When The World Feels Unstable Should You Buy A Home

We talk through why the market suddenly feels confusing again and how war-driven uncertainty can ripple into inflation, oil prices, and mortgage rates. We break down what smart buyers and sellers can do right now to avoid costly timing mistakes and still come out ahead. 

• why global uncertainty can push mortgage rates higher even when the Fed holds steady 
• what a “payment-sensitive” buyer changes about pricing and negotiation 
• why overpricing leads to chasing the market and leaving money on the table 
• how correct pricing can restart showings fast using a real San Antonio example 
• when “date the rate, marry the house” actually makes sense and when it doesn’t 
• how concessions, rate buydowns, and builder incentives can unlock affordability 
• why waiting for the perfect rate can backfire as competition returns 
• what 2008 to 2009 taught investors about buying during fear 
• why people still buy and sell regardless of headlines and election cycles 

please like, subscribe, subscribe, comment, share, follow, whatever it might be. 

https://housenextdoortx.com

Transcript

Farmhouse Catch-Up And Gopher Drama

SPEAKER_00 0:00

Welcome to The House Next Door. With Barbara Gillio. And Anthony Harris. Where real estate meets reality. Welcome back to The House Next Door. Where Real Estate Meets Reality. I'm Barbara Gillio. And I'm Anthony Harris. And this is season two, episode four. We're making it. We're making it. We're treasuring along. And we're back at the farmhouse in the um in in person. We've done a couple of uh virtuals just to kind of play around with I don't know, just mixing it up and definitely like being in person. We like the farmhouse. Yeah, I like being in the farmhouse.

SPEAKER_02 0:37

I like to see the boys. The newfies.

SPEAKER_00 0:39

The newfies are out laying around somewhere outside. Hopefully they don't start barking. And I put pigtails.

SPEAKER_01 0:45

You make it seem such like a studio, the farmhouse, and then you talk about the dogs. I know. And then talk about the dogs.

SPEAKER_00 0:51

And Rumi has pigtails today in his hair just for Anthony. I did his hair for Anthony.

SPEAKER_02 0:56

Oh cute. He came and greeted me with his little pigtails.

SPEAKER_00 1:00

Right. I was told Anthony this morning, want to move in the sprinkler around the yard because I live in the country and I do not have a sprinkler system for the first time in a long time in my life. And I'm kind of glad I don't because I got a quote for it. It was not cheap because I got a lot of acreage. And then and I wasn't doing like the whole property, but it was doing a, I guess, because the property's so big, just a little bit doesn't look like it's a lot, but it really is a lot. I'm glad I didn't do it though, because of all the freaking gophers.

SPEAKER_01 1:32

They would have Oh, they would have destroyed it.

SPEAKER_00 1:33

They would have destroyed it.

SPEAKER_01 1:34

And tell about your gopher story from this morning.

SPEAKER_00 1:37

So every day I have a gopher story. And so I was going to take care of the bird buddy because I live on an animal sanctuary. And well, not an animal sanctuary, a wildlife refuge sanctuary.

SPEAKER_01 1:49

Well, and a bird buddy is a a bird feeder that has a camera in it.

SPEAKER_00 1:53

Right. And it will identify the different species. And so when you live in a wildlife uh sanctuary, you can get a really amazing tax exemption. It's almost like an ag exemption. And so you have to file a report every year by April 30th, and you have to say what birds you're taking care of, what bird houses you have. I got a bat house because I'm going to start making habitats for bats because they're really good for pest control and also for rabies and biting, you know, uh large dogs like Kucho situations.

SPEAKER_02 2:30

How about gophers?

SPEAKER_00 2:31

That was my drama thing. But um, so I'm going in feeding, putting stuff back in the bird buddy because we have a squirrel who terrorizes the uh bird buddy. And as I was standing there, I saw the little gopher and he came up with his little gopher feet, and he's kicking the dirt out. And I totally saw him and I was like, oh my God, there he is. I could just like just grab his little neck. And instead, like I took the bag of seed, bird seed, and I bonked him on his feet.

SPEAKER_02 2:59

It's like whack-a-mole.

