How Louisville Lives

Residential real estate trends define Louisville's growth and neighborhoods. 

This week the Access Louisville podcast got out of the studio for a live recording during which we dive in to local and national residential real estate trends. 

Three local experts joined us for the discussion: Stacy Durbin, president of HomeServices KOI, Inc., overseeing Huff Realty, Semonin Realtors, and Rector Hayden Realtors.; Jakeeva Lee, CEO of Greater Louisville Association of Realtors; and Jon Mand, head of Jon Mand & Associates, part of Lenihan Sotheby's.

The event was held Thursday, July 30 at the Baird Conference Center on the 29th floor of 500 W. Jefferson in Downtown Louisville. 

Access Louisville, sponsored by Baird, is a weekly podcast from Louisville Business First. You can listen in the player above. You can also follow it on popular podcast services including Apple Podcasts and Spotify 

Transcript

SPEAKER_11 0:00

The housing market has more twists and turns than an Agatha Christie novel. We're gonna piece together the clues up next on Access Louable. Thanks for joining us. My name is David Mann. Access Louisville is a weekly podcast from Lobo Business First. Normally we talk about the latest news going on here in Louvo, Kentucky. But this week we've got something a little different. We're gonna talk about real estate with some very special guests. We've got to please welcome Stacy Durbin of Cinnamon Realtors. Cinnamon Realtors. You don't know how many times, Stacy, I've accidentally said cinnamon and then edited it out, but now I can't on that take. So um let's see, Jakiva Lee of Greater Louisville Association of Realtors. And John Mand of Linehan Sotheby's. If you're out there listening at home, you're like, who's clapping? Well, we've also got this awesome live audience. They're joining us here on the 29th floor of the conference of the Baird Conference Room here in downtown Louisville. So you gotta say hi one more time. All right, so let's get into it. The the housing market's been on a pretty wild ride. I think a lot of people know that. It's hard to say when it really started. We had a buying frenzy during the pandemic, uh, low inventory, uh, high prices, low interest rates, followed by very high interest rates. Then you had locked-in buyers who wouldn't move because they had those low interest rates. Uh and you got uh fewer home starts and on and on. Uh so I guess we'll just start there. We're in the middle of this turbulent ride. Uh, I'm gonna start with you, Stacy, since you're sitting next to me. What's your take on the housing market overall right now?

SPEAKER_05 2:00

I think it's a unique market. That's what we've come to call it. It's not good, it's not bad, it's unique in its own way. And you're right. There have been some turbulent times over the last few years, but it also has been a really exciting time in the field of real estate, in the industry of real estate. Um, we needed change. Our industry had has been around forever. A lot of people have done things the same way forever. I've been in the business 22 years, and uh in the last six years, we've seen more change than in my 15 years beforehand. Um the housing market is good. Uh, we we'll get into the details later on what interest rates are doing to the market and what inventory looks like, but I would call it an odd market, but a good market right now, generally speaking.

SPEAKER_11 2:44

Yeah. Jaqiva, same question for you.

SPEAKER_06 2:46

So um every month, our association, the Greater Louisville Association of Realtors, we issue out a monthly report based off of data that comes from our Apex MLS. And so what those results tell us, at least in the month of June, is that we're in a balanced market. So compared to last this time last year, uh homes sold are up about 10%. Um listings are up about 12%. So what that tells us is that we have a good inventory of sellers that are entering the market, but also buyers that are able to buy homes now. Um, and so we're we're really excited about the data that we're seeing as far as Louisville being a balanced market because it's not that way across other markets across the country. So we're encouraged by that. A balanced market is a fair market for everybody.

SPEAKER_11 3:37

Yeah, it seems like the statistics have been trending the right way. Uh John, same question for you. What's your take?

SPEAKER_09 3:42

Yeah, I'd say it's a little bit of both of their answers. You know, when we do our quarterly market reports and drill down on paper, it's a very strong market uh across uh price points, um, you know, all the way up the uh the price ladder. Um, but it's also I would say a deliberate market. Um the boots on the ground and our interactions with customers, it it's definitely lost the uh, you know, the feeding frenzy, you know, post-pandemic. Um it's buyers are taking their time, they're making more deliberate decisions. Um it's just much more of a calculated process than the kind of hurried frenzy that it was previously. But on paper, uh it's exceptionally strong. I mean, we're having a record year for high-end home sales, um, but uh, you know, that doesn't tell the whole story.

SPEAKER_11 4:28

Yeah. So yeah, good good point. And I think one of the um the the reason that we've been seeing some talk about this nationally is there there has been a lot of change and fluctuation. So that leads me to this um Road to Housing Act, which just passed recently in Congress. Um it includes some new directions on zoning, some restrictions on large housing investors, and some tweaks on financing, other things like that. I don't want to get into the particulars of it, but Jakeiva, I thought since you were kind of the uh you're kind of looking at it from a uh more of a global position, you know, what do you think of this legislation? Did it uh do you think it accomplished what what you know?

SPEAKER_06 5:12

I think it's a it's a step in the right direction. I mean, we've been working on this bill almost two years now, 21 months to be exact, and working with the National Association of Realtors as well as our uh state association, Kentucky Realtors, as well as on the local level, uh the GLAR level, our lobbyists and our advocacy team has really been boots on the ground trying to ensure that we're not piecemealing legislation. So we're not necessarily focusing on within this bill just interest rates or inventory or um affordability. It's a holistic bill, which is a win for everyone. I mean, part of the success of this bill is that it is bipartisan. And so there's support on both sides of the aisle, which is extremely important to help push our industry forward for everybody, for all consumers. One of the things that are I really am personally excited about within this bill is that it gives incentives to folks who may not want to save funds for a home, because we've seen that trend for first-time home buyers, millennials, Gen Z, they're kind of shifting away from purchasing a home because some rhetoric's out there, unfortunately. And so now in this bill, it's including incentives so that it's encouraging buyers, potential buyers to save for homes, as well as veterans giving more incentives and more education resources for VA loan. And um, also a big piece that was that took some time on the hill is um providing restrictions in this bill for big corporations.

