2024 Home Inspection Market Outlook

Emerge from the storm with newfound insight as we navigate the choppy waters of the home inspection industry together. Season 4 of Inspector Toolbelt Talk kicks off with a heartfelt look back at the challenges we've faced and an energizing perspective on the resilience that defines our community. 

We're not just recapping the past; we're charting a course for success in an evolving landscape. The real estate market's anticipated spring rebound and the Federal Reserve's deft hand could be the winds that guide us forward, with interest rates potentially settling at a welcoming 6%.  

Join us as we peer over the horizon at the Silver Tsunami, considering the impact of baby boomers' real estate decisions, and the changing work trends that might reshape our beloved industry. We'll dissect the implications of municipalities fighting against vacant properties and the rise of single-family home rentals, equipping you with the strategies to sail smoothly through these changes. Lean in with us as we offer an encouraging forecast for the steadfast inspectors poised to reclaim stability in the market, projecting an upswing as we steer toward the promising shores of spring 2025.

Check out our home inspection app at www.inspectortoolbelt.com
Need a home inspection website? See samples of our website at www.inspectortoolbelt.com/home-inspection-websites

*The views and opinions expressed in this podcast, and the guests on it, do not necessarily reflect the views and opinions of Inspector Toolbelt and its associates.

Transcript

Ian R  
Welcome back, everyone, to the beginning of season four of Inspector Toolbelt Talk. Can you believe, Beon, it's been four seasons? Well, it's beginning of.

Beon DeNood  
Yeah, crazy man. 2024, four seasons. I don't know, when we started this thing, we were kind of like, well, not sure what we're doing here, but I don't know, I'm not sure if we really know any better what we doing but we still going and so there you go. 

Ian R  
Oh man but it's it's been crazy. We usually take the the end of December and the beginning of January off because it's the time a year and you know, everybody's out doing things not listening to podcasts necessarily. But I was looking over our old episodes. We had some crazy wild stuff, though. Especially the one with Nick Gromicko and Nathan Thornbury, wild year, and now we both have beards. So I feel like that means something, I'm not sure why, but yours is better than mine. I'm jealous.

Beon DeNood  
We'll see. We'll see what the new year holds. It's off to an interesting start. 

Ian R  
Yup, it holds lots more facial hair for us here at ITB. I think most of our male compatriots, fellow workers, whatever we're calling them have facial hair now, and possibly a percentage of our female workers. I'm not sure.

Beon DeNood  
No comment on that one.

Ian R  
But, man, we didn't even do the q4 Market Outlook last year, because last year was a dumpster fire for the home inspection industry for most of it anyways. So we didn't even do q4.

Beon DeNood  
I don't even think you would have gotten many guys listening because they were just kind of fed up by then. And I don't know if there was anything new to report on to be honest. 

Ian R  
Well, you know, a guy emailed me like maybe a week or two ago, and he had just finished up season three. And he said, kudos to you guys. You nailed it on the head of where we were going to be by the end of 2023. And I'm like, it didn't take a super genius to figure this stuff out. I'm proud. I'm proud that we were pretty accurate. 

Beon DeNood  
But we'll take it. 

Ian R  
We'll take it. But by the end of the year, I'm like, I'm not doing a q4 market outlook. Because basically the outlook is, hey, guys, we're heading into one of the worst years in home inspection market history into the slow season, enoy. Yeah.

Beon DeNood  
It really was was kind of tough. And, you know, looking at the train wreck that represents the industry right now. I mean, look, some people will say, Oh, you're being overly negative, or whatever. I'm still banging out whatever. And, you know, maybe there's some guys who still, you know, have decent business, but we're looking at the market as a whole with the numbers for home inspectors. I think we do we speak on this before like the like the license renewals state by state for home inspectors. 

