A Wiser Retirement®

332. The 2026 Housing Market: Trends, Changes, and What to Expect

• Wiser Wealth Management • Episode 332

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Housing affects nearly every part of life, whether you rent, own, invest, or you’re just trying to keep up with rising costs. In this episode of A Wiser Retirement® Podcast, we sit down with Tom Townsend, REALTOR® of Tom Townsend Realty Group to break down the housing trends shaping 2026.

Related Podcast Episodes: 

Ep 267. The 2025 Housing Market: Trends, Changes, and What to Expect

Ep 198. Real Estate Market Trends: What to Watch for in 2024 with Tom Townsend

Related Financial Education Videos:

How to Reduce Capital Gains When Selling Real Estate

Should I invest in real estate or stocks?

Other Links:

Tom Townsend Realty Group

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Setting The 2026 Housing Stage

SPEAKER_04

Housing touches almost every part of our lives, whether you rent, own, or invest, or just trying to make sense of rising costs. Today we're talking about the big housing trends shaping 2026. Stay tuned.

SPEAKER_02

Welcome to a wiser retirement podcast, where we cut through the noise and bring you real, honest conversations about investing retirement and building lasting wealth. No sales pitches, no gimmicks, just everything your financial advisor won't tell you.

SPEAKER_04

Welcome to the wiser retirement podcast. I'm Casey Smith. Today I'm joined with our regular uh around town realtor, Tom Townsend of Tom Townsend Realty Group to discuss the 2026 housing market trends, changes, and what to expect. Welcome back, Tom.

SPEAKER_06

Well, thank you for having me. I'm excited to be here. How's business? It's actually good.

SPEAKER_04

Yeah, we've uh we've got every time I open up my social media, you're there staring at me, talking to me. So I'm like you. So kudos.

SPEAKER_06

That's the new marketing plan. That's how people kudos to your team. A lot of people don't figure it out. So that's awesome. Yeah, we've put a uh actually quite a lot of effort into uh social media and actually getting it out there. So getting the message out there.

SPEAKER_04

You have to. And it's a long game. You have to kind of build trust of your market and eventually people start calling.

SPEAKER_06

Well, good. I'm glad it's out there. I'm glad you recognize that. That's right. Good to hear.

Meet The Hosts And Guest Realtor

SPEAKER_04

So let's um let's get started on the big picture for 2026. Um so when you look at the housing market overall, so renting, buying, building, how would you describe the market headed into 2026?

Rates, Stabilization, And Affordability

SPEAKER_06

I would say after a few years of turmoil, if you will, we've had kind of a crazy market over the last three or four years, a lot of fluctuation. We're running into more of a stable environment. So um affordability is gonna be a big issue as people move forward, especially for first-time home buyers. Um, but really we're we're getting into a normal stage. Um I think people are recognizing that rates, interest rates are gonna be they they are what they are. They're not gonna be changing a whole heck of a lot. Um a lot of people were waiting for the market to crash. Yeah, sitting on the sidelines. Yeah. So I think the the the trend for 2026 is stabilization, which is gonna be healthy for the market, market overall.

SPEAKER_04

Do you think that's a new normal or do you think that's a pause before something, another catalyst? I mean, we obviously we never know of a black swan event, but exactly.

SPEAKER_06

Yeah, we we don't. But yeah, I think it's the new norm. Right now, it's the new norm. Just we're gonna be in a stable environment here for the I think I saw the 30 year, was it five and three quarters? Does that sound right? Uh that's pretty low. We're more probably pushing six. Six. I haven't looked at it this week.

SPEAKER_04

Some some of the data that I see is national and and it's not always no, it's not always super accurate, but well, one person got a five point two five mortgage probably. And exactly.

SPEAKER_06

And they probably had a you know above eight hundred credit score, and right now, you know, they absolutely everything's perfect.

Inventory Builds And Loan Products

SPEAKER_04

But um, so which housing trend do you think will matter the most for households this year?

SPEAKER_06

Uh well, it depends on if you're a buyer, a seller. Yeah. Um, you know, for buyers, there's going to be there is a building of inventory. So that's a good sign.

SPEAKER_04

Okay, good.

SPEAKER_06

Uh, we've been very shy of inventory lately. We're still shy if you look at it, yeah, you know, from a balance standpoint.

SPEAKER_04

Right.

SPEAKER_06

Uh, but there are options out there. So from a buyer standpoint, you're gonna have more inventory, you're gonna have more selection out there. Uh, a lot of the finance options out there as well, the banks have got to lend money. Yep. And so they're being creative. They're coming out with new some new products uh that buyers may be taking a look at. Uh, as scary as it is for some of us, arms are coming back, so adjustable rate mortgages are coming back. We're starting to see that, especially for first-time home buyers. That's an incentive. Yeah.

SPEAKER_04

Uh I mean, you're you'd be doing that at the top instead of the bottom of the market. So that makes a little more sense than it did in 2019.

SPEAKER_06

Yeah. Yeah. And they're doing fixed rates, you know, for like the first three years, five years, and then hopefully after three or five years, the rates aren't, you know, they're gonna be a little more favorable, right? That's what they're banking on. Yeah. That's what they're banking on.

SPEAKER_04

It kind of goes along the lines of that 50-year mortgage that everyone got all upset about. Um, but that that was kind of my take on it was 50-year mortgage is a horrible idea. However, however, if you're a young person and it gets you into the house and you know that yeah, your income will be rising over time, then yeah, you want to just get it paid down like a 15-year mortgage, personally, but yeah, but at least get it back to a 30 or a 25 by paying extra.

SPEAKER_06

Yeah, and if your goal is or refinance it, yeah, you know, I mean, if you're really trying to build wealth through real estate, I mean it's better than renting.

SPEAKER_04

Yeah. You know, so I I think most people most people just took that on face value and go, 50-year mortgage wants to be in debt forever. And it's like, yeah, but that's maybe what you have to do. They did the same thing with cars and nobody bulked about it. You can do like a 90-month loan for a hundred thousand dollar SUV right now. How is that a good idea? Yeah, you know, yeah. Um 72 months 72 month loan didn't exist when I was when I first bought my first car. That wasn't an option.

