SPEAKER_01: 0:01

Reality Podcast, Gary Scott and Tony Jarrett, third quarter market update. TJ, how are you?

SPEAKER_00: 0:11

Good. Good morning. Glad to be here with you again for the third quarter.

SPEAKER_01: 0:15

Yeah, it's great to see you. And a reminder for our sales professionals, trusted advisors, this particular reality podcast needs to be sent out so the consuming public gets a sense of the market conditions. So we've uh really enjoyed the first two market updates. And uh, you know, you always think that not a lot's gonna change in a 90-day period. And to some degree that's true, and to other degrees that's not. So let's jump right into it. Uh we're gonna jump right into some big trends and the one that everybody is asking about and the news is uh reporting on, which is listing inventory. So uh share with us a little bit your per perspective of listing inventory across the markets.

SPEAKER_00: 1:02

Well, when we talk about the simplified, it's the for sale signs, and there's a lot more for sale signs out in the market across the board. Now, Gary and I are going to talk today about the Carolinas region. So it's pretty consistent in every region that we serve. We're probably averaging between 25 to 30 percent more for sale signs than we did a year ago. So when you think about that, that's really good for buyers. There's a lot more options out there. Um, and it continues. The trend continues each quarter to increase a little bit. But for sellers, it means there's a lot more competition. Uh, you really got to know what your competition is down the street in the neighborhood and the area. Uh, I will tell you when you look at certain markets that we serve, the highest I saw was Greenville, South Carolina. Our buddy Adam sent me some stats the other day, and it was up 55% year over year. That's a lot of for sale signs in Greenville, South Carolina. The mountains were up 20, 25%. Every market was up. So it's it's this has been the first time in probably four or five years. Our friend Dave, David Childers, who runs uh keeping current matters, has said that month, four months, last four months, over one million listings in the United States, which is the first time in probably six years, I think he said. But every month that's trended. So this is this is probably the big one of the big trends that we're seeing in the market of just more for sales signs coming our way.

SPEAKER_01: 2:30

Let me uh let me provide a little perspective on that. Uh a couple of things. First of all, the upstate of South Carolina and Greenville, I think the other component of that market is just the sheer number of new construction listings. Yeah. And so, you know, Tony and I always talk about, you know, how every market is truly hyperlocal. So we're going to be making some comments that are directionally correct. Uh, but really, you know, you got to peel it back a little bit uh in order to understand why the 55%. Uh a lot of that is a lot of new construction has come to market. But again, that is competition. So you can't diminish that. The other, the other uh I'll call perspective that I like to provide is you know, uh David said for four months in a row, over a million listings. So what does that mean to anybody? Again, we're talking about across the country. Back in the the tightest inventory market we had, probably 21 or 22, probably 21, Tony, that number was like 397,000 across the country. Right. And back in the financial crisis, you know, now we're going back in a little bit of history, it was over three million. And so let's remember perspective. And so what I want to do now, Tony, is is ask you the follow-up question that says, yes, listing and inventory is up 25, 30, 35 percent. Let's put that into uh month's supply of inventory because I think prices will or are being ref reflective of that.

SPEAKER_00: 4:18

Well, the month's supply of inventory has gone to average across Carolinas of four months. Now, think about that for a quick second using your perspective. It just two years ago, it was two months. So it's doubled the amount in just the last two years, and every quarter it's gone up a little bit more. Now, if you look at the field goalpost of what is healthy, four months to six months has always been something that we really feel good in that range of health, normal, normalization, if you will. Uh balance are some words that come to my mind. It's where the buyer and the seller both are sitting at the table negotiating. I think we're right there. I keep hearing people ask me, are we dipping into a buyer's market? We're not there yet. It's still balanced, uh, very healthy. But one of the leading indicators that I've seen that's come out of this trend in the last few quarters is price reductions. And I will tell you on average for the Carolinas, we're around 25-30% as well, kind of the same number of same number of inventories, about the same number of price reductions. But I was looking at some stats, the triangle region of Durham, Chapel Hill, Raleigh, they're leading the this trend. Now they're they're pushing about in the last quarter, about 40% of their inventory had a price reduction, which is amazing. So we're really seeing two different sellers right now. There's the seller that really is confident in their price and they push and they push too much. And this price reduction is a trend that's reflecting that. When you sit on the market for a long time and start reducing the price, you were sending signals to the buyers. And the buyers, fair or unfair, is something's wrong with the house, it needs work, there's just something going on, and it causes. Now, the other side of this, what we're seeing this, is still the aggressive pricing of underpricing to get better returns. I'm going to give you a quick example. I just heard this one the other day, and this is from one of our Greensboro agents. Met a seller, and the seller said, I think my value is$325,000. Our agent consulted and said, I tell you what, if you price under$300,$295, I guarantee you we will build some frenzy around your price. I think of Eddie Cash out of our Raleigh market who told me years ago, I want buyers fighting over my seller's properties. Always resonated with me. Well, this seller said, okay, we'll trust you. We went$295. We got nine offers. Nine in 24 hours. The offer that won was$335. The seller won a$325. We got$335 all cash closed in less than 30 days. Um, that's where the challenges in this market, when we talk about more inventory, the price reductions, if you can price it right in the very beginning, you really can shift the market. So it's this mindset of sellers pricing it or the market pricing it. And in this case, the market priced it, the market won, the market came and it delivered, and we really exceeded the expectations of our seller. Really cool story, but unfortunately, not hearing many of these stories right now. I'm still hearing the 25 to 40 percent of price reductions. Very interesting trend that we're seeing, though.