Ian R  
Yeah, so, before, we mention that, I do want to say that while last year was a nosedive for the market, we're actually coming out of it. And we're going to talk about a few points of why we are still very optimistic for 2024. But going back, if you're listening to this, then very likely you survived that dumpster fire of a year. But what Beon just mentioned were the statistics. So there's some that I mean, you can't say this is how much of the market of the home inspectors in the market left, because you have states like Colorado, they don't have licensing or California, some states, they give you, everybody who has a license, and some will only give you, you know, renewal periods. So, from our estimates, depending on where you are some areas lost 30 to 40% of licensed home inspectors. I want to let that sink in, if you sat in a room with 10 guys, three or four of them are gone now, just one area of New Jersey, they lost a little over 30% There was a couple of areas that we were taking. And again, it depends on are you comparing last year to this year, or 2023 to 2022, rather, and how you look at the numbers. But the churn rate was low, the new home inspectors entering and gaining new licenses was at an all time low too. So we worked with home inspection schools out there. And they were telling us their numbers. We're not going to reveal them here, obviously. And we were looking at what's called the churn rate. It was it was abysmal. We lost a lot of home inspectors and a couple of other industry vendors shared their numbers to a certain extent with us. And they said the same thing. Air quotes around forced retirement is what a lot of home inspectors went through last year. So definitely wild. It was a rough year for a lot of us.

Beon DeNood  
Yeah, yeah, for sure. And I'm glad you put that positive sort of precursor in there, you know, it's not all downhill, looks like, looks like the clouds may be starting to part ways a little, at least, but exactly what that means for our listeners and for the market as a whole because last year was interesting, it wasn't just the overall economy right, towards the end there we had the whole, you know, swing around with the real estate market itself with the lawsuit and lawsuits being filed against NAR, what that means for the future of the real estate industry, there's kind of a lot of stuff going on, you know, so we'll have to see, you know, how it all plays out. Obviously, we've given some of our thoughts on that. But as far as the the home inspection market itself, like it, you offered a bit of positivity, but I'd be interested to see what your what's your thoughts on, where we're, where we're headed here.

Ian R  
So last year, in q2, and the q3 market outlook for 2023, we actually said around springtime of this year, we'd come out of the nosedive. I actually see signs of that happening. We'll start really pulling up by spring, but I can see signs of that happening now, because the unaffordability the market isn't sustainable. And just if you're if you want to look up some of what we're going to talk about. Forbes was one of our big resources. Bankrate had a interesting article, actually, on the overall real estate market outlook for 2024. We did, I personally did anyway, still looked at the NAR website, man, that website is like propaganda. It's just like, hey, here's some facts that aren't true. And not saying that they aren't true. But here's our wild, crazy spin on, you know what's actually happening. But either way, I still want to take it into account, Zillow, and a couple of other resources that we went to. And then anecdotally, one of my favorite words, you know, what's happening out in the real world with inspectors on the ground. So here's a couple of positives that I think that are happening in the market right now. So I don't know if you saw Beon, but the feds are preparing for what they like to call a soft landing. And one of the ways that they do a soft landing is to with bated breath, lower interest rates. And we're not talking like huge, we're not going to go down to 3% again, or 2.9. I've seen people with 2.9% interest rates. But some predict that we might be down to 6% by the end of the year. So we talked about before that there is a mindset that comes about where people have to get used to a higher interest rate. And then anything below that seems good, even though it may be higher than what they're used to from years past. 

Beon DeNood  
Right. 

Ian R  
Personally, I think that's what the feds are really trying to do. Because the housing crisis is really pushing politicians, their constituents are like, dude, we need someplace to live. Houses are literally twice as much almost as what they used to be just five years ago, we need to do something. I think personally, that's probably behind it. So that's that's the first bit of good news. What are your thoughts on the interest rates going down there, Beon?

Beon DeNood  
Yeah, it does seem like it will, they keep saying that they think they have achieved what they needed to achieve. So we'll probably see some easing. I agree with your sentiment completely. But yeah, I don't know. I think if that thing ever dips below 6% again, you can see a pretty interesting thing. But you see they have to be careful, too because if those interest rates drop too quickly, your market comes right back on fire, your economy fires up too strongly again. And then we end up with the same issues we've had for for most of this year, you know, and they'd have to correct again. So yeah, they got to ease up on it a little bit. But yeah, it looks like the sort of the the excessive hikes at every sort of quarter. It looks like those hopefully, are behind us, or at least very much, much slower than what they've been.

