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Fannie Mae 2027 Rate Forecast Shift: What DFW Realtors Must Prepare For · This Week in DFW Real Estate

0:00
Speaker 1: What was the saying that all the commercial brokers, multifamily
0:02
Speaker 1: brokers were saying? Survive till 25. There was a different
0:06
Speaker 1: one for 26. Hold your something through 26. What rhymes
0:10
Speaker 1: with seven? What rhymes with two? I don't know, but
0:15
Speaker 1: it might be. I don't even know. Go out of
0:19
Speaker 1: business in 27.
0:19
Speaker 2: Real estate agents tend to kind of just parrot whatever
0:24
Speaker 2: trending narrative there is, whether it's, Marry the house, date
0:29
Speaker 2: the rate, which is terrible advice. There's always a theme
0:33
Speaker 2: to a lot of different parts of the market cycle.
0:36
Speaker 1: Penny May forecast for October a month earlier anticipated rates
0:41
Speaker 1: in 2027 to be at 6.7%. They've readjusted that now
0:43
Speaker 1: for 7.5% all of 2027. 7.5% all of 2027. So
0:45
Speaker 1: if you are if you were waiting for interest rates
0:58
Speaker 1: to save your business, um, don't have good news for you.
1:02
Speaker 1: The weekly podcast built for agents who actually get paid.
1:07
Speaker 1: Market moves, listing heat, closing streets, DFW agents. All right,
1:29
Speaker 1: I'm trying to think of something to say, because this
1:32
Speaker 1: show is going to be a doom and gloom show today, Brian.
1:35
Speaker 2: We don't mean to make it that way, and I
1:37
Speaker 2: think everything in life is about perspective.
1:40
Speaker 1: Is it? Yes. I think that the world is what
1:45
Speaker 1: you make of it. The world is your oyster. There's
1:50
Speaker 1: no pearl in it, but not right now, because we
1:54
Speaker 1: had to pawn it. Well, I think so. They had
1:59
Speaker 1: to pawn those pearls because times are tough.
2:02
Speaker 2: We're going to talk some numbers today, and all of
2:04
Speaker 2: the numbers lead to the story that existing home sales
2:08
Speaker 2: are down. Was it Goldman Sachs? Who did the adjustment?
2:13
Speaker 1: All of them. All of them. All the reports. Revised
2:16
Speaker 1: their forecast. Have been revised down. Things aren't looking... What
2:20
Speaker 1: was the saying that all the commercial brokers, multifamily brokers
2:23
Speaker 1: were saying? Survive till 25. There was a different one
2:27
Speaker 1: for 26. Hold your... Hold your something through 26. What
2:30
Speaker 1: rhymes with seven? What rhymes with two?
2:33
Speaker 2: I don't know, but it might be.
2:37
Speaker 1: I don't even know. Go out of business in 27.
2:40
Speaker 2: Hey, what we have not looked at these numbers against is,
2:46
Speaker 2: you know, the amount of competition in the marketplace, right?
2:49
Speaker 2: So all things are perspective. Existing home sale forecasts have
2:56
Speaker 2: been getting revised downward all across.
3:00
Speaker 1: The ecosphere this last week or so.
3:02
Speaker 2: Goldman Sachs, NAR, everybody's saying fewer, fewer, fewer existing home
3:08
Speaker 2: sales in 2027, even than there were in 2026. And
3:14
Speaker 2: so we're going to talk about it today. We're going
3:16
Speaker 2: to talk about what you can do to take advantage
3:19
Speaker 2: of these variables and how Like I said, everything is perspective.
3:24
Speaker 2: I want to talk a little bit about what do
3:26
Speaker 2: you think the state of the industry itself is going
3:28
Speaker 2: to look like in 2027? Because it's not just about
3:30
Speaker 2: existing home sales. There's obviously other economic variables, but there's
3:34
Speaker 2: also technology.
3:36
Speaker 1: There's the AI boogeyman. It feels like we're at the
3:39
Speaker 1: precipice of something. Look, I'm just going to go sell
3:43
Speaker 1: AI products. Yeah. I mean, that's what my post was yesterday.
3:47
Speaker 2: I have this future vision where there's going to be
3:49
Speaker 2: a small moment in time. Where AI products are just
3:53
Speaker 2: being bought by AI buyers. And like, there's this weird
3:57
Speaker 2: ecosphere where people are making AI stuff and it's being
4:00
Speaker 2: bought by AI agents that work for companies. And like,
4:04
Speaker 2: I think that's sort of the first iteration of the
4:08
Speaker 2: end game.