SPEAKER_01: 7:40

Yeah, so interesting. So I think the other number that Dave Childers shared with us uh recently was in the month of August, uh 20.5% of active listings in that month had a price change. The number you're sharing is of active inventory today, somewhere between 30 and 40 percent have had a price had a price reduction. Uh I'm gonna piggyback on your story. And you know, the the you've answered the question, Tony, and you and I spoke about it at the first quarter update and the second quarter update. You price it right when the market creates the demand. Like that's as simple as economics 101. I'll share with you two stories. Uh, I'm gonna leave, uh I'm gonna put this particular agent, the witness protection program. They're a great agent for our company. So, long story short, they have three listings. Two of them, price dry, conditioned, uncluttered, boom. Sell. The other one, I happen to know the seller, and I know the agent, and I talk to them separately. Seller comes up to me and says, Hey, I just listed a property and we've had no showings. So I quickly jump to, well, I only have one conclusion, right? And it's overpriced. Well, the agent said that's what they thought I could get. So I talk to the agent, and the agent says to me, Well, that's the price the seller wanted. But this is the most significant. The agent tells me that the seller said they needed this price to get their money out of the property. Well, they bought the property, Tony, four years ago, and they're asking, you know, like 65 to 70 percent more than they bought it for. And I think this is one of the challenges that we are experiencing is that we're forgetting, depending on when I bought my property, that I have still built incredible equity and value. Yes, maybe a year ago I might have gotten that price. Prices aren't coming down, prices just may not be what they were, and I think those are the important things for us to think about. I I want to echo the other thing that you said, and I think it's really critically important for every seller to hear this. When you have a price reduction, you are creating a narrative about your house. Period. Like I'm just saying that the buying, the consuming, the consumer today, the buyer today, is patient. And if they see a price change versus go to a property on a weekend where there's a frenzy because it was priced right, you know, it really is a dynamic that we're seeing over and over again in all of our markets. Pricing is as critical today as it has ever been, and conditioning.

SPEAKER_00: 11:04

Yep. And our stats that we're talking about is one price reduction. I think I don't have the stat for our listeners today, but I will tell you we're starting to see the two and three and four price reductions, more than we have. And the more you reduce, the more signals you're sending to people. I think the other one that I would add is concessions. We are definitely seeing a lot of concessions in this market, especially on the new construction side. That the average that I'm seeing is probably about$10,000. Now, on an average three to$400,000 house, new construction, I'm probably getting about$10,000 in concessions, closing costs, blinds, appliances. That's a competition for me as the resale owner sitting just a mile down the road. You got to know that product as well because it is definitely we're seeing that shift as well. So our resale sellers need to think about closing costs. And the other one, last one, is buying down mortgage rates has gotten really big in the last show, probably the last quarter. Uh, that's speaking to more buyers right now because you're going to buy my rate down, which means that my monthly payment is less. And I think a lot of people are starting to shop by monthly payment more than they're shopping by the price of the house. It's fascinating to watch that shift as well.

