What's Up With This Market?

In this episode, the Anthony and Barbara discuss the current state of the real estate market, focusing on interest rates, what sellers can do to standout, the impact of COVID-19, and the importance of proper pricing strategies. They explore how the market has corrected itself from the highs of the pandemic and the challenges sellers face in understanding their home's value. The conversation also highlights the optimism for the future as buyer activity increases and interest rates stabilize.

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Transcript

Episode 2 (00:07)
But today, let's talk about like something great happened today. So it's the rates. Yes. OK, so we're we're do as we're filming this or recording this. It's September 8th, 2025. everything we say could change. It will change tomorrow.

Yeah, I haven't checked it this afternoon. Yeah, this morning. That's all. Yes. go ahead, Anthony. Where are our rates right now? for government rate, we were under 6%. We were so earlier when I checked my rates daily, they were at 5.97 or 5.98. That's great. it's been over a year since we've been that low. it has. And I have a seller listing that

the buyers on the fence. So I texted the agent this morning. I was like, Hey, I just talked to my lender. We're able to get government loans under 6%. So now's the time to buy. And I hope that helps you with your hire. Yeah. It gets people off the fence because we, every, everybody's been waiting for these rates for a little bit of a reprieve. It's been a crazy few years in real estate. I mean, ever since 2020. Yeah. May 2020.

was a start. Because 2020, felt like everything hit the dirt, right? And we thought, you know, everything was going to change. And then it did. And then 2021 happened and that was crazy. 2022 happened. That was crazy. And then what? June 2022, the brakes just hit. And then since June 2022, we have just been in a really crazy.

slow space with real estate as the market has been Correcting, you know, lot of people have said oh, I feel like you know, it's 2008 again and the market's crashing No, it's not it's totally different because when we were in people have equity in their home first of all and second of all when we we had over inflated values due to low low interest rates and low inventory and so homes that really should have

never appreciated, like 36%, right? Should have never appraised for those things, but people were just signing those appraisal waivers like, we don't care. And And honestly, I feel like the appraisers were appraising them. They were, there was no checks and balances during that time. And everybody kept kind of doing this knee jerk reaction, appraisers included, where it was-

The new normal, this is the new normal. I'm like, no, it's not. This could be a glitch in our market. We just went through a global pandemic. We are in a global pandemic at that time. And it's like, let's just give this some time to figure it out. And then sure enough, we had to put the brakes on those values and it got crazy. So how do you do it? Interest rates. And then that just stopped the market. And all of a sudden, now you're dealing with a high inventory market. You're dealing with-

Yeah, everything is going a lot slower, we're getting healthier. we were at 8%. Yes, I remember. I might as well have just packed my bags and went on a safari. It never came back. Had no cell service. No one cared. No one was calling me. That's how bad it was when it got to 8%. And I think other agents felt the same. you know, the weird thing is I think when we were at 8%, I had, I had some clients. So

Right after that, think the market or the rates went way down. Yeah, there was a little dip. And I sold one at that point, but a lot of mine were cash. And so I had people buying bits because they were in power. The people with cash because nobody else was buying. If you were a cash buyer during that time, it was a great time. it felt like at that, so we went from these really, really inflated values where buyers were 100K over, 200K over all this.

stuff. I mean, I remember my my home that I sold during that time. Actually, I sold right before it all hit, which that's going to be written on my grave. She sold two weeks before the market went crazy. I was a record breaking amount for that time in my neighborhood. And then the next two weeks, I could have made 200K more. Anyway, nobody knew.

I was on the opposite side of that. I was selling my house in 22 right before the rates. They were starting to climb a little bit, but we had it under contract and we were selling right as the rates started spiking. Spiking, yeah. But we already lost equity from what it was in 21. so it was, now once they put the rates up higher,

That was a very unhealthy market we were in in 2021. Really, honestly, 2018 and 2019 were pretty unhealthy too. It's getting better, but now it is. houses are still priced too high. Yeah. Well, you have that. So unhealthy, crazy market during COVID. Now we're starting to get enough inventory. The rates were higher. We're getting that healthy market where it's more balanced. The sellers are.