SPEAKER_11 6:45

Yeah.

SPEAKER_06 6:46

The single family homes. We've seen that trend where you know these big corporations are purchasing in bulk single family homes, eliminating inventory from the market, and that's drive making the market unequal. So um, there's a lot of good that's gonna come from this bill. We're very excited and very encouraged that it's gonna push us in the right direction. It is gonna take some time, but uh we're we're in the right, we're on the right track.

SPEAKER_11 7:09

Yeah. I I have the theory that private equity is always looking for something invested it to invest in. Right now, uh it I think it was residential housing, and now it's kind of shifted to data centers, so maybe that'll give residential housing a break. Yeah, there's that's a whole other podcast right there. But uh, um but uh yeah, hopefully that that that and the new uh restrictions on uh on large residential investors, you know, kind of eases that a bit. Uh John or uh Stacy, do you have any opinions on the uh the new legislation that came out, or is it just kind of a wait and see at this point?

SPEAKER_09 7:46

I I'd defer to Stacy on that. I mean, in our you know, from our perspective, a lot of the uh components of that bill don't necessarily directly hit the segments of the market that we focus on, but I would say overall it's important to us to have a really strong market. You know, the entry, the first time home buyers are incredibly important. It provides the liquidity for those buyer, you know, sellers to move up. Um and so it is all a very tight-knit uh you know economy. And so, yeah, we're definitely supportive of anything that is done to improve that.

SPEAKER_11 8:15

Yeah, yeah. Uh so I guess uh whoever wants to take this one, um, how are the interest rates impacting the industry right now? I know that was a big narrative for uh for the last year or so, but uh I don't know, has there been stabilization there?

SPEAKER_05 8:32

I think so. I think I think buyers who have been on the fence for a long time now, over two years, you know, if you go back to 2020, we had this season of rates that were between two and three and a half. They were never intended to stay there. Those were what we're hearing called crisis rates, right? To to stave off other things from happening. The intention was never for us to live in that area of interest rates. So when you do a 30-year look back, the average interest rate is about 7.7%. So what we see today at the six and a half, slightly under, slightly over, we have great interest rates today. And when you do some of the math and really talk to a buyer and take the time to educate them on the importance of purchasing at a, let's call it a six and three quarters today, what they'll save in an inventory market today where you have time to look, you have inventory at your disposal to review and choose from, versus if the interest rates drop to six, how many more new buyers are gonna enter the market and what's that gonna do to the demand of the homes and the prices? It's gonna go up. And so when you again, you can do some math, what a six and a half at a $400,000 house versus a six for a $450,000 home, you're not talking a big difference. So we spend a lot of time. Um the the large media is not always our friend in the real estate industry. Uh, and and we encourage our our agents, our clients to to educate their consumers on these things and to help them understand that buying at a little bit of a higher interest rate today, but when inventory is high and demand is a little bit lower is actually a better choice than waiting until an interest rate goes to six. Right. You can also refinance. You know, we've had refinance booms over the last couple of years, and the expense of refinancing is pretty minimal when you look at the whole scope of a cost of a mortgage. So we really do a lot of educating. I don't, I think we're in an era that is going to be in this interest rate um, you know, range for a while. I think people are just now starting to figure that out. Um, but I do think if interest rates drop to six, we'll see a whole wave of new buyers come to the market because they feel like they'll have a win. Yeah. Uh so it's a it's a good time to buy.

SPEAKER_11 10:41

It's like you can it don't let perfect be the enemy of good. Right. You know, the old thing. Um All right. Uh any anything to add on that?

SPEAKER_09 10:50

Yeah, I I would just say that the you know the interest rate, the lock-in effect from that is certainly uh been a driver of these inventory shortages, you know, over the past few years. But uh, you know, as rates have kind of stabilized that, um, you know, people can press pause on their life, but they can't press stop, you know. And so what we've saw was, you know, all of these home purchases are typically driven by a you know a major life change. You know, people get married or they get divorced or they get a job or lose a job or have a child or they're empty nesters. There's something that's going on in their life that's triggering this home purchasing decision. And so they can defer the acquisition and and making the move, but they can't, you know, defer it indefinitely. And so that's what we're kind of seeing now is I don't want to call it capitulation on the point of sellers, but the friction of staying where they are is so great that they're like, forget it, you know, I'm gonna have to lose my two and a half percent interest rate and go to the market rate because I need an extra bedroom or I need, you know, a home office, or I need, you know, we're moving out of town, whatever it is. Yeah. That's really I think what's been driving these year-over-year increases in home sales and this increase in inventory that Shakiva mentioned, uh, are sellers getting to that point where the friction of remaining where they are is just too great.

SPEAKER_11 12:05

Yeah. And I feel like we've been dancing around this question a bit, but uh the home prices, um, you know, are those are those down where they're gonna be for a while, or do you feel like those are gonna come down more?

SPEAKER_06 12:17

Just looking at the data, because I guess I'm the data girl, um uh the average home price is about 300, a little bit over $300,000 here in our in our local market. And that is extremely affordable in a market like Louisville compared to other markets inside comparable size, like Nashville or Cincinnati.

SPEAKER_11 12:38

There there's a narrative that prices are high, but but they are much higher in other regions. So that's totally true.

SPEAKER_06 12:44

And so I think that's what's attracting transplants to Louisville. I think that's what attracting new buyers in our market, millennials, um, other demographics to actually want to sow their their roots in Louisville because it is so affordable. So I for the foreseeable future, at least where interest rates are stable right now, I think it's gonna remain that average medium we're we're looking at right now.