SPEAKER_06

Yeah, that's right.

SPEAKER_04

So it it's um the the market has to evolve uh to help people. That's my biggest concern is about young people. I have some of the best talent in finance here at Wiser. And one of the things you want them to do is is come here and start a family and find a house and be rooted here because that's good for us, right? Yes. Um what are they gonna go buy? A$500,000 house is basically a teardown. Yeah, yeah, yeah.

SPEAKER_06

Yeah, and no, we've got an affordability issue. Yeah, definitely have got an affordability issue. I think that uh one of the stats that I read, and don't quote me on this, but I think the average age of the first-time home buyer is like 35 or 30,000. I can totally see that.

SPEAKER_04

Yeah, I can totally because you got to save up$200,000 to buy what you want.

SPEAKER_06

Yeah. Uh yeah. That's a staggering stat. I mean, that that is really like wow, that's a but that's that's here in Marietta.

SPEAKER_04

California has been that way for my lifetime.

SPEAKER_06

Correct. And we, you know, I I preface this every time we get together, I always talk about local. Yes, right. Real estate is local, right? Um, and we always get caught up in these national numbers and such, and it gets so washed out, but it really is what's happening right here locally. And listen, downtown Atlanta is different than Marietta. Yeah. And it's different than Woodstock. I kind of browse things.

SPEAKER_04

I think downtown's got some value in there, honestly, if you're willing to live down there.

SPEAKER_06

Sure. Yeah. Yeah. I mean, you know, the urban, you know, inside the perimeter is going to be a little bit different than the north side. Yeah. Alpha Roswell. It's a different market.

SPEAKER_04

Correct.

SPEAKER_06

So um you you really have to look locally.

SPEAKER_04

Um I just don't think there's much of a reverse commute anymore.

Local Markets: Metro Atlanta Snapshot

SPEAKER_06

No, not really. You know, there's so many people that are still working remotely. Um, that we're seeing that's kind of where we're seeing the boom in some of these suburbs. You know, even getting up into Ballground and Jasper, yeah, coming, yeah. Those areas, a lot of those people are remote workers. So there's still that migration that we're seeing up there.

SPEAKER_04

Bigger house for the same price out there.

SPEAKER_06

Yes. Yeah. Yeah. That makes sense. Yep. And they don't have to, you know, uh, you still have people that are commuting down, you know, down inside the perimeter somewhere on buckhead. Um, so they're gonna be a little bit closer.

SPEAKER_04

But so you you said the market was getting better as far as supply. Um, would you call it a buyer's market or a seller's market right now?

SPEAKER_06

I would say that it is a balance. We're moving into like a balanced market. Again, it depends on exactly where you're at. Yeah. Um we we just had some dealings in the Sandy Springs area, Roswell Alpharetta. That's still a seller's market. You get into those really, you know, those areas that are really sought after as far as you know, the schools and just the amenities that are over there, there's still a lot of demand.

SPEAKER_03

Right.

SPEAKER_06

Uh, you get in some of the other areas, um, Austel, Dallas, that's really balanced. Very, very balanced. The further you get up into like Cherokee County, I would say Ballground, Willeska. Woodstock's still pretty demanding. I mean, Woodstock's done a really good job as far as bringing in and attracting a lot of um a lot of migration happening in Woodstock.

SPEAKER_03

Yeah.

SPEAKER_06

So if you haven't been to Woodstock in the last 10 years, you need to go visit it's not the same Woodstock when I was a kid, that's for sure. No, it isn't.

SPEAKER_04

Well then, but I'm seeing these uh the these mega um uh developments going into areas in Cartersville.

SPEAKER_06

Yes. All up 75, that corridor.

SPEAKER_04

Is that the next um our next towns, the next community?

SPEAKER_06

Probably anything. You're getting up into Adairsville, up into that area starting to build out. Yeah, and because it's affordable, it's still affordable up in those areas.

SPEAKER_04

What's the what's your what's your average price for uh what would be a good house?

SPEAKER_06

In Adairesville? Yeah. Uh Adairesville, you know, you can get into some new construction, like in the high 300s. Okay. 375, 380. Yeah. You take that same house and plop it down into woodstock, you're at 450, 475. Easy. Easy.

SPEAKER_04

And then Marietta?

SPEAKER_06

Uh 500.

SPEAKER_04

Yeah. Right.

SPEAKER_06

Depending on if it was new, did it? If it was new around here. Yeah, if it was new. You know, and these are these are three bedroom, two-bath. Yeah. Nothing crazy. House.

SPEAKER_04

Oh, okay. Not like 3,000 square feet.

SPEAKER_06

No. No. No, these are interesting, you know, quote unquote starter homes, if you will.

SPEAKER_04

So, you know, it do you think there's a lot of people still sitting on the sidelines? Yes. So people basically wanna they want to move, but they're not maybe they're scared of the interest rate, or are they is it is it a lack of inventory?

SPEAKER_06

It is, well, sellers are locked into their home. So they're still what we refer to as locked-in sellers. Yeah, those are people that are sitting at a 2.93% interest rate, right? And they're having a real hard time trading that out for a six percent interest rate. Can't blame them. So the sellers that we do see out there that are in current, you know, they've got obviously got a house.

SPEAKER_03

Yeah.

SPEAKER_06

Um, there's a need for them to move. I mean, there's a lot of there's a lot of motivation. It's a job change. It is we're selling the big house and we're moving out of state. Right. There's a there's a pretty high incentive for them to move right now and to get rid of that 2.9% interest rate.

SPEAKER_03

Yeah.

Price Points Across Nearby Cities

SPEAKER_06

So we still have a lot of people um in that in that you know, in that situation. Sure. So that's that's holding back a lot of the inventory on the market. So a lot of the new inventory is really coming from new construction.

SPEAKER_04

Yeah.

SPEAKER_06

So that's what we're seeing.