SPEAKER_00 3:01

I just bung him on the um and I yelled at him like, go, just get out. And I bonked his feet.

SPEAKER_02 3:07

Do you think that helped?

SPEAKER_00 3:08

No, this is why they all live in my yard because my my neighbors are, you know, they're taking care of them, right? They're trapping them and killing them. They're shooting them. They might be blowing them up. They're using some lethal poison. And my dumbass is just hitting them over the head with a bag of bird seed and scalding them. So yeah, they live in my yard. So they live in my yard.

SPEAKER_02 3:30

So next week they won't be here.

SPEAKER_00 3:31

Oh, yeah. I really scared them.

SPEAKER_02 3:35

He's probably going to think it's a challenge and do it every day.

SPEAKER_00 3:37

Yeah, he's like, oh, that lady's crazy. Let's all live in her yard. She doesn't kill us, she just yells at us. Right. So stupid. I have a problem. But I don't want like I want to kill them, but then I don't want to kill them because they're a nuisance. Well, I want to kill them because they're a nuisance and they make my yard look horrible, right? And I did kill them when I did like people can see your yard. I know, no one can see my yard. But I I did kill them with the gas when I had the guy out and he put the hose down and it carbon monoxides and knocks them out and they're dead in the the little hole. Um, but then new gophers come over and just take over the holes. They just walk over the dead carcass of their friends and take over the hole. It's awful.

SPEAKER_02 4:18

Thanks for painting that picture for us. We really appreciate it. These gophers are brutal, right?

SPEAKER_00 4:23

And so so I did that.

SPEAKER_02 4:25

You're just trying to get the coin.

SPEAKER_00 4:26

They are. It didn't feel like I was killing them. They were just going to sleep.

SPEAKER_01 4:31

And then when I see them, I'm like that dog that when you were a kid, the dog that went out to the ranch.

SPEAKER_00 4:37

Yes, I never did that, but somebody else in my family might have done it, not mentioning names. And but um, but yeah, they're kind of cute.

SPEAKER_01 4:47

I don't know if I've ever seen a gopher.

SPEAKER_00 4:49

They're kind of well, they they're kind of ugly and cute at the same time. So I have a problem.

SPEAKER_01 4:53

I think bats are ugly. They scare me.

SPEAKER_00 4:56

They can't. Well, you I got my bat house. Wait till I we could sit on the front porch and watch the bats.

SPEAKER_01 5:01

Nope.

SPEAKER_00 5:02

Fly into our nest.

SPEAKER_01 5:04

That's a negative.

SPEAKER_00 5:04

Okay. I guess we should get on topic today, right?

SPEAKER_01 5:07

We're never on topic.

Why Global Conflict Hits Housing

SPEAKER_00 5:08

No. Okay. Well, today.

SPEAKER_01 5:10

We have an exciting topic. I don't know if it's that exciting, but it's something we have to talk about.

SPEAKER_00 5:15

It's important. We need to address what's going on in the world and how is that affecting real estate? And, you know, originally we were gonna have a guest speaker and do all of that, but we really need to put a pause on that and just talk about the this war that's happening and what does that mean for real estate?

SPEAKER_01 5:33

Because that's it's pretty poignant to, you know, people and what does it mean for the yeah, for the just even outside of real estate, the economy and and it all goes hand in hand.

SPEAKER_00 5:43

It all goes hand in hand. And we're not economists. No. So we're gonna focus the best we can on the real estate portion, but it feels like a confusing, weird market. And that is a that is a fair way to feel. It definitely feels that way.

SPEAKER_01 6:00

Yeah, and I feel like we've been in a weird market since COVID. And it it's we're on a roller coaster. We're just going through it. I felt like the last couple months we were getting better, you know, after a year and a half of stable rates dropping a little bit, not crazy, we got under six percent. We were oh, that was so fabulous, yeah.

SPEAKER_00 6:17

Um and then yeah, then this war started, and interest rates are back up because inflation is back up, because oil prices are going up. And so when inflation goes up, this puts pressure on rates, and now we're we're back up in the sixes, and so we may or may not see a pause from that. It does definitely make it a trickier market again, but just because it's a little bit tricky and confusing, it is it is a great opportunity for both buyers and sellers, if you kind of know how to you know strategize, strategize correctly, right? There, if you think through this smart, this could be a really amazing market for both buyers and sellers.