Ian R  
Yeah, most economists I say most, there's always going to be naysayers. But the vast majority agree that the real estate market hit its all time low. And that's they're not saying that this is going to be a banner year. But it is not going to be as bad. It's our route upward. So there's a couple of other things, good things going for us, ironically, losing, depending on our market, and again, there's guys out there saying, oh man, best year ever. I gotta caveat this again, though. I know, and can see data for some of these companies. And they'll be like, oh, man, we had a we had the most amazing year and I'm looking at their data. I'm like, okay, we're obviously not going to reveal that data. So also understand that two things happen. People's perception of a really good year is they do five inspections that month, maybe they're a part timer, or maybe they were able to squeak by and they call that a banner year, their perception of what is an amazing year might be different than ours. Also too, some guys just don't like to show a, it was a really hard year, I kind of feel like a failure. But that's why they're on Facebook at all hours of the day bragging about how awesome they are instead of in an attic. 

Beon DeNood  
Right.

Ian R  
But in reality, though, there are some markets where I mean, some markets down in Texas and a couple of other areas, slamming, they really don't care what's happening with the overall market. So caveat it with that, but because most of the market has lost so many home inspectors. So there's areas of the Northeast where they lost almost exactly a third of all home inspectors. Now, if we think of the those are licenses. So if we think about how many active home inspectors there actually are out of the, you know, 66 out of 100 that are left, probably a third of those are relatively inactive and just kind of do it here or there and don't care if their license is renewed, because they're just doing a part time. So there's only a small pool of us left doing the actual inspections, and maybe 2020, 2021, we were worried because that one older guy that had our market cinch down was unbreakable. Maybe now he's, he was pushed into retirement. Or maybe he lost some of the footing because as many home inspectors as we'd lost, the real estate world has actually lost more agents, a lot of agents were forced into retirement leaving the industry. And there was a number and I couldn't verify it. So I'm not gonna say it on air, unless I can verify it. But if it's true, a larger portion of the agents than I realized, went out of business as well. So let their licenses go. So there is a market gap for us. So even if we turn up just a little bit in the market, there's going to be opportunity for all of us that stuck around. And we talked about that last year. This is the time that the market is going to start to go up. There's less inspectors entering the market. And then once the market, so let's say the market does run really high this year, which I don't think it will, how long does it take a home inspector to go get their training, get their license, learn how to do home inspections, network, get all their tools, get their legs under him. It's a, it's a process a year or two sometimes. So no matter what we're going to be ahead of everybody else, because there's no home inspectors coming on comparatively speaking, that is, and a lot of the markets gone. So that's going to be an advantage for us that stuck around. It's also going to be good for ancillary inspections, because maybe we had a hard time breaking into the septic market. A lot of septic companies will be like, well, we just don't do as many of those anymore and then move on to whatever is big, because they're not tied to the real estate industry, that can open that market for us. Chimney sweeps, level two chimney inspections, rather, all sorts of things are going to open up for us, as this market starts to unfold over the next few months. Would you agree with that?

Beon DeNood  
Yeah, that would be an interesting ancillary offering chimney sweeps, you know, be a little bit dirty, but..

Ian R  
I think I've talked about it another podcast, I think, I think it's a great opportunity level two chimney inspections, a lot people argue with me, but that's fine. But just the overall market opportunity. Half the farmers are gone. Now's the time to buy up land. And we might not see the crops we want at first. But at least we'll have the land when the market turns around. 

Beon DeNood  
Yeah. No, and I think that sort of coincides even with what we're seeing, you refer to data on our platform, obviously, we not wanting to share, you know, individual inspector numbers or anything but a trend that we are seeing is there are some newer providers, newer inspectors, when I'm saying they're newer, they've come in to the inspection world within the last two or three years or so, they continue to have, continued to see sort of a slow but continuous upward trajectory in their work that they're doing, the number of inspections that they're doing. So, like Ian was saying, you know, maybe you've come in, and you've had some other inspectors drop out of your market. Well, you know, if you're still around, you've been able to capitalize on it, will continue to, so yeah, I agree with you 100% there, that sounds more or less what I was thinking. The other, you probably got it on yourew list there. But the other topic I think that that drives things together is home prices and inventory. 

Ian R  
Yeah.

Beon DeNood  
I think some folks are thinking that we're going to see this big drop in prices, but I know it doesn't look like that's really going to be happening.