SPEAKER_01: 12:16

You know, it's interesting when you when you shop that way, you begin shopping like when you bought a car. Bingo. You know, they always say cost versus price. You know, when we buy a car, you know, I want a$450 car payment. We don't really think about what interest rate it is. Like we don't think about all the stuff. We just know my payment. Where in housing, it typically has not been that way, but as the gap from two and a half, three, three and a half to six and a quarter to seven. And, you know, we're going to talk about interest rates in a little bit, and and you uh you you beat me to the importance of buying down. I'm a resale seller. Get that rate in the fives, and you will create a market that is unique to perhaps your competition. Plus, many, many resale sellers, competition is new construction, and they're doing it over and over and over again. So, again, as we think about uh selling in the world we are in today, I've got to make sure that I'm uh highly in tune with all of the components of uh of the market conditions and the market dynamics. So obviously, uh, you know, we you and I talk about the media all the time. You know, when the media automatically sees inventory up 30%, days on the market up 25 days, you know, they immediately often immediately suggest that prices are coming down. Let's take a minute and talk about price appreciation and what we are see that what we are seeing happen in our markets.

SPEAKER_00: 14:16

Again, another consistent trend across the Carolinas we're we're probably looking at somewhere between three to six percent price appreciation, very healthy, very uh very consistent. To your point, though, what's concerning to me is that when I hear these things with the media, it I have to believe buyers are sitting there going, let's wait. Let's sit on the sidelines and wait on the prices to drop. And when you see 30 to 40 percent of the for sale signs dropping, dropping, dropping, what's fascinating to me, this is not about prices falling. This is about prices hitting the market to begin with. Those sellers who are selling their houses, even when they reduce, I'm confident to your analogy, they bought it four years ago, they're still, the asset is still performing. They're still above where they paid for it. It's just they missed the mark in the in the beginning. Uh it's still a healthy return for our sellers right now. But it's really about sellers being realistic about our growth right now versus trying to hit something that is not attainable right now, especially from two, three years ago from the pandemic. And it's really local, meaning that when you price these properties, not only do you need to look at the comps, which is what we always look at the last six months. Today, I think it's even more important to see what the active inventory is. Because the pace is 25-30% of new sales coming up, quite frankly, your pricing could change over the next couple of weeks based on your competition that's hitting the market right now. Your listing agents out there should be really looking at this every week, watching, giving you market reports every single week because the market has changed a lot in the last few quarters around pricing. But if I can get six percent price appreciation, that's pretty healthy right now and pretty consistent based on everything we're seeing across the board. Right.

SPEAKER_01: 16:06

So I'm gonna piggyback on uh using active listings, Tony. We talked about it in the second quarter. And I think that uh maybe we were ahead of the curve in the second quarter as we were talking about it. And I was uh talking to somebody the other day, and I said, you know, what I would imagine if I was uh a listing agent and I was coming to list your house, here's how I would approach it. I would say, listen, Tony, uh there are six competitive listings that are active on the market with your property. I have gone and seen them all. I have toured them all. I'm not relying on an MLS, I'm not relying on a portal, I went and looked at them. Those are the competitors. I can't go look at what sold three months, six months, nine months ago. And what we're gonna take a look at over the next couple of weeks, we're gonna watch those listings in addition to yours. And if one of them sells, I'm gonna microanalyze that sale. I'm gonna call that listing agent, Tony. I'm gonna find out did they show my listing, our our your house, did they show your house? If they did, tell me about it. And what that, and I know we gotta wait, but what that property sells for and the next one, like that's the story. If I've got six, if I'm one of six and three of the six sell, that that's gotta be the data that you and I are talking about as we reflect on our marketing strategy. And I just I I wanna I want to expound on that at a high level. It is about the listings. Now, one of these stories I told you about this agent in the witness protection program, there were no listings in this particular subdivision for three years, so it was a high demand, and she priced it right. Yeah, and but I guarantee you she put it in perfect condition. Now, I haven't found out that it sell for more. I'm gonna bet. You know why I think so? Showing started Thursday a week ago, and she texted me under contract Thursday night. Well, how about that? Again, no verses there weren't four others in there for sale that had been sitting. You know, really, really understanding current inventory data, I think is is is paramount. Um Tony, what you know, it's we're we're in the fourth quarter, we're looking at third quarter review. Um, you know, one of the things that people ask you and I all the time is like, what do we think is gonna happen? You know, we're we're sitting here recording this on October 13th. By the time it comes out, it's gonna be October 20th, October 25th. We're gonna be one month into the fourth quarter, we're gonna be one month after the third quarter. You know, our our podcast is really about a little reflection, but also a little prediction and prognostication. Um, what are you thinking about the fourth quarter?