SPEAKER_01 7:05

Yep, I agree. Yeah, it's in you know, if if sellers have a great realtor on their end, then they've warned them about the uncertainty and there's buyers out there looking, but you need to be priced correctly. We were talking earlier, and you what was the saying that you said about chasing the market?

What Buyers Can Negotiate Now

SPEAKER_00 7:23

Oh, right. Like the three points that are really key right now for buyers, there's more opportunity to negotiate, right? And it's it is depending upon the market. Well, not the seller, but just the market. There are some markets where multiple offers, and we talk about this, are always happening. And there are some pockets right now where multiple offers are happening because the rates were a little bit lower. So, but overall, it it is still a really good time to negotiate. Inventory is tight, but there's definitely more inventory than we've had in the past. And then also it's a time where there's less competition per se, and sellers are willing to do some concessions. Very smart key buyer elements going on right now. But for sellers, getting back to that tagline, it buyers are price sensitive in the terms of payment sensitive. And then they're taking a little bit more time to look at these houses and think about what their payment's gonna be and kind of trying to do these uh concessions. So for sellers, you gotta understand that it's not about you know, you yes, you want the top dollar, you want all this stuff, but you gotta remember these buyers are looking at higher rates and they're very payment sensitive. And so if you price super high, it's not a market to be pricing high to negotiate down. And I've hasn't been a market like that for years. And I kind of hammer this home, but it is not a time to do that saying, oh, let's start at you know$750, but we'll really only take, you know, we'll go, we'll take something up to you know$720 or something like that. Forget about it. Since these buyers are price payment sensitive, they're not even a look at your listing. So if you price high or you name your price thinking you can negotiate down, that's not this market. It's gonna be price it high and chase the market down and leave money on the table. That's this kind of market. So if you don't price right, your next option is you're just chasing the market for the rest of the time.

SPEAKER_01 9:32

And you're gonna be on the market for 200 days.

SPEAKER_00 9:35

And you're gonna leave way more money on the table than if you had started at the correct price.

SPEAKER_01 9:41

And I have an example of that. Um, I took one in San Antonio, been on the market forever. I told her from the get-go we need to be at 285. 285 was the magic number at, you know, six months ago, three months ago, two months ago, today. 385 or 285. Well, I finally got her down. She expired. We got I got her down. We went back on market. We had three showings in three days.

SPEAKER_00 10:04

Yeah.

SPEAKER_01 10:04

Because we were priced correctly.

SPEAKER_00 10:06

Price correctly. And what that tells you is sellers, there are buyers out there, but you have to be in that range where they will look. You have to think about would you pay$8,000 a month on your home with the interest rate? So, like if you're looking at a house that's say, I don't know,$950,000 or something, and I'm not going to be doing, I'm just going to do what we call realtor math, which is completely wrong math, but it'll get you in the range. And you're paying, you know, six and a half percent, you put 30% down or 20% down, your payment is still. Yeah. And you think about who can afford that monthly payment, your house better be pretty darn perfect. Otherwise, there's other options in terms of new construction where they can buy the right down, they can have a brand new shiny home. You need to be really turnkey and pretty amazing to command some of these higher monthly payments from buyers.

SPEAKER_01 11:02

And I think you still can get a high dollar, but it has to be a unique house. It has to be that unicorn, like the one that I just got under or we're about to close on. But we were the highest priced in the neighborhood.

SPEAKER_00 11:13

And you set a new comp for the neighborhood.

SPEAKER_01 11:15

And and it's a lot of hard work that went into that to set that that work from uh doing appraisal packages and really knowing the product when we positioned it. But we had multiple offers on it. You did. And that shows that the market reacted to that really well.

SPEAKER_00 11:31

The market reacted to that home, how it was set up, even the higher price, it didn't scare people off because it was such a unique opportunity. And so when you do get these unique opportunities in homes, you still don't have the ability to out outprice them. But if you you can maximize the price. You can maximize the price.

SPEAKER_01 11:50

Um as long as you can show the value.