Ian R  
No, I totally agree with you there. The demand is still greater than the inventory and that's economics 101. So no matter what there's still a buildup of buyers from the past several years. So we're not dealing with this year's buyers, you're dealing with this year's buyers plus buyers from 2021 to 2023. Because better than half of them did not get a house in those years. So that is going to be one of the things that will slow down our upward trajectory, the plane didn't crash, but it's not pulling up as fast as we might want, it's not going to be like, wow, this is amazing, inventory is still at historic lows, and it hit one of the biggest lows ever, per capita in December, which it's Christmas time, so they always expect it to go down a little bit more. And especially in the northeast, people don't like to move as much in the cold weather. So that's always expected. But it was even more than they expected, mortgage applications and all those things all went down. So that's going to be a little bit of a wrench in the works, so to speak, is inventory. And if inventory stays low, prices are going to stay high. But prices are starting on a downward trend, or at least not skyrocketing as fast as they were before. The predictions, Zillow was one of the ones that predicted that home prices would go down. 

Beon DeNood  
Yeah, interesting, I guess will depend on market too, to see, see who goes up and who goes down, depending on you know how far we should say. But it is interesting tying that back to interest rates, because there's two things that will drive the pricing of houses. When you're talking about inventory, obviously, the more houses that are built, but even if everybody's building as fast as they can, some of the stats out there, I saw somebody saying, even if they met 30% to half of the current like, you know, pace, if they just about doubled it, that extra inventory would just be absorbed by the market without really changing stats all that much. But with interest rates, if interest rates continue to keep coming down, there's people who have locked in and not selling because they have such a good current interest rate, where that gap will start to close. And then there'll be more confident to make their next jump to the next property where it's not going to cost them an arm and a leg. So that releases more inventory onto the, onto the market. So I guess as we see those two things aligned, construction continues on the current trend, and maybe, you know, steps up a little bit and we see the interest rates coming down. We'll see, you know, those transactions going up, because that's, that's the metric we watch the closest I guess as home inspectors, is you want to see how many transactions you know whether home prices going up, down, interest rates, whatever, we want to focus on what's going to cause more transactions, because that's where home inspectors obviously move in and are able to generate their business from, but one of the stats I saw was saying we should see on 2023 we should expect about a 12 to 15% increase overall in the year on real estate transactions. I don't know if that aligns with what you saw.

Ian R  
Yeah. You're talking about 2024 you mean?

Beon DeNood  
Yeah, 2024. Sorry. Yeah. 2024. So kind of a tepid, you know, it'll, it'll go up. And for some, it's a relief, because it's not going to be crashing down, you know, but we'll see some relief throughout throughout the year, I guess. 

Ian R  
So here, here's my opinion on that. And I saw basically the same number. So if we get a 15% increase in transactions, which would mean hypothetically, a 15% increase in inventory. Either way, I also don't look at just how many transactions but look at time on market. If you have lower time on market, you can have 1000 transactions, but only 200 of them actually get a home inspection. So I look at number of transactions plus time on market to make a little makeshift Jimmy rigged, you know, algorithm in my head.  Yeah. But if we have a market right now, that in 2023, got rid of, you know, a third of home inspectors approximately. So if we kept on the same track as 2023, we'd have a market that could sustain that two thirds that are left, hypothetically, it'll limp it along. So a 15% increase is actually good, in my opinion, because that means the market can actually support more home inspectors, but the home inspectors that are there will actually absorb it, it will also increase the time on market for homes and reduce the chances of, you know people skipping an inspection. So that 15% while might seem modest to most with what happened in 2023. I mean that, that's a great opportunity for new guys, like you were saying earlier, guys that have been around for two, three years, maybe trying to make their break into a market. Now there's a 15% increase and 1/3 less inspectors. That to me, that's a good sign. I think that'll be good for the market overall.

