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REality
Welcome to the REality podcast--the best podcast for real estate agents. Join us each episode as we talk with industry experts and top producing real estate agents to peel back the curtain and reveal what it takes to make it in today's ultra competitive real estate business. This is real life, in real time, sharing real experiences of industry professionals to help both new and seasoned agents achieve their goals and realize their potential. Are you ready to take your real estate business to the next level? Let's get started now. Sign up for Gary's weekly FOCUS newsletter, delivered right to your inbox each Monday morning: https://mailchi.mp/e3771e6a2516/focus-email
REality
Dave Childers on Navigating Market Shifts, Election Impacts, and Building Client Trust
Join us as we unlock the secrets of the real estate world with Dave Childers, CEO of Keeping Current Matters. Discover how to stand out as a trusted advisor and learn the nuances of empowering agents to navigate the ever-evolving housing landscape. We tackle the pressing topics of the NAR lawsuit settlement, how the 2024 election might influence the real estate market and Dave's predictions for the real estate market in 2025. Dave’s insights are a beacon for agents aiming to articulate their value amidst the industry's complexities.
Welcome to Reality Podcast, gary Scott, with you again this week, excited to have Dave Childers with us. I'm going to read a little bit about Dave before I welcome him to the show. I read his bio this morning and I've taken four or five sentences to set the tone for today's episode. For today's episode, dave is a thought leader in the real estate industry, widely recognized for his expertise, his leadership and his unwavering commitment to keeping agents well-informed about the ever-changing dynamics of the ever-changing real estate market. Dave is CEO of Keeping Current Matters and he's revolutionized the way real estate professionals stay ahead. His passion is rooted in his unwavering commitment to equipping agents to be the standout expert in their market so that every family can feel confident when buying and selling a home confident when buying and selling a home. A visionary leader, a trusted advisor and a driving force behind the success of Keeping Current Matters. Welcome, dave Childress, to Reality Podcast.
Speaker 2:Gary, I'm excited to be here and thank you for inviting me, and I want to say one thing you just mentioned that in the bio about every family feeling confident. If you were, I'm here at home right now, but if you were in our office here in Richmond Virginia, you would come in and there's a wall that says we believe every family should feel confident, whether buying or selling a home. The beginning, gary, steve's mission, everything at KCM has been about educating people so that they could make their best decision. On that, and I'm grateful to get a chance to spend a few minutes with you, but even more so to be a part of an organization that believes in helping people make wise decisions more than anything else, and I'm grateful for it. Excited to spend a few minutes together.
Speaker 1:Yeah, we're certainly thrilled to have you. You know, as I read the bio, the word or the phrase trusted advisor yeah, and that's been a cornerstone of our company for the last 30 years. You know that really sets we believe it sets us apart and that we, as real estate professionals, trusted advisors. Dave, we want to seat at the table next to the attorney and the financial advisor and the accountant of our clients. That's how significant we believe what we do is, and I also love the part of your bio that you just referenced. So, anyway, we're going to jump into it.
Speaker 2:We got a lot to cover today.
Speaker 1:Boy, the real estate industry is in the news. A little bit going on here and there, yeah, a little bit going on, so I'm going to jump right into August 17th. Nar lawsuit settled, announced March 15th. Companies had an opportunity to prepare for some change. I want to know from you and your team's perspective, what have you seen in a month and a half?
Speaker 2:Yeah, I think it's a great question and a great place to start off because it's a reality of where we sit right now in the real estate business. So let me back up and let me say a couple of things about what I think is important about where we sit right now. One I think it's important that we as an industry and professionals acknowledge sort of why we are here, Acknowledge that there have been people that have gone through the home buying and selling, you know, a process in a transaction and felt like maybe I didn't get the value that I thought I should have gotten, or felt like you know what, that I didn't feel like I was working with a professional. I think there's an element of that that is, you know, is true about our business and that's why when KCM was founded back in gosh 2007, it was around the idea of what does it look like to be the professional agent, what does it look like to know what's happening in the world economically, know what's happening in the world of real estate and give your client the best advice, and really, back then that was sort of a nice to have, Right, it was good information, it was nice to have.
Speaker 2:Today, I would make the argument. You have to have it. It was nice to have Today. I would make the argument. You have to have it. You have to be in front of clients and they want to know. Do you know what's going on? Do you understand what's happening in this market? So I think, first of all, understanding why we're there, because of folks that have gone through transactions that haven't felt that way, the value of being the expert. And I would argue, right now, Gary, there is no better time to be the expert in the real estate business than right now. And let's face it, I will say something maybe controversial, but a couple of years ago I don't know if you had to be the expert, you had to have a phone and you had to be able to do that.