4:09
Speaker 1: Could be. Look, if you listen to last week's show,
4:13
Speaker 1: Brian is back. So we no longer have Matt Kelderman
4:16
Speaker 1: joining us today. And you are listening to This Week
4:20
Speaker 1: in DFW Real Estate. Go and support our sponsors. Homeward
4:23
Speaker 1: Property Management, Dana Wynn, she is getting a ton. I'm
4:29
Speaker 1: swamped with calls right now from agents sending over referrals.
4:33
Speaker 1: We've got a lot of, she talked to a lady
4:36
Speaker 1: yesterday that is converting her Airbnb because that no longer
4:39
Speaker 1: makes sense and converting them to a long-term rental. But
4:43
Speaker 1: Homeward Property Management is the property management company you want
4:46
Speaker 1: to be working with, you want to send your referrals to.
4:48
Speaker 1: All you need to do is go to HomewardDFW.com. And
4:51
Speaker 1: then if you need a home warranty, Brian, right? Because, look,
4:55
Speaker 1: it's better to pay for that home warranty now than
4:57
Speaker 1: to pay for those repairs later. So get with Darren
5:01
Speaker 1: Smith over at Armadillo Home Warranty, armadillo.one. Tell them that
5:05
Speaker 1: the guys from This Week in DFW Real Estate sent
5:08
Speaker 1: you over there. And then, last but not least, you
5:12
Speaker 1: need to have ProCare Home Solutions doing your remodeling, your make-readies,
5:16
Speaker 1: your repairs, anything you need under the sun when it
5:18
Speaker 1: comes to commercial, multifamily, or residential real estate. They can
5:22
Speaker 1: do it from the ground up. Interior, exterior, roof, HVAC, ProCareDFW.com.
5:27
Speaker 1: And then you probably need to be making podcasts right
5:30
Speaker 1: now because if you're not selling real estate, what else
5:32
Speaker 1: are you doing? Building AI agents that check your email inbox.
5:39
Speaker 1: Your email inbox of nothing, of just other people trying
5:41
Speaker 1: to sell you stuff. So make sure you get with Jesse.
5:45
Speaker 1: Showalter at TOR Studios. Go to torstudios.com. That is T-O-R-E studios.com.
5:50
Speaker 1: And make sure to subscribe to our YouTube channel and
5:52
Speaker 1: go to our Facebook group, DFW Realtors Network and Collaborate. Yeah,
5:57
Speaker 1: there we go. That's all of it right there. All right,
6:00
Speaker 1: let's get to it.
6:01
Speaker 2: We know we're talking doom and gloom, but I don't
6:03
Speaker 2: fundamentally believe that. I do think that everything is about perspective.
6:07
Speaker 2: And it has been interesting to see forecasts get revised
6:09
Speaker 2: down kind of across the board. The generally prevailing narrative
6:14
Speaker 2: right now is that 2027 in the existing resale space
6:18
Speaker 2: in America is going to be lighter than 2026, which
6:21
Speaker 2: was lighter than 25, which has been lighter every year
6:24
Speaker 2: since 2022.
6:25
Speaker 1: That is probably the reality.
6:27
Speaker 2: Barring some grand economic change, there's probably going to be
6:32
Speaker 2: fewer home sales in 2027 than there were in 2026.
6:37
Speaker 2: And there's a heck of a lot more going on
6:39
Speaker 2: in the industry right now than just that. I think
6:41
Speaker 2: just as a baseline, because we always try to make
6:44
Speaker 2: these actionable for agents. I don't know about you guys,
6:48
Speaker 2: but I have definitely started to feel like the, I'm
6:53
Speaker 2: trying to put this delicately, there are a lot of
6:56
Speaker 2: agents who were at a point where they were sort
7:01
Speaker 2: of already kind of quietly quitting on their business, meaning
7:05
Speaker 2: they were not actively prospecting for new business every single
7:09
Speaker 2: day the way they were when home sales were really up.
7:13
Speaker 2: And I think we're going to see a lot of
7:15
Speaker 2: those guys start to fall off of the roster, if
7:21
Speaker 2: that makes sense going forward. The point that I'm trying
7:24
Speaker 2: to make, I don't like to sound doom and gloom,
7:26
Speaker 2: is that over a long enough time horizon... supply and
7:30
Speaker 2: demand tend to come into balance. And so we've had
7:33
Speaker 2: an oversupply of real estate professionals to meet the demand
7:36
Speaker 2: for several years now. If there's one thing about 2027
7:39
Speaker 2: that I will make a prediction on is that you're
7:43
Speaker 2: going to start to see the amount of people in
7:45
Speaker 2: the space, realtors in the space, begin to start lining
7:50
Speaker 2: up again with the amount of transactions that are happening.
