Passive Impact: Real Estate Investing & Special Needs Housing
Welcome to "Passive Impact: Real Estate Investing & Special Needs Housing," where we explore how real estate investment can generate passive income while making a positive difference. Join host Robert Flowers as he shares strategies, success stories, and opportunities for investors looking to create financial stability and meaningful community impact.
Passive Impact: Real Estate Investing & Special Needs Housing
Real Estate Reality Check: Housing in 2025
The real estate market has hit its lowest point since 1995, with existing home sales dipping to around 4 million in 2024, creating uncertainty for potential buyers and sellers about what to expect in the coming year. We analyze insights from real estate broker Stephanie Birkin to help you understand mortgage rate trends, inventory challenges, and practical strategies for navigating the 2025 housing market with confidence.
• Mortgage rates expected to remain in the high 6% range with some easing in 2025, but don't anticipate a return to sub-4% rates
• Watch the 10-year Treasury yield, not just Fed announcements, to better predict mortgage rate movements
• Limited inventory persists due to homeowners locked into low rates, creating a real estate standoff with gradual improvement expected
• Buyers should complete pre-approval now, explore down payment assistance programs, and clearly define needs versus wants
• Demographic shifts show more cash buyers, older first-time buyers (median age 38), and more single female buyers entering the market
• Sellers should list in late February/early March and follow the PLANS framework: Price strategically, Light up your home, Ask an agent, Negotiate creatively, Stage for success
Visit flowersandassociatesboking.com/book to learn about our sponsor and check out Robert Flowers' latest book, "From Setback to Comeback: Finding your Resiliency in Tough Times."
So you know, existing home sales in 2024, they dipped, you know, down to around four million.
Speaker 2:Yeah.
Speaker 1:And that's the lowest we've seen since 1995.
Speaker 2:Really, Since 1995?.
Speaker 1:Since 1995. Right, so if you're out there listening and you're thinking about making a move, you know you're probably like what the heck does this mean for me?
Speaker 2:Yeah, what does this mean? Going forward.
Speaker 1:Exactly, and that's what we're going to be diving into today, right? So we took a look at a recent Today Show segment and Stephanie Birkin, who's a real estate broker Okay, she was on there talking about you know her experience in this current market, and so we wanted to kind of take a deep dive into that. Yeah, try to get some clarity and give you a clearer picture about what we might expect in 2025, you know, for the real estate market.
Speaker 2:Right, because I think a lot of people are wondering that.
Speaker 1:Yeah, what can buyers and sellers really anticipate? What about mortgage rates, inventory and just some practical advice that you can use?
Speaker 2:Absolutely.
Speaker 1:Right. So we want to move beyond the speculation.
Speaker 2:Yeah.
Speaker 1:Give you some solid insights. Help you feel more informed about what's ahead.
Speaker 2:Absolutely.
Speaker 1:So, before we get into the details, though, I do wanna mention our sponsors. So today's Deep Dive is supported in part by Flowers and Associates Property Rentals.
Speaker 2:Great company.
Speaker 1:They actually focus on housing solutions for individuals with special needs.
Speaker 2:Oh, very good, that's an important area.
Speaker 1:Really important area and the company was actually founded by Robert Flowers.
Speaker 2:Oh, Robert Flowers.
Speaker 1:Yeah, longtime listeners will recognize that name.
Speaker 2:Yes, yes, he's been on the show before.
Speaker 1:He's been on some previous deep dives with us.
Speaker 2:Yeah, he's great.
Speaker 1:And Robert is also a respected author in the real estate field.
Speaker 2:Yes, he is.
Speaker 1:He's written several great books, including his latest book, from Setback to Comeback Finding your Resiliency in Tough Times.
Speaker 2:Oh, I've heard about that one. I haven't gotten to read it yet, though.
Speaker 1:Yeah, it's fantastic. You know, it offers a lot of valuable perspectives on things.
Speaker 2:I'm going to check it out.
Speaker 1:Yeah, I recommend it. I'm going to check it out. Yeah, I recommend it. So you can find Robert's books on Amazon or you can learn more about Flowers and Associates at flowersandassociatesbookingcom. Forward slash book. Okay, and so we appreciate their support in bringing you this deep dive. Absolutely so let's jump into it.
Speaker 2:Okay, let's do it.
Speaker 1:So first up is, you know, this topic that I think is on a lot of people's minds right now Uh-huh, mortgage rates. Yes, I mean, it's been a roller coaster.