Speaker 2:I'm not saying folks didn't work hard and all of that, but this is the expert's market. So we see it, number one is a flight to quality right. This is, agents that are able to articulate their value and I'll get into that in just a second are winning in this market. You know, I was, with matter of fact, yesterday with one of the largest realtor associations in this country talking about, you know, there's sort of this thought that we would lose a lot of agents through this transition. That has not happened, let's be clear. It's not happened. Now I do believe there will be a separation of people you know they're doing business versus those that aren't. But this particular association was up year over year in the number of agents that they had in their association. So we're not seeing this mass exodus. But I think there are a couple of things that are really, really clear. I've had the last several weeks a chance to speak at a number of different events and get to talk to agents and I can tell you hands down what is winning right now the agent that is confident about. I know what is happening and they communicate with clarity to their clients. Because you're going to come up to that situation and you're either going to go I don't know we're going to have to wait and see or here's exactly how we're navigating it. And I think, gary, right now, agents that are confident in their value, I think, gary, right now, agents that are confident in their value, agents that are confident in how they articulate, that are winning.
Speaker 2:And I'll tell you this kind of a funny story my neighbor's name is Mike and Mike and I honestly don't know each other that well, see each other, you know bringing the trash can down and you know, have lived next to each other for several years. And he texted me the other day and he said do you have a minute to talk about the real estate? He kind of phrased it, the real estate lawsuit, and I, the first thing honestly I thought was how did Mike get my phone number? I don't know. You know, like Mike, you know all good, but it kind of shocked me and I was on the road and I said, sure, you know, love to catch up and and talk and um, so we ended up over the next couple of days connecting. I called him up and I said hey, he ended up over the next couple of days connecting.
Speaker 2:I called him up and I said hey, tell me what's going on. And he said this to me. He said I've got some friends that are elderly I don't know if he's kind of maybe a father figure or something like that to him and they need to sell their home and they need to kind of downsize and buy something else. And they met with an agent and the agent said we can't show you any homes unless we have an agreement. And then he said this to me. He said, david, is that true? And I said, mike, it is, it absolutely is true, and I promise you this, gary.
Speaker 2:At that point we hung up the phone and that's the only question he had. But here's what after that interaction, what I realized is the agent that was working with that couple didn't do anything to build trust, didn't do anything to communicate confidently. If anything, they created more doubt in this person's mind. If anything, they created more doubt in this person's mind. And it was just a validator for me that stepping into a transaction today, confidently, communicating clearly, I believe hands down, is what is winning in this market and it's the best thing for a buyer right now. I really believe that.
Speaker 1:Well, I think the other thing you did, which is what we've coached our folks to do, is, when someone brings up the lawsuit, toss the ball back to them, ask them what they've heard about it. I think in the beginning we wanted to be so expert, dave, that somebody mentioned it, and then I just spewed everything I knew, rather than you were very specific. What is really your question? I mean, the lawsuit is a complex and he had a specific question of do I need an agreement before I sell a house?
Speaker 2:Now it's a great point. Let me say one other thing about that. That question, right there, is the best question to ask anyone in any situation that you're faced with. Let me give you the example here, gary. Gary, I have a question about home prices, or I think homes are going to lose value. What's my question back? Tell me what you've heard. Tell me what you've heard or what you think. Tell me what you've heard which is based on what you've heard.
Speaker 2:And maybe what you heard was my uncle said I wouldn't buy a house right now because of whatever Based on what? Right? And that's been the premise of what you know. Well, what we've done for the last 15 plus years is help agents stand in the gap Because, listen, when you have the facts, it's no longer my opinion versus your opinion, it's your opinion versus the facts. Right Now, I don't want to wield those in a way and kind of put you in your place and all that, but I want to use them with care and concern and say would you mind if I showed you what's really happening? Would you mind if I kind of unpacked this lawsuit or where we're at right now and tell you how I'm helping clients navigate this market?
Speaker 1:I think it goes to the preamble conversation I had about data and about numbers and about facts. You know, opinions without facts it's one of my favorite quotes from a guy I think his name is Bill Bullard right, opinions without knowledge is ignorance. And I think we have a tendency to take a survey of one who thinks they know what they don't know, and I think it's interesting. You talked about confidence, you talked about clarity, and then I add in the consistency, it's about being consistent in what we do, and then I think the other thing is about curiosity. We, as real estate professionals today, I think I think the other thing is about curiosity. You know just, we as real estate professionals today, I think I have to ask more and more questions. Really, you use the word we have to unpack exactly. I say peel the onion back of that buyer and seller.
Speaker 1:Let's shift gears a little bit, because we got a lot to cover today and you are a perfect guy to cover it. You know, today there's no secret that we don't record these live, so I'm going to go come clean with our audience. It is Friday, october 11th, and so my next question has to do with the election, which is 20, some odd days away. I had to check today with Ashley. Are we going to put this out before or after? The outcome we are going to this will be running prior to November 5th, so a question that you and I get in our industry gets your thoughts on election 2024.