SPEAKER_00: 19:16

Well, right now, activity is pretty consistent and really good. Um, I'll give you a couple thoughts. One is I want everybody to think about the rate of for sale signs versus the rate of buyers, is it definitely a trend. Uh I don't think anybody can see us, but I always take take your hand and do an uh an angle up of 25% and then do the 5%. There's a big gap right there. Um the trend, the third quarter was one of our strongest buyer activity that we've seen so far this year. Now we just talked about the inventory has been pretty consistently up 20-25%. Buyer activity is starting to move. I know you said we were going to talk about interest rates. Interest rates are fueling a little bit of this right now, especially in the last 30 days. Um, well, let's just uh it's hard for me to answer your question without going down that path because I think that's the prediction. Yeah, let's go. So the Fed reduced the Federal Reserve rate, which the mortgage rates had already dipped into that ahead of that. Now, there seems to be some confidence that the Fed is going to reduce their rate two more times this year. If they do that, I think we could possibly see mortgage rates dip a little bit more. Uh, I will tell you that there are a lot of refinances right now happening. And I think when we get to your words below six and get in that high fives, I think we're going to see more activity. October is always typically a pretty good month. November is also, then we hit the holidays. So we have the seasonal coming up, but that could change where these mortgage rates continue to dip. So our mortgage rates, I think about it, for two years ago hit a high of 8%. All of last year, the average was a right around 7. Right now, we're around 6.25 to 6.35 on average. But about two, three weeks ago, it dipped to six when the Fed moved, and then it normalized again and came back up. But what if this happens two more times? It really impacts affordability. It impacts people going, okay, now's the time to move. I mean, here's the challenge in our industry, and you know this just as well as I do. It's really hard to time this. I'm gonna jump back in the market when rates hit six, and then you decide life is not right then, and you wait, I'll wait another week, and then they go back up to six and a quarter. Uh, it's really hard right now, and it's been somewhat of a roller coaster, but in the market we're in right now, with more inventory coming on and rates staying in that six and a quarter range, it's a really good time because what you need to think about as a buyer, if they did get below five, guess what's going to happen to prices? We're going to start seeing a little activity of that frenzy, and suddenly I may have to pay a little bit more for that house I wanted last week. So all these, it's a domino effect, all these things happen, but you it now is a good time. And I my prediction would be if this continues, I think it's going to be a strong fourth quarter, quite frankly. And it really could launch into a first quarter pretty right after those holidays, as we talked, talked about earlier. I think we could really get to see some good activity out there. What a wonderful time for a seller to really price it right because this inventory is pulling some new buyers into the market.

SPEAKER_01: 22:34

Yeah. So Tony, uh excellent, excellent point. So one of the things that that I think about is, you know, over the past couple of years, the number of existing homes sold across this country have hovered a little bit below 4 million, a little more below four, a little above four. And one of the general narratives is the 4 million people that have bought and sold each of the last three years have done so because of a life event. Right? They did so because my family grew. They did so because I relocated. They did so because I'm now a multi-generational homeowner. You know, child moves back in with me. Because the interest rates kind of kept people from, I'll call it the discretionary move. And so what it appears to me is that we in this country sell about 4 million homes based on people's needs changing. And I'm gonna piggyback that I think what's beginning to happen is a more discretionary view of buying and selling. Uh, I think we're looking at perhaps people that bought in the frenzy of 20 and 21. We talk often that that frenzy caused people to buy a property at a interest rate that they have today, but maybe that house isn't right for them today. Right. Because a circumstance has changed, but they've been, as they call interest rate locked. So I call it discretionary home buying and selling versus the necessity home buying and selling. We've kind of lived on the necessity of home buying and selling in the last 36 months. I believe that the discretionary want dream move up over expand is probably going to be seen in the fourth quarter and starting next year, regardless of the interest rate, because there is a confidence. And remember, when interest rates go down and prices go up slower, housing affordability expands, which is hugely important, particularly first-time homebuyer. Uh, Tony, I'm gonna I'm gonna pivot a little bit to the first-time home buyer. You know, one of the real dynamics that has impacted and influenced the real estate market is the average age of a first-time homebuyer in 2024 was 38 years old. And I think I read a stat recently that in 1980, that number was 28 years old. Uh, and so think about that. And I kind of laugh to myself because we say that if I bought something in 2019, that five years I grew equity. I grew average, uh, my average uh home price went up 57%, my equity went up 74%. I say if that 38-year-old had bought when they were 33. And so let's talk a little bit about what can happen that motivates the first-time home buyer to become a first-time homebuyer earlier, if that makes sense.