SPEAKER_00 11:53

If somehow you can show the value exactly, and that you know, you're in a range where people are gonna respond. Sellers have to be strategic. We've got to make sure we've got staging going on, understand there are buyers there, there are great opportunities. The market isn't crashing, it's been correcting, it's you know, there's still low inventory, and people have really great interest rates, they're locked in. We're just we're trying to correct still. For sellers, you you just have to somehow take that mindset from 2020 where you could name your price and they could get anything you want. And yes, I know your home was worth a million dollars in 2021, but it's not today. That's the reality. It's like the stock market. You know, one minute your stock's worth something, and then the next minute it's not worth something, and it's ever changing. And so for real estate is not quite as crazy as the stock market. Well, these days, but it feels like it sometimes, right? It does.

SPEAKER_01 12:50

Just a month ago, I felt like it was a very different market than what it is today, and that was pre-war. Oh, the interest rates were under six percent. They were people felt comfortable. Yeah. They felt like they knew the certain like what was happening, and then we went to war and the uncertainty kicked in and the banks freak out, the stock market freaks out, the oil prices freak out.

SPEAKER_00 13:10

Everybody freaks out.

SPEAKER_01 13:11

And the Fed just said that they're keeping the rates the same for a federal rate, but I know that on the retail side of it, the banks, they're raising the interest rates in anticipation of the Fed raising because of inflation. And it sucks for that buyer, but knowing how to nego navigate that and go navigate that is the challenge. And that's why when we come in, we know the market, we know how it's reacting day to day. And you know, we work at a decent cypress brokerage where we get to hear every week how everybody's business is doing and kind of gauge the Austin market.

SPEAKER_00 13:45

Right.

SPEAKER_01 13:45

And we do a wide range too, from uh Houston, San Antonio, Austin.

Date The Rate And Refinance Later

SPEAKER_00 13:51

Funny, you mentioned the the part about rates, right, being higher. And a couple of years ago, when the rates really went up, the buzz line for every realtor was and also lenders. You uh marry the date date the rate and marry the house, right? Blah blah blah. I'm like, it got to a point where if anybody said that, you just were like, oh, you all dries. Yeah, I'm over it. But there's actually a lot of truth to that.

SPEAKER_01 14:16

I mean, there is because we You always can refinance as long as you can afford it, as long as you can afford it in the moment. Yeah, don't get in a house that you can't.

SPEAKER_00 14:24

You you can only afford for a year, and if those rates don't change, you're in trouble. But you can negotiate. This is why it's such a great opportunity for buyers. And you know, it's you can negotiate that price of that home and the concessions, and there's some really good opportunities out there in terms of inventory. You can always readjust that rate. And so, really smart buyers right now are getting that price down because as soon as those rates come down, this is what changes. We start that prices go up, demand goes up. All of a sudden, we're back into that chaos of multiple offers. So, in some ways, it's you end up doing better now than you do when the rates are lower and you're in that multiple offer competitive market once again. So it's it's a really smart time to buy and also sell because and here's the other thing with that is if you're on the sidelines just waiting for these rates to go down, like we said, that's just that is one of the biggest mistakes buyers are making right now, and even sellers. It's just to sit there and say, Well, we're gonna wait for that rate to come down, and then we'll get into this. No, you're just leaving money, like you're leaving opportunity and money on the table when you do that, and that's the number one biggest mistake. Get if you want to buy a home, take advantage of this opportunity to negotiate, have some options. If you're waiting for that rate, you may be waiting for a year or two.

SPEAKER_02 15:54

And then probably or they've been waiting for three.

SPEAKER_00 15:56

Yeah, exactly. You've been waiting for three.

SPEAKER_02 15:58

How's that going?

SPEAKER_00 15:59

And exactly, and you're meantime meantime, maybe you're renting, or maybe you're in a situation you don't want to be in in a certain home and a neighborhood, and all these good things. But you kind of have to seize the opportunity where it is and then renegotiate that, or not renegotiate, but refinance that rate. Um, otherwise, some of these good opportunities are gonna be gone.

SPEAKER_01 16:21

There's even some lenders I've heard that will give free refinancing. Yeah, absolutely.