SPEAKER_05 13:10

You're right. The Midwest is the most has the best price point to purchase in, the most affordability across the entire nation. Um, we're lucky to be part of the Midwest. I think with that also gives us a little bit of insulation against the highs and lows that some of the coastal towns experience, where, you know, over I think the last six years, there's been about a 35% increase in uh in home prices in our market. When we see a balanced market, we can still expect two to four percent of appreciation, which is great. You look at other investments that you make out there over a period of, you know, 25 years, is that what is that what it comes down to? And it's not always the case. So um, yeah, it's still a great market. I don't think there's anything out there that's saying home prices are gonna come down. So I think again, those buyers that are out there waiting for something to drop or waiting for it to slow down, I don't think it's gonna happen.

SPEAKER_11 14:00

Yeah, yeah. I would say, when does anything ever come down? Uh I would, you know, it seems like we're we're having you know a very serious discussion here, but this kind of just want to have a little fun too. What do you think the hot neighborhoods are in Louisville that are really where do people want to be, I guess? Um, and anyone who wants to take that question, I I've uh uh Stacy, I bet you you probably know as well as anybody.

SPEAKER_05 14:24

I'm happy to jump in. I think I think uh, you know, the revitalization of downtown has been exciting over the last six years. It was a little touch and go for a while. Uh that's really exciting to see that happen in the markets. You go out to New Loo and Germantown and even parts of the highlands that are being revitalized, which is exciting. These are great, vibrant parts of our city uh where people want to be. I think the East End always has a draw to it, right? Prospect up and down 42. Uh, and I know this is slightly outside of Jefferson County, but if you haven't heard of Clore Station, I grew up in Oldham County. Uh, it's gonna be, I think, the most exciting development for the next 25 years in our marketplace. Uh, it's very comparable or similar, I should say, to um uh to Norton Commons, uh, multi-use, multi-function, walkability. It's just really, really exciting. I encourage you to check it out. It's gonna be a spot where you can get downtown in 20 minutes, you can get uh further out if you work further out, and what it's gonna do to Oldham County is really gonna, I think, blow the lid off of the area and be exciting. So to me, that's a hot spot to watch for sure.

SPEAKER_11 15:28

Yeah, people like that walkability, it seems like. Uh John, how about you?

SPEAKER_09 15:32

Yeah, our business practice kind of focuses on that east end segment. Um, and so, you know, as Stacy mentioned, that's always very desirable. Um, just looking at the stats, I mean, for the last uh for this uh past quarter, um 40207's done exceptionally well for the high-end homes. Um and then uh Oldham County, both North and South Oldham County, I mean, those markets were up 40 to 75 percent in terms of the number of sales that happened in the second quarter. So uh definitely uh outpacing by a large percentage everything else on the East End uh side of Louisville.

SPEAKER_11 16:06

Yeah. And and John, you deal a lot in the high-end homes and luxury homes. So what are uh some amenities that buyers are looking for there?

SPEAKER_09 16:16

Uh that's gonna vary kind of depending on what part of town you're in and what that housing stock looks like. You know, um the things that somebody might expect out in prospect or a newer construction home is gonna be very different than you know, Mockingbird Valley or Indian Hills. But uh I'd say the common denominator across all of it is privacy. It seems to really people want, uh even if it's not a huge yard, they definitely want to have their own sense of space, um, more privacy in that respect. But um, you know, as you get uh further out, I would say the wish list for people is certainly you know open floor plans, but not fully open anymore. There's definitely some separation. First floor living's a must-have, uh sculleries and working pantries, those are uh uh always high on the list now where people can keep all the clutter out of the kitchen, which is where everybody's gonna gather.

SPEAKER_11 17:03

So that started maybe in the pandemic or maybe just before.

SPEAKER_09 17:06

It did. And then, you know, as you keep going up the price scale, I mean these homes just quickly turn into private resorts. Um, wellness center concepts, you know, spas, you know, infrared saunas and you know, putting greens and golf simulators, all of it. Uh so you know, there's a lot of boxes that get checked, and it's surprising to me just how many homes check a lot of those boxes.

SPEAKER_11 17:27

Yeah. I bet the new construction does, you know, they they know what they're doing. Yeah.

SPEAKER_05 17:31

I think another neat thing that we're seeing too in the high-end market is um AI in the home, right? Like you can have a refrigerator now that tells you what's in it from you know being away, or temperature-controlled flooring and homes and bathrooms and just the ability to control everything from your phone is something, you know, 10 years ago we never would have thought would exist. Uh, but you're right. I think privacy and outside living spaces too, they really want entertainment areas and places where they don't have to leave. So again, they they're just looking to build out outside areas uh just to enhance their usability of the home.

SPEAKER_11 18:05

Yeah. Yeah, it's got come a long way from my wife calling me and saying, Hey, do we have any mustard? Um let's see. I guess uh I guess this is a question for anyone, but uh, you know, how have first-time homebuyers changed? Uh I guess you don't see them much on the luxury market, John, but uh maybe uh maybe you got some experience with them or Stacey, uh, you know, how do you think they've kind of they're savvier today than ever. Yeah.

SPEAKER_05 18:30

Uh when I sold real estate uh a million years ago, uh I worked with a lot of first-time homebuyers. And uh, you know, since the dawn of the internet, we've given the information to everybody uh out there, which we thought would be detrimental to the real estate industry, and it hasn't been. It's actually been a good thing. Uh, but buyers today are savvy. They're smart, they're understanding, they're thoughtful, um, they want to be educated, they want to be guided. It's very different, I think, than some other generations. Um, but they they want help too. They want to be guided. You know, everybody can find homes. So a realtor's job is not anymore to find the home for them, it's to negotiate for them. It's to be the guide, it's to see things through to make sure that their investments are the best that they can be. But I would call homeowners savvy. Um, you know, the age to purchase a first-time home is in the mid-30s now. Uh, it has crept up over the years. Some of you might have older kids living in your basement still. Let's talk and get them out. Uh but uh, but they're savvy and and smart and making purchases that are wise. And I think Jaqiva said it earlier, um, they're making them for longer term. People don't move as often either. Uh so when they make these purchases, it's for 10 to 13 years. They're not hopping up as much as they used to.