Beon DeNood  
That makes sense.  Yeah, it would be interesting to know with, you know, so many inspectors not renewing licenses, that's, that's the only metric we have to go on there. But we saying if 30% or so last, or not last got out of the market. It will be interesting now, as far as like producers, you know, were they higher producers, mid market producers, lower end producers. But I guess as things pick up, we'll get more of an insight into that dynamic too, as things pick up corresponding to however, the market moves, you know, but I'm just, I'm just, feel good that we're not at a point, we were like, hey, guys, man, you know, we're heading down and just hang in there. It's actually like a little glimmer of hope. If, if you've survived till now, you're gonna likely be okay, you know, obviously, as competition re enters, but I don't think we're at that point yet, where guys who pulled out are going to be like, okay, it's ready to jump back in again, because that small amount of growth isn't going to be enough for them to be excited about. So if you're in right now and been able to survive so far, you'll probably do okay, through 2024.

Ian R  
Yeah, and I, you know, I'm a, relatively a people person. I know a lot of people in this industry. And it's kind of a mixed bag of everybody that left, like I hear some inspectors say, oh, is just a low end, guys. I know some guys that had multi inspector firms that just went out of business. And they were they were cranking. Just recently, there was another five inspector firm that I knew, doing great, fantastic company, it went right back down to the owner, and he's struggling on his own. Then I know the guys that are new, they're like, oh, I couldn't make it work after my first year, didn't get anything, and then they left. So it's kind of both ends of the spectrum and everything in the middle. So we didn't just lose the, quote, unquote, lower end of the market of home inspectors, we lost a good swath of them. Guys who have been doing it for, you know, 20, 30 years, guys, guys that I've known have been doing it since I started or before, got back some very large inspection firms, some of the largest in the country, laying people off. We're losing good competition. And if we're still here, losing good competition is good for us who are left, which is sad to say, but it's true. 

Beon DeNood  
Yeah, that makes sense. That's a valuable insight. Because I was just thinking a multi inspector, you know, I mean, you may think of a big outfit, oh, you got some insulation against market downturn and stuff. But I mean, you're operating expenses as a multi inspector is massive, you know, so if you got even five guys, five trucks, you got some space that you're leasing to, you know, act as a base or whatever, all those expenses continue, no matter no matter what, you know, and if you've laid, laid those guys off to it, you know, so, yeah, those guys were under, they could find themselves under pressure really, really quick in a situation like that.

Ian R  
Yeah. And we're still humans. So it's not like everybody is just waiting on the sidelines to get back into the market. They've gone off and done other things. They've gotten other jobs started other businesses. And, you know, there's missed opportunity costs for big companies that lay a guy off. So like you said, you have five guys, five trucks, and you have a pool of 200 agents that love that one guy. Maybe everybody else has 400 agents that love the other ones. So you lay off the guy who had 200 agents, loved that one guy. So now you need to sell the truck, you have a loss. And if things pick up even a little bit, you're probably gonna lose those 200 agents that love the guy that you laid off, and they're going to need somewhere else to go. So it's just unfortunately, just how the market is, it's opportunity, missed opportunity cost and all those things. But there was something interesting that I've been following, the silver tsunami, have you read about that? 

Beon DeNood  
No, not at all. 

Ian R  
So they're waiting for Baby Boomers to start selling. And they are thinking, and I don't know how much I agree yet. They're thinking that this year is going to be the year that baby boomers actually sell. So baby boomers are some of the oldest end of it as reaching 75. But interestingly, they're one of the generations that have held on to living on their own in their own home the longest, just the generation, they just, it's their home. You know, it meant it meant a lot and they're not going to live with family as much. So they're thinking, a lot of economists and I was reading an article on Zillow about this as well, that the silver tsunami, they were calling it the silver wave, and now they're calling it the silver tsunami, they're sitting on one of the largest stocks of real estate inventory in history, it's nuts. But they're thinking that they're going to sell this year, because everybody else is talking about what we're talking about 2024, it's going to start swinging up, inventory is going to go up, prices are going to finally stabilize. And then in 2025, the prices are going to go down, interest rates, and yada, yada, yada. So, you know, if you're a baby boomer, you're sitting there, you're thinking, maybe you're well off, and you have a financial advisor, whatever, they're gonna tell you the same thing, or your cousin, who's a, who's a, an accountant, whatever, they're gonna say, hey, listen, if you want to get top dollar for your house, now's the time to sell your house that you bought in 1980. For $17,000 is now worth 490. That can get you a long time in a retirement community. You know, if you wait too long, you're gonna get, you know, you can imagine a conversation. So they're thinking the silver tsunami is going to happen this year. So if that happens, that will change every prediction. I don't think it's going to happen. Because I think boomers are in their house, not thinking about the financial aspect but thinking about, this is where I am, this is my home, I think is more of an emotional attachment. Because otherwise they would have sold last year. 