Speaker 2:Sure, I think it's. You know it is easily, gary, the number one question that I get right now. So if I go in and you know I mentioned I've been on the road many, many times over the last gosh five or six weeks I can tell you this in every group that I've been privileged to get a chance to spend time with. I've talked about this and I want to say a couple of things about it. One, the election does not have a tremendous impact on real estate. That's the short answer. Now I'm going to break it down for you here in just a second. I do not recommend you saying that to people because they're going to say you're in the business, sounds like something you'd say, move on, right, but it does not have a tremendous impact. Our team has gone back and done a phenomenal job researching this and I'll give all of this information to you, gary, and if folks reach out or you can post it somewhere where they can grab this research. Second thing I'll say there are questions that people have about real estate. This is one of them that they may never ask us. They may not sit down and say, hey, gary, what impact does the election have? But they're thinking it and we can post information, content, things like that, record a quick video, whatever the case is. To answer those questions Now, I'll tell you a couple of things that come to mind.
Speaker 2:First, normally, if you go all the way back to the 60s we've studied it Transactions between October and November in a non-election year drop 9.8%. So that's seasonality in our business, right, and that's how it happens outside of an election year. In an election year, volume drops about 15%. So that's the effect that I always like to think of is people put their hands in their pockets and they say we'll just wait. Okay, we'll wait, we'll wait and see. Right, there's elections and uncertainty and the direction of policy and consumer confidence are so intertwined today. We used to live in a world where, whether a Republican or a Democrat was elected, it's like, okay, we're going to go on with life. We live in a polarized world right now. Whoever wins determines what I believe about the direction of housing of our country. And am I going to buy a car or buy a house or major purchase? So our business I'll give you an example that probably sums this up the best. Our business operates much more like a Apple store than it does a McDonald's, and I'll give you an example.
Speaker 2:Let's we were talking earlier. You know I know there's so many folks probably that listen to this that you live in areas in, you know, western North Carolina affected by the storm, and my heart goes out to you. It's been, you know, just so horrific to see. But let's imagine we were all together in a city that had some sort of storm come in and we couldn't leave the house for two or three days. Well, if you owned a McDonald's, you lose that business. You don't decide not to eat breakfast, lunch or dinner. You eat it at home, you don't go out. Well, if you owned an Apple store, if that was a possibility, we'd all want to own one first of all. But if you owned an Apple store, you don't make a decision not to go out and buy that computer anymore, you just wait until you can get out of the house. So we don't lose those transactions, they just get delayed.
Speaker 2:And that's the story of the election in real estate. Now I will tell you, our team went back and surveyed you know real estate. Now I will tell you, our team went back and surveyed markets on. You know what happens to prices, what happens to inventory, and these are the things that I'll give you real quick. I'll give you all this data and slides if folks listening want it, but I'll tell you. I'll run through these quickly.
Speaker 2:Home sales went up after nine of the last presidential elections. So if you take home sales the year of the election, they went up the year after the election nine out of ten times. So what you can say. If somebody said what happens to home sales in an election, well, typically we sell more homes the year after an election than we do the election year. I'll tell you another very interesting fact is typically in a four-year cycle, the first year of the presidential cycle is the best year for housing. If you go back and look at that historically Now, I do not think that will be the case this go around because I believe our business will get incrementally better each year as we go through the next several years. But home sales went up Existing home prices went up after seven of the last elections, seven of the last eight elections. So that means you know prices the year of the election went up the following year. There's one exception, that's 2008.
Speaker 2:I always make the comment. There's a little bit going on in real estate back then. So I know prices go up, I know transactions go up, so that's interesting, right, I can tell people. Here's what typically happens. Now here's another interesting one. What typically happens Now?
Speaker 2:Here's another interesting one. If you look at July to November of an election year, mortgage rates have decreased in eight of the last 11 election cycles, july to November. Now you can get some conspiracy theory. People fired up on this one, gary, you know. And what effect does the Federal Reserve and all that have on an election? I do not believe there's a correlation between it. But what's happening right now? We're seeing mortgage rates come down, certainly in a volatile environment, and we can talk more about that. But I think we can say with certainty and I'll give you the data again, I'll give you all the research here's what typically happens in an election year. Oh, by the way, let's talk about what's most important to you and help you navigate this market. And I will say this Do? I think over the next few weeks, when this podcast is released, it would be completely normal for a few people to say we're going to wait and see? I think it would. But my coaching to you is you don't lose those transactions. They just get delayed a little bit.
Speaker 1:Yeah, excellent, excellent. You remind me. I think you know this. I grew up in the real estate family and my father would always touch on winter storms up in the Northeast, yeah, and he always used restaurants and real estate. He didn't use McDonald's and Apple. Back then it was in the 70s and 80s and he said what happened is I feel sorry for the restaurateurs People didn't go eat three times as much. They lost that business. We simply to your point. It got delayed from January of 1989 to March or April or May, and you're suggesting the exact same thing. Those data points are very interesting and I think one of the things and you and I spent a few minutes talking about the importance of understanding data and a comment that I've made time and again is numbers are interesting, dave, but if you can do something with them, they become impactful.