SPEAKER_03 19:44

Yeah.

SPEAKER_11 19:45

What do you think is behind that people not moving as much? Is it the price uh or the environment currently?

SPEAKER_05 19:50

Or I think it's all of it. I think it's price. I think it's Jaiva talked about inventory and how much they've saved. I think there's a misnomer that you have to have 20% down to buy a house. You don't. Yeah. There are a lot of uh financing options out there for consumers that don't require 20% down, but those, you know, misconceptions have been out there forever. Um, and so again, back to the education of our clients, how important that is not to just let somebody scroll through and read their news feed to get their information, but to truly be the people that help guide them along the way. It's just important.

SPEAKER_11 20:22

Yeah. Yeah. And I bet, you know, if you're looking at your your news feed, you're seeing a lot of stuff from, you know, Riverside, California, which is not the same market as here. So, you know, you're not you're you're gonna see uh there is gonna be a lot of misinformation about that sort of thing. Um, let's see. I guess to keep it, you know, on the same question about first-time homebuyers. I mean, is there any stats out there about you know the ages and that sort of thing?

SPEAKER_06 20:45

Yeah, so um NAR, they released their home buyers report last year, and it actually is higher, it's about 40, 40 years old for first-time homebuyers um last year, which is incredibly different than what we've seen the last five, 10 years. And so when you have a higher age group of being first-time homebuyers, they're being more critical around where they're placing their investments and how they're saving. Um, also, first-time homebuyers, they're talking to AI a lot more. The AI is becoming your therapist, it's becoming your, you know, your counselor, it's becoming your career guide. And so they're depending on AI, but then also we're we're seeing a retraction from AI. Um, how many times do you call, you know, T Mobile? I'm just name dropping on a customer service line. And uh, because I that was top of mind because I just had an issue yesterday. Yeah, yeah, yeah. But um you call uh, you know, the the the phone line and you get a robot.

SPEAKER_03 21:55

Yeah.

SPEAKER_06 21:55

And you're like, no, just representative, representative. People want the human connection. And so we're seeing that retraction from okay, we don't want everything robotic, we don't want everything AI. And so that's the importance of utilizing a realtor. We're seeing now more than ever, the data is showing us that folks in the age of AI, they still want to utilize a realtor. They still want to utilize someone that's gonna help them obtain that dream of homeownership because they still, even though in the age of technology and being more savvy, they there's still a lot of missing pieces that are guiding that that dream of homeownership. So we're seeing we're that's what we're seeing in the market right now.

SPEAKER_05 22:36

I'll I'll call out too. I think it's gonna change in the next five years. I have a 16-year-old and I'm already talking to him about buying his first house. And and I think there's other people doing that because again, when you talk to this, I don't even know what generation that is, generation 16-year-old. Uh when you when you talk to them, they don't they don't hear about the stock market. They don't hear about some other what we've had traditional investments. And so he's saving money now. We're saving money. And if he's an 18-year-old who can buy his first house, he's gonna be because that's how he sees an opportunity to make money. Uh, and so not just an investment for himself to live in, but as a as a professional portfolio that he can build. So I think there's gonna be in the next five years, especially if if rates stay similar, if our environment stays similar, I think yes, the 40-year-olds will purchase. Um, but I think there'll be another generation that they're gonna find themselves in competition with, and it's gonna be 18 to 22 year olds that see this as a great investment for the future.

SPEAKER_11 23:31

Yeah. We just had um the folks at Business First know this person, but uh 23-year-old who who purchased a house. And uh I think it was so astounding that uh Market Watch, the national media company, uh I called her to see if she'd do an interview about so it was like uh just because that was, you know, she's an outlier uh in that regard. So um, all right, let's see. So uh getting into the inventory stuff that we talked to, what do you think Louisville needs more of? Is it more single-family homes? Is it more condos? Is it more luxury homes? Um, is it all of the above? I bet it's all of the above.

SPEAKER_06 24:06

Um I I would say I, you know, people that know me, they know that I'm a transplant. Um, I come from uh a larger market. And one of the things that I talk to with other realtors before I even came to Louisville, I'm like, okay, where I'm gonna live, and then what type of property do I want? And I'm like, I want a condo. Where are the condos? I mean, I'm a millennial, no, not married, no kids. I don't want the responsibility of figuring out landscaping or you know, shoveling the snow whenever it happens to snow. I don't want that responsibility. Give me an HOA, that's what I want. Um, but then talking to other realtors, um, they're like, well, we don't really have a market for condos. So um there's some, but it's not, you know, it's not as robust as single family homes. And so if, you know, where things are tracking, where the you know, mayor's office and one louvable, they're trying to attract new economic development and new opportunities and new companies and big corporations, that's gonna drive a lot more um new consumers into our market where they're gonna look for different types of property to purchase and to live in. And so the more access, the more inventory that we can build outside of single family homes, I think is a win, especially for my generation, millennials and Gen Z and those that don't necessarily want that the big purchase yet, if they're not, you know, if they're not, if they don't have kids or they're single and things of that nature. So I think for me, especially condos would be a great win.