7:55
Speaker 2: That does mean people will move on from their real
7:58
Speaker 2: estate sales careers and It also means the people that
8:00
Speaker 2: are in this to build a business and who are
8:02
Speaker 2: working at it every day are going to have the
8:04
Speaker 2: ability to start taking market share again.
8:07
Speaker 1: No, I mean, look, this is the real estate recession. Yes.
8:12
Speaker 1: And if you're brand new to this, you're still super optimistic.
8:19
Speaker 1: You're excited about your future and your outcome. By the way,
8:22
Speaker 1: it is the best time to actually build a real
8:24
Speaker 1: estate business.
8:25
Speaker 2: What?
8:25
Speaker 1: This lady across the hall is, the whole office in
8:28
Speaker 1: there is just like beautiful. Yeah, she is redesigning. She
8:31
Speaker 1: must have more money than she knows what to do
8:33
Speaker 1: with because that office is phenomenal. She runs a peptide business.
8:36
Speaker 1: That's right. She's rolling in it. It's all the peptide games. But,
8:40
Speaker 1: you know, what we're seeing here is it's been revised
8:43
Speaker 1: down to $ 3. 9 million in annual home sales. I mean,
8:47
Speaker 1: we haven't– in 2022, if we go back and look
8:50
Speaker 1: at those numbers– We were coming off of $ 4. 7 million, roughly,
8:57
Speaker 1: just a hair under $ 4. 75 million existing home sales. And
9:03
Speaker 1: that dropped down to really about $ 4. 2 million in 2023.
9:11
Speaker 1: So we've been hovering in this kind of lower $ 4
9:14
Speaker 1: million transactional count for the last several years now. Wow.
9:23
Speaker 2: Were very big years. What was the, what was before 4.7?
9:26
Speaker 2: I want to say we're at like six and change.
9:29
Speaker 2: There was, it was a 21 that we were like
9:30
Speaker 2: at six, but that might've included new construction.
9:33
Speaker 1: Yeah. Somewhere, somewhere around that was that, and that was
9:36
Speaker 1: the record, right? So that was, that was at its
9:38
Speaker 1: height about 6 million, a little over, I think it
9:41
Speaker 1: was over 6 million in annual home sales.
9:43
Speaker 2: Something to keep in mind, by the way, is that
9:45
Speaker 2: those numbers do matter, right? So when we talk about
9:48
Speaker 2: being in a real estate recession, um, it's, it's, it's
9:50
Speaker 2: very natural that when you have a peak, you're going
9:55
Speaker 2: to have a uh, a pullback from that peak.
9:58
Speaker 1: Right.
9:58
Speaker 2: So if in 2021, I think it was, I can't remember.
10:01
Speaker 2: I don't want to be married to that number, but
10:02
Speaker 2: like we had record home sales in America.
10:07
Speaker 1: Look at this. I mean, just look at the title
10:09
Speaker 1: wave coming off of this chart, right? 6.5%. Okay. So we, yeah, there's, yeah.
10:15
Speaker 1: Times 6.4 thousand times thousand. I don't know what that means.
10:18
Speaker 2: Regardless, we, uh, 2021, I believe it was, was our
10:23
Speaker 2: highest existing home sales closed year in history, right?
10:29
Speaker 1: If I, okay. Yeah. If I, there we go. There's
10:31
Speaker 1: seven point.
10:32
Speaker 2: That's that, that must include something new construction, something I
10:37
Speaker 2: can't remember. Anyway, Regardless, we had a massive year. We
10:41
Speaker 2: had massive years in 2020 and 2021. There's only so
10:46
Speaker 2: many people who are going to buy a house in
10:47
Speaker 2: America within a certain time horizon, right? And so regardless
10:51
Speaker 2: of all other macroeconomic factors, regardless of global politics, regardless
10:56
Speaker 2: of wars, regardless of inflation, all those things, we were
10:59
Speaker 2: always going to see a pullback in the residential sales space.
11:02
Speaker 2: That was just $ 6. 8 million. In October of 2020 was
11:08
Speaker 2: what traded year over year?
11:12
Speaker 1: Okay.
11:12
Speaker 2: So like that's almost double of what the forecast is now.