Speaker 2:For sure.
Speaker 1:And I think that's really the challenge for our listener is like what are you going to do with nine out of 10, seven out of eight? What are you going to do with that data and this trusted advisor has that data when they meet a new person or see someone that they know in the Starbucks tomorrow morning for Saturday coffee and someone asks them that question, right Again it goes back to a real key to our earlier conversation, and that is respond with confidence and clarity and conviction. Great takeaways.
Speaker 2:Can I say one thing, gary? I want to say one thing about that, please. I think that's very, very true and we could talk probably for the rest of this podcast about it, but I want to sort of make a point here, because I get to have these conversations with a lot of agents and one of the biggest sort of blocks and I think it's normal, I think it's completely normal that prevents people from doing that is they say I don't want to be wrong. Right, people from doing that is they say I don't want to be wrong, I don't want to tell somebody something, and then things change. I don't want to tell somebody mortgage rates just fell and then they shot up to whatever they did overnight, which is obviously the volatile interest rate, mortgage rate world that we live in. Here would be my coaching to you and I always Steve Harney, the founder of KCM, taught me this and he would always say no one, david, can give you perfect advice.
Speaker 2:No one can give you perfect advice. A doctor can't, a lawyer can't. What they can give you is they can give you their expert opinion, their expert analysis of the situation, and that's our job right To take the facts and give my expert perspective on what's happening. Whatever market I'm in, whatever situation I'm in, whatever the, you know the needs are for this buyer, the seller, this individual or family. You know the needs are for this buyer, the seller, this individual or family.
Speaker 2:And the example is sort of suppose that you end up in a situation and you're sick, go to the doctor. What are they going to do? They're going to say, hey, let's look at your situation and run you through some tests. And they're going to say here's what we see and here's what we prescribe, right. And they're going to say, come back in 45 days and we're going to put you through another set of tests and here's what we see and here's what we're going to prescribe. And that's our job right now is to say here's what I see. Let me give you the best advice based upon that and if it changes, I'll bring that to you. But I think that little piece of understanding that we live in a fast moving world right now relative to some of the things that are hitting our business. But my coaching would be don't let that stop you in giving your expert analysis of what's going on.
Speaker 1:You've used the word expert multiple times in that last segment and that's a big takeaway for me. And when we think about 1,600,000 agents whatever that number- is today.
Speaker 1:Not everyone is an expert, and so I think one takeaway for our listeners is what am I doing every day to be an expert, so that I can give expert advice and analysis based on the current situation? And I think expertise and confidence go like this If I feel I'm an expert and I'm confident and I'm an expert, I'm going to articulate it that way. And again it goes back to your example of the elderly couple buying a home. That realtor basically said here's the new rule, but didn't walk them through the why they didn't. They didn't list the buyer. You know that's kind of a buzz phrase these days. We've got to list the buyer like we list the list product. So great takeaway. I take notes, as you can tell from this. I love this. I don't want to be wrong. Therefore, I give no opinion, boy, that's a big power.
Speaker 2:Right right, you have to have the knowledge. You have to have the knowledge. You have to have spent time and sort of understand that I know a great place to get the knowledge from Gary, if anybody's interested. I used to always tell people, and I do tell this I say I didn't come on this podcast or anything to tell you to become a member of KCM, but we think we do a good job of it. But here's the point you need this kind of information. You have to have a discipline of how am I accumulating knowledge. I believe that is something that every expert agent, every great agent you know, has a discipline in.
Speaker 1:Let's take a minute and talk about steve. Is that okay if we talk about steve a little bit? Yeah, uh. So, uh, our listeners know kcm steve harney, a friend of all of us, our industry. Uh, people that had a chance to meet him were inspired by his uh, his charisma and his knowledge, his accent, energy, right. Last time we interviewed him, if he said four times, he must have said 22 times you want to make a difference in the housing market? Go get a listing. Go get a listing. I don't do a great imitation.
Speaker 2:It's pretty close.
Speaker 1:I've told this story multiple times and I want to share it, and then I'm going to turn it back over to you. Is November 2nd of 2010,. Steve was doing a program in front of 550 agents. If we all remember November of 2010,. I always say the only thing worse than 08 was 09. The only thing worse than 09 was 210. And ironically, 11 wasn't a heck of a lot better.
Speaker 2:Right, right.
Speaker 1:Financial crisis was not a year, was not a six month. It was a journey that we all navigated. It was with great help from KCM, and Steve stood up on the stage and he said two things and I'll never forget it and I actually I've got two slides in my deck that I take around to our company today and I shared one this week. And he sat there and he said ladies and gentlemen, think about this. This is 14 years ago. This isn't like yesterday. The more things change, the more things stay the same. The basic fundamentals are exactly the same today as they were yesterday. It is our execution that must be boldly different. I love that quote. Then he said this, and it holds true today Agents, teams and companies that dominate the next six months will dominate the next decade.
Speaker 2:Yeah, yeah, yeah.