SPEAKER_11 25:45

I am totally with you on that because uh I know um I have a single family house now, and like when I get older, I'm not gonna want to take care of this yard or garden or any of that stuff. And and you know, I think if Louisville's trying to grow the core of downtown, like that that seems to be the option. We had a guest in uh uh recently, uh last year or something, he was speaking at the downtown um uh partnership luncheon and it was he guy was from Cincinnati. And one of the things they did up there was uh instead of having developers focus on apartments, they had developers focus on uh building condos because it gave more ownership of the downtown neighborhood, and I think it was what's the over the Rhine neighborhood over there. So um yeah, I think our market really needs that.

SPEAKER_06 26:32

So um we've been seeing that with um uh these high-rises that have been sitting vacant, even in other markets, they are repurposing these high-rises to condos and to um apartments, and and so giving more opening up more inventory in the market, and I think that's that is an opportunity, a real opportunity for the yeah.

SPEAKER_11 26:49

And I saw that federal legislation that got passed, I saw there was some incentive for for that kind of uh redevelopment type uh office tower. I don't know what the extent of that is or if it'll be effective, but you know, that's uh at least they're thinking about it. So uh anyone else on uh um you know what the market needs?

SPEAKER_09 27:06

Yeah, I I would say you know that the all of the above is probably the the answer there. I mean it's inventory levels across the board are are at the you know historic lows. I mean, not quite as low as we had uh a few years ago, but but still pretty tight. Um the condo market's interesting because you know the supply and demand seems we don't have a backlog of people looking for condos currently. So it seems like the supply and demand there is all true. But I think it's probably a a case of if you build it, they will come. You know, that uh that that type of inventory, particularly, you know, in the urban uh core, uh, could certainly attract a new market.

SPEAKER_11 27:41

Yeah. It's definitely a louable thing, you know, to have a single family house, I think. Um all right, let's see here. Oh, um I guess this is for anybody. Um what you kind of touched on it a little bit, Stacy, but what's it like being a realtor today, like in the age of Zillow when um, you know, you kind of come into it, I guess, and you have this you already know what the house looks like, and you and you have an idea of like, I guess the buyer's probably like, I'm gonna put a pool here and I'm gonna do that. You know, what's what's that like for you guys?

SPEAKER_05 28:15

Yeah, again, it's accessibility of information. The Zillows and Realtor.coms and other, excuse me, mega MLSs that are out there, which is where realtors source their primary information from. We're in a very changing landscape. That's very fair to say, I think Chakiva and O will agree with me. Um, it's not a again, it's not a it's not a bad place to be. I think at the end of the day, most realtors, speaking about realtors specifically, I think they're coming back to the real how much relationships matter. Yeah. You know, we all would rather have a warm referral for whatever it is we're looking for. You know, if you need a painter, do you go to the phone book and look up a painter? No, you you go read reviews, you look for that referral and that or that warm handoff of who your friend might know. Um, realtors are the same way. So while Zillow and all the others have give us the access to the information, most real estate agents still work really, really hard to work by referral and make those connections. So I I think it's just a the age of availability of information. I don't think it's truly changed how we do our job. I think it's changed some opportunity for people, but I don't think it's a bad thing.

SPEAKER_09 29:21

Yeah. Yeah, I I would agree. I mean, I think that Zillows and just the elevation of the online presentation of properties that's happened, particularly over the past decade, you know, where you have professional photos and videos and you know, 3D walkthroughs and everything, that's really helped just compress the learning curve for buyers. They came into you know into the market very well equipped. Um, it used to be that the worst case scenario for us with a buyer that was new to the Louisville market, we'd take them out in the perfect house that checked all their boxes, we'd see it on the first day, and then they wouldn't buy it. You know, they'd want to see 20 more houses, and then by the time we got through those, that one was gone and we were chasing you know the one that got away, you know, the whole time. And now buyers are able to really understand the market. It provides them a lot more context coming in. So they've been watching Zillow for months or years. You know, it's a favorite hobby for a lot of people, you know. So they know what to expect in their price range, they know the cadence of the listing inventory, you know, how often they're gonna come on the market. And so when the opportunity presents itself, they're ready to act on it because they've they've kind of done all that homework that we typically used to do, having to be, you know, boots on the ground, just out walking through homes. They've been able to do a lot of that uh virtually. But uh Zillow's been uh, I would say overall a help in that respect. Um, you know, the AI stuff that you mentioned, that's that's a new one that uh is certainly changing the landscape, but it's also helping equip buyers uh particularly and sellers too. We get a lot of you know AI generated due diligence uh from our home sellers. Um and that's helpful. I mean, the more that they're able to dig into it with an AI model and and understand the right questions to ask, and then we can answer them. I mean, the better informed the clients are, uh, the better it the whole experience is. Yeah.

SPEAKER_11 31:05

Do they ask to look at fewer houses?

SPEAKER_09 31:07

Uh I would say on well, by default, yes, because we don't have the inventory to show you. That's true. But they at least understand uh the limited inventory because they've been tracking it on Zillow.

SPEAKER_11 31:19

So all right. Well, I just want to let you all know in about five minutes or so we're gonna open up to uh audience questions. So be thinking of some some questions. Um but you know, I wanted to get into the career part of this because I've noticed a lot of people kind of keep realtor as like the a second career, you know, that's uh what they're gonna do at the second half of their career and that sort of thing. My grandpa uh was a uh GE executive for many years and then switched to real estate after he retired from GE. So um uh, you know, I think uh but uh that makes me think that maybe, you know, maybe does is an older candidate uh as as good a candidate for for a real estate job. So I guess that's my question is just who's a good candidate for uh for for a career in real estate?