11:17
Speaker 2: Not quite double. Double would be like 7.8. But you
11:19
Speaker 2: see what I'm saying. It's like a substantial amount more
11:23
Speaker 2: than what we're seeing now. That was going to happen anyway.
11:27
Speaker 2: We were going to see a relatively sharp retraction simply
11:31
Speaker 2: because there are only so many people that are going
11:32
Speaker 2: to buy or sell a house in a certain time horizon.
11:34
Speaker 2: Within the same, you know, call it decade. So if 2020,
11:37
Speaker 2: you have 6.8 million trades, then it makes sense that
11:42
Speaker 2: the years downstream are going to be lighter. So I
11:45
Speaker 2: don't want this to sound like, of course, there are
11:48
Speaker 2: different macroeconomic variables right now. Rates are high. All the fears, right?
11:52
Speaker 2: Life is expensive. But on top of that, there's also
11:55
Speaker 2: a very natural part of the business cycle unfolding now.
11:58
Speaker 2: And I do want real estate agents to keep that
12:00
Speaker 2: in mind because at the end of the day, all
12:02
Speaker 2: things being constant, People will eventually get used to the
12:06
Speaker 2: variables in front of them, and they will eventually begin
12:08
Speaker 2: buying and selling homes again because people don't move for economics.
12:12
Speaker 1: They mostly move for life, right? Life events.
12:14
Speaker 2: And so over a long enough time horizon, we will
12:17
Speaker 2: start to see home sales increase again. But my point
12:19
Speaker 2: I'm trying to make is this is just as much
12:23
Speaker 2: a symptom of having really, really big years a few
12:26
Speaker 2: years ago as it is about what's currently happening in
12:29
Speaker 2: the economy.
12:30
Speaker 1: Last week's show, we talked about Leo Perea, who's the
12:34
Speaker 1: CEO of eXp, right? He'd come out and when he
12:40
Speaker 1: was doing his presentation, he had talked about, look, the
12:43
Speaker 1: housing market has already crashed three years ago. And we're
12:46
Speaker 1: not crashing in terms of price. We're crashing in terms
12:50
Speaker 1: of transactional counts. And so what we have right now
12:53
Speaker 1: is we don't really have a market crashing problem. We
12:57
Speaker 1: don't really have a pricing problem. We kind of have
13:01
Speaker 1: a market pricing expectation problem. And that takes some time
13:05
Speaker 1: to to the hangover effect, right? We had the hangover
13:09
Speaker 1: of getting out of COVID. We had, back in there
13:12
Speaker 1: in the recession days, we had the hangover of buyers
13:14
Speaker 1: wanting to lowball everyone when the market had turned better, right?
13:17
Speaker 1: Once we get out of this market, this high inventory,
13:21
Speaker 1: higher interest rate, you know, being able to get more
13:23
Speaker 1: concessions right now than anything else, there will be a
13:26
Speaker 1: hangover on this where buyers think that, hey, it's there still,
13:29
Speaker 1: it Their time is still to shine, and then it
13:31
Speaker 1: will be the homeowners again, the sellers. And what I'm finding, though,
13:36
Speaker 1: is that we're not seeing, unfortunately, real estate professionals educating
13:42
Speaker 1: themselves at a higher level. Yeah. And they're still advising
13:47
Speaker 1: based on– actually, I don't even know what they're advising on.
13:51
Speaker 1: I'm hearing some agents– I'll give you an example today.
13:55
Speaker 1: I got a call from one of my agents who
13:59
Speaker 1: they had a homeowner call them that said that, hey,
14:02
Speaker 1: they're unhappy with their current agent. Excuse me. Their current
14:06
Speaker 1: agent hasn't even been on the market yet. And they're
14:09
Speaker 1: unhappy because that agent didn't have enough money to pay
14:12
Speaker 1: for photos and made the client pay for them. And
14:15
Speaker 1: that already is red flags. And so that's a number
14:21
Speaker 1: one problem. The number two problem is agents not plugging
14:24
Speaker 1: into what's truly happening in the real estate economy, the
14:27
Speaker 1: real estate marketplace, and not advising clients or understanding that, hey,
14:33
Speaker 1: waiting until springtime is actually not going to be better
14:35
Speaker 1: this time. Yeah.
14:37
Speaker 2: I could not agree more. And what I'm about to say,
14:40
Speaker 2: I don't want it to sound... harsh. There are some really, really,
14:46
Speaker 2: really smart people in the residential real estate space. And
14:49
Speaker 2: I've gotten so much knowledge and insight from my mentors
14:53
Speaker 2: over the years and from people like my co-host. And
14:56
Speaker 2: there's a lot of really smart people in this industry.