SPEAKER_04

You know, I was talking to a client who works for one of these um regional builders. Yeah. And he was just saying, I was just this is just a terrible time for the real estate right now. And I'm guessing from their perspective, it's the loans to build out these spec houses, is probably why they think that. I would I I don't know. I'd ask them why. That wasn't that wasn't the topic of uh that wasn't the topic of the meeting, but I I kind of thought to myself, huh? Wonder why I wonder why a developer would think this is a bad time to for real estate right now.

SPEAKER_06

Yeah, I'm not quite sure. I mean, it's always good depending on what you're yeah, maybe they're building things that people don't want, possibly. Now I know the builders are pulling back on some of their acquisitional land. I have been talking to a lot of builders and we see that.

SPEAKER_03

Yeah.

SPEAKER_06

So, you know, builders are, I mean, they're they're planning five years out, right? So they're they bought land five years ago. They've got to develop that. So if there's a slowdown, yeah, um, and they gotta, you know, they gotta do they still have to they're still sitting on this thing, they gotta put roads in, and yeah. You gotta finish that off. So maybe that's what the perspective was. Is it maybe maybe they see things slowing down potentially? It could be. Could be, and I'm sure the rates are not helping a whole heck of a lot because it's not helping across the board.

SPEAKER_04

Yeah. I gotta see it as it's not like the mass uh acquisition of homes. I think it's it's a slower, it seemed to be a slower pace.

SPEAKER_06

It is definitely a slower pace compared to a few years ago. Yeah. Now 22 and 23, that was a frenzy.

SPEAKER_04

Yeah.

SPEAKER_06

That was crazy frenzy after which is not normal. Which is not normal. So we're seeing a much more uh balanced and normal pace. It's probably a little bit low than what we need to be, um, than you know what we typically would see. I want to put one point because we talked about rates and something to keep your eye out. There's a lot of chatter out there with different products. One of them has gained a lot of traction. I don't know if it's gonna come to fruition, but it would be a game changer, and that would be a portable loan option. Have you heard of that? Have you heard of that?

SPEAKER_04

I've read about I've read about this, but what's the incentive of the bank to do it? Uh maybe we need to describe it first.

Locked-In Sellers And New Construction

SPEAKER_06

Yeah, the description is you can take your existing loan and transport it over to a new home. That would be a game changer. So now those folks that have that 3% interest rate, they can take that loan and use it on a purchase of a new home. That would be a game changer. Yeah. Great question. Have you seen that actually done? No, it's just all talk. Okay, okay. Um a lot of people are like, this can be done. This is not that complicated. Yeah. You know, we can, you know, you're you may have to throw an incentive for the banks. Yeah. You know, government may have to step in a little bit and incentivize the banks to go through this process. Right. So you may have to throw something out there for them. Um, but that would be a game changer.

SPEAKER_04

Is that a Trump administration proposal? Is that where that came out? I don't know.

SPEAKER_06

Yeah, well, I mean, it came out. I first heard about it a couple months ago. Yeah.

SPEAKER_04

Um I I about this I feel like that's something that like that got floated out along with the 50-year mortgage.

SPEAKER_06

It did, about the same time. Yeah. So we'll see if it happens. Uh, but I always like to throw that out there because the more talk there is about it, I think people are like, hey, when is that coming out?

SPEAKER_04

Uh yeah, I'm not sure if it's all talk. Because the the cost of the capital of the bank, well, I think if I guess if the bank retains the capital, then it's it it doesn't really hurt them. You've got an administrative cost to actually yeah, there could I could see it there could be a fee of some sort, you know, maybe maybe it's a percentage of the loan or something.

SPEAKER_06

That's kind of what we were thinking. Yeah, you know, I'm like, you know, it may be a one percent fee or whatever, whatever it happens to be. You're probably gonna have to incentivize the banks to go through that process. Yeah, you know, because there is a cost to them.

SPEAKER_04

Um but from a legality from a securities deed standpoint, trying to clean that up. Well, that's interesting.

SPEAKER_06

That was my biggest concern. I'm like, how does that work on the backside? Because these loans get sold off, they get bundled together. That's true.

SPEAKER_04

And I thought but the property doesn't change. Now the property is changing.

SPEAKER_06

Yes.

SPEAKER_04

So you gotta again, this is why we should all be uh everything should be in the blockchain. If everything was in the blockchain, you wouldn't have this problem, right? And you can you could be very easily resecuritize something because because it it's all on the chain, right? Yep, absolutely. That's a different podcast. Yep, that is a different podcast. That's the one next week, anyways.

SPEAKER_06

I just thought I'd throw that out there just because you were mentioning, you know, what kind of trends and what would unlock.

SPEAKER_04

These are conversations that that people who make decisions need to be having so that maybe we could figure this out.

SPEAKER_06

Yep, absolutely.

SPEAKER_04

Um what do you think is controlling or driving um home values right now?

SPEAKER_06

Well, it's supply and demand. So it's demand. Okay. Uh you know, we we have seen some softening in appreciation of real estate. Yeah. I think it's getting back to a normal state.

SPEAKER_04

I think I I've seen I've seen some decl slight declines in home values. Uh, I see this when we do review meetings with clients and we're up. Sure, just this is based off Zillow and like red Redfin has. Sure, but maybe 20, 30 to$50,000 less than maybe a year ago, but nothing crazy.

SPEAKER_06

Yep. Again, it's really, really localized. Yeah. And it has to do with price point, the style of house. So we're seeing value changes in all those different segments of real estate.

SPEAKER_03

Yeah.

Market Pace Versus Builder Outlook

SPEAKER_06

So overall, uh, you know, and the north side, again, localized. You know, we saw a modest appreciation in 2025, one and a half to two percent, I've heard, you know, in that area. Yeah. However, I've also seen condos, townhouses, I've seen decreases in those two segments of the market.

SPEAKER_03

Yeah.

SPEAKER_06

So um not as much demand for those.

SPEAKER_03

Right.

SPEAKER_06

They seem to be kind of pricey at one point, and they're kind of starting to pull back. Condos have uh other issues that we may or may not talk about, but um, they've got some challenges. Right. So that's kind of pulled back. But we've seen um, I just did an analysis for a gentleman that has some rental properties, they're all townhouses, and I went through it and he there was a 3.3% depreciation, or I'm sorry, a pullback on his value from a year ago, year over year. We just finished it up yesterday for him.