Totally in control buyers. Well, I would say they're kind of more in control, but it's still somewhat. In my experience, the sellers are still. Unrealistic with their pricing. Well, and that's because there hasn't been enough time. you saw that your house was say, your $500,000 house was worth a million a couple of years ago, right? And so now, well, that just isn't the case. And really, it was really never that value.

It was just this weird anomaly that happened and it was that value for that split second. You may never see that value again. In your house, you may not cash out 500K in equity. There was just this moment in time where people were getting that. But then they also were buying expensive. Exactly. The flip side is they had to turn around and buy at the top of the market. So a lot of those folks who bought then, they don't have that equity in their home right now. They have to wait a little longer. And so this

we're finally starting to get back to where normal appreciation would have been if we hadn't had that huge bump in equity during COVID. it's not a crashing, it's more of a correcting back to what normal appreciation would have been. now. It's not crashing. No. It's just slowing down. We're slowing down. We're getting more inventory. We're getting healthier and we're getting the affordability and those values back down to where they really should have appreciated to.

Yeah, exactly. But that's hard for sellers because they look at it and they go, my gosh, my house was worth so much. And now they feel like they're taking a hit, but they really aren't taking a hit. It's just it's the market is going back to where it normally should have been a healthier amount of appreciation in your home instead of.

winning the lottery by selling their home. That's the lottery. Exactly. We didn't win. We didn't win. Yeah. And so I think that's what's so hard for sellers mindset is there's still that gap of I really feel like my house should be worth this. And it's like, well, you know, if you can get out of your house with all your fees, your closing costs and all that good stuff, if you can get out of there with at least, you know, five, 50,000, that used to be a good thing. Now people feel like that's not a good thing. If you don't get out of it with in

without 250K or 300K plus, then you've just given your house away. And that's not really how it is. That's just what COVID skewed our minds to. So it's taking time for sellers to understand that. it was interesting, a couple of weeks ago, or a couple of months ago, I did ⁓ some research into how property is appreciated. And I looked at a property because it sold to the, it was up for sale active. ⁓

but the previous buyer bought it like 10 years ago. So I took like an average appreciation over 10 years subtracted COVID since the last five years. But it's like, I don't remember what number it was. I want to say five or 8 % And then during COVID it was like 24%. Right. And that's what the seller still wants is typical appreciation depending on where you were.

Outer suburbs from Austin, Leander, Liberty Hill, all of that before all of this nonsense happened. I mean, you could easily look at 5%, 3 % appreciation year over year. That was very steady, slow, know, normal, It's like four years.

is about the time that you have enough equity to pay compensation. Yeah. And have enough to do a little down payment. And then the next house you're buying isn't this huge swing because appreciation is pretty steady, Well, and the job markets were also crazy during COVID too because everybody was under or not underemployed. They were over employed. Yeah. ⁓ too much. were. And it's crazy. Yeah. And they were making too much working from home where they wanted a bigger home, needed an extra.

for each of them. ⁓ And then that all fueled into, and they were moving out to the suburbs, and then whenever the job market started going down, the companies wanted them all Everybody back to work, and now was their way of... Everybody's fleeing the suburbs again. Yeah, so those prices just got so inflated out there, and now all those workers have to go back. So they're coming back towards the city, and it's making the markets out in Leander and Liberty Hill a little bit more challenging because...

You know, there's not a lot of people who can work from home anymore. And those values were pushed up so high. They have the longest to get back. And they still are. But they're but they have to get back to a reasonable level. Right. They're not they were never a million dollar home. And that that's the that's the perception that I try to get to sellers all the time is, like you said, let's look at what real appreciation appreciation was over the last 10 years, taking out this global pandemic.

And then that kind of, sometimes I say to them, look at, okay. Even when you look at 2008, 2009. Yeah. It's the same, like the normal appreciation after we started recovering is still 5%. Right. It's nothing, know, COVID was just COVID. COVID was just COVID. And you know, certain places like downtown Austin, they always see a little bit better appreciation and some of the Unless it's a condo. Yeah, that's a different beast. And then, you know, like Northwest Austin, they,

certain school districts will drive up the appreciation more. I mean, I remember Laurel Mountain schools in Northwest Austin, that was just a crazy place in 2018. Everybody was, we were having the multiple offers and waving everything just because everybody wanted to be in that school district. you have these little micro bursts of weird markets throughout Austin, just depending on what's going on in those.