Beon DeNood  
Right. 

Ian R  
But what are your thoughts?

Beon DeNood  
Yeah, and that is an interesting concept. Because I mean, they still need somewhere to go, right? It's a property that they, so if, I know that here in Florida being a very popular retirement, you know, area for folks, inventory is not super great, even for retirement properties around in the area. I mean, they're knocking down more woods, then you can keep up with, you know, building new retirement homes and properties. But those probably are going to be coming online in the next two to three years. So it will be an interesting, I think, if you get a a matchup of, of inventory available for the Baby Boomers to go to. Yeah, absolutely. You'll probably see that transition and move, now that's just based on my opinion, I don't know what the real stats are for their retirement, you know, property inventory, if it differs from general inventory. But yeah, I mean, selling your house, I mean, okay, I wouldn't even want to think of the capital gains you're gonna pay on a place that you bought at 1980 and you're selling now, that's a good chunk. But either way, you'll still walk away with a good bundle of cash, right, to be able to put down on your next place. So..

Ian R  
Well, yeah. And so baby boomers are also the generation that didn't have as much retirement or pension as a lot of other generations before them, which is, well, I say a lot of other generations, we're not going to get into a history lesson. But they were not as prepared for retirement as experts had hoped. So a lot of them, one of the last things that they have that's a value is their home, and their land. So I mean, what you brought up is a very good point. And one of the reasons I think that it's not going to be a silver tsunami, maybe a silver wave, a slight one later this year, is because some of them are, they're still in really good health, one of the healthiest older generations ever. Like they have the best health care. They're gonna, they're gonna be around for a lot longer, they say. So if you're 70 years old, puttering around your own house feeling good, you're not thinking let me move into a retirement community and do nothing all day. Yeah. Or play bridge. So I don't, I just think it's more emotional than, it's more societal than it is about money. 

Beon DeNood  
Yeah, no, it's true. I mean, a lot of my neighbor's, there are many along my street who are, are over 70, some are even over 80. And they have what I consider a fairly large property for someone who's, who's older. But you know, they've already been here for maybe, you know, since their retirement, they moved soon after their retirement. So they've been here for 10, 15 years already. And yeah, they're not looking to looking to move, but yeah, it will be interesting because I guess with the the rise in property prices, it seems like in areas like the northeast, California, that the value of properties it looks like it's set to still rise slightly through this year. So you know, they may be looking to like you say to time it, where you can put those those homes on the market. And I don't know if you can, because you know what interesting thing is over here and I know this is just more anecdotal and really having, ey, I used that word. 

Ian R  
Yeah, it's a good word, right?

Beon DeNood  
That didn't really have any substance on the topic, but what we did notice is obviously in this area during the pandemic, it was just, you know, tons of people, the whole work from home work remote, you know, era, there was a flood of people coming down to live here. But since and companies are changing the remote worker policies, there's been a lot, like a sizable amount of people that have left again, to go back, quote unquote, home, you know. So it's interesting, there is some some movement, but we'll see, it looks like there's all the steps are pointing in the direction of more movement coming. But still, no, no windfalls. It doesn't look like everything's aligned for that to happen yet. 

Ian R  
Yeah, I do think the silver tsunami is still important to take into account. Because, I mean, you think about every other generation, and even Wall Street, how much of a percentage of the market they own, which will lead me to my next point, it's not as much as the boomers, they have, they have so much of the inventory, if they actually let go of it. That would, that would be a game changer, it wouldn't, it wouldn't matter what the interest rates are, they could be 15% interest rates, and you have all these houses on the market, people are going to buy them up. And I don't think it would have a huge effect on pricing. But if you're a savvy Boomer, you're thinking right now, this might be the last year where I'm going to get top dollar, it's not going to go up, you know, my house almost doubled in value, since, you know, just the past eight years, it's not going to happen. And it's, it's going to level off or die down. But I bring up Wall Street as one of my next points, because it was an interesting angle, that they're calling the new First Time Home for families, a house rental, a single family home rental. That's not happened before a lot in the past. And I say Wall Street, because a lot of these investors, whether they're part of Wall Street or not, they bought up a lot of housing inventory over the past four years. And so what they need to do with it to make money logistically is rent out the houses. I mean, even Nick Gromicko, he talked about that, he built four houses and just rented them out. It's, it's good money sense. So people are starting to rent more single family homes than they really ever have before, in this capacity. So I don't know, I don't know how I feel about that. I feel like that's going to stifle the market, or maybe motivate people because they're gonna be paying, you know, five grand a month in certain markets for a single family home and be like, dude, I don't care how much a house costs, I'm gonna go buy one.

