Taking Back Your Power: Insights into Homeownership

The real estate market isn’t just “good” or “bad” right now. It’s confusing because it’s multiple markets happening at once, and the difference between a buyer’s experience and a seller’s experience can be night and day. I want to slow the noise down and talk about what’s actually driving today’s housing market, using real numbers and real-world patterns I see every day.

We start with the uncomfortable stats that explain why so many people feel stuck: the net worth gap between renters and homeowners, the average first-time homebuyer age rising to 40, and what it means when so many purchases are happening in households without kids under 18. Then we dig into how we got here, from the 2008 building slowdown and mortgage reforms to historically low interest rates and the COVID acceleration that tightened everything. In markets like Metro Richmond and Central Virginia, rapid appreciation and low inventory change the game, especially when baby boomers can leverage equity while first-time buyers are trying to gain traction.

I also break down how professionals define a market using months’ supply of inventory, why “the market is crashing” doesn’t match the metrics I’m seeing, and why foreclosure fears often get overstated when demand stays high. Most importantly, we talk strategy: how to build a realistic plan, how to think about risk the way sellers do, and how offer terms like inspections, appraisal gaps, earnest money, and closing timelines can make or break a deal.

If homeownership is a goal for you or someone you love, subscribe, share this with a friend who’s trying to buy, and leave a review so more people can find clear housing advice. What part of the homebuying process feels most overwhelming right now?

Transcript

This episode has been something that has really been on my mind for a long time, and it is really addressing the state of the real estate market. And why I felt really compelled to share things with you all is because housing affects people on a daily basis, and there's some startling things that are happening in the nation, at our state level, and locally that I really feel really passionate about sharing with you.

And so that's really the basis of this. This is not to cause panic. It is not to be self-serving for me and sell more real estate, although that is what I do. That's how I put food on the table for my family and provide shelter. But I wanted to share some information, some kind of behind-the-scenes facts so that you can operate with a lot of information, and I hope this will help people kind of take their power back, especially with some of the national and local headlines that we're seeing about real estate.

So this podcast is for anyone who has ever dreamed of homeownership, who has dreams for their children, their grandchildren, family, and friends.

There is a lot of headlines, a lot of mixed information out there, and in my daily practice, we see lots of confusion, but I'm not confused. And so I wanna share with you some insights that I think will be helpful and really help people take their power back when it comes to housing. I wanna really address before I dive into statistics, inventory, interest rates, market predictions, why this has been so important to me.

You know, I've sat across from now thousands of people over my 22 years, sitting at kitchen tables, dining room tables, and really watching people's lives unfold from the perspective of real estate. And I have watched people build incredible wealth and make real estate a tool. But a house is so much bigger than that.

A house is representative of people's identity. It gives people lots of stability. It gives you room to put down roots, and of course, it is an investment vehicle. And before I really dive in, I do wanna discuss or have a little bit of a conversation about renting. There is nothing in the world wrong with renting.

There is no shame in renting. Renting serves a really great purpose. But an alarming statistic that I see is the gap between people's net worth between someone who rents a home and who owns a home. And the new statistics are showing that a homeowner's net worth is 40 times greater than someone who is renting, and that gap is just widening.

So I wanna pause on that and let you kinda think about that is a huge disparity between two different segments of the population when you're looking at just renters and homeowners. And that's where my passion really lies, in educating people and helping people understand the facts that's out there. 

 Out of this episode, it's important to me that I give you all hope and a plan so that if homeownership is part of your dream or you, someone in your family or someone that you are friends with, that there is a path forward, because we're up against some really tough statistics.

So outside of the net worth difference, here's some things that are startling to me that over my 22 years is still head-turning when I hear it. So the average age of a first-time homebuyer is now 40 years old. This is the oldest it has ever been. When I got into the business, it was someone in their 20s, maybe early 30s, as a first-time homebuyer.

So people on average are missing an entire decade of homeownership benefits and values. So that's a lot of money, and if you do any research or understand compound interest, that's... If you were to put that money in the market or have it in housing, that's a really large missed opportunity.

There are lots and lots of folks kind of asking me constantly, "Well, Kristin, who are buying... who's buying these houses? Like, where are people coming from?" And you might be really surprised to hear that 80% of homes bought and sold, according to NAR's, and that's our National Association of Realtors profile of buyers and sellers, had zero children under the age of 18 in their homes.

So I'll say that again. 80% of properties bought and sold in the United States was done by folks who had no one under the age of 18 in their homes. These are startling facts. So we've got around 40% net worth difference between a renter and a homeowner. We have first-time homebuyer age has now crept up to 40 years old, and then the lion's share of the transactions is being done by folks who have no one under 18 in their house.