14:59
Speaker 2: On the aggregate, I've kind of always held the belief
15:03
Speaker 2: that real estate agents tend to kind of just parrot
15:07
Speaker 2: whatever trending narrative there is, whether it's Marry the house,
15:13
Speaker 2: date the rate, which is terrible advice. There's always a
15:16
Speaker 2: theme to a lot of different parts of the market cycle.
15:21
Speaker 1: You know what I mean?
15:22
Speaker 2: How many agents did you see coming out when Jerome
15:28
Speaker 2: started to raise rates in 2022? They're like, all of
15:33
Speaker 2: a sudden, they're experts on how rates are not directly
15:37
Speaker 2: tied to the Fed rate. like it's actually tied to
15:42
Speaker 2: treasury yields, like things they didn't actually know before that.
15:44
Speaker 1: You know what I mean?
15:46
Speaker 2: Because that's like a regurgitation of like what the trending
15:49
Speaker 2: sort of thing to talk about in real estate is.
15:51
Speaker 2: The point that I'm making is that I don't, I
15:53
Speaker 2: have never found in my lived experience that most agents
15:58
Speaker 2: are really good economic advisors. They're just not well-learned in
16:03
Speaker 2: that regard. And so what I think is happening is
16:05
Speaker 2: that When it becomes more difficult to create this sort
16:12
Speaker 2: of overall generic narrative for what the real estate industry
16:16
Speaker 2: should be saying right now, then you have a lot
16:18
Speaker 2: of agents that don't know what to say at all.
16:21
Speaker 2: That makes sense what I'm saying. I've always said, For
16:24
Speaker 2: the longest time, there's really only three things that matter.
16:26
Speaker 2: It's wages, asset prices, and interest rates. And if those
16:29
Speaker 2: get out of whack, the only way to get them
16:30
Speaker 2: back into whack is for asset prices and wages to
16:33
Speaker 2: come back in because interest rates are fluctuant, they're incendiary,
16:38
Speaker 2: and they're transitory. So at the end of the day,
16:41
Speaker 2: people have to make enough money to buy a house
16:43
Speaker 2: regardless of where the rate currently is. That's difficult to
16:48
Speaker 2: stomach right now because asset prices are so much higher
16:50
Speaker 2: than wages. And they're so much higher than relative wages.
16:54
Speaker 2: Relative wages are more important because relative wages... take into
16:57
Speaker 2: account other prices, food, energy, all the other things that
17:01
Speaker 2: people have to pay for. And so relative wages and
17:04
Speaker 2: asset prices are way out of whack right now. And
17:07
Speaker 2: when you have that, it becomes very difficult for like
17:11
Speaker 2: the real estate sales industry as a whole to come
17:15
Speaker 2: up with this catchy one-liner about like, you know, what
17:19
Speaker 2: was the survive till 25 or the date, the rate,
17:21
Speaker 2: or like whatever the tagline is, there's nothing for agents
17:25
Speaker 2: to glom onto right now to make themselves a pseudo
17:29
Speaker 2: expert in. So they actually have to become real experts
17:32
Speaker 2: and a lot of agents are not doing that.
17:35
Speaker 1: So it may not seem like it. We actually do
17:38
Speaker 1: prepare for the show. Um, and our lives prepares for this.
17:42
Speaker 1: That's right. Yeah. The experience. No, but when, when I
17:46
Speaker 1: was kind of putting all this data through just to
17:49
Speaker 1: give me some, some understanding and, and to organize my thoughts, um,
17:54
Speaker 1: AI is even saying this, by the way, is that
17:57
Speaker 1: the biggest threat for real estate agents isn't an AI.
18:01
Speaker 1: It's becoming an irrelevance, right? So it's saying something like
18:07
Speaker 1: right now where the problem is that agents aren't able
18:13
Speaker 1: to understand and interpret data at a very high level. And,
18:17
Speaker 1: you know, buyers and sellers can get listing information, they
18:19
Speaker 1: can get market, they can get everything. Buyers and sellers
18:21
Speaker 1: can get all this out of fingertips, but it doesn't,
18:24
Speaker 1: their agents are the ones that need to be being
18:27
Speaker 1: able to explain this in a story, in a way
18:31
Speaker 1: to help people solve problems. Yeah. Because this is a
18:35
Speaker 1: market of problems. This is not a market of ease.
18:38
Speaker 1: This isn't, hey, you know, this puzzle piece fits here.