Beon DeNood  
Right, exactly. That is interesting, because I thought of that earlier, but didn't know how it tied in. Because that trend we are even seeing around where we live is properties will be for sale, we'll notice they'll stay for sale for longer than what they were. And then they'll sell and you'll see oh, look for sale signs gone, or they have their you know, sale pending sign. And the very next sign to go up is a for rent sign. So it kind of even locally, I've seen that, like enough to notice it. Notice the trend. So that is an interesting point you made there.

Ian R  
Well, too. And this is just an assumption on my part. I was talking with a friend whose father passed away, it was a very good friend of mine. And his house, the municipality is forcing them to have somebody occupy it. And they're like, we don't care who, we cannot have any more vacant homes in our municipality and apparently is going on, in quite wide swaths because people would buy these single family homes. They're like, I don't know what's going on. But I know this house is going to be worth 50% more in a couple of years here. 

Beon DeNood  
Let's just sit on it. 

Ian R  
And they just sat on it. So now these municipalities are kind of like, okay, we can't have empty neighborhoods, that's going to devalue our entire neighborhood. If half the houses are unoccupied. So they've started renting, renting the single family homes more. So it's a really weird dynamic of houses that they just knew were going to be worth more, now they're just renting them out. And in some cases, just renting them out so that the municipality doesn't, you know, evict them basically or take away their house. Super weird out there. All of this. All of this stemmed basically from the pandemic, mostly.

Beon DeNood  
Yeah, that's pretty wild, pretty interesting. So, yeah, I don't know overall, like I was trying to think of, you know, any, because the guys always love the buzzwords, marketing strategy. You know, what, what can I do, but I don't know, is there really? I mean, other than seeing what agents are left in town and focusing on them? I don't know. I don't know. What would you recommend? 

Ian R  
So we did a podcast sometime, I think early December with Mike Ortiz. It's going to be very important to do direct to consumer marketing. And more important than it has been in the past, and especially preparing for what's going to happen with NAR still because that's still going on. Then also think about doing rental inspections. So if single family homes are being rented in your area, try offering that as a service because real estate agents are still often involved. And it depends on the market. Sometimes the agent gets first month's rent as long as they vet the, you know, the renters and there's insurance and stuff involved. Think about doing inspections for that, because that, that's still, it's almost pretty much a full inspection or almost, not quite sometimes, depends on the municipality, sometimes they have different requirements. And then go for new agents right now. Because the new agents, if we're a new inspector, we're like, yes, market opportunity, finally. You know what the new agents are saying? Yes, new market opportunity, finally. Get on with them, and ride that train up. So those are going to be my three recommendations for this year, so far. Direct to consumer marketing. Think about rental inspections. And I didn't mention this before, 11th month inspections, those are getting really hot right now, phase inspections and 11th month inspections, I know entire companies that are basically, that's their whole business model for the next year. And they're, they're surviving. And then focus on newer agents, we'd love to have the agent that has been around for 20 years. But you know, what the agent has been around for 20, 30 years is more likely to leave if the market gets a little hard again. And the newer guys are going to be out there. What's that expression? The wolf at the top of the mountain is never as hungry as the wolf climbing. So stick with that wolf that's climbing the mountain. But don't forget direct to consumer, because the thing with NAR could go totally sideways. And all those new agent relationships you made could go nowhere. So don't put all your eggs in one basket. But what's your, what's your summary for your predictions for 2024, Beon?