SPEAKER_05 32:08

Uh Stacy, I'll go to your Yeah, I think we we still see a mix. You're right. Traditionally speaking, people have made real estate their second career, retired from another, whether they were a teacher or a nurse or an executive looking to, you know, still do something who's professionally mature, which is wonderful to have in a realtor. Um, but I think we're also seeing a younger generation get into this business and see it as an opportunity to truly build a business. I think most people who chose it as a second career later in life thought it was their retirement plan, their way to stay active and stay involved and make some money and have some fun and use their, again, professional previous career to morph into something today. But we see more and more young people getting into the industry, people in their early 20s, early 30s, because it is a business. It's an opportunity for somebody with very low barrier to entry. It does not cost a lot to get in this business. There's not a lot of pre-education required. Um, and so they get in and they're building something for a lifetime, which is really unique and exciting, I think, for that generation. Uh, we see agents who are most successful that are hungry and that are willing to work hard. Um, HGTV didn't do us many favors for a period of time when that was hot and new. We were portrayed as the people that just, you know, walked, drove around with our lattes and our cool sunglasses. And then we picked up our paycheck after we got a sign out of the yard. And that's actually not, in fact, what we do. There's quite a bit more to it. Uh uh, but those that are that are willing to work hard, that are highly relational, can really make a career for themselves. And another misnomer is that you have to be an extrovert to be successful in this business. You don't. Actually, people who are very highly relational, thoughtful, and are listeners make the best realtors because they can connect with someone and be their guide and be their negotiator and educate them along the way. And those are the ones that we see that are, again, creating something for a lifetime uh that's really exciting.

SPEAKER_11 33:58

Yeah. And, you know, we have this story coming out, it's coming out on Friday, but it's about people who are uh social media influencers and realtors at the same time. So I think you have to have that skill set too, you know, just to uh to to have the online presence. You know, that takes a certain type of personality. Um John, anything to add on that?

SPEAKER_09 34:17

Yeah, I I mean I would say that the the second career uh path is a pretty standard uh way to enter into the business. And I I certainly don't think it's a bad one. I mean, I I would say on my team, that's the case of every one of us. You know, none of us came out of college and you know went right into the real estate industry. Um but just you know, I I think that's invaluable in a lot of ways, certainly not the only way to do it, but just uh interacting in a professional environment, um, just having that professional maturity that you mentioned. Um, the people that are successful in the business are the people that treat it like a business, like a career, you know, that they're showing up every day, putting in the work, you know, following their systems, and they just understand that uh level of professionalism that's required. Um you can certainly learn that, you know, in the real estate industry as well, but uh but yeah, the path seems to always kind of be through other careers. And and that's also helpful just from a you know business lead generation perspective, that the point you're an established professional in in some other career, you probably have a sphere of influence of of people and you know mutual respect for them and for you uh that leads to you know easy opportunities to assist them. You know, if you you've been their trusted advisor in some other field, then it's transitions naturally into the real estate industry.

SPEAKER_11 35:28

Yeah. What's your favorite thing about the the real estate industry? I guess anyone.

SPEAKER_09 35:33

Mine would be the people. I find it endlessly fascinating just to meet people, hear their stories, learn about, you know, their businesses, their families, you know, what's going on, you know, the the life changes, um, and and then just being able to to be the trusted advisor that we've been talking about this whole time, you know, through that process that that they have somebody, you know, during what is one of the most stressful uh you know events to go through. Um they have somebody that they can trust that can kind of shoulder a lot of that burden. I mean, we don't pack and move them, that's the real stressful part. Yeah, true. But we can at least make sure that they feel confident in the process um, you know, throughout the transactional life cycle.

SPEAKER_11 36:12

Yeah. Stacy, anything to add or Jakeiva?

SPEAKER_06 36:16

I would say uh my favorite thing about real estate is opportunity. Um, like you know, when I was growing up, I I always had an affinity affinity for real estate and housing. My parents never owned their own home. We always were living in an apartment. And so um I remember driving around during the holidays, and my mom, well, both of my parents, my dad would be driving, and we'll just look around at the homes and the lights lit up for the holidays and the decorations, and just seeing the look on my mom's face because of certain barriers that they weren't able to afford a home. And so um, now being a homeowner myself, it just opens up living the dreams of my parents and the opportunity that real estate has afforded me personally. The other thing is um I knew that I I was not a realtor and that I could not be do what these fine folks do. Um, but I knew that there is a gateway of entry into real estate. I always wanted to be connected to real estate in some capacity. And so I'm glad that there's an opportunity through association management, working with the Greater Louisville Association of Realtors, um, because there's different pathways and that opportunity of helping to helping to support our realtors and our members and helping them support their clients has been incredibly invaluable and very rewarding.

SPEAKER_03 37:38

All right.

SPEAKER_05 37:38

I think my role is a little bit different. I work with about a thousand agents in Kentucky, Ohio, and Indiana. Um I did sell real estate for a while. I moved into a corporate role about 15 years ago. And the most exciting part about this industry, there's two parts. I love the change. If I had to do the same thing day in and day out, I wouldn't make it. So markets change in real estate. You can be in one industry and have so much change and opportunity that it's just exciting. Uh, but what I think fills my cup most is the ability to work with entrepreneurs to build a business and have them put a roadmap in place to become successful and to come alongside them and create a partnership as a company that helps them do what they want to do, that ultimately helps them build relationships and feed their family or meet their goals. And that's just really exciting to me because it's a great business to be in.

SPEAKER_11 38:23

Yeah, I bet that's very rewarding.

SPEAKER_05 38:24

It is.

SPEAKER_11 38:25

Well, let's take a break right here. We'll get a message from our sponsors at Baird, and then we'll come back for some audience questions.

SPEAKER_07 38:32

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SPEAKER_11 39:04

All right. Uh let's open things up to the audience. Jay Van Hoy is back there. He's got a microphone. And uh if anyone has a question, I guess raise their hand.

SPEAKER_02 39:14

And I'm contractually obligated to be on the podcast once a month. So this is my profile. So uh if you don't mind saying uh your name and what organization you're with, and then your question.