SPEAKER_04

Interesting.

SPEAKER_06

So he wasn't happy about it, but it wasn't surprising for him. He's like, Yeah, I kind of figured as much.

SPEAKER_04

So yeah, you see more inventory uh of those type of those type of units as well.

SPEAKER_06

Yes, that's what's getting built. It's the it's back to affordability. Yep. Right? There's been a big push for affordability. Um there's a lot of pressure on the municipalities.

SPEAKER_04

Yeah, that's that's another good point. Not to derail our podcast here, but you know, we we had an election recently um in Marietta. We have a mayor who went to Marietta High School, you know, good old boy. Yeah. Uh probably should be handing the baton off to somebody else, but chose to run again, uh, barely within, you know, a few hundred votes, maybe less. Wow. Beat out, beat out uh a young man who just graduated college.

SPEAKER_07

Okay.

SPEAKER_04

And his whole campaign was uh we'll we'll just say very uh generous that there's gonna be a lot of free things handed out. Uh I kind of felt like I was in high school again and they were running for uh a student council, and they're like, We're not gonna come to school on Fridays, we're gonna have Snicker bars for lunch on Thursdays and cokes for everybody, free vending machines. You know, it's kind of it kind of had that vibe to it. Uh and then all of a sudden I started seeing his signs like pop up everywhere. And um yeah, I'll I'll I'll say that that was interesting. I I I made a social media post that that to some was pretty funny and probably made other people mad. But I said it, I said your neighbors are self-identifying now as stupid. Because you just like read this stuff, you're like, oh my gosh, this isn't real, man. This can't be real. I mean, yeah. But at the same time, like the establishment has to understand like what the needs of the community are. Yeah, now the all this but this whole campaign, the young man's whole campaign was if we're gonna have affordable housing in Marietta. And I just kept thinking, how does a municipality determine affordable housing? Yeah, how do you do that?

SPEAKER_06

Well, how do you inject that into a community?

SPEAKER_04

I you know, how can you say, Mr. and Mrs. Smith, I'm sorry, um, your house is valued at 700,000. We're trying to get affordable so you pricing or so you can't sell your house more than 350. That doesn't exist anywhere in America. No, no, I mean there's rent control. Well, correct. I was so so so he I guess he could do rent control.

Appreciation Trends And Condos Pullback

SPEAKER_06

I don't know if anybody asked him how that all worked.

SPEAKER_04

I don't think anybody did. Yeah, well, that's the problem. That's that's the whole thing. I kept like, there was I couldn't find anything online about how it was. There's there was because it could look Marietta's a really in it's a big town, but it's a small town compared to this, right? So the Marietta mayor is not like not like we're watching the New York Merrill race or the LA Merrill race or even Atlanta, right? So so yeah, there's no debate or anything like that. But but yeah, I mean, have you ever seen a community where the municipality says dictates what you can and can't sell your home for? I don't doesn't make any sense. Have you seen the home prices in New York, New York? I mean, that's crazy.

SPEAKER_06

Now you you can incentivize development, right? But controlling it, putting rent controls.

SPEAKER_04

No, and that but that's what they did here. They they they they had a really sad part of town that that um had apartments that I don't think had one single improvement made to it. It's right next to the golf course, right next to our to our Hilton, which is kind of our main hotel here. Uh and they condemned it basically. They took it from the rent apartment company and said, Look, you don't have you have ruse caving in. You don't have a live uh a livable environment here. Sure. So they condemned it, they bulldozed it. I assume that the apartment building got a money for it. I think that's how that works. Yep. Uh, and then they built um houses, they all look the same for like six hundred thousand dollars, which is part of the problem, right? But they sold it to a developer. So so even then you can't sell it to a developer and say you can't you can't sell a house for more than X amount here.

SPEAKER_06

I mean, I guess you unless you're paying that developer on the back on the back end. On the back end and saying, Listen, okay, we want to have housing that starts at 300 to 350. Yeah. And the developer's gonna go, okay, well, who's paying me the other 300 grand per unit? Where's that combined?

SPEAKER_04

It would be subsidized.

SPEAKER_06

So if you were subsidized.

SPEAKER_04

So if you were a smart person, you would have buy that$350,000 house and you'd flip it for$600,000.

SPEAKER_06

Well, yeah, and then the couple years, then you're gonna open it up. Good point, right? Good point. Someone's looking at the arbitrage. It's exactly right. Then you're gonna still then you're gonna take that subsidized development and you're gonna throw it to the free market and bang, you're right.

SPEAKER_04

Exactly. It's gonna reset to wherever that area needs to be. That's right. Which is gonna be 600 grand. Yeah, yeah. So I don't I don't know the mechanics of yeah, I I think I I can see I can see how politicians could could say rent, but even then it needs Be the free market.

SPEAKER_05

Um uh would you as a politician, wouldn't you be like, please don't ask me details, please don't ask me details.

SPEAKER_04

I know. I know that's why I said your neighbors are self-identified and stupid because here you are, you're a homeowner and in a in a middle class part of town. You put that sign out to me, you're just saying, I want to sell my house for way less than what I paid for it.

SPEAKER_05

Yeah, yeah, exactly.

SPEAKER_04

Well, it's amazing you got that many votes, but it just kind of goes to I I I some days I just want to sit outside with one of the signs that says, prove me wrong, you know, put my little statement on there. Yeah. Anyway, um, maybe someone else has some other ideas, but uh from from where I sit at a wealth management firm, uh, I don't know that any of my clients are interested in uh devaluing their homes uh for the sake of another family that could then just sell the house for uh what the market's asking. Not in our area. I'm gonna stay local.

SPEAKER_06

I don't know what the coasts are doing, you know. Well, they're not doing that either. I'm sure they're not. No, I'm sure they're not.

Portable Loans: Hype Or Game Changer

SPEAKER_04

But uh all right. Uh moving on uh after that tangent. Um so what well let's let's stay on that topic, actually. What do people consider affordable today? What are you seeing out of your clients?