You can't make a blanket statement for Austin real estate because it is so nichey in different areas. But yeah, it's just, been a wild ride. And I have to say, it was not fun selling real estate in 2020, 2021. I know a lot of my friends thought it was fun. They were like, oh, I love it. just writing offers. I'm like, I hated it. Oh, I hated it too. I hated it. Every time I'd go show, you know, there's a line, they would do open house and you had four hours to get your offers in. Right.

And I would go take clients, and I had one in particular, and he would always be like, okay, let's go to the COVID Fest today. Because there's a line of a thousand people outside this house during COVID, and we're all wearing masks, and we're standing there in line for this open house. And you can't even look at the house because it's go, go, go. And then it's like writing the offer in your car, just all caffeinated out. We'll give you everything. And then my clients would always say, do you think we're overpaying? I'm like...

You're absolutely overpaying, but that's how it is right now. And they're like, well, we'll hold its value. And I said, I have no idea. I can't predict. And that's where we're in this correction. So it's not a crashing. It's not any of that. It's just a correcting from a very unhealthy market that we had that we never should have had. And slowly, I think we're getting there. And especially with

Rates being as high as they were for so long we that allowed us to get some major inventory and now We've got a little break in the rates and maybe we're gonna start to get to this where we're not a crazy buyers market We're not a crazy sellers market. We're nice boring balance Each person's got to give a little take a little it's Sting's every house in 45 days. Yeah, exactly It was awful having to write those offers like that of that so back to the pricing

I was showing a house in Bastrop last Friday. And it was on the market for 390 days. No, 690 days. OK. Two years. Almost three. I was like, how many years is that? Yeah, it was almost three. And I looked at the pricing history. It had three price drops in three years. Every year they would do a price drop.

And so when I talked to the realtor before we went and looked at it, I said, hey, I see that this house, and I'm very familiar with the neighborhood. And I said, hey, and I still think it's overpriced, but I said, hey, what's going on with this house? I see that you've had it listed for 300 and 690 days. she was like, well, I'm going to tell you like everybody in my open houses that we know we've been on the market for a while.

⁓ run some comps and you know see what's going on. was like well I know the market really well. And she's like now we're in a good position which in my eyes I still think they were too high. But they were within reason. Yeah before they weren't even in the ballpark right? Yeah they were at almost $500,000 and now it's at $330,000. Yeah and you get sellers like that that are just they're not and I won't take those listings. Me neither. I just won't because

I'm setting them up for failure and disappointment. And I believe in only taking listings where I truly believe I can deliver the results that my sellers need. If I can't deliver the results you need, I'm not taking your listing. And so there's listings that I walk away from when the sellers just, they don't understand the data. They don't want to see the data. And they just want me to put a sign in the front of the house and wait for somebody to maybe come in and just buy this house without looking at any.

data or no representation. I'm like, no, that's not, I'm in the business of selling houses. The famous line in Austin is, well, someone from California is going to come and pay. somebody from California is going to pay cash. Well, that's somebody has a realtor who's going to tell them not to overpay. Or they'll go and look at what else is up for sale and compare against it. Well, and I was talking to, ⁓

some people about this other realtors and I feel like we all have this same conversation of where seller mentality is with listing their homes. And I have this conversation all the time in my listing appointments to the point where it's like, want to bang my head against the wall. Literally bang my head. Well, how about we list the house a little bit higher for negotiating room. So we have that negotiating buffer. Do you just want to kill the next person who says that to you?