We need to take note of this. We need to think about how we can help change that. And so what really got us to this place? How did we get here? Well, this lack of inventory was something that has been projected for years and years. And so it's not a surprise. But what happened is COVID accelerated the situation, and it was the perfect collision.

It's like the perfect trifecta of things going in a certain direction that put so much pressure on the real estate market. And so here's what happened. In 2008, the Great Recession, or really the real estate lending crash, builders stopped building, and that has a massive impact, and we knew it was gonna happen.

And so you may say, "Well, why did builders stop building?" Well, because they lost millions and millions of dollars when the housing market literally was like a faucet. It was on full blast, and then it cut off overnight. And so builders were stuck with lots of speculative inventory, homes that were built, and no one to buy them, and they lost their shirts.

So we had a complete stoppage of building and then a really long time, even to this day, of undersupply of building. Then we had mortgage reforms, which was a great thing. So national lending guidelines changed, and there was lots more requirements for someone to become a homeowner, so people had more skin in the game.

But it also reduced the amount of people that could purchase. Then we had interest rates that became so, so low, and everyone was buying. Anyone and everyone was buying. And when that lending reform happened, combined with a lack of supply, we find ourselves in a really, really tight market. And there's another ingredient that I hear people missing, and that is our populations.

So we have the millennials who have entered into home buying ages, also coupled with the fact that we have baby boomers. And so we have, for the first time in history, our first-time home buyer demographics competing with our baby boomer demographics, oftentimes for the exact same properties. And that makes it really challenging because, at least here locally, our average appreciation rate here in Metro Richmond for a house has increased 50% in the last six years. 50%. So if you take a moment and you step back and you think about that, that means anyone who has enjoyed the benefits of home ownership is sitting on a tremendous amount of equity. So when those baby boomers go to make a move on a real estate transaction, they are equipped with a ton of cash, it might not be all cash, but a lot of cash, up against a first-time home buyer who is just getting started and is oftentimes not flush with cash.

So think about that. We've had an undersupply of building, we've had false rates, really, really low rates, an anomaly really, and we keep trying to compare today's rates to those momentary rates. And then we have COVID, and we have two huge populations all kind of going for the same real estate, and it creates the perfect mixture for a very, very tight real estate market.

So the most common question I get is, "Kristen, how's the market?" And the answer is, it's really something that really depends, and it's kind of a tale of multiple markets because the market looks really different if we're talking about a buyer and a seller. So we'll stop and, like, back up right there.

A seller is going to have a very different response to that question than a buyer because right now the seller is sitting firmly in the driver's seat, at least here locally. Nationally, that number may be a little bit more balanced, but here in our local market, it is still a very strong seller's market.

And to help answer the question of how is the market, it probably would help if some of us in the industry would slow down and stop and share with you how we define markets. So we look at months supply of inventory. And you may say, "Why? Why in the world would you look at that?" Because it really is a fictitious illustration that we use to say this:

Months supply. All right, how many months, if no other properties came on the market, which is obviously not a real-world example, but it's used as an illustration to show demand, so if no other properties came on the market, how long would it take us to deplete everything that's on the market? That represents our month's supply.

So anything below six months supply is a very strong seller's market. Anything north of six months is a buyer's market. So the markets of '08, '09, '10, those were very strong buyer's markets. The favor was certainly in the buyer's hands. But that has changed drastically since COVID. Even before COVID, we were in a seller's market.

But now, surviving COVID, and now we're years after it, we are still seeing the hangover effects. And here locally, we are really struggling to find two months of inventory, and that is a really, like, very, very small amount of homes that are available. So we start there. So we've got month's supply, what's a buyer and seller's market.

And so to answer the question even further, "Well, Kristin, how's the market?" It depends if you're a buyer or seller, and then take another step. Where? Where are you looking? Where are you selling your home? It's not just county by county, and it's not just neighborhood by neighborhood. Sometimes a block or an actual location can really change the value of a property, and that matters.

So it's hard to say in general how the market is. I see the market as really positive. I think there's lots of opportunity, but it requires a lot of skill set, it requires a lot of knowledge, and it's really helpful to have a really concrete plan. 

There are so many different resources for information when it comes to housing. We have- You're bombarded by messaging. You have folks on social media giving you advice. Because housing is such a common item to be consumed, you have parents and coworkers and family and friends giving you advice because they've bought or sold a home or two.

You also have headlines of any news publication you can turn on. So the question is: Is the market crashing? Are foreclosures creeping up? Has the opportunity to have a bidding war on your house passed? Will you ever be able to buy a house? All of this messaging is constantly in consumers' faces, and that is where I'd like to provide some clarity and guidance for you.