SPEAKER_00: 25:55

Well, I think marriage, children is always seems to be from based on what I see with our agents, you see those first-time homebuyers, it's it's that life cycle. I don't want to raise my children in an apartment. I want to go get the yard. I hear that a lot. But, you know, you think about it. You you made a comment in 1980. I remember I bought my first house at 25 years old. And now that I think about the lifestyles in the downtowns that we go to, I there weren't that many apartments. There were, and in fact, where I grew up in Greensboro, North Carolina, you didn't go downtown. And today it's a lifestyle. So I think the lifestyle of many of our downtowns has expanded some of the young folks to say, let me work on my career, let me enjoy life down here. We didn't, you and I didn't have those kind of opportunities. You know, I think about it. Uh, would I have stayed in downtown in an apartment a little bit longer? Maybe, maybe. But I think the the good thing that we have going in the Carolinas right now is that wage growth has been pretty solid. Employment has been really good. I think the best and the most the thing you said that resonates the most is the investment ownership opportunity that I had, or the return on investment, if you will, that I think is stronger today than it was back in when we bought our first homes. Um I will tell you personally, you know, I own an investment property. Uh I wish I had done it years, years ago. And the mortgage I'm I'm refinancing. So for our listeners out there, I locked in at 23, just like our clients did at 7.125. And I locked in at 5.875. That's a really nice monthly payment now. Uh and I will tell you when the appraisal came back, I kind of smiled and pinched myself a little bit because the rate of return was even more than what you said. I don't want to say this on the on the radio, but it's like, yeah, now to me, now my my thing is retirement one day. So I want the return for me down the road. But if I am a 30-year-old versus 38 or 33, as you said, uh, I'd like to jump back in the market at 33 to get a think about it, if you bought a$300,000 house and oh, and you kept it to the time of 38, just those five years, and if our average return is three to six percent, think about the number. Let's just take an average of, say, four, and you take that four percent over five years, that's a pretty good return of equity that I have that I could use to buy another house, to bar against, to pay my kids college. I mean, there's so many things you can do with that that I will not get in that apartment building downtown having that lifestyle. And with this market shifting back into the five high fives, low sixes, and sellers now looking to say, I will help you with your closing cost, my gosh, what a what a wonderful time right now to jump back in and buy. What do you think about that?

SPEAKER_01: 28:58

Well, so I'm gonna I'm gonna go down a strategy. I don't know if we've ever discussed this. If we have, I apologize. But you mentioned uh pay for college. And uh a mentor of mine uh literally he had five children. Uh, and at the birth year of each child, he bought an investment property. And he chose real estate as his$529. Yeah. So every year he bought investment property. You figure you they go to college at age 18, so you get a 30-year mortgage, you paid off 18, you know, and he had somebody else paying the rent, therefore, they paid the mortgage. So he did not buy it for a positive cash flow. He bought it so that if he needed house on Scott Street to educate child one, he had now this particular mentor ended up not needing it for that. But again, think about it differently. And part of the challenge we have, Tony, is the other markets that these that the 30 Some things have been in, have made a lot of money. So they've made a lot of money in their 401, their Roth, or they've made money in their investment portfolio, and they are relatively liquid. So I think the other piece of the homeownership equation is with prices rising, uh, people having enough money to put down. And uh, you know, I know we've shared this before, but I think it's really, really critical that parents and grandparents evaluate the strategy of leaving it when I'm not here versus sharing it while I'm here so that my child or grandchild can begin to experience the generational wealth that can be built through homeownership. So you and I both know our chairman Pat Riley, you know, he's been talking about this for four years. You know, we talk often about the generational wealth that is going to drop through, uh like$1.8 trillion is going to go to new generations. And so the question for a parent like myself, or a grandparent like myself, or you is if I'm capable of gifting the 20%, am I better off doing that now versus being so well prepared for uh life after? And I think that's just a balance. Those are personal choices, no judgment by us. We're just here to share some thoughts for everyone to think about, you know, particularly as you think about the baby boomers who, you know, they've been in their same house, they've got it paid for, their equity is gigantic. You know, is there another way to provide a benefit and a value to the generations in my family? I just I share that. Pat is passionate about it. Um, and so I just I think it's about looking at home ownership a little different than maybe we have in the past.