Speaker 1:Boy, how good are those quotes. I'm sure you've heard them more than once and you've got a. You've probably got a trough full of many more. But you know, steve, great friend of ours, we got a couple of podcasts that we've archived, because all the things he says, regardless of the market work, I'd like to, just I'd like our listener to get to know a little bit more about you. You've been with KCM Dave. For how long?
Speaker 2:Well, steve and I met in 2007. He just sold his real estate company and he said I want to help agents. That was really his sort of driving force. And I had been in the business of building products for officers, for title reps, for agents. And so I was in an event and a mutual friend of ours said the two of you should meet.
Speaker 2:And I told you before, I grew up in a little town outside, about an hour outside of Atlanta, close to Athens, georgia, steve, obviously from the Bronx, I mean you couldn't probably pick two guys that had different backgrounds but we instantly connected and I'm like I like this guy, I like Steve, and we became friends. I mean honestly, gary, in my life he became almost like a father figure of sorts to me and business and life. And my dad's a wonderful man still alive I told you he lives outside of Greenville, south Carolina, my mom and dad. But Steve had that ability right, he had a charismatic ability and if you were to ask me who Steve was, I could rattle off a lot of things from. You know, ran a marvelous company, sold that company prior to 2008, a figure in the industry. You know we could rattle this off and transform the way agents educate buyers and sellers through KCM. But what Steve really was was a builder of people he wanted to see. I used to joke around a lot. I'm like I think Steve wants to see me win more than my mom does. You know he wanted to see everybody that he came in contact with win and, you know, coming through 2008,. You're right. So we worked, he and I worked hand in hand through that market, right, and it was a way it was, hey, things are gonna get better in 12, maybe 18 months, and then 12 months later we're like, all right, it might not. And then a year later we're like we might all die. You know, like it. Just that was that market and I want to say this too. I've told this to you privately, but I will say it publicly. It's not hard to say KCM wouldn't be where it's at without the support of organizations and Tate and you are absolutely there from back in the days with leading RE and so many great, you know, companies across the country that supported what we did before anybody knew about it, and I want anybody listening to this to know that that the organization that you're a part of was important to Steve. Gary, you were tremendously important to Steve and we are grateful for that, super, super grateful. There's a list of people and Gary, you're one of them that when you call, I'm going to do it. I'm going to do whatever I can because there were so many people that were there for us in, you know, the beginning of KCM and helping launch this dream of how do we do it differently, how do we do things differently. And I'll say this On Sunday, march 3rd, steve called me.
Speaker 2:It was a Sunday morning. Oh, he actually texted me. He said can you call me? Which was? We talked a lot, obviously, like any of us do in our business, but it was unique for a Sunday morning. And he said I don't feel well and it was actually in Philly watching a basketball game that his son, stephen, who's a coach for the Harvard women's team, was coaching and they were playing the night before. He said I think I have food poisoning. Can you cover me on a presentation tomorrow? And I said no problem, it wouldn't be something out of the ordinary that we would do. Hope you feel better and you know we'll catch up when you can.
Speaker 2:I missed a call from him Monday morning and by Monday. Know, we'll catch up when you can. I missed a call from him Monday morning and by Monday evening he had passed and it was extremely sudden. We'd been in the office together and you know, thursday, friday and all that, and that was Monday, march the 4th, and the message of Steve's life was a builder of people caring and making a difference and for all of us to take his legacy. And we now have that chance. There's, you know, almost 50 people at KCM that drive that mission forward, tens of thousands of agents that use the resource today that he started with a dream in his garage and year after year didn't take a dime out of the business. You know the classic kind of entrepreneurial story and today homeowners and agents and all of us in the business are beneficiaries of that. So just know, from our end we are extremely grateful for the support that you've always given us and it means the world.
Speaker 1:Well, thank you, I was not going to go through this interview and not talk about Steve and, you know, while he is missed and will always be missed, you know the legacy is one that is secure, yeah for sure, for decades ahead, and I think that's. You know. It's interesting. I wrote down, as you were talking, steve wanted everyone to win. Yeah, for sure. I wrote down servant leader To do what he did, the way he did. It is really inspiring.
Speaker 1:Again, we'll move on to some predictions, but I do want to make one comment. It was March 6th, but I do want to make one comment. It was March 6th that I received a voicemail on my cell phone from David. While we've known each other for 20 years, we've never called each other. So, and you were kind enough to allow our company a little advance notice of the news that I think came out either Friday or Saturday, advance notice of the news that I think came out either Friday or Saturday.
Speaker 1:And I think that and I've told that story, dave, to our company and the premise of it is you being our sales professionals, trusted advisors, employees, you built that relationship, the company built that relationship and the company is the people, and I think that's special. So I appreciate that. Didn't want to get off our interview today without that. So it's never too early to predict next year and you know, I know you're not afraid of being wrong. I do know that. So we're not going to go through every metric, but high level I think you spoke about it a little bit as you touched on some election trends and things like that 2025 real estate market from the eyes of Dave and KCM.