SPEAKER_06

Yeah, we're it's interesting. So my first time home buyers that are calling in, um they're talking about monthly payments. Very strange.

SPEAKER_04

Okay.

SPEAKER_06

Because that's where their mind is going for whatever reason.

SPEAKER_04

Are they reverse engineering into reverse engineering into their own? 3,000 a month, what does that buy me?

SPEAKER_06

Yeah. So for an example, one of the first conversations we usually have with first, let's just talk about first-time home buyers. Uh, you know, well, what's your price range? What are you kind of looking at? And they'll throw out, well,$3,000. And I'm like, that's pretty cheap. I don't know if I'm gonna find anything for$3,000. This is where my mind is going, right? And they're like, no, that's my monthly payment. That's what my more that's what I want my monthly mortgage payment to be. No more than that.

SPEAKER_04

You know, so they probably should start with the mortgage person and then come see.

SPEAKER_06

I'm like, oh, okay. Yeah. Uh yeah. So I'm now I'm re you know, I'm I'm reverse engineering that whole process and we have a lengthier conversation about, well, there's a lot of factors that are involved with keeping you in that budget.

SPEAKER_04

Yeah. Well, my mind goes back to those condos you keep talking about because some of those have like$400 monthly monthly dues. So that affects your your exact viability.

SPEAKER_06

Yes. So there's a lot of factors involved to try and keep it in there. So we have to walk walk them through the whole process of listen, there's a lot of factors involved. Right. You know, so let's kind of reverse engineer this and kind of get to that. Um, but that's that's where their minds are at. They're looking at the monthly payment, affordability. They're not extravagant, you know, it's it's all about budgeting, yeah, uh, meeting my needs that I currently have right now, not being extravagant. Uh, the other trends that we're seeing with first-time home buyers is they're not looking for a big, huge house that's got a big yard. Simplicity. We're seeing a lot of simplicity come from that group. Okay. They also want to have experiences in life and not necessarily be married to real estate. Yeah, good for them. Yeah, I think it's great. Yeah. I think it's wonderful. So they want to have that flexibility to take trips and travel and do different things. Uh, I don't know about you. Back in my day, I we really didn't. We were just kind of like, I want to buy a house, I want to have, you know, have all these things. I wasn't concerned about having all these experiences on the side, but the younger kids, they they do. Again, my definition of kids is anybody under 40.

SPEAKER_04

Right. It'll be tied down to a house, I guess.

SPEAKER_06

Exactly. Yeah. Um, so affordability now, from that standpoint, that's kind of where they're at. Reality is uh I can tell you in Cherokee County, I think the median sale price, I'm trying to remember what I just saw, like four, but it's about$450,000. So the new norm is between$400 and$600. Now you get into Marietta, that's gonna tick up. Yep. Um, same thing. You get closer to Atlanta area, that's gonna tick way up. You're talking$700,000. Yeah. Uh, but that's gonna be kind of your medium.

SPEAKER_04

I run around the middle house.

SPEAKER_06

Yeah, yeah. Exactly.

SPEAKER_01

Before we jump back into the episode, do you know if you are ready to take off and launch into retirement? Get your pre-retirement checklist, a free guide from Wiser Wealth Management, from cash flow to social security. We've got your account down covered. Go to wiserinvestor.com slash guides to download your free guide today. Now let's get back to the episode.

Defining Affordability By Monthly Payment

SPEAKER_04

So rent versus own. So a lot of people I'm I hear chatter about why would I ever buy a house? It's just better to rent a house. Um, I go online and I say interesting. And I start looking for a house that I personally want to rent. I don't see anything. I mean, there's some pretty cool ones downtown Atlanta, 15 or inside the perimeter,$15,000 a month, but I don't think they're talking about those. Yeah. Probably not. Right. Probably not. So I don't know. I feel like when you rent a house, it's like it's like it's not yours. So you're not gonna maybe maybe it's just my mind of continuous improvement. It's like, oh, we gotta remodel this bathroom this year. Next year we're gonna redo the basement. Next year we're gonna, right? And and I guess as a renter, this is what you get. You don't make any changes, right? That's right. So have have you had those kind of discussions of why buying is better than renting? Or or have you ever said to anybody, I think it's better that you rent than you than buy a house?

SPEAKER_06

Yeah, I've actually had those conversations. So everybody's a little bit different. I I don't think it's changed over the years.

SPEAKER_03

Yeah.

SPEAKER_06

You know, you buy real estate as a is a mechanism to build wealth, correct? Long-term wealth. You own it. So as it appreciates, you benefit from that. Renting, there's no appreciation, you're not building wealth. However, lots of flexibility with renting.

SPEAKER_03

Yeah.

SPEAKER_06

Uh, it does cost you less on the upfront on the front side. So if you don't have the cash, you don't have the funds, renting may make sense. Also, it's not portable. So if you're in a stage of your life where you may only be here for two or three years and you want to have the flexibility to leave, or maybe you are planning on leaving the state or moving, yeah. It may not make sense for you to buy right now. Um, because you know, you got to sell it. Yeah.

SPEAKER_04

Right. Or I guess if you're new to area, but but why would you rent a house versus a you know a luxury apartment or something like that?

SPEAKER_06

You know, I think that's I I think that comes down to personal preference. I don't know if there's a financial incentive, right? Um you know, between a house and an apartment, a house you're gonna have to maintain, you know, I was just thinking yard work you're mowing someone else's yard. The landmore is a hey, there's a lot more right now.

SPEAKER_04

We have clients that have rental homes that uh they they still maintain the yard and everything, but they used to live there and they don't want their neighbors to be upset that that stuff doesn't get maintained anymore. And so they just said, okay, well, yard works just baked into the rate.

SPEAKER_06

I have rental properties. And I uh part of mine with one of my renters, I have a service that mows the lawn for them. Yeah, now that's baked into their rate, their rent.

SPEAKER_04

They're paying for it indirectly, I guess. Correct. Yeah, you negotiated that with them, or they they wanted you to do that.