SPEAKER_00: 32:05

Well, and you when you think of it as a financial vehicle, the last 83 years in the United States, there's only been seven times out of that 83 that we had a price drop or a depreciation. And the last one, quite frankly, was over 15, 16 years ago. Right. And that was the housing crash. So as far as a financial vehicle, it's a pretty safe bet. Um, usually it's stock market or real estate. And so real estate has been pretty consistent. It's and you think about when I should have bought a home, boy, if you could have bought a home in 2019, 2020, your your return would be pretty, pretty good right now. So I I think for all those young folks listening today, if you are listening, figure out ways to get that like that down payment, like Gary talked about. And I know those boomer baby boomers of grandparents, they'll probably gift you some money to go in there. And the seller also paying closing costs, you probably could get in right now. I hear the stories, I can't afford to buy house, the prices are so high. You can't afford not to because the prices are going to continue. Figuring out the closing costs and the down payment is one. Don't think about the price, think about how to get into it based on that monthly payment, like we talked about earlier. And then suddenly, like you said, it's not a cash flow, it's an asset that you can tap into later, which is really important.

SPEAKER_01: 33:21

So really good. Hey, Tony, so to the parents and grandparents that are not happy with us, uh, it's Tony.gerrett at HowardHannett.com. For those uh millennials who want to buy a house and you're fired up about our strategy, it's Gary.scott at HowardHannett.com. Hey, uh, before we jump, I want to go to days on the market. We touched on it, but I want to I want to share this with our listener. And this came from Dave Childers. And you know, we've talked a couple of times today about keeping current matters. You know, we think Dave and his team really have a pulse. So uh I'm gonna I'm gonna share this insight that he shared with us. Uh he says this is not a price crash, it is a normalization of the market. Right. I want you to listen carefully. Long-term expectations for cumulative home price change from 2025 to 2029 range from a pessimistic 6.7 to an optimistic 27.4. So, two things to unwind there. It's probably not 6.7, and it's probably not 27.4. Number two is these predictions would be given by experts. So you guys draw your own conclusion on the definition of an expert from 6.7 to 27.4. But historically, Tony just mentioned it. Historically, 4 to 6, 4 to 6, 4 to 6, maybe get an eight, maybe get a 3. Think about that. And the other thing, and I just I share this time and time and time again. There is incredible value that is not able to be monetized by having a home where you have memories and experiences. I just, yes, it is a financial vehicle to grow wealth, but it is a vehicle to build things far more significant than wealth. Now, somebody could say I can do that in a rental property. You absolutely can. But remember, you know, I'm worried about 6.6.5%, and I'm renting and I'm paying 100%. And I know everybody knows that math. Again, right. Uh, and so um, what I want to shift now to is let's talk about days on market. We talked about month supply of inventory, we talked about uh inventory up 25, 30 percent, we talked really spent a lot of time on pricing and why it's so important. What has happened to days on the market?

SPEAKER_00: 35:57

Well, after the second third, it kind of leveled and then it started going back up again. So it's back up to around 50 days on average for across the Carolinas. The mountains are a little bit higher simply because the mountains are always a little bit higher with inventory there. But I think our listeners could count on two months. And what I always find fascinating about days on market, when you talk about days on market, days on market is a success stat. You must have a contract in order for me to give you the days on market. So if I say it's 50 days on market average, that means the seller priced it right, conditioned it right to get a good offer in 50 days or less. There's probably another stat, which I don't know, of those who didn't price it right and don't condition, who are just still sitting there. I don't know what that number is, but 50 days means you hit it right to begin with. Uh and and in past, that's really healthy. Two months, 45 to 60 days, that range is quite frankly healthy. And you made a comment earlier that resonated with me, and that is buyers are not in a rush right now. They're the ones who are back in the market, they're taking their time. Unless you see that house that you know, and you know after three or four showings of knowing the active market, you're like, oh, that one's not gonna last. I need to jump on that fast. The house I gave you the example of Greensboro that had nine offers, everybody knew$295 on that house was priced right and it wouldn't last. You'll know. But if you're not priced right, the buyers have no motivation. They may like your house, but it's going to take a little longer. And that has seeped into the trend a little bit that just it's taking a little bit of time. Because you think about three years ago, we were probably average 14, 15, 16 days on the market. Now we're at 50. But again, it's it's it's normalized to a good rate.

