or not find the right one or not see enough houses. And the truth is when you're ready to buy, buy, especially in this time when we have such a plethora of inventory. Um, it's you're gonna find it. You're gonna find it, right? Don't don't worry about it. Start looking. Yeah. Just go.

Brittany Waterman 36:47

Start doing it.

Ashley Graves 36:48

Just start looking and and but don't really get into it until you're ready to pull the trigger. So many people start six months out and they're like, oh, will you show us this house? And I'm like, but you don't wanna, you know, your lease isn't up until you know July and it's January. Like, don't do this to yourself because you're gonna find something you love, then you're gonna, you know, hem and ha over it, and then you don't even know what's gonna be on the market in, you know, May when you should start buying, right? And so then even if you let's say you buy something in March because you love it, and then you're double paying your rent until July, and then something comes on the market in May that breaks your heart, it's just I would say, you know, if you want to close in a certain month, the earliest you should be looking is the very earliest, 90 days ahead of time, but I would say 60 days ahead of time. And and and Brittany mentioned um something earlier about, you know, pay. I thought it was so great. Brittany, what did you say about when you should start looking?

Brittany Waterman 37:46

Well, you know, a typical transaction is about 30 days. So that's a little tidbit of information. And you just have to be ready to double pay rent or not sell your home if you're ready for that scenario, but make your home ready if that's you know, this is the case. It's just a matter of how long you want to double carry a home. I had uh clients recently that didn't listen. They acknowledged that they didn't listen, but they did, they re-signed, they had the opportunity to go month to month on a lease or re-sign for a year. And obviously, when you re sign a lease, a yearly rate is better than a month to month. And they decided to go for the year because they really felt like it was gonna take that long. And it's funny that Ashley brought up this topic, and I just had this happen literally closing in November. And um, they ended up renewing for the year. Literally, like three days later, we found the home. Oh and uh they closed on that home. I think that the Department of Complex ended up working with them, but it's it's once you start looking, you will likely find something that you love. And so be ready. Um, if you're comfortable paying more, you know, Ashley kind of said just do it in the month you want to do it. If you feel like you have less anxiety because you look sooner, that's great. We're here for you. Just know that you'll probably find something fairly quickly and um be ready to kind of do that 30 to 45 day, you know, it's a roller coaster and we're here for it. And that's it will likely happen.

Migration, Industry Diversification, Relocation

Natalie Picha 39:01

Our our personal experience, and I have to say a thank you, big thank you to Ashley who helped us with our transaction um in the Bay Area. We call it the 40 days and 40 nights, very biblical. Um, you know, we lived in our home for 28 years and literally transacted both sides in 40 days and 40 nights and completely moved. I I don't, I only by the grace of God. That's all I can say. The whirlwind. It was it was a whirlwind, but 40 days and 40 nights, and it all it all happened and fell into place. Um, so what is one thing sellers should rethink? Pricing.

Ashley Graves 39:35

Pricing.

Brittany Waterman 39:36

What did you say about that?

Ashley Graves 39:37

Yeah, they they are becoming a little more realistic uh on pricing. But I think sellers really do need to embrace, at least unless you're in these little special pocket areas. And don't worry, you'll know when you're there, your neighbors will tell you. But uh, if you're not, if you are for the most part in a buyer's market like the rest of us are, you've got to differentiate yourself. So the first and foremost, listen to your agent. They are not there. To prevent you from success, right? I like to say we we all get in a boat and nobody wins until we get to the other side. So your agent isn't there to undermine you. There, they have a fiduciary duty to make sure you are getting the best deal possible at the same time. If no one's successful, no one's successful. So listen to them as a good guide. And if you disagree, you know, talk about pricing, get them to show you why. Because once you get in a hole with pricing, uh you just become another house that's on the market. And then that leads to buyer speculation. Oh, well, what's wrong with this house? It's immediately not the space you want to be in. So while you may disagree that your house is worth I don't know, 50,000 more than what your agent tells you, uh it's probably in your best interest to listen to what your agent is saying and and price accordingly and just get really let let them help you get really real with the market as a seller. I mean, there's other things you can do that um pro tips, like you know, just making sure you deep clean. I always suggest my sellers uh do a pre-inspection if it's been a really long time, just so that they can let the buyer know, hey, hey, this house has already been inspected. I mean, sometimes they don't want to do that because they know they have to disclose anything that comes up on a seller's disclosure, but it does put you in the driver's seat of being able to say, hey, we know this is wrong, we've uh fixed these things, and now you've got a punch list you can put out with your listing that says updated X, Y, and Z. Um, and that price, you know, coupled with the right pricing and the right marketing that we can do, um, especially now that we have bigger, better tools uh with Sotheby's, um, you know, that's that's just a win-win for sellers. But you but you really have to be realistic about where the market's at and listen to your agents.