Speaker 2:It has.
Speaker 1:The report that that Stephanie referenced this morning puts them at around six point eight, seven five percent.
Speaker 2:OK.
Speaker 1:In the high sixes. All right. We even touched seven percent recently.
Speaker 2:We did, I did.
Speaker 1:So I think you know a lot of people out there like are we going to get back to those sub four percent interest rates?
Speaker 2:Right, those were the days.
Speaker 1:Right. So what did Stephanie have to say about that? What's the realistic outlook?
Speaker 2:Well, she was pretty straight up, you know she's like look, expect a little bit of easing, you know going into 2025., but temper your expectations, ok. She said you know, plan as if they're going to stay in the high sixes and then you know if they go lower, that's a bonus, right. As for you know those crazy low rates that we were seeing before, she doesn't see that happening anytime soon.
Speaker 1:Yeah, it's tough to think about that.
Speaker 2:It is.
Speaker 1:But you know, this brings up a point. I think that's really important. Okay, for people to understand about the market.
Speaker 2:Uh-huh important.
Speaker 1:Okay For people to understand about the market. You know, I think there's often this assumption that mortgage rates and the Federal Reserve rate cuts are kind of moving in lockstep Right. You know, you see headlines the Fed's lowering rates and people assume, okay, mortgage rates are going to drop too.
Speaker 2:But Not necessarily.
Speaker 1:It's not that simple, is it?
Speaker 2:No, no, it's not that direct of a connection.
Speaker 1:Right.
Speaker 2:You know you have to look at the 10 year treasury yield. That's right, that's kind of the key.
Speaker 1:That's a key factor and Stephanie really highlighted that. Yeah.
Speaker 2:It's like the return that investors expect on these long term government bonds, you know.
Speaker 1:Right. They're seen as relatively safe and because mortgages are also long term investments, their rates tend to follow. You know the trends of this benchmark. So, yeah, the Fed's actions. They have broader economic impacts, for sure. But, their direct effect on your mortgage rate is more indirect.
Speaker 2:It's more of a ripple effect than a direct hit. That's a good way to put it Right.
Speaker 1:So takeaway for you listening is pay attention to that 10-year treasury yield.
Speaker 2:Absolutely, if you really want to have a better grasp of where those rates are headed.
Speaker 1:Yeah, it's not just about the Fed announcement.
Speaker 2:No, it's bigger than that Okay.
Speaker 1:so let's shift gears a little bit. All right and talk about the situation with housing inventory. Okay, we know it's been tight.
Speaker 2:Yeah.
Speaker 1:But you know what are the underlying reasons for that?
Speaker 2:And what does it mean for whether it's a better time to buy or sell right now? Well, stephanie, she pointed out, the big thing is you've got a lot of existing homeowners that are locked into these super low, sub 4 percent mortgage rates.
Speaker 1:Right, they're sitting pretty.
Speaker 2:Oh yeah. And they're thinking why would I sell now and have to buy something new at these much higher rates?
Speaker 1:Right, you'd be giving up that incredible rate.
Speaker 2:Exactly, and that's keeping a lot of those houses off the market.
Speaker 1:Makes sense, and at the same time, though, you've got.
Speaker 2:You've got all these buyers out there. Pent up demand who have been struggling with affordability.
Speaker 1:Yeah, you know.
Speaker 2:Right, and they're ready to jump in, but there just isn't much to choose from.
Speaker 1:It's almost like a standoff then, isn't it?
Speaker 2:It is. It's like a real estate stalemate. So what's the prediction for how this might evolve in 2025? Are we going to see a bunch of new listings hit the market? I don't think she sees that, you know, like a sudden flood of new listings. Ok, more like a gradual, steady improvement.
Speaker 1:OK.
Speaker 2:You know, as rates maybe ease up a little bit even if it's not a huge drop Right and as new construction projects get finished and add to the supply, we should see things get a little more balanced and stable. Okay, but no drastic overnight shifts. So no, housing market explosion no not that we can do More, like a slow and steady wins the race kind of thing, you know, those incremental improvements, like she said. That's the trend to watch. Okay, the good news is she thinks the hardest part is behind us.
Speaker 1:Okay.
Speaker 2:We've turned the corner.
Speaker 1:You've turned the corner Good.
Speaker 2:Yeah, heading toward more stability.
Speaker 1:All right. So for those of you listening, you know, keep in mind that those existing homeowner rates, you know that's a big factor A huge factor. And it's influencing how many homes are actually out there.