SPEAKER_04 39:24

My name is Dan Whitis, and I'm the vice president of construction and land development for South Central Bank here in the Louisville area. My question is about the inventory and the question about lot loans and with the idea toward construction. How do you guys as realtors handle that? Because it's not necessarily a nice packaged house ready to go. It's a process that will go from start to finish that as they build the lot and maybe be able to sell their current home, or if they're brand new into it, because one of the areas I'm seeing is either A, you have the mega uh developments where you are either getting into so the one-off builders who are like buying lots to build homes generally are are people whose family have deeded them a lot. And we're not really seeing that inventory coming as a unique way, as a one-off from single families to do it themselves. What is your thoughts on that? And how can we spur inventory through that route as opposed to looking for full developments?

SPEAKER_11 40:19

Right. You mind take that one?

SPEAKER_09 40:21

Yeah, we do a a tremendous amount of land sales and new development representation. Um, and it it really kind of runs the gamut. I mean, what we see often on the lot loan side is that people will pay cash for the lot and then they're they're deeding that, you know, over that is the collateral for the construction loan, you know, with the builder. Um, you know, we do see some builders that want to carry the construction financing and control that through their bank. And so they're actually the ones that are carrying, you know, that that lot loan uh and construction financing. So it it we do certainly come across an occasional lot loan, but they're typically pretty short, you know, life cycle on those. People are, you know, often it's a two-year term, you know, interest-only type payments on those products, and it's just a bridge, you know, from the point that they've purchased a lot, gotten through the several months of you know design and planning with the architect, and then they're gonna roll that, they're gonna refinance out of that into a full construction loan anyway.

SPEAKER_11 41:16

All right. Anything else? All right, we got another question out there.

SPEAKER_02 41:22

One over here. Here we go.

SPEAKER_00 41:26

Hello, Camila Acevedo, co-founder of Rely Build Roofing and Construction. So with inspections and things popping up, what has that trend been like in the past several years? Are you seeing more things popping up?

SPEAKER_05 41:38

I think oh go ahead.

SPEAKER_00 41:40

That's okay.

SPEAKER_09 41:42

Go ahead. Okay. Um I would say no. I mean, from a inspection standpoint, um, and particularly on the new construction, there's been no you know, drop-off in quality or more punch list items than we've you know seen traditionally on existing home sales. Um I would say that you know, if you looked at a home inspection report today versus 10 years ago, um, they're gonna be pretty comparable in terms of the items that are flagged. Um you know, everybody has their own you know hot button issues. The the difference is probably uh going back to the the you know introduction of AI, that buyers are now digging into these items on the report and saying, you know, well, what about this? What about that? You know, there uh those models will pick up, you know, problems with building products or uh construction techniques in other markets and they'll be worried about you know the uh you know synthetic stone veneer, you know, facade on the house, you know, and things like that that may not be directly applicable to how construction's done in in our market.

SPEAKER_05 42:37

I know. I also think that we did go through a period of time between late 2020 and 2022 where a lot of people were waiving inspections or were not asking for repairs because the marketplace was so tight and so busy to be competitive as a buyer, you were waiving a lot of those things. So I I don't disagree with you, but I do think we're seeing a a um a comeback of some more traditional reviews and inspections and asks, which is great for your industry. I also think it's important to note how many insurance changes have happened in our specific region. Uh, if you haven't checked your insurance uh policies, you might give them a peek because due to all the flooding and tornadoes and things like that in our region, the insurance companies have really elevated and tightened what their requirements are. I mean, we you used to be able to sell a house with a 12-year-old roof with no problem, and that doesn't happen today. Um, you can sell it, you can't get it insured. So your business should be really picking up, I would assume. Um, and you should be getting phone calls from real estate agents for estimates all day long. Yeah.

SPEAKER_02 43:36

All right. Yeah. I was shopping for around for insurance and uh for homeowners, and my roof's too old. So I'm gonna have to get it replaced to get insurance.

SPEAKER_05 43:44

I will say uh we are hearing that that's starting to loosen a little bit, but for the last eighteen months, it's been it's been very unique. I mean, in my twenty two years, I've never heard it that tight or specific in need. Yeah.

SPEAKER_10 43:56

Any more questions out there? One more? Yeah.

unknown 43:59

Oh boy.

SPEAKER_10 44:00

We got time for more than one. Okay.

SPEAKER_01 44:03

Hi. Caitlin Tudor with Cimmon and Realtors. You we talked a little bit about how agents role in today for their first-time home buyers specifically. What are we seeing in terms from a seller client, the expectation of the realtor today that's different from yours past?

SPEAKER_05 44:21

For the record, she's not a plant. And I think she was going to ask that question. But I'll delightfully answer it. Thank you, Caitlin. You know, for the longest time, the real estate industry was the same. How we got paid, how we uh made our connections, how we went through the process of selling a home. And most of you are aware that our industry has gone through significant change in the last three years. And I think sellers are more savvy too. I think as a culture as a whole, I think our expectations have been elevated and how we want to be served. We want to understand what we're purchasing. We want to have a firm confidence in what we're buying, especially when it's most often the largest or selling the largest investment, you know, in of our lifetime. And so I think real estate agents, specifically working with sellers, have to spend a lot of time sharing their value. Uh and not to sell someone on what they do, but to make them feel educated and understand what the process is going to be and to validate what it is we charge for our services, because it is a service. It's odd because I think we're we're noted as a service industry, but we're actually more of a support industry. Again, we're not here to sell you on, I don't have to talk you, Kevin, into selling your home. You're gonna come to me when you're ready to sell your home. Uh, it's gonna be my job to explain to you how to do that and how to get the highest and best price for your, for your, for your listing. And I think it used to not be that way. Um, there was a there was a saying that was common in our marketplace a while back that even turkeys can fly in a hurricane. And we're seeing more and more people get out of the industry because they're having to understand what the process is to list and sell homes and to truly serve people in that journey because they're not doing it near as often. So we have to explain it more. Now I have the visual of turkeys. Once it's there, you'll it's it makes sense.