Speaker 2:Yeah. So I think the couple of things I'll say about that we're starting to get 2025 forecast in and what we try to do is kind of pull everything together that folks are saying and then go OK, what does that now mean? Will say boldly and confidently First, we will look back at 2024 from a transaction standpoint as the bottom of this market. We will end up selling more homes next year. Let me kind of walk you through this and again I'll include this in what I send to you. But if you think about the last several years, total home sales this is new and existing total sales in this country 2021, 6.9 million, knocking on the door of seven. 2022, we go to 5.7, so that drop off and then 23 and 24, the current pace somewhere 23 was 4.8. We think we'll end up around 4.6 or 7 in total home sales this year. And the forecast the average of forecast in total home sales for 2025 is 5.4 million homes sold in this country. So we survey everybody that's making a forecast and then average those and look at that. So a couple of things that I want to point out to everybody.
Speaker 2:One, two years ago, a little over two years ago, when mortgage rates started to rise. It was the fastest rise in recorded history of the 30-year fixed mortgage rate. Let me say that again, it was the fastest rise in recorded history of the 30-year fixed mortgage rate. And we sort of came out of this market. That was on fire, right, and maybe some of us even are like when are we going to get back to the good old days? Right, and I can talk about that too and how those weren't the good old days.
Speaker 2:But we've come through the last two years with significant headwinds in our business, based primarily on affordability, right, the rise in mortgage rates, the rise in prices. And I'll give you something very interesting, gary In the last year, 70 percent of buyers abandoned their search because of price. Seventy percent, seventy percent. So just think about that. And I think we should have a relevant market opinion based upon this and I'll give you a couple of things to think through. But okay, transaction volume sort of starts to slow down.
Speaker 2:We've been in this red hot market. Mortgage rates fall post-COVID to two and a half, two and three quarters. Everybody jumps in and says we're going to buy, we can now buy what we want. Rates go up at a faster pace than they've ever gone, sort of giving whiplash to our business, and we're in the turn right now. We're in the turn. I hope if you're listening to this, you're starting to feel a little bit of that. I'm not here to say we're going to have a gust of wind behind us, but I think we might have a slight breeze going into next year, I don't think we will face the headwinds that we've seen in 2023 and 2024.
Speaker 2:And I'll give you a little bit of perspective on that. But there are three things that go into the calculation and the effect of affordability. Three things are mortgage rates, where they're at prices of homes, and wages. Those are the three things that affect affordability of a home in this country. So what can I tell you about each one of those? First wages are growing at a faster pace than they have in the last 20 years. That's a good thing. Mortgage rates I'll tell you this. Every forecaster that we follow at KCM has us in a better mortgage rate environment going into next year.
Speaker 1:Now, it'll be volatile.
Speaker 2:It'll be up and down, exactly like what we're seeing right now, because it's not a straight line and prices are forecasted to rise at a much more historically normal rate than the unhealthy rise that we've seen in the last several years. You know, 2020, 21, 22,. It was very unhealthy. We have to be honest about that in what we do. But I can tell you right now, the average of the forecasters we, the 10 forecasters that we follow, everybody from Goldman Sachs to Zillow to you know, everybody out there forecasting prices is 2.6% appreciation in 2025. So what do I believe about next year that I can say with confidence We'll sell more homes, we'll be in a better mortgage rate environment. Now, the one thing I'll guarantee you, gary if you ever try to predict or forecast mortgage rates, you'll be wrong. I can tell you that confidently, that is for sure, and prices will rise at a much more normal and healthy rate than what we've seen in the past. That all bodes very, very well for housing going into 2025.
Speaker 1:Which also then, I think would bode well for 26 and 27 and 28. Completely and it's interesting in 2023, as we looked at 2024, you know it's not as good as we thought it was going to be, albeit albeit we didn't think it was going to be great, but we thought it'd be better. And but all along, over the last, you know, 24 months, there was this fundamental belief that 25, 26 and 27 were going to be really opportunistic years, and you know clearly the lawsuit has created an additional opportunity and I loved your analysis in the beginning that you know, when the lawsuit first came out, the common thought was agents are going to drop like flies. We haven't seen it. We'll see a little bit, but your term was there's going to be the great separation.
Speaker 1:Sure, yeah, the great separation, which is how I have viewed this whole change as kind of a once in a lifetime opportunity to take our industry to a place that we deserve to be, from a level of professionalism comparative to other industries.
Speaker 1:So there is a unique opportunity if we take advantage of it, but we've got to take advantage of it. One of the commitments that your company makes is to equip the real estate trusted advisor with everything they need to be successful. So I've got a couple of questions. One is the concept of finish strong. I know that you and I are avid believers that those who work really smart and hard and intentional from this day to the end of the year will come out of the gates like a racehorse till the end of the year will come out of the gates like a racehorse. What pieces of advice do you have for our listeners, for them to do today, tomorrow, the next day, for the next it's not quite 90 days, but it's about the next 80 days to prepare themselves to finish this year strong but, more importantly, to give them the gas into 2025, which you've already suggested by every indicator should be better.