SPEAKER_06

Yes. Um they didn't have a lawnmower, they didn't really they weren't really hip on taking care of the yard.

SPEAKER_04

Yeah, yeah.

SPEAKER_06

And I was like, well, we're gonna take care of the yard. So we just baked it into the rate. Okay, you know, we just negotiated. So they're hiring.

SPEAKER_04

We learned something, maybe and they loved it. You can you can get negotiate some of this stuff.

SPEAKER_06

It works for them and it works for me from a landlord standpoint that I know the lawn is being taken care of, and I'm not gonna have any ugly houses issues.

SPEAKER_04

Right. Yeah. So um all right. So I it sounds like that's part, it's just very personal. Um I I just I feel like that that's part of the hurdle for younger people today is one student debt. If they come out debt-free, that's great, but then you still gotta put what at least 5% down. I think there's some programs at 3% down for first-time homebuyers. Yeah, but then it goes back to that monthly nut. Now you got to pay the PMI and you gotta pay the mortgage plus the plus the uh insurance and plus the taxes. Yeah, like FHA.$3,000 doesn't get you very far in the city. No, it really doesn't.

Rent Versus Own: Tradeoffs That Matter

SPEAKER_06

You know, the FHA, uh, you can put three and a half percent down. You still have closing costs, and you're right, you have PMI, right? Mortgage insurance premium, which is about$225 or$250 a month.

SPEAKER_04

I mean the financial planning rule thumb is$25% of your gross revenue. Shouldn't be no more than 25% of your gross revenue should be going to housing.

SPEAKER_06

Allocated towards yeah, yeah. That's everything.

SPEAKER_04

Just not the not the lawn, but just that's the mortgage and the insurance and and your escrow account.

SPEAKER_06

Okay.

SPEAKER_04

Not main maintenance, you're in a separate category. So that's that's kind of a rule of thumb based on what you're making.

SPEAKER_06

Yeah, and I would think that that's probably still this, you know, that's been the standard for a long time, I believe. Yep. You know?

SPEAKER_04

Income's change, not the percentage. There you go. Yeah. Um, so do you think that new construction is solving some of our housing challenges, or are we just kind of moving things around a little bit? Because it seems like all the new construction is pretty far away. I don't see a whole uh whole neighborhoods going in anywhere.

SPEAKER_06

Well, yeah, I mean, you know, that's where the land's at and the available land is. Again, there's a big push for affordability. You don't see a lot of uh I mean, I don't know, uh there's not a lot of developments going around that are building mega houses right now. I mean, there are a few of them here and there, right? But they're small.

SPEAKER_04

Probably up in Alpharetta.

SPEAKER_06

Exactly.

SPEAKER_04

Yeah, yep.

SPEAKER_06

You're gonna see that a little bit more up in Alpharetta, pushing up into coming area and and those kind of areas. Uh everything else, I mean, it's condensed, it's high density housing.

SPEAKER_04

Yep.

SPEAKER_06

And again, there's a lot of pressure on local municipalities and cities to get affordability. So we're talking townhouses or tiny houses that are very, very small lots. Right. And uh they all kind of look the same.

unknown

Right.

SPEAKER_04

Maybe the insides are unique. I don't know. Probably not, but um, but yeah, that that'll I get that. Once once, once the trees grow up, uh you won't even notice. Yeah, exactly. I'm still looking for 20 acres uh to put about four horses on. Yeah, I haven't seen that that's that's that's uh going away very fast. Um I the the best spot I can come up with would be like extreme northeast uh northwest Georgia, uh up north of Somerville, between Somerville and um uh Chattanooga.

SPEAKER_06

Yeah. But now is that because of your price point or because of availability?

SPEAKER_04

Availability, just land. But but even then I see large tracks for sale, and I was like, ooh, that that may not be good. Yeah, well, there's there's no highway system that really gets you there. So I think you're safe from mega neighborhoods, probably. Yeah, but eventually, you know, the 75's gonna run out and they're gonna keep going that way. Yeah. I you know, the good news is that when you fly around, um there's a ton of trees and ton of land. Yeah, it doesn't seem like that when you're driving around the city. It seems like there's no space. Nothing left, but there's tons of space left.

SPEAKER_06

Yeah, it's all privately owned. Yes. You know, that's the thing. Yeah, for right now, is right. Yeah, we do the same, you know, so many people uh we focus a lot on the north side. So um and there we have we talk to a lot of folks that are looking for land. They want five, everybody wants five acres.

SPEAKER_04

Yeah. You you could get that up um uh ball ground still.

SPEAKER_06

You can, yeah, yeah. And that's you know, once again, you fly around.

SPEAKER_04

In a good day, you you could probably see downtown Atlanta from ball ground. Yeah, yeah, and certain little peaks if you're up high enough. Exactly. You know, let's shift a little bit to people who want to buy property to rent. They want rental properties. I I have less conversations about this now than ever. Um, I'm assuming that you know, a house, a starter house at$500,000 doesn't make sense to buy as a rental.

SPEAKER_06

Um not well, it may depending on what your finance most of it. Yeah, it it doesn't, depending on the investor and what your financial plan looks like. Yeah, most investors are going in and they're looking for appreciation in it. Yeah, right. So they're looking long term, right? What's the appreciation rate gonna be over the next five plus years? And then the cash flow. Does it cash flow right now today? Correct. Brand new half a million dollar house. I could almost I would be shocked if you're gonna find that thing to cash flow for you.

SPEAKER_03

Yeah.

SPEAKER_06

That that means you'd have to bring in a$5,000 a month rent.

SPEAKER_04

Yeah.

SPEAKER_06

And you're not.

SPEAKER_04

If you're you spend$5,000 a month, you'd probably just buy a house. Yeah, you know, it kind of goes back to that. You know, do rents kind of still sit around$2,500 to$3,000 a month? I feel like that's always where they've sat for some reason. Yep.$2,500 to$3,000 a month.

SPEAKER_06

Yeah, and that's a nice uh nice rental. Well, I just walked through two of them. They were brand, you know, these are two-year-old townhouses in Kennesaw over by the college.

SPEAKER_03

Yeah, yeah.