Speaker 2:Yes.
Speaker 1:And the market might not, you know, do a complete 180 overnight.
Speaker 2:Right.
Speaker 1:But it does seem like we're moving in a more positive direction.
Speaker 2:That's the hope.
Speaker 1:So, if you're thinking about buying in 2025, what did Stephanie have to say about that? Like, what steps can you be taking now to prepare yourself?
Speaker 2:OK. So her number one piece of advice, which I think is just so smart, is get a really clear picture of your finances right now, Like go through the whole pre-approval process as if you were actually applying for a mortgage today.
Speaker 1:Wow, so really go through the whole process.
Speaker 2:The whole thing that way. You know you got to get all your financial documents together. You know figure out which your liquid assets are. You know how much cash do you have on hand. What's your credit score looking like?
Speaker 1:Right, it's like doing your homework before the test.
Speaker 2:Exactly, and you know, once you do that, you'll have a much more realistic understanding of what you can actually afford.
Speaker 1:That makes a lot of sense, right? So what other recommendations does she have for potential buyers?
Speaker 2:So she talked about this thing that I think people don't always think about, which is assistance programs.
Speaker 1:Oh OK.
Speaker 2:There are programs out there that can actually help with down payments and closing costs.
Speaker 1:I didn't realize that.
Speaker 2:Yeah, and she also said it's super important to personalize your home search.
Speaker 1:Okay, what does that mean?
Speaker 2:Really think about you know what are your needs versus your wants. Okay, like what do you absolutely have to have in a home and what are things that would be nice but aren't deal breakers?
Speaker 1:Right.
Speaker 2:That'll help you narrow down your search and make those decisions faster when you do find something you like.
Speaker 1:Okay, and of course you know staying informed about your local market.
Speaker 2:Absolutely Got to know what's going on in your area.
Speaker 1:Right, that's always important and you know thinking about our younger listeners. You know millennials and Gen Z.
Speaker 2:Oh yeah, she had a great message for them.
Speaker 1:Yeah, what was that?
Speaker 2:She's like it's never too early to start saving.
Speaker 1:OK.
Speaker 2:Even if it's a small amount from each paycheck.
Speaker 1:Right.
Speaker 2:Over time that really adds up. Yeah, definitely makes a difference and she pointed out some shifts in buyer demographics.
Speaker 1:Too right she did.
Speaker 2:What were those? So she said, we're seeing more cash buyers these days.
Speaker 1:Interesting.
Speaker 2:Yeah, and the median age of first time buyers is up a bit. It's run 38 now.
Speaker 1:Oh, so people are waiting longer to buy.
Speaker 2:Seems like it, and we're also seeing a rise in single female buyers.
Speaker 1:Really.
Speaker 2:Yeah, they're actually outnumbering single male buyers in a lot of markets.
Speaker 1:Wow, that's fascinating. I wonder if that's tied to broader economic trends.
Speaker 2:It.
Speaker 1:Yeah, okay. So if we're in a market where there's still a little bit of competition, what did she have to say about how buyers can make their offers stand out?
Speaker 2:So she talked about this idea of warming up your offer.
Speaker 1:Okay, warming up your offer.
Speaker 2:Yeah, like buying a home. It's not just a financial transaction. It's often really personal for sellers.
Speaker 1:Yeah, their home.
Speaker 2:Exactly so she's like find ways to add a personal touch. Okay, you know, something genuine and appropriate that resonates with the seller beyond just the price.
Speaker 1:Like what.
Speaker 2:Well, you know, it depends on the situation, right, but maybe a letter talking about what you love about the house.
Speaker 1:Okay.
Speaker 2:Or how you can see your family living there.
Speaker 1:Yeah.
Speaker 2:Something that shows you're not just another buyer.
Speaker 1:Right, you connect with it.
Speaker 2:Exactly.
Speaker 1:Okay, so for all you buyers out there thinking about 2025.
Speaker 2:Here's the takeaway.
Speaker 1:Get your finances in order. Investigate those assistance programs. Figure out your needs versus your wants.
Speaker 2:Keep learning about your local market.
Speaker 1:Yes, make saving a priority and think about how you can personalize your offer.
Speaker 2:Yeah, great advice.
Speaker 1:So now let's switch gears and talk about the sellers. Okay, you know. What insights did Stephanie share for those who might be thinking about selling in 2025?