18:42
Speaker 1: You sometimes have to jam it in. Yeah. Because all
18:45
Speaker 1: the edges are bent a little bit. And I'll give
18:48
Speaker 1: you an example. I have a seller who a homeowner
18:50
Speaker 1: hit me up today or was referred to me. She
18:53
Speaker 1: owes $ 15, 000 in back taxes. She has a tenant who's
18:56
Speaker 1: not paying rent and needs to get that out of there.
18:58
Speaker 1: She's looking for cash offers, but it wants a higher price.
19:01
Speaker 1: By the way, her renter, who I found out later
19:03
Speaker 1: as I was digging and doing more due diligence on it,
19:06
Speaker 1: the renter is her brother who- The mom had sent
19:09
Speaker 1: a letter to evict him, but he's not moved out.
19:13
Speaker 1: He hasn't paid. And so it's like, all right, what
19:16
Speaker 1: do we do on this? Are we selling it to
19:19
Speaker 1: an investor who's going to inherit your brother? That they
19:24
Speaker 1: have to go handle the eviction? Because if that's the case,
19:27
Speaker 1: it's going to be a lot more time consumption. It's
19:28
Speaker 1: going to be a lower price. You know who loves
19:30
Speaker 1: handling those situations? Dana Witt at home. No, don't refer
19:33
Speaker 1: her to that one. Homewarddfw.com. But- It's about solving problems
19:40
Speaker 1: rather than looking for the easy solutions or the easy
19:44
Speaker 1: way or just moving on from it. Be like, oh,
19:47
Speaker 1: so sorry, I can't help you.
19:49
Speaker 2: I couldn't agree more. I'm going to try to say
19:51
Speaker 2: something that I know to be true. I don't want
19:54
Speaker 2: to articulate it the right way because.
19:56
Speaker 1: A lot of smart- Because you don't want it to
19:57
Speaker 1: be a lie.
19:58
Speaker 2: No, no, no.
19:58
Speaker 1: It's not that it's a lie.
19:59
Speaker 2: It's just like, I know this to be true, but
20:01
Speaker 2: a lot of smarter people do a much better job
20:04
Speaker 2: of articulating it than I do. This is like a
20:08
Speaker 2: very market-driven sentiment. this is like a Wall Street misnomer,
20:11
Speaker 2: not a misnomer, this is like a Wall Street known truth.
20:16
Speaker 2: Markets are created by inefficiencies in communication and information, right?
20:22
Speaker 2: So how is a market made? A market is made
20:24
Speaker 2: because you think something is worth X and I think
20:27
Speaker 2: that something is worth Y. And the truth is really
20:32
Speaker 2: not objective. It is, I guess the truth is really
20:36
Speaker 2: subjective to both of us, right? It's a You multiply
20:39
Speaker 2: that by billions of people on planet Earth and hundreds
20:43
Speaker 2: of millions of things that we could trade, and the
20:46
Speaker 2: market is always a reflection of what this imbalance of
20:50
Speaker 2: information looks like. Things go up and down in value
20:55
Speaker 2: based on the distribution of information regarding those things. That's
20:59
Speaker 2: a very simple way of trying to explain it, but
21:01
Speaker 2: I hope that makes sense, right? If The point being,
21:05
Speaker 2: if everyone had equal information all the time and equal
21:08
Speaker 2: trust in that information all the time, then there would
21:11
Speaker 2: be no such thing as a market because things would
21:12
Speaker 2: just be objectively what they're worth. There would be no
21:18
Speaker 2: disagreement on what anything should cost or is worth because
21:21
Speaker 2: we would all have equal information and equal value or
21:24
Speaker 2: equal sentiment around the validity of that information all the time.
21:29
Speaker 1: I say that to say.
21:31
Speaker 2: what moves markets in very dramatic ways up or down
21:37
Speaker 2: is that gap in information on both sides, right?
21:40
Speaker 1: So when we had.
21:41
Speaker 2: The big, big COVID run up, the gap in information became,
21:48
Speaker 2: we went from like a relatively stable neutral market to
21:50
Speaker 2: the prevailing narrative being, um, we have cheap money. We
21:55
Speaker 2: should buy a house now at all costs, even if
21:57
Speaker 2: we have to drain all of our savings. Feel free
22:00
Speaker 2: to disagree with me, but that's how the market operated
22:02
Speaker 2: from the years of 2020 to 2022 and a half, right?