SPEAKER_06

Uh, two years old, nice units. They rent for$2,500 a month.

SPEAKER_03

There you go.

SPEAKER_06

They're three bedroom, two and a half bath, beautiful townhouses.

SPEAKER_03

Yeah.

SPEAKER_06

Really, really nice area. But the investors like, I've these things have never cash flowed for me for two years. And I've said, I'm yeah, I'm sure they they haven't. Right. Pay too much for it. Yeah, I mean paid like$450,000 for each one.

SPEAKER_03

Yeah.

SPEAKER_06

Right. So he needs to bring in forty five hundred dollars a month in order for it to really cash flow.

SPEAKER_04

And you know, I feel like if you're long-term, I feel like you're gonna play that game. You're gonna have you have to find a deal or you gotta be outside this market. You need to be in a different market.

Investing For Cash Flow In New Markets

SPEAKER_06

You need to be in a different market. I I know a lot of investors that have moved out of this market, they're down in Macon. Yeah, they find deals down there that that are cash flowing. Uh Columbus is another.

SPEAKER_04

I was about to say Columbus is you can still buy a house in there for under$100,000. Yeah.

SPEAKER_06

There you go. Right?

SPEAKER_04

Yeah, but might need some remodeling, but not much. Exactly.

SPEAKER_06

So they're going into those types of markets. Um, and it just because it's just it's really, really difficult and challenged to find those opportunities in in our area.

SPEAKER_04

I I'd say for anybody out there thinking about buying a home, don't discount small town USA. I've learned this with my kids going to college. So looking at the home prices like in Starkville, yeah, Mississippi, yeah. If you're like, wow, this is a pretty cool house for$250,000.

SPEAKER_06

Exactly.

SPEAKER_04

And I love this little town. There's no target, just Walmart. But but then you switch it and you go look at like Western Kentucky's. That's Bowling Green. It's an hour and a half north of Nashville. You'll start looking around there and you go, wow, I can join a country club here that for$7,000, which is nicer than the Marietta Country Club, which is$75,000.

SPEAKER_07

Yeah.

SPEAKER_04

And the dues are hundreds of dollars a month instead of thousands of dollars a month.

SPEAKER_07

Yeah.

SPEAKER_04

And they have all the shopping, kind of reminds me a little bit of a Marietta, I guess. They have a downtown that's kind of neat, but not no, not crazy. Not nothing memorable, I guess. Yeah. But then you start looking around, it's like you can buy a mega home for$1.2 million and it's a new build. Yeah.

unknown

Yeah.

SPEAKER_04

On the golf course.

SPEAKER_06

Yeah, isn't that crazy?

SPEAKER_04

And I'm down here, I'm like that down here, that's a four million dollar house. Easy. Yeah, exactly. So so not that you're gonna, you know, you you're and this, I don't have looked at the schools there. No reason for me to do that, but but I'm just saying, you know, you you have situations like a Cartersville, like a like, you know, towns in between here in Macon. Um I wouldn't discount the the the the the smaller, slower pace, but you can still get to work. Maybe it's a little bit of a longer drive.

SPEAKER_06

Yeah, and that's gonna be the sacrifice, you know. It's a commute.

SPEAKER_04

Or maybe get to work remote, or if you're in aviation, you only have to drive it every four days. Yeah, right. So that's uh that's something to think about.

SPEAKER_06

Yeah, and that's why we're seeing those migration patterns still holding strong into these suburban areas, is because you know, some folks my daughter, for an example, she has only has to go into the office, I think, two or three times a week. Yeah. So she might be able to drive an hour for that. Yeah, yeah, exactly. So they moved her corporate office down to Buckhead. She wasn't real happy about that because she was 15 minutes away, but now she's an hour. Right. But you know, she's like, listen, if I, you know, two or three times a week, I can tolerate it.

SPEAKER_04

What do you think um is maybe one under the uh one under the radar force that could shape um housing more than people realize this year?

SPEAKER_06

Uh one thing we haven't really talked about, which has been an up-and-coming issue. Do I want to call it an issue? Change? Insurance. Well, what way? Uh well, they're increasing. Insurance has gotten very, very expensive for folks. Uh, even renters. Yeah. Renters' insurance is going up. Uh, I mentioned briefly the condos have gotten in gotten into a little bit of an issue. Yeah. Um, because the insurance, this is what I've been told. Um, the insurance companies took some pretty massive losses, especially down in the south here. Uh, a few years ago when we had the deep, deep freeze in those condo units. Yeah, a lot of pipes were freezing. They took a lot of damages there. Then we also remember the condo collapse that was down in Florida.

SPEAKER_04

No, that's right. That reshaped all Florida condos.

SPEAKER_06

Yes, very much so.

Under-The-Radar Force: Insurance Costs

SPEAKER_04

I actually have a guy I should bring on the podcast who who uh sells condos all over Florida. Okay. Uh he'd be a great conversation to have because they're in the the everyone's having to do those inspections now and con condos there. If you want to buy a condo in Florida, there is one available, I guarantee it. Yeah. I know. People went out. Yes, absolutely. People who were kind of barely affording that second condo are now like, we can't we can't do this anymore. We have to sell. And then all these condos came up, and now they're having a hard time.

SPEAKER_06

Correct. And that's because the insurance premiums have number one, the insurance premiums have gone up. The other thing that has happened is uh there's a certificate that the that the condo association receives from an insurance company. Yeah. Some of them are renewing and they have a stipulation in there that there is a$50,000 deductible per unit for any water damage that occurs in their in their property. Oh, wow.

SPEAKER_04

So you're on the hook for$50,000. The owner if you're a unit. If your unit is the problem.

SPEAKER_06

Correct. So your neighbor upstairs, they have a double pipes, blows you out. Yeah, you got a$50,000 deductible. Oh, wait a minute.

SPEAKER_04

I thought the person causing it had$50,000.

SPEAKER_06

Well, the damage is into my unit. Maybe I'm downstairs, right? Yeah. So I'm gonna try and file, I'm gonna file an insurance claim.

SPEAKER_04

On them.

SPEAKER_06

On them. Yeah. Yep.