So there are no metrics that I know of that support a market crash. We have people that are buying have more skin in the game. They have more money being put down. In fact, the average first-time home buyer is putting 10% down on their house, and they are getting conventional financing. That is a wild, drastic turn from FHA as the real mode of lending years ago.

We now are seeing more of a conventional product being mainstream. So you've got people putting more money down. You also have a very strong undersupply of building, which is something that I've talked about. You have- And when you stop and think about why that matters, if a builder's running a business and if they have built 20 homes, we call it spec inventory. It's speculative building. It's building for the future, no one custom building. If you had 20 properties in a neighborhood that were all available and for some reason that builder needed to dump them, then that could really lower prices in your neighborhood and really cause a loss in your equity position.

But that's not happening because we don't have an oversupply of building. We have a drastic undersupply. And then we have even if we did have some foreclosures hit the market, and I've heard a lot of headlines about it and there's lots of debunking that myth out there, even if a few foreclosures came on the market, the buying- there's so many buyers hungry for properties, they're just gonna get absorbed really, really quickly.

And the banks are not gonna have to take a loss on them because supply and demand. There's so much demand for housing. And so those are some things to kinda think through as to why we do not see, and I certainly don't see, any indications of our market changing. And so this brings up, I think, another important topic, and that is how do you get in? How do you get in?

Because when I sit before a buyer who wants to buy a house, the conversation is very different if they are a first-time homebuyer versus if they have a property to sell, and the reason is simply equity. Usually, that person who already owns a house has a vehicle for growth, financial growth, because their property has appreciated.

If you are a first-time homebuyer, there is a path forward, there is hope, but it takes strategy, and that is something that I kind of lay awake at night thinking about. How can I share the information that I have with people so that you can start to have conversations with your partner, with your folks in your household, folks that you're friends with, about becoming a homeowner?

And so there's probably- this is probably a little bit of a controversial thing for me to say, but if you stop and think about it, the average wedding in the United States is $30,000 and that is a stat that is kind of head-turning. I've seen much more elaborate weddings and smaller weddings, but let's say it's $30,000.

The average cost of a used car is 20-some thousand. And if the average price of a house is $400,000, it is really around those sorts of investment numbers. We're talking about a wedding. We're talking about a used car. And that is obviously a lot of money, and I am not insensitive to the fact that saving that amount of money is a hard thing to do. But I wonder if we don't need to reframe the way we're thinking about things like weddings and cars into something that has a longer-term impact for you that is financially beneficial. And I see a lot of baby boomers coming to me and asking me, "How can I help my son or daughter or my child get into a house? What can I do to help?" And there is certainly an argument that that generation, our baby boomer generation, is able to help their kids. Now, not everyone is able to do that. That is such a far stretch of the truth. I recognize that. But we're seeing one of the greatest exchanges of wealth, and I actually think it is the greatest exchange of wealth with the baby boomer population as they downsize, as they unfortunately pass away. We are seeing a massive wealth transfer, and so there's an opportunity here.

And when I stop and think about it, I am from- I was fortunate- I am from a family whose parents did enjoy homeownership, but some of my grandparents grew up in houses where they did not. My mother grew up in a house with parents that had to rent until they were in their 40s when they first enjoyed homeownership.

And so every generation has a window of opportunity, and all of us are born into life at different points in the race. But I think having a plan and kind of rethinking through the way that you're going to maybe have that wedding, buy a new car, maybe you're gonna have to share, you know, rent out rooms. There are ways forward. It just depends on what your motivation is in terms of housing. 

So as I'm going over all of this and you're thinking about perhaps where you are in your life and in your journey, or where your kids are, or loved ones, I wanna point out something that I see in my daily practice that is a little bit- I want you to kind of stop and think about this.

So as- you know, real estate is hyperlocal. Real estate is something that I think is probably a little overly complicated, and it's not- it shouldn't be. But there is this perception that your home- let's say you're thinking of selling- there is a perception that there is one value for your home, and this kind of drives me nuts, so I wanna talk about this a little bit.

There is not- if you had three appraisers and three real estate agents all look at a property, and we had to give you an exact figure, you're gonna get six different numbers. There isn't an exact figure for every house. Why? Because there's so many variables. And yet I see, and the national stats support this, that by a lion's share, most buyers and most sellers only interview one agent.

And of course, me saying this puts me at risk for you if you were to ever reach out to me of being interviewed against and compete, but that competition is a great thing for consumers. And I think it's important that you recognize that as you're navigating a market as robust as this is, it's important that you recognize that experience really matters, and there's not one value for your home.