Speaker 2:All right. So for sellers, timing is key. Okay, she actually recommends listing your property in late February or early March.
Speaker 1:Why that time frame?
Speaker 2:So you're right, there at the start of the spring buying season, okay, and the weather's usually getting better, right? So more buyers are out looking at homes.
Speaker 1:Makes sense.
Speaker 2:But here's the thing she's like you got to be prepared. Okay, Start getting your property ready now.
Speaker 1:Don't wait till the last minute. No procrastination allowed.
Speaker 2:So what kind of advice did she have about getting your home ready to sell?
Speaker 1:Okay, so she had this great acronym that I love it's PLANS. Plans Okay so the P stands for price. Strategically Okay, don't get greedy, don't overprice your home.
Speaker 2:Right, even if you think you can get away with it.
Speaker 1:Right.
Speaker 2:Okay, what's L?
Speaker 1:L is for light up the house.
Speaker 2:Literally yeah. Increase the wattage of your light bulbs. Make sure every room is bright and welcoming it makes a big difference.
Speaker 1:It does, it does. What about A?
Speaker 2:A is for ask an agent.
Speaker 1:Okay.
Speaker 2:You know work with a good, experienced real estate agent.
Speaker 1:Someone you trust.
Speaker 2:Uh-huh, someone who knows your market.
Speaker 1:What about N?
Speaker 2:N is for negotiate creatively.
Speaker 1:Okay.
Speaker 2:Be open to different strategies, you know, beyond just the final sale price.
Speaker 1:Right, think outside the box, exactly and finally S.
Speaker 2:S is for stage for success.
Speaker 1:Staging. We hear a lot about staging. Does it really make that much of a difference?
Speaker 2:Oh, she says, it makes huge difference.
Speaker 1:Huge difference Okay.
Speaker 2:You know, presenting your home in the best possible light it really influences how buyers see it and what they're willing to offer.
Speaker 1:So make it look good.
Speaker 2:Make it shine.
Speaker 1:Okay, so if you're thinking about selling in 2025.
Speaker 2:Late February, early March.
Speaker 1:Late February, early March, and start working on your plans now.
Speaker 2:Get those plans in motion.
Speaker 1:Price strategically, light it up. Ask an agent negotiate creatively. Stage for success.
Speaker 2:Great advice.
Speaker 1:So we've covered a lot today.
Speaker 2:We have.
Speaker 1:What are the big takeaways you think our listeners should really remember about the 2025 real estate market, based on what Stephanie shared.
Speaker 2:So the key things to keep in mind are mortgage rates. We're expecting them to ease a bit, but don't expect them to go back to those record lows. Ok, it's safer to plan for those high sixes.
Speaker 1:High sixes.
Speaker 2:Yeah, Then you know, if they go lower, you're pleasantly surprised.
Speaker 1:That's right.
Speaker 2:As for inventory, you know it's still a little tight because of those homeowners that are locked into those lower rates, but we're seeing signs of a gradual shift towards a more balanced market.
Speaker 1:Okay, slow and steady.
Speaker 2:Exactly. And for buyers, you know, being financially prepared, exploring those assistance options, knowing your needs, those are all super important.
Speaker 1:And for seller.
Speaker 2:Strategic timing, you know, late winter, early spring, and then that careful preparation using the Planet Tech framework that's going to be key.
Speaker 1:All right, so really good advice for both sides.
Speaker 2:Yeah, lots to think about.
Speaker 1:So, as you process all of this, you know you're thinking about these trends and mortgage rates and inventory Right and the advice for both buyers and sellers. Here's a final thought for you.
Speaker 2:Okay, you know what's the most empowering step you feel like you can take, based on this information regarding your housing goals this year, that's a great question.
Speaker 1:Are you actively planning to buy? Are you thinking about selling or do you just want to? You know, understand the real estate landscape a little better? Whatever your goal is, take a moment and think about that. One actionable step you can take right now.
Speaker 2:Yeah, step you can take today.
Speaker 1:To move forward with confidence and a clear plan.
Speaker 2:With knowledge is power right.
Speaker 1:That's right, that's right and that's what we try to do here on the Deep Dive.
Speaker 2:Absolutely Give you the information you need to make the best decisions.
Speaker 1:So thanks for joining us.
Speaker 2:And happy house hunting.
Speaker 1:Or selling.
Speaker 2:Or just being informed.
Speaker 1:All right, we'll see you next time on the Deep Dive.
Speaker 2:Take care.