SPEAKER_04

But if it doesn't work out and you have to cover yourself, the point is the owners are fifty thousand dollars.

SPEAKER_06

So what that does is it kicks out Fanny and Freddie financing. So it's non-warrantable mortgage. Yeah. So a new buyer going into that condo complex can't get a warrantable mortgage. So it puts them in a higher rate. Right. It puts them into a secondary lending world.

SPEAKER_04

No FHA, which is why your condo prices have come down a little bit.

SPEAKER_06

There you go. Yeah. So that is a trend that we are really watching, and that's one of the reasons why we're seeing such a difficult time with some of these condo complexes.

SPEAKER_04

Yeah. Interesting.

SPEAKER_06

And then they're really strict on the reserves that these condo complexes actually have to hold. Okay. So if they don't meet certain requirements with the with the um uh reserves that they're holding, correct. Then again, you have a non-warrantable condo complex, and you're in the secondary market, lending market. So it's kind of an interesting, you know, yeah, under the radar thing that we're watching.

SPEAKER_04

Okay. So didn't see that one coming. Yeah. All right. Uh well, thank you, Tom. Anything else you want to add? Uh from your perspective, plug it away.

SPEAKER_06

Listen, yeah. Overall, I mean, we are we are, you know, we we've stated this every time I come on. We're in a wonderful area of the country.

SPEAKER_03

Yeah.

SPEAKER_06

We always have demand here. It's it's, you know, from a real estate standpoint, um, we're really pretty healthier than a lot of folks from other areas. So overall, it it's great. Um, we've had some hurdles to overcome over the last couple of years, but we've gotten through it. And I think we're gonna get into a healthier, more stable market moving forward. So the outlook long term in our general area is real positive. Yeah, I really do. Unemployment's still low, employment's good. Uh, we have a lot of folks moving into the area. We have good, healthy growth. So those are all real positive things for real estate long term.

SPEAKER_04

So, what I hear is uh stable real estate here in Georgia and uh or at least the metro Atlanta area. Um no massive price decrease because of uh outside factors. Yeah, pretty pretty stable market. Uh, we have pretty stable interest rates. You might you might see uh half a percent better by year end, but it's not gonna be down to the threes.

SPEAKER_06

Yeah, we're not yeah, I don't the experts that we rely on, we don't see three. I won't see three in my lifetime. Right. Okay. Got it. No one is pretty much but you're twenty five years old, so yeah, that's right. I got a long way to go.

Outlook: Stability And Long-Term Health

SPEAKER_04

All right, let's uh Uh let's quickly ask you three questions in three minutes. Tom, we do this uh for all of our guests one time uh as they pass through. You haven't done yours yet. So let's start here with question number one. What's a money mistake you're weirdly glad that you made?

SPEAKER_06

Uh yeah. So let's keep it on the real estate side. Um probably with my very first property that I purchased, investment property that I purchased, totally undervaluing the value of having enough money, having enough reserves, and how much money it actually is going to take to maintain that property. Um that was a big mistake. I thought, you know, having a thousand extra dollars in my bank account was probably pretty good until the roof fell apart, and I had to, you know, kind of have that aside. So that was probably um a big lesson that I that I learned that you better have some cash set aside and some reserves moving forward if you want to be a landlord. Yeah. So that was a that was a that was a there was a lot of learning lessons uh with buying your first investment property.

SPEAKER_04

If you could travel to one place, where would you go and who are you taking?

Three Questions In Three Minutes

SPEAKER_06

That's an interesting question. Uh it just so happens my wife is retiring in three months, and I keep on asking her, what do you want to do? You want to go on a trip? What do you want to do? She hasn't made a decision yet, but that's all right. We're working on it. Me personally, um, I would I'm very intrigued with visiting and touring like Europe. I would love to go on a like a river cruise in Europe. Okay. I think that would be cool. We've done some cruising with my sister and brother-in-law. We thoroughly enjoy hanging out with them and doing some cruises with them. Sure. But I think a river cruise through Europe with my wife, my sister and brother-in-law, that would be cool for me. Got it. Yeah, yeah.

SPEAKER_04

Um, what's something you believed strongly 10 years ago that you don't believe anymore?

SPEAKER_06

I'll keep it on the theme of real estate. Um, and I would say that I believe that um it's not about timing the market. It's more of how much time you spend in the market. So from a real estate standpoint, it is there there's no day trading in real estate, right? It's time in. You look at the cycles, which are six to ten years long. So no longer do I believe that you can jump into real estate today and make a million dollars in a week. Um does it happen every once in a while, sure. Sure. Yeah, right. But it's time in. This is a time in uh investment. So that's a that's a belief that I now look at. Slow build. It is a slow build, just you know, right up your alley. You understand that. Um, but yeah, that would probably be a belief about real estate.

SPEAKER_04

Got it. All right, thank you. Um thanks for listening today to this episode. If you're interested in learning more about uh Tom Townsend and his services, you can find him at you can reach me anywhere on social media, just like literally.

SPEAKER_06

Yeah, I mean, all you got to do is type in Townsend Realty Group uh or Tom Townsend, Woodstock, Georgia, Realit or any of those, search any of that, and I'm gonna pop up all over the place. Our website is um www.townr is in reality. G is in group.com. So townrg.com.

Where To Find Tom And Closing

SPEAKER_04

Thank you. And if you're a regular listener to the podcast, please uh take a moment and make sure you give us a good review uh on whatever platform you're uh listening on. Uh if you have any questions about your financial journey, you can reach out to us here at wiserinvestor.com to schedule an appointment with one of our uh financial advisors. Thank you so much. We'll talk to you guys next week, or uh see you guys next week.

SPEAKER_00

Thanks for listening to a wiser retirement podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wiserinvestor.com and reach out. This podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets, or any other investment vehicles or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investor advisor with the SEC. The host and or guest may personally own securities, digital assets, or other investment vehicles mentioned on this podcast. Neither the host nor guests of the show are compensated for their participation, and no referral fees are paid to or received by any host or guest for clients, listeners, or similar interests. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional, andor legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.