And dollar per square foot is a very dangerous evaluation. It is a tool in the toolbox, but it is certainly not the only metric when it comes to valuing your home. And I think a lot of consumers only interview one agent because probably it's based upon trust. There's someone that you know and trust that have their real estate license, and that's critical.

So I applaud you hiring someone you trust because that's really important. But just be aware that the value of your property is kind of up for debate. There is a lot of different factors, and that really comes into experience. And so when there's so much information flying at you and there's so much data right at everyone's fingertips, that's not the role of a real estate agent. It's to help come in and really translate that. What does all of this data mean? What does the market- what is the market doing? What can you expect? That is really the role that I serve on a daily basis for buyers and sellers, is helping them translate what is happening in the marketplace. And in this market, buyers having someone who is really talented working on their behalf is really important.

We all have access to the same tools as professionals. It's understanding what tools are available to you, what makes the most sense, and being able to analyze the different risk profiles that every house has because the state of the market here locally in Metro Richmond is very, very strong. And yes, we are still seeing multiple offers. Not everywhere, but we are seeing it, and we are certainly seeing sellers being firmly in the driver's seat. So having a plan is really important.

Another popular- maybe it's not a question, but it's something that I hear a lot- outside of how's the market- is, "Well, Kristen, I know I could sell my house for a lot of money, but what would I buy? Where would I go?" That's a fair question. And I like to point you back to the data, to the stats, to help you kind of formulate an opinion as to whether or not you should make a move or when you should make a move. So last year here in central Virginia, we sold almost 19,000 properties. That's a lot. So the question isn't, 'what would I buy?' I think the question needs to be more like reframed, and that is, 'how can I buy?' Because there have been some gorgeous properties that have come across my desk that I would have bought in a second if I was in the market. But the important piece is, is how do you buy it? Because the great properties are selling swiftly with typically some very head-turning terms. 

The path forward in buying a house, having a plan- what can you do? There's- when a seller is looking at an offer, I think really in order to be a great buyer, you have to really understand a seller and what a seller may be looking at, especially if it's a competitive situation. A seller is looking at price, of course, but they're also looking at how can they reduce their risk.

And so if you look through the lens of risk as a buyer, it helps you put together offers that show the seller that you're not such a big risk. And so that would be things like home inspection contingencies, appraisal gap coverages, earnest money deposits, and closing dates. And that's all boring legal jargon within real estate.

But those are really things that a seller looks at. And I've heard so many people say, "I would never buy a house without a home inspection." I respect that. As someone who is taught how to protect my client, and that is literally NAR's code of ethics number one rule and reg, is protecting and promoting the best interest of your client.

It's not a comfortable position to tell a buyer, "You may be up against buyers who are willing to waive the inspection," but that is the case. And so whether or not you should waive an inspection depends greatly upon how much risk you're willing to take and what the profile is of the house.

Because if you know the roof age, you know the HVAC, you know the windows, you know a lot about the house, it may be- it may be a point at- in your buying process where you decide, "I'm willing to take that risk." You also could do walk-and-talks. But to back up and think about, probably, really the financing of buying, I have seen in my practice where parents are giving some money towards a down payment or closing cost, or grandparents.

I have seen people taking- obviously, saving up money is the number one vehicle for people to have cash to put in. I have seen people make a lot of sacrifices, and when I think back to my grandparents, who both of my grandfathers worked multiple jobs to support their families. A lot of my really successful first-time home buyers are working multiple jobs, so there is sacrifice, and it's probably something to consider.

And all of this is really just to bring awareness to the fact that we don't see the real estate housing market all of a sudden freeing up and having lots and lots of inventory on the market. Because sellers are in love with their interest rates. They might not be in love with their home, it might not actually fit their lifestyle anymore, but they love their interest rates, 2% and 3%, so we have a hard time getting people to separate from that, and I respect that.

And when you combine that with housing prices having doubled and a higher interest rate, you can see why we're not seeing a lot of movement. So the real movement is usually happening through life chapters, where people are being forced to move, or they have enjoyed such a huge equity gain that they're willing to make a move. ​

So whether or not you're renting a house, you own a house, it's really hard to time a market. It's actually impossible. That's usually just luck. So don't focus on timing the market. I would encourage you to focus on building a plan. It's never too early to reach out to a professional, whether it is a lender or a real estate agent, to help you formulate, even if it's a five-year plan.

It's never too early to put together a plan if homeownership is your goal. And I would tell you to really keep your chin up, have a really positive attitude, because housing is worth that struggle. Look at the wealth building that is occurring with people that own housing. It just might take a little bit longer. It might have a different path to it, but I think it's worth it. I've seen it firsthand, and if you have any questions about it, you are always welcome to reach out to me.​