SPEAKER_00 16:25

Or at least discounted, you know, some of it discounted because there's some closing costs associated with refinance.

SPEAKER_01 16:31

And an example of that is my brother, he bought his house maybe a year ago and his interest rate was higher, and they're looking at refinancing it now, and that's just within the year, and you know, not a lot's changed, but enough has changed with interest rates to bring down the payment.

SPEAKER_00 16:44

Yeah, absolutely. That is one of the number one biggest mistakes buyers are making is just thinking, oh, they're gonna go back down to four and three percent. Uh well, I'll never say never because COVID, you know, trained us like that. But it's highly not likely that the Fed is ever gonna be that tough is um We are getting a new Fed. Yes, I know, and but it But I think he is conservative. I I don't think he's gonna be, yeah, exactly.

SPEAKER_01 17:13

I think interest rates are gonna drop, but not crazy. Just little quarter of the point.

SPEAKER_00 17:17

My lender has been saying they're not gonna go below um 5.7. And this was before the craziness, the war, right? And so now that we have the the war going, they could go all the way back up to 7%. And then people go, Oh, you should hold the brakes on that. No, if you're buying, take advantage of that. This is where we can negotiate that price, and then when things get a little bit more stable, refinance that rate.

SPEAKER_01 17:43

And builders, they have like right now Dear Horton has 3.99 for 30 years, so 4%, you know. And I have a client right now where his payment is$200 less than his rent. So, you know, it makes sense for him to buy and he's taking advantage of it.

SPEAKER_00 17:59

Absolutely.

SPEAKER_01 18:00

We got them to pay all of closing costs, we got them to buy down the rate, we got, you know, the there's some real wonderful.

Timing The Market Versus Taking Action

SPEAKER_00 18:07

I keep saying it, I feel like I'm it should be drinking game. Every time I say this is a wonderful opportunity, take a drink. And sign right here. Sign right here. But you know, if you're we like when you're looking at these opportunities in real estate, it's kind of similar to the stock market in this, where it the there's never this perfect moment, right? And and if there is, it's way too competitive. It's always in hindsight that we go, oh man, I should have bought then. And that's how the perfect moment's always a little uncomfortable.

SPEAKER_01 18:37

Even when I bought my house, I was the same. Um but something else is the real estate market is the first to fill it and the last to recover. So, you know, that's why hindsight, because by the time we figure it out, it's already done. We've already passed that point, yeah. So because we're the very first industry to hit it. Um, we're very reliant on interest rates, on the stock market, you know, certainty in the market. But people always need a buy and sell.

2008 Lessons And Normal Appreciation

SPEAKER_00 19:03

They do, they always need to buy and sell. And so, you know, this market, this world looks really kind of chaotic and crazy and scary. And that is absolutely a fair and true statement. But the but is there's some amazing opportunity in this uh chaos for real estate.

SPEAKER_01 19:26

And and to go back on your your point about the hindsight is in 2008, 2009, that's when investors made a ton of money. Right. And looking when you were in that market, nobody wanted to buy because it was a very scary time in the real estate market. They hit it real hard, and investors knew that they went in and bought up these for foreclosures for pennies on the dollar, and then 10 years later sold them at a three times profit. And you know, there was so much money to be made in that market.

SPEAKER_00 19:56

Um, and typically with down markets, that's that's where opportunity is, that's where you can make money, but it feels when nobody else is buying. It feels uncomfortable, it feels sticky, it feels um scary.

SPEAKER_01 20:08

And something that I tell my clients too is if you can afford it now, just it's just statistically your real estate will go up, I thought it was four percent a year or like your gen your normal appreciation.

SPEAKER_00 20:20

So normal appreciation, which we haven't seen in a long time, but normal appreciation in in this particular central Texas area, general, because there are pockets that have different levels, but it's about three to eight percent year over year.

SPEAKER_01 20:35

So, you know, in three, four years you'll be fine. And statistically, we can't predict anything. Right.

SPEAKER_00 20:42

But during COVID, that's where we saw 36% which overnight. Overnight.

SPEAKER_01 20:46

And that's why we're in this position.