SPEAKER_11 46:12

Yeah, I'm gonna drop that into so many conversations today. Um any anything else on that question?

SPEAKER_09 46:19

Yeah, I would echo the same. I mean, the the expectation, particularly at the high end, has always been there for a high level of service, and uh, but that is certainly becoming more universal that uh the bar continues to be raised, whether it's from a marketing perspective and the you know the quality of the photography that agents are expected to deliver and videos and all of these uh, you know, the digital uh syndication and and you know, just kind of running the gamut. And then at our end of the market, it's you know the personal representation, you know, that we're present every time somebody wants to see one of our listings. You know, we feel that it, you know, it's incumbent on us if we're gonna call ourselves sales agents, we need to be present at the point of sale. You know, that's the only time that we have a direct contact with the buyer and are able to explain to them why the particular listing might be the best solution, you know, to their housing needs. And so um that expectation has been there all the time, but it's certainly uh ratcheted up.

SPEAKER_11 47:10

Yeah. All right, we probably got time for one more. And if there's not one, I have one.

SPEAKER_03 47:16

Oh, he has one.

SPEAKER_08 47:22

Thank you. Good morning. My name is Francisco Alzuru. I'm a transplant from Miami, Florida uh to Louisville. I just moved here three years ago. I'm um uh property owner and and and property manager. Our company's called Bluegrass Multifamily. I have two separate questions. One is about middle housing. That's a very common form of housing that exists in some of the major cities. It doesn't seem that is something that's uh used widely uh here in Louvo. So I'd like to uh hear your opinion about that. Why and and what how it would benefit buyers and sellers. The second question has to do about the uh the comments about the law, the new law. Um nationwide the ownership of single-family homes by big corporations is less than one percent of total inventory. It is good big news when BlackRock goes and buys a thousand family homes in in Tampa. But they as a group, Wall Street only owns one percent or less of the national inventory. In fact, LLCs and corporations own less than ten percent of the entire inventory in the country. Is that the case here in Louisville? Is Louisville a city where individuals own their homes or are in are they owned in the form of LLC where somebody buys a neighbor's house and rents it out?

SPEAKER_05 48:56

Um I'll answer your middle inventory question. Um I think we have a huge need for that here. Uh you're seeing uh in in other surrounding cities, people are taking these traditional neighborhoods or the spaces in between that have been commercially zoned as X forever, and you're seeing them change and turn them into other things that we've not had before. Um, again, we've had an inventory shortage, and new construction will never be able to meet the demand. We don't have enough land, we don't have enough money, we don't have enough developers. So creating changes in our commercial zoning to allow for existing neighborhoods to have more duplexes, multifamily apartment units where they couldn't before is going to be really, really important to sustain or to help make available properties for additional numbers of people that are coming into the marketplace. So you're right. We're seeing lots of um out of northern Kentucky specifically, there's a new company that's working to uh go into neighborhoods and create opportunities for single family residential homeowners to build something in on the land, right? Do we really need a half an acre? Probably not. We might want it. And and for certain price points, that will continue to be fine. But can we put a duplex behind it or a small tiny house or something like that? We are also seeing lots of um multi-generational need for housing that our current housing inventory doesn't allow for unless you have a lot of money, quite frankly, or you're pooling those. So that middle housing, I think making it available, changing our commercial zoning into some other opportunities will loosen that up. But it is a, you're very correct. I think there the need is definitely there. It'll be a good solution if we can loosen the purse strings a little bit to allow that to happen.

SPEAKER_06 50:37

And I will say for the Greater Louisville Association of Realtors, this is an issue that we have been advocating for the last couple of years. There is a task force that our lobbying advocacy team has been um talking with the zoning commission and um working with our realtors and our legislative management team to advance uh legislation that will allow and open up opportunities when it comes to middle housing. But there are steps to do that. Um we have we have to be very collaborative in that process because it is fairly new for our market. So trying to be as intentional as possible and get the uh the steps right before executing. So this is an issue that is um I foresee being um an opportunity, a real opportunity in the next few years. But we've been working on this the last three years or so.

SPEAKER_11 51:23

I'll take a stab at the last answer or the last question, but it'll it'll be an unsatisfactory answer, I'm afraid. Um that we have done some stories on some deals, large home, uh large transactions uh involving multiple homes. But um, but I don't think we have a a ton of that. I think that we I don't know the answer to that question. Um I think it's a great question though, and something that we should look into. Um I have read that the majority of LLCs that do own homes usually own less than like five. You know, I mean it's usually smaller property groups that instead of you know something like you mentioned, BlackRock buying a thousand homes. I don't think we have a ton of that in this market. But we have had, you know, Shay, we did a story a few years ago about um about a major deal for I can't remember how many homes, but it was I would just say looking at our the real estate leads we get every week, it's largely A to B. Yeah, yeah. Yeah. All right. Well, I think on that note, uh we will go ahead and wrap up our show here. We do this every week. Uh we don't always uh have uh an audience in front of us, and we don't always have such great guests or uh such a beautiful space. But Business First puts together a podcast every week. And uh whether you're here in the live audience or listening to us out there, uh be sure to check that out. It's on uh any of your favorite podcast services, very popular on Apple and Spotify. You can also listen to it on our website. Uh thank you very much, Stacy, Jakiva, and John. Thank you, Baird, for your support. And uh thank you guys out there for listening to us, and uh, we'll see you next time. Bye-bye, I don't know.