I want to swear. We're not going do that anymore. It doesn't work. Sorry. I had an unhinged moment. Sorry. I'm back. I was on TikTok yesterday last night and I saw a video from Glinda Baker and she was talking about the same thing. She's like, that's the old way of doing real estate. It's the old way. It is the old way of doing real estate. And in Austin in particular,

And I know I'm talking really local about our market, but that's where we know. That's where we work. The buyers in Austin, ever since I started real estate, have never thought that way. It's always been price right at market value, but honestly, pricing below market value to negotiate up to that number you want. That's how it works. That's the good thing about Austin is we have enough buyers out there that you will never undersell your

Yeah, because if you under price your home from the get-go, it will bring it up to market. It will. There's enough buyers. There's enough buyers. And I tell my clients all the time when that happens and they say, well, if we price too low and everybody comes in at that price, I said, well, that's the market telling you that your market value. And if they think it's more, they'll come in with higher offers. You know, I just had that conversation with the one that I'm about to get under contract. I was telling the listing agent because they have it listed a little high and they say they're motivated.

And we gave our offer and he's like, well, we got this and out last week. And I was like, okay, so shouldn't that tell you that you're overpriced if you're getting two offers, it's been listed for 45 days, you're getting two offers around the same price, That should be about what the market. That's the market telling you. And I always tell my clients, we're going to do all the data. We look at all the data. We look at all the research. We have the analytics. We run the comps. We do all of that. That's all part of our pricing process.

but it's not an exact science. And at the end of the day, we can do all of that and get really close to that number, but it's what the market tells us. And we can hit that mark right on, we could be a little over, a little under, but the market will tell us if we're right or wrong. And you know what I really hate is whenever sellers don't see our point of view, and then we know deep inside that we could have got them more if we would have.

priced accordingly at the very beginning. And now we're to that price that we told them at the very beginning, but now we're 90 days on the market and it's not cool anymore. It's stale, we're leaving money on the table. And I try to explain that too. And again, it's that older method of thinking and that fear of leaving money on the table. it feels hard for them to understand, but if you price aggressively in the beginning,

and you have less days on market, you're gonna yield more at the closing table. If you go way too high, it's like, that 20,000 you're worried about, light it on fire because you overpriced and now that's gonna happen. And no matter how many times I try to explain that to my clients, they don't get it. And here's another thing, it's gonna make me go on a hinge. We should call this episode the unhinged, Barbara's unhinged market update. I don't understand why people hire me.

Like I come in, I do all the things I do. Okay, I'm sorry, I'm getting violent right now with you. But I do my beautiful photography, my social media videos. I don't think that clients realize how much money time we put into thousands of dollars, thousands of dollars into my listings. It's insane. And then the most important part of my listing strategy is price and pricing. That is everything else doesn't matter. The pricing strategy is so important.

And so I present that and then they go, well, you know, I think I want to list my house here. There's no data, no data to support any of that. I want to, why did you hire? It's like, hi. Okay. And I'm not going to compare myself to a lawyer because I'm not a lawyer. Okay. At all. I'm not, but it's like hiring a lawyer and then you're in the courtroom and it's time for cross examination. And you tell your lawyer to sit down while you go cross examine the defendant or whatever, or whoever's doing you.

And your lawyers, well, why did you even hire me? And that's some are like, you go to your hair stylist, you're like, today, I'm going to cut my own hair while you watch. Tell me how to do it. And I might listen. might not. Yeah. So that's how I feel when my clients do that to me. And then when their home doesn't sell in the time frame or, you know, then it's our fault. And it's like, but you didn't allow me to do my job. You hired me and then you tied my hands. Drives me crazy.

drives me crazy. that's your unhinged. That's my unhinged moment. And well, and so how do we feel? I feel kind of positive going into the last quarter of 2025. This last week, I've been really busy this weekend. think I showed over 20 people. Not 20 people, 20 properties to like six people. That's great, though. That's buyer activity. And I feel like if we start getting these rate cuts and they. And I wrote an offer.

And you wrote an offer. Yeah, I got it signed today. We're not under contract yet, but. From this weekend. I feel very hopeful for the last quarter, and I'm hoping that we all get a lot of traction and the market starts to heal. You know, we've been in this healing. I'm hoping we're healing and recovering and we're just going to, like I said, get steady and boring and. Steady and boring. Steady and boring.