Austin Jobs Startups And New Growth

SPEAKER_00 20:48

Yeah, that's why we're in this messy position. And then we have a lot of other reasons why we're in this messy position when there's you know economic uncertainty and there's war looming, and well, there's war happening, but how you know how impactful? How much worse could it get, right?

SPEAKER_01 21:05

And then um in our market, there's there's been the jobs have also gone up and down. Um I saw that Elon is bringing a four billion dollar chip manufacturer to Austin. Did you see that? I did not see that. Yeah, so it's AI chip and it's supposed to be revolutionary. Is it Austin or is it Bass Drop? It's I think Austin. He did the press conference at Upsolem the power plant, the old power plant. Um, I don't know. I think it's Austin, though. He's bringing a lot of money into this new apparently it's revolutionary chips that are gonna outperform any other chip that's on the market.

SPEAKER_00 21:43

And when you say chip, you mean like a poker chip? I think it's I think it's like a computer chip.

SPEAKER_01 21:50

Is it a semiconductor? Yeah, I think so.

SPEAKER_00 21:53

Okay, is it AI?

SPEAKER_01 21:54

Yeah, it's AI semiconductor, I think. Oh, okay. It's something that's not from my understanding it's It seems like it's something that's not been made yet. So it's revolutionary and it's going to enhance AI.

SPEAKER_00 22:06

Well, so there's yeah, there's we'll see.

SPEAKER_01 22:07

I don't know.

SPEAKER_00 22:08

There's constantly opportunities in the chaos.

SPEAKER_01 22:12

And also back to the job market, during hard times are when startups do really well. It's when they get started because people are forced to focus, you know, if they get laid off, can't get another job, they're forced to make their own job. You see a lot of economic growth in that time with sole proprietorships and the small businesses.

SPEAKER_00 22:28

I mean, sometimes it's like you're running towards the fire. The people who are running towards the fire are the ones that, you know, really can benefit and grow major wealth during these hard times. And by running towards the fire, please do not mean run into a burning house. It is a metaphor.

SPEAKER_02 22:47

We get sued.

SPEAKER_00 22:48

Seeing a metaphor.

SPEAKER_02 22:49

This next door LLC podcast gets sued.

SPEAKER_00 22:54

If we were an LLC, we're not that, we're not that. We don't have our crap.

SPEAKER_02 22:59

But we do have an episode every Wednesday.

Midterms Key Takeaways And Closing

SPEAKER_00 23:01

We do have an episode come. Hell or high water. We've got an episode every Wednesday. But yeah, but in summary of this episode, which we really felt like it was important to talk about just what is happening. Address the elephant in the room and say that it is the sky is not falling in terms of real estate. It might be falling in terms of other things, but it's not falling in terms of real estate. There are some great opportunities. Don't be afraid of rates getting a little bit higher. That can always be readjusted as long as you can afford your payment now. And for smart sellers and smart buyers, there there's no reason to sit back and wait because as you sit there and wait, that's that's when you end up paying more.

SPEAKER_01 23:50

And one other random tablet is we have midterms. I love a random tidbit. We have midterm elections coming up, and it seems like during election times it gets better a little bit. Um no matter what sides in it, it always does because they, you know, they won't vote.

SPEAKER_00 24:07

So yeah, well, let's hope. The real estate market has been through quite a bit. And um, but we keep surviving, we keep pivoting. I mean, like Anthony, you said we need shelter, right? People are, you know, their families are growing, families are downsizing, divorces are happening, you know, all of the above. And so no matter what is happening in the world, what the rates are, people will always need a place to live. And most buyers are sellers. So, or sellers are buyers. You got that right. Both. Both, exactly.

SPEAKER_02 24:41

Well, I think that sums it all up.

SPEAKER_00 24:43

So, yeah, thanks for joining us for this episode. It's House Next Door.

SPEAKER_01 24:48

And we'll see you next week.

SPEAKER_00 24:49

We'll see you next Wednesday. Have a great week.

SPEAKER_01 24:52

Thank you for tuning in.

SPEAKER_00 24:53

We'll see you next week. Yes, so please like, subscribe, subscribe, comment, share, follow, whatever it might be. Until next time.