22:08
Speaker 2: And then what exacerbated that feeling? Well, you get a
22:11
Speaker 2: whole industry of real estate salespeople that are parroting the
22:16
Speaker 2: narrative that this is the best time to buy a
22:18
Speaker 2: house in human history. If you don't get one now,
22:20
Speaker 2: you're going to miss out for the rest of your life, right?
22:22
Speaker 2: Like it is just the best time to buy a house.
22:25
Speaker 2: So that information flow is what causes the market to move. Now,
22:33
Speaker 2: enough people believe that the prevailing... Now, enough people believe
22:37
Speaker 2: that their idea of the objective truth is that houses
22:39
Speaker 2: should be worth this much, and they're willing to trade
22:41
Speaker 2: at this price, right? Now, several years removed from that,
22:46
Speaker 2: we've had a lot happen. We have rates, we have wars,
22:49
Speaker 2: we have economy, we have inflation, all the different things.
22:52
Speaker 2: And now, that same prevailing narrative has reversed.
22:56
Speaker 1: Now, that.
23:00
Speaker 2: objective truth to most would-be homebuyers is that homes overpriced,
23:04
Speaker 2: it's a bad time to buy a house. And so
23:06
Speaker 2: what happens? The market slows down, asset prices dip. There
23:10
Speaker 2: are plenty of other variables, but now the market becomes
23:13
Speaker 2: inefficient in the other way. And I say that to say,
23:16
Speaker 2: the reality is the homes haven't changed. They're still just
23:19
Speaker 2: walls and roofs and things like that. And you're still
23:22
Speaker 2: just borrowing fiat currency to pay for them. So what changes? Well,
23:26
Speaker 2: the changes is the perspective of the person in the
23:29
Speaker 2: marketplace trading, right? Now they believe that this should be
23:32
Speaker 2: valued at a lower price or the market becomes less
23:37
Speaker 2: liquid because fewer people are willing to enter the arena
23:39
Speaker 2: and trade at this level of pricing in the first place.
23:43
Speaker 2: So they're either making lower offers or they're not entering
23:47
Speaker 2: the arena to trade at all. What brings markets back
23:51
Speaker 2: to balance over time is that flow of information and
23:56
Speaker 2: that narrative starting to equalize, right? Slowly but surely, more
24:00
Speaker 2: people think it's a better time to buy, right? And
24:03
Speaker 2: that can happen in many different ways. But what can
24:05
Speaker 2: happen or what can exacerbate that piece of the cycle
24:09
Speaker 2: is better information, more educated people understanding the market dynamics
24:15
Speaker 2: and more quickly getting us back to a place of imbalance.
24:19
Speaker 2: We see this I mean, you see this in real
24:21
Speaker 2: time if you just look at a stock ticker, right?
24:23
Speaker 1: It just goes up and down.
24:24
Speaker 2: That's just people having conversations and deciding with the information
24:27
Speaker 2: they have at their fingertips what the right price for
24:29
Speaker 2: this thing should be, right? It happens very, very, very quickly.
24:33
Speaker 2: A macrocosm, a bigger version of that is the housing market.
24:37
Speaker 2: And where we're at right now, I believe, is the
24:40
Speaker 2: same real estate sales industry that was so excited to
24:45
Speaker 2: shout from the rooftops in 2021 of how great a
24:48
Speaker 2: time it was to buy a house is not doing
24:51
Speaker 2: a good enough job of actually talking about what I
24:54
Speaker 2: would be doing in this market. If I hadn't just
24:56
Speaker 2: bought a house last year, I'd be looking to go
24:58
Speaker 2: get myself a D on a house right now, but
25:00
Speaker 2: I know exactly why I know, right. That I have,
25:04
Speaker 2: I have leverage right now. I understand that some people
25:06
Speaker 2: are not in a position to buy a house simply because.
25:08
Speaker 1: Where their wages are at, right?
25:10
Speaker 2: But there's a much broader section of America that would
25:13
Speaker 2: be homebuyers right now that their general sense from the
25:16
Speaker 2: limited information that they have is that it's just a
25:18
Speaker 2: bad time.
25:19
Speaker 1: Let's play a game real quick. Yeah. We're going to
25:22
Speaker 1: play what looks bad but could be positive for real
25:26
Speaker 1: estate agents. Okay. Okay? 3.99 million annualized home sales, right?
25:33
Speaker 1: Looks bad. How is that a positive?
25:36
Speaker 2: Well, it'd certainly be a positive if 3.99 home sales
25:40
Speaker 2: means that far fewer people are in the marketplace trading
25:43
Speaker 2: those homes, representing the people who are trading those homes.