SPEAKER_01: 37:49

So, two things. I gave you the example of the property that uh was listed and sold in a day. And uh, the reason I'm familiar with the property is I was interested in the property for me. And what happened is I was I was out of town, but I also was not gonna get caught up in it. Now, if I came back and it was sitting here for sale today, Tony, I'd probably go look at it tomorrow. Like I was that I am that patient buyer, like really patient. I'm not gonna get caught up in it because I don't have to get caught up in it. I've at I've become a discretionary purchaser, but it's at my discretion. So I'm back in the market after not being in the market, but I'm gonna be in the market on my terms. And again, I'm not I'm I don't think I'm unique. I think there's a lot of people like that in this market. And let's go back to days on the market. You can just correct me if I'm wrong. If the average is 50, and we know there are some that are sitting, like I go online and you know, 140. So think about this. There are some selling in 14 to 20, or some selling in 75 to 100. Let that be our guide on pricing. An average days on the market is a number, but we have to remember there's a whole bunch less than that because we know there's a fair amount above that. So we just have to think about that. Again, we're gonna be a broken record today for sellers uh because at the end of the day, it is a great time to sell if you are motivated to sell at a price that you allow the buyer to determine.

SPEAKER_00: 39:42

Let me give you another stat that, as you were talking, made me think about it. And that is being positioned right as a buyer right now is really critical, meaning your loan financing, your down payment, you you've got to hit the ground ready versus go look at the property, see what it is, and then figure that stuff out. I have no way to back what I'm getting ready to say up, but I'm hearing more of our agents tell us that they may put a house on the market and get no showings in the first week. And then the second or third week, suddenly it starts picking up activity. You might, as a buyer, slide in that first week, make a clean offer, as we say, and win the house immediately versus what you just said made me think about it, meaning I don't want to get into all that. I don't want to get in that mix. Well, there's no rhyme or reason right now. Now, I will give you a stat, the tried region. I haven't been able to track this in other regions, but in the tried region, we're averaging right now four showings per listing. It's the lowest I've ever tracked. And if you think about as a seller, you price it right and it's gonna take you 50 days, and I may only have four people that come in to look at my property, that's even more important that I'm that I'm positioned right. Now, I do believe that's going, that trend's going to reverse. I think it's gonna go up. But just two years ago, we were averaging 12 shillings per listing. Now we're down to four. So the buyer activity makes me worried about some of these buyers sitting on the sideline. But this last quarter with the rates, it's starting to shift again. But the craziness, as we've seen, is really gone from the market, unless it's a just a very unique piece of property and unique neighborhood price point, et cetera. But you you might not have to deal with that crazy if you're positioned to move in very quickly with an offer, a clean offer, and get in there. Um, it's been fascinating to watch. I still say my word soft sellers market. I'm not seeing much on list price to close price, which we haven't talked about. It's between 98 and 99%, which I think is still stronger than most markets. But on the flip side, I'm getting concessions with that 98-99%. And that I'd rather get, I'd rather I'll pay you full price or 98% of price if you're going to help me reduce my cost and my monthly payment. That I can't say that enough today.

SPEAKER_01: 41:53

So let me add another thing to that. Correct me if I'm wrong, Tony. When we see that percent list to sale price,$98.99, it is of the last listing price. That's right. It is not of the first listing price. So I want everybody to, you know, my dad used to say, you know, figures lie and liars figure. And, you know, the bottom line is numbers can do what we want them to do. If I've got 36% of the listings have a price change, then if I'm getting 98%, I might be getting 98% of the price reduction. So again, not a red flag. Just data is a reference point for us to make decisions as consumers. So I don't want to be, I don't want to be too excited about 98.99. If I'm, let's say it's the third price change.

SPEAKER_00: 42:49

Yeah. Well, I am seeing on the second, I can't, I can't track the third, but the second price, it starts shifting between 94 to 96. So it really shifts. Yeah. Good.

SPEAKER_01: 42:58

Yeah. Good. Again, I just I think these are good good questions. Uh, so Tony, you brought something up, uh, and you've you've shared this with Katrina for the last five years since I've been back. And I think it would be great for us to remind uh every buyer and seller of what we think are the five most critical statistics as we begin to think about buying and selling. So, how about before we put a bow around uh third quarter review that uh just re-rehash or or reshare the five stats that are really important? We've gone over them, but let's uh let's put them in in order.