Speaker 2:Yeah, I think it will be. I think we're playing right now for that. Let me just say that I think the agents that are active and are out in the market will then reap that benefit. I'm not saying they're in business to be had right now, because it certainly is, but I think really Steve used to always say the character that you show over the next 90 days will pay dividends in the reputation that you enjoy in the next 10 years. Right, and so I think there are a lot of agents right now that are confused, they're fearful and, in a lot of cases, are paralyzed. Right, A question's going to come up and you're going to answer it with either here's my confident perspective on it or we'll have to wait and see. What's your perspective right now on the NARA settlement? What's your perspective on you? Know all the things that are happening. We're clear on what their objective is.
Speaker 2:Right, and so I think I think having a confident perspective is critically important. Now I do think this you know we're here in October. You mentioned that we'll go through November and Thanksgiving and you know, ultimately, christmas and time off, it's a lot. It's a time where a lot of agents sort of take their foot off the gas. And I'm certainly not saying don't spend time with your family, don't take time off. Certainly do that, but don't take your foot off the gas because you have a chance to be out in the market when a lot of other people aren't. That'd be my coaching.
Speaker 2:There are three things that we talked about before that I think about a lot. When you know it's what we do at KCM, which is study the market, and you know I'll get a lot of agents will come up to me and they'll say something like this, gary, they'll say, well, if I could articulate it as well as you could, I wouldn't mind doing it, and I understand that I get a chance to talk about it frequently and so I do have an advantage there and I understand that. But here's what I would say Set your sort of discipline and ongoing time to accumulate knowledge. Whatever that is Listening to this podcast, listening to things maybe that are happening in the world of real estate. Have your go-to sources Again, love to have you check Keeping Current Matters out and just listen to what we're saying. I'll guarantee I tell new people in the business all the time. Gary, if you were to go in and listen to our monthly market report which is what Steve started, you know, gosh over 15 years ago, a couple months you'd be an expert in this. You could have a more fluent conversation than most people that have been in the market for two or three years or five or 10 years.
Speaker 2:So have your discipline of accumulating knowledge. That's the first pillar that you have to think about, and I would do it for the next. We call it 60 days between now and the end of the year, excluding holidays. Accumulate knowledge. Second, be intentional about sharing that knowledge. I will tell you the best agents right now are communicating across multiple channels and think about whatever those are that are important to you Facebook, Instagram, linkedin, youtube, whatever those channels are and they're doing it consistently. So I want to accumulate my knowledge, I want to share it across channels consistently.
Speaker 2:And then three this is huge. This is where it counts is I want to engage on that knowledge With somebody. You know if I'm talking about the enormous amount of equity that people have in their homes today. Have you thought about how you're going to leverage the equity in your home? Have you thought about buying or selling a home? There's a lot of pent-up demand that's on the sidelines right now. There are a lot of people that put off a decision. I mentioned the number of folks that had abandoned their search based on price. You know, I think I think there's going to be more opportunity in the in the year to come, for sure, for agents that are visible, that are the expert when it comes time and people do make that decision, to jump back in.
Speaker 1:Well, I love that. I love that accumulation of information and intentionality. You know, that's a word that I've been thinking about a lot, Dave. You know, I think we have great intentions, but to be intentional and have intentions are two very different things.
Speaker 1:The intentionality of everything that we do, and we talked earlier about the importance of knowing the numbers and then leveraging them into a conversation. Great, great stuff. Let's talk about new home sales a little bit. You know, when you talked about total home sales, obviously those numbers 69574846 are all divided into existing home sales and new home sales and I believe correct me if I'm wrong the last couple of years, the new home sales has stayed at a much more constant level than the existing home sale. The existing home sale has predominantly led the decline. It would be the last time I looked at a KCM document that told me about the comparison and contrasting of new versus existing. Just give our listeners a little perspective on new homes in 2025.
Speaker 2:Well, I think most of the folks my suspicion is, you'd have to confirm this for me most of the folks listening in your market are in markets where builders can build right. There are a lot of markets across the US where builders there's just not land right. You think about some of the cities that I grew up outside of Atlanta. Atlanta is one of those markets where there's a lot of infill. You know of Atlanta. Atlanta is one of those markets where there's a lot of infill, you know. But the good news is, I believe and you could validate it again more than I could builders are active. I think in most areas where they can build, they're trying to build them as fast as they can.
Speaker 2:If you look at here's the interesting thing, a couple of things If you look at those that things, if you look at those that sort of measure, the undersupply of homes in this country. It's somewhere between two and five million. Now I have a problem with that because you think is it two or is it five? That seems like a pretty big sort of gap. But let's just say we don't have enough homes in this country for the number of people that want to go out and buy them. That is a fact right now and there's a very real reason for that, and those are the sort of the hangover of 2008. And a lot of builders getting out of the business. Truthfully, you know, if you live through that market, you know the story of that. So I'll say this In the last couple of years in the last year for sure builders have won right.