Brittany Waterman 41:47

Okay, now we're joking when we were prepping real quick that nobody cares that it's reclaimed wood from your house you grew up in in the country of Idaho, you know, like that is wood, and it's still wood floors. Um, there's a lot of an emotional aspect to it, and but pricing it right is is the hardest thing to do, and that's what that's to put your best foot forward on the market. And that's what we're hoping to see in 2026 that we did not see in 2025.

Natalie Picha 42:13

And then last question one trend that will surprise people in 2026.

Real Estate As Economic Compass

Ashley Graves 42:18

I think you know, Ashley said smaller homes, and I don't know if I was like on par on you know, I couldn't think of something fun to come up with, but Ashley's comment was smaller homes and just choosing, you know, intention and lifestyle, which I do agree with that aspect of it. Although I think I'm in a walk of life where it's still just bigger homes because I'm growing with people, I have young children, and so we just need more space uh for all the things. But um I think that could be, you know, again area specific and hyper focal. But we were really trying to come up with something more fun and to answer that question. Well, I I do think, you know, as Texas is leading the nation in um in new home construction, and that is something that, you know, we could go down a rabbit hole on on how different cities feel about that. It's been, you know, some somewhat a source of contentions with some of the cities when it comes to this state legislature approving all of these. Uh, but for the most part, the the momentum behind it is, you know, not just the home builders wanting to to expand and make more money, but we do have a lot of areas in in Texas that can absorb it because of the influx of people as we talked about before. But but the trend is, you know, I think when I was looking, you know, it's it's we're slowly backing out of this idea of building bigger. In 2020, the average uh square foot of a new build was 2189 square feet. And in 2025, you're looking at uh 2073. So that's almost a hundred square foot smaller that these houses are being built. Um, citing things like affordability and I I think also just being able to squeeze in a little more here and there. But but I think people are starting to realize, you know, they don't need these bigger spaces necessarily. It goes back to the intentional buying process. Um I I think we'll see more of that. And I think people that maybe were afraid to purchase things like one bedrooms or two bedrooms, um, you're gonna purchase what you want, right? And and and so these 2,000 square feet houses are rapidly becoming what you would have seen, you know, a decade ago where you walk into a new construction neighborhood and everything's, you know, 2,800 square feet and up or something like that. So I I do think we see these smaller spaces becoming more of what buyers want, because even though they want to own a house, the idea still scares them and the smaller spaces are a little more easier to wrap your head around and manage.

Podcast Wrap-up

Natalie Picha 44:42

Well, and I think it kind of that kind of points to a trend. I mean, I'm seeing at least with uh I have grown children and speaking to other people in our circles, uh, my grandmother's house, our family's still in our family, and it is full of stuff. My mother's house um is very full of stuff. I just downsized, but unfortunately my house is still pretty full of stuff. And my children don't want any of our stuff. So there's this trend, um, but you know, towards minimalism, I think. And I think that's still there. Less stuff means you might be able to take that vacation, or you might be able to lock the door and walk away and you know, be gone, like you said, for for maybe months at a time and and do something a little bit non-traditional. I think that we are definitely seeing that in our our industry as well. And I don't know, I guess all of these antique stores and resale shops or estate sales are going to be flush with inventory with all of this stuff. Overrun for sure. Multiple China patterns. You've got to fit multiple china patterns. Well, thank you both very much. I always enjoy this conversation. I know that it's been a couple of years since we sat down and and spoke. We probably should put this on the calendar for annually. Uh, while we're not talking specifically about the stock market, what we are talking about is something that touches every single one of our clients. It definitely is part of a generational wealth conversation as well. And truly, it kind of points to what's going on in the economy. So thank you both for sharing what I call boots on the ground. Every day you're out there and and getting this information to us. Um, to our listeners, I want to thank you so much for tuning in to this episode of Market Talk. Please take a moment to subscribe and leave us a rating and review. Our hope is to reach as many listeners as possible. So please share this episode with friends and family. Helping others is what keeps us going every day. You can find us on LinkedIn, Facebook, and Instagram for additional content. And as always, please book a consultation or continue the conversation from today's episode by visiting our website at RoyalHarborPartners.com. Whether you're just beginning your financial journey or already working towards your ultimate life goals, we're here to guide you. Experience the difference of working with a firm that empowers your life, a firm that focuses on what matters most to you. Thank you both, Brittany and Ashley, so much. Can't wait to hear uh this one out on the web soon.

Brittany Waterman 47:18

Oh, thank you, Natalie.

Ashley Graves 47:20

Thank you for having us to be here.

Disclaimer 47:25

Royal Harbor Partners is a registered investment advisor, and the opinions expressed by Royal Harbor Partners on this show are their own. Registration as an investment advisor does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice. The information presented is for educational purposes only and does not intend to make any offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk, and unless otherwise stated, are not guaranteed. The information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.