SPEAKER_00: 43:41

Um well, days on market, roughly 50 days. Uh two is uh monthly supply of inventory, basically four months. Three is price appreciation, which is roughly four to six percent across the board. Uh the number of showings is my other one, which uh is down, but I don't know all the regions. It it varies. Uh and then uh five is list price to close price ratio, which we said is somewhere between 98 to 99 with no price reductions, probably 94, 96 percent with one at least one price reduction. So those are the stats that I would key in on for the group.

SPEAKER_01: 44:28

Yeah, and we'll continue when we do a fourth quarter wrap and a uh Q1 kind of review. We'll really dig into where they uh where those five data points went from January 1 of 25 to the end of the year. Uh, you know, I think I wrote down here, Tony, as you're doing price appreciation, there are also markets that are two to three. And so again, let's remember buyers and sellers, hyperlocal. Uh you know, let's the number of showings are really important. Uh, you know, and and I think if you've got a lot of showings and you're not selling, that's telling you one thing. If you're not getting a lot of showings and your five competitive listings that we talked about earlier are selling, again, it it does require the real estate professional, the trusted advisor, to really dig a little deeper into every transaction that surrounds your transaction to really try to understand why that one sold, why we're not getting showings. Heck, three of my competitive listings sold, and not one of them looked at my listing. Okay, is that something I'm not doing? So, again, uh, I think that the ability to evaluate it almost by transaction really gives us uh a perspective from an uh education and an informative perspective. So again, as we think about buying and selling fourth quarter, uh I I remain bullish on it's a good time to do both. Uh, with more inventory, there's less competition, but you still have month supply of inventory, gives you a price uh opportunity. And obviously, depending on when you bought your home, um, as my father also used to say, Tony, bears get rich, bulls get rich, and pigs get slaughtered, right? And uh, you know, if you've made some money and you're prepared to make a discretionary move because it it's something you and your family want to do, um, don't let the interest rate keep you from it. Um, that would be my uh advice and counsel.

SPEAKER_00: 46:36

Let me give you a closing thought from my side, and that is the feel factor. I think it feels better. Now, I want you to think about that for a second for this year. I mean, we entered this year with recovery from a hurricane that hit the western part of the state. In the mountains right now, real estate activity has been so much better this last quarter. It feels like there's been a lag effect from that hurricane. It feels better. We had an election, we had a stock market shift that really dipped in the first in the first quarter. Now it's performing very well. We we touched on it briefly, but we've we've had some of the largest economic uh announcements made in the state of North Carolina in the last six months. So the feel factor is really good. And when it feels good with the stock market, when it feels good with buyer activity, when it feels good with mortgage rates, what a wonderful time to home own a home because your asset typically performs pretty good during those times. And I do, uh I'm like you, uh I'm pretty bullish. I think 2026 is going to be a much better year, especially the trends that are happening right now. We had to normalize out, and we talked about that pandemic. We had to normalize out of all that, and then we had all that hurricane of activity. Now it's feeling much differently. It feels good.

SPEAKER_01: 47:54

Well, our next podcast will give predictions, but I do believe uh sales units will be up 10% next year. So I do believe that uh in and I'm gonna close with an interesting stat. So I was doing some research on uh, you know, the the percentage of time we spend as humans on things we have no control of versus that what we have control of. And so I got this data, but one of the data points that came out in my research was, and I think it's fascinating, and I double-checked it a couple times because it felt high, but it basically said that of the things we worry about as humans, 91.5% of the time what we worry about does not happen. Right. So I want to just combine that with what you just said, and just think about the why, like the motivation. And uh, you know, if I'm thinking about buying a house, why, okay, my six and an eighth, six and a quarter. What is five and seven eighths? It just probably doesn't matter. Uh that's right. In addition to wrapping up Q4 and kicking off Q1 of next year, uh, Tony, I'm gonna put a uh a little bug in our ear to talk about the silver tsunami that has not happened. Uh, we all believe that the baby boomers were gonna really bring homes to market, and it's never happened to the extent in which we believed it would happen, and maybe with an increase in inventory, because many of them didn't have any place to go, if you remember, you know, during COVID. Uh so let's uh make a note that in addition to our review and and uh projection, that we'll just talk a little bit about you know where our belief is on the baby boomers bringing a lot of real estate to market. So uh with that being said, as always, uh good friend, expert on real estate stats, Mr. Tony Jarrett. Always great to have you on reality podcast. We'll see you in about 90 days, partner.

SPEAKER_00: 50:02

Thank you so much. Hope everybody has a great holiday season. Yep. Have a great day, gang.

SPEAKER_01: 50:06

Thanks for listening.