Speaker 2:They've been able to use a concession to buy down a rate and get somebody in what's been the biggest issue Affordability, I think, going into this year. I think they will continue to operate that well, that way, and I think they're going to enjoy a market where you know they're going to be the ones that bring the inventory to market that's going to be saleable. I also think they're going to focus a lot more and this is becoming clear on more of a first-time home buyer product that has been eliminated from the market just because things have gotten more expensive, right? If you just think logically about the last couple of years, mortgage rates fall, builders start building bigger properties, more expensive properties, because people could afford them why not? And that's not the case today. So I think the outlook is bright for home builders. I think they're going to continue to try to build them as fast as they can and I think for the immediate future that will be a good thing for supply and for folks looking.
Speaker 1:Yeah, I think it's interesting to your point. You know how many homes are we behind? Two million to five million. You know that's quite the gap and there's no singular answer for that. We are about to tie a bow around this episode of Reality Podcast. Special guest today from KCM, dave Childers. One of the questions I ask and I've gotten in trouble before with it only because not everybody does read. I don't know whether you're a reader or not read. I don't know whether you're a reader or not. If you are a reader, I always like to give our listeners a book, particularly this time of the year, as I do the three things that you've highly recommended. Over the next 60 days, any books come to mind that you are on your high recommendation list, dave.
Speaker 2:For sure. I'll give you a couple. I had a phenomenal opportunity when I was in college to work for a leadership author named John Maxwell. Um, john wrote a book called the 21, uh qualities, uh, 21 laws of leader. Um and uh phenomenal leadership book. If you haven't read that or you haven't seen it, I'd highly encourage you to grab that from John Maxwell. Probably the best book that I've ever read in my life was by a guy named Andy Andrews. I don't know if you've ever heard of Andy. He is a fictional historical writer, so he will take a, you know, sort of a history lesson and he'll write around it historical fiction. He wrote a book called the Traveler's Gift. It's probably the best book that I've read in my life. For me, it's the seven decisions that determine personal Seven Decisions that Determine Personal Success, and if you're just looking for a good read that is engaging, that has a lesson behind it, there's not a better book, in my opinion, than that one.
Speaker 1:There you go. One of my goals and it's got to be a discipline is to take the book recommendations as provided by the guests of reality at the end of the year and provide a library. I mean, we've gotten everything from the Art of War to the Traveler's Gift, to the Four Agreements, to lots of John Maxwell, I think I just loaded up. I think it's called the Higher Road, yeah, the High Road to Leadership, I believe.
Speaker 2:I'm going through a book right now called Good Leaders Ask Great Questions oh, I love it which is a Maxwell book which is phenomenal, Really, really good.
Speaker 1:Awesome. Well, Dave, you and I could talk for hours on end. It is great to be with you, Fortunately for you and I. I get to see you, you get to see me. Our listeners are going to get a little bit of a 90-second clip on social media. My final question is it's the one thing, one piece of advice for all of us, whether it's the real estate business or how we finish up 2024. You've been very specific in your three Key to success. The one thing, the one thing.
Speaker 2:One thing that I think about a lot is in our business. What does my perfect morning look like? Morning look like? Because I will tell you this, gary the way that I start the day will then most times dictate how that day goes. So I try to, I'll mix it up from time to time, but I'm very intentional about what my morning routine is, because that then will set the tone for the day ahead. And if there was anything the other thing I'll tell you too we're wrapping up the end of this year.
Speaker 2:I'm a big fan of taking a day at the end of the year and saying where do I want to be this time next year? Right, there's a lot of we've heard it in the business forever. You've been in the business 20 years, or a one year 20 times, you know and being intentional about where do I want to grow spiritually, emotionally, health wise, business wise, all of those areas. You don't need anything fancy to do it, but say, hey, these are some goals that I have, you know, coming into the end of the new year, and I want to be intentional about it.
Speaker 1:I love it. You know, all of us have to figure out a way to work on our business, not just in our business. I think that's a big part of your message. So I'm going to close it, and Dave and I talked about this before we got on the air. So I had a perfect morning. I had a perfect morning. I got up, I had a cup of coffee, I got caught up on some reading, I went and put two four-month-old twins, benji and Chloe, in a stroller, I took them on a three-mile walk with daughter-in-law and then I brought him in and I fed one of them, and then the perfect morning turned into the perfect afternoon. My first appointment was the interview with Dave Childers. So I'm going to tell you what the team here, dave, knows, that at the end of every day I say to myself was it a win or a loss? Yeah, and so it's only 204. I'm going to tell you right now. Friday, october 11th, 2024 is in the W column. Thanks for joining us, my friend we appreciate it.
Speaker 1:Take care partner.
