In this podcast episode, Kenny Letner hosts Christian Phillips and Aric Martinez to discuss the current state of the real estate market and whether there is a housing bubble. Christian believes there is a bubble that will eventually pop, while Aric thinks the market is just catching up after being undervalued for years. They also discuss the importance of understanding the difference between a market crash and a job crash for real estate agents. The conversation takes place in a new podcast room in Kenny's new office Lynnhaven parkway, and they also mention a grand opening and happy hour event Friday April 21 from 3-6 open to all who want to come. They also discuss the issue of housing affordability, the gap between median list price and median sales price, and their predictions for the fall real estate market.
Introduction and Office Grand Opening [00:00:01-00:02:37]
Kenny introduces the podcast episode and welcomes Christian Phillips and Aric Martinez as guests. They discuss the grand opening and happy hour event at Kenny's new office on0 Lynnhaven.
Aric's View on Market Catching Up [00:05:53-00:07:40]
Aric thinks that the Hampton Roads real estate market has been undervalued for many years and is just now catching up. He believes that there may be bubbles in the market, but it will take years for them to reach critical mass. He also mentions the importance of understanding the difference between a market crash and a job crash for real estate agents.
Undervalued Real Estate in Virginia Beach [00:15:35]
Discussion on the affordability of real estate in Virginia Beach compared to other coastal communities, with mention of the role of military and government employment in driving wages.
The affordability issue [00:16:35]
Aric and Christian discuss the affordability issue in the real estate market, with Eric arguing that it's not an affordability issue but an expectation issue.
Importance of infrastructure [00:19:34]
The speakers discuss the importance of infrastructure, particularly schools, in supporting more neighborhoods and rezones. They also mention the need for job creation for lower-income individuals.
Micro Real Estate Markets [00:33:29]
Aric emphasizes the importance of understanding micro real estate markets and how they differ within a larger region like Hampton Roads.
The Median List Price vs. Sales Price [00:34:26]
Discussion on the difference between the median list price and sales price in Hampton Roads and how it indicates a potential housing bubble.
The Importance of Looking at the Market from Different Angles [00:35:46]
The significance of analyzing the real estate market from various perspectives and over a more extended period to get a more accurate picture.
Inventory and Interest Rates [00:45:25]
Christian predicts that by fall, the market will have three to five months of inventory and mortgage interest rates will remain the same.
No Decrease in Prices [00:51:16]
Aric thinks the market will flatten but not see a decrease in prices, while Christian predicts a true price correction in at least 24 months.
Predicting a housing bubble [00:51:40]
Christian Phillips discusses his prediction of a housing bubble based on the gap between list price and sale price from 2007 to 2010.
The possibility of a market correction [00:52:36]
Aric Martinez believes that a market correction could happen, but people are underestimating the liquidity in the market.
Potential changes in the real estate industry [00:56:20]
Kenny Letner discusses a lawsuit in Chicago that could fundamentally change how real estate is done, potentially leading to subagency or a change in the listing agreement.