Beon DeNood  
2024, the bleeding is over, we're going to start being able to claw up if using the expression of a mountain, we're going to be able to claw your way up the mountain a little ways. Probably if you've stepped out of the market, probably not best timing to step back in yet, if you got something else that's solid. But if you've survived, you're going to see an uptick for 2024. And hopefully things can align by the end and 2025 can look a bit more like previous years. But I guess that that's how I would summarize. 

Ian R  
Yup. So I got basically the same thing. The one wildcard in my mind is an election year here in the U.S. So that does tend to affect the market sometimes better, sometimes worse, just depending on what's going on. But besides that wildcard I think the nosedive is over, I like how you put it, the bleeding has stopped. Now you still have to heal the wound. But we're coming out of the nosedive, but it's not going to be as fast to trajectory up as it was going down. I think by by spring, I think we're going to be doing okay. By mid spring, I think we're going to be feeling really good about stuff, the inspectors that stuck around. And we might get a little bit of a false sense of yay, everything's back to normal. Once we get around to September, October, we're really going to see where the market actually is headed, especially with the elections going on. But this year is going to be overall an upward trajectory. The numbers are already going up. So December dropped, and the January numbers, and almost the key metrics that we as home inspectors care about, the numbers are already going the direction we want them to go. So upward trajectory, going to be a good year. Again, not a banner year, but we haven't been saying that at all anyways. 2025, spring of 2025 is my jam. I think that's going to be, that's going to be okay, we can start to breathe. But yeah, if you stuck around kudos, because this is, this is what you stuck around for.

Beon DeNood  
Awesome. Well, that would make me happy if I was listening. So. So yeah, so that's great. But yeah, I appreciate all those insights. You've been doing this for a while. And you've seen kind of the flow through a like, okay, we've never probably had something like this before. But the principles are pretty much the same. Right? And the recovery, we'll see it pull out very similarly.

Ian R  
Yeah. And I appreciate your insights. I mean, especially you're a stock market guy, you, you keep an eye on that. We've also had quite the rally lately with that just as a side point. People actually are sitting on more money than they expected. I think it was said in one of the Forbes articles. The cash to buy is actually not the issue. There's a large set of buyers out there with enough cash at least for down payments, if not to buy cash. It's just a matter of inventory and getting things moving along, which we're heading in that direction. So I appreciate your insights too, and it's always nice having you on to kickoff the beginning of Season Four. Season Four, man, four seasons. This is awesome.

Beon DeNood  
That's quite something. No, well done with keeping the show going, Ian. And yeah, here's to a good year for ITB as well. 

Ian R  
Yeah.

Beon DeNood  
I must say one thing, I will say is, talking about growth, all the way through this, the market's been up and down. But we've, we've continued to easily steady way up, so good. Our user base is growing, more guys are getting into understand what we're all about. So I'm hoping as the market comes back, we'll be able to continue that growth. But yeah, for all you ITB users out there, way to go, man, we'll keep on building for you. 

Ian R  
Yeah, I do have to put a shameless plug in there too, on that note, Beon, because I was listening to another podcast that said, while all the other software's out there are receding, we're growing. And I'm like, we're not receding. I'm looking at our numbers, I'm like, we're doing pretty good. Yeah. Yeah, we're growing. Our team is quite large. And we're coming out with new features every month. We're taking on new users all the time. And we did really, really well with a, with a fantastic user base this past year. I love our users. Some of them I've gotten quite close to over time, you know, yeah, we've had them on the shows even. 

Beon DeNood  
Yeah.

Ian R  
So yeah, it's been a good year for us anyways, but we still saw it, it's a weird market still, it'll come around and level off for everybody.

Beon DeNood  
Sounds good, man. We should end it off Jim Cramer style. It's gonna be money, money for everybody!

Ian R  
Okay, we'll end it on that one. Thanks Beon.

Beon DeNood  
On behalf of myself, Ian, and the entire ITB team. Thank you for listening to this episode. Don't forget to hit that subscribe button so you can catch our future episodes as well. And if you have any feedback, please send us an email at info@inspectortoolbelt.com. Also, don't forget to check out our brand new app for home inspectors, scheduling and report writing all in one easy to use app. Check it out now at Inspectortoolbelt.com.

Ian R  
The views and opinions of this podcast and its guests do not necessarily reflect the opinions of Inspector Toolbelt and its associates.