25:46
Speaker 2: So big opportunity to take market share if you're a
25:49
Speaker 2: real estate sales professional. Yep.
25:50
Speaker 1: So you hit it.
25:52
Speaker 2: Yeah. Yep.
25:53
Speaker 1: So Jesse, play the... Did I get a... Why do
25:56
Speaker 1: you have a board there if it doesn't make sense? Yeah,
25:58
Speaker 1: where's the... Guess. Yeah. We don't even have our headphones on.
26:02
Speaker 1: No one didn't even do anything. We don't even know.
26:03
Speaker 1: I didn't even know we were here. Yeah! Okay, that's
26:07
Speaker 1: the one.
26:08
Speaker 2: Right?
26:08
Speaker 1: So even in a slow market, millions of transactions are
26:10
Speaker 1: still happening. So we're talking about, like, we look at
26:13
Speaker 1: this as a bad thing, but we're still talking about
26:15
Speaker 1: almost 4 million. Yeah, exactly. At the end of the day,
26:17
Speaker 1: 4 million people are going to move next year. Agents
26:20
Speaker 1: grow by capturing more market share without even needing an
26:22
Speaker 1: overall market recovery. So, right? So, all right. What looks bad?
26:27
Speaker 1: Sales down 2.2% year over year. I mean, I.
26:33
Speaker 2: Think that's an easy one. 98% of the market that
26:36
Speaker 2: traded last year would trade. Not the same market, but
26:39
Speaker 2: you know what I mean. 2.2% in the broad scheme
26:41
Speaker 2: of things. If my competition is going to get out
26:44
Speaker 2: of the way or quiet, quit, or not renew their
26:46
Speaker 2: license and home sales only dip by 2.2%, again, I
26:49
Speaker 2: think it's relatively same answer.
26:50
Speaker 1: I have the ability to take a lot more market share.
26:52
Speaker 1: A challenging market is going to expose agents who rely
26:55
Speaker 1: on easy inbound style business versus agents who prospect consistently
27:00
Speaker 1: differentiate themselves, right? So those proactive prospectors are the ones
27:03
Speaker 1: that are really going to win in this marketplace rather
27:07
Speaker 1: than the ones that are waiting for their phone to ring,
27:09
Speaker 1: waiting for those referral-style businesses. All right. Price appreciation slowing
27:15
Speaker 1: to 1.3%. Sounds bad. That is the best news you're
27:19
Speaker 1: going to hear all day, in my opinion. I say
27:21
Speaker 1: this all time. Wages, asset prices, interest rates.
27:24
Speaker 2: Asset prices need to slow in appreciation.
27:28
Speaker 1: If anything.
27:29
Speaker 2: They need to depreciate just a bit to bring the
27:31
Speaker 2: market back into balance.
27:32
Speaker 1: Well, it becomes more, again, sellers are becoming more receptive
27:36
Speaker 1: to realistic pricing. Yes. Right? So we're getting out of
27:39
Speaker 1: that post-COVID run up. We're not used to, you know,
27:42
Speaker 1: we're no longer talking about 10 plus percent appreciation rates.
27:45
Speaker 2: Yes.
27:46
Speaker 1: Buyers may find less pressure from rapidly rising prices. Investors
27:52
Speaker 1: account for 20% of sales, which is up from 15%
27:54
Speaker 1: last year. Okay.
27:57
Speaker 2: Well, again, that does indicate some thawing of the market.
28:00
Speaker 2: Here's what I'll tell you is that when investment capital
28:06
Speaker 2: being injected into the real estate market comes to a halt,
28:09
Speaker 2: that usually means that asset.
28:11
Speaker 1: Prices are way inflated.
28:12
Speaker 2: So I'm not the type of person that wants to
28:14
Speaker 2: see the institutional investors of the world take over the market.
28:17
Speaker 1: I think that's a terrible thing.
28:18
Speaker 2: But it is a key indicator of where the market
28:21
Speaker 2: stands from an affordability standpoint. If people don't even want
28:23
Speaker 2: to invest in real estate, that's bad. The fact that
28:25
Speaker 2: that's increasing is good.
28:27
Speaker 1: But for an opportunity for agents, right? So your investor
28:31
Speaker 1: relationships could become a good major source of your business.
28:34
Speaker 1: Your first year selling houses, how many houses did you
28:39
Speaker 1: sell your very first year? I think it was 38.
28:41
Speaker 1: Let's call it 35. Yeah.
28:41
Speaker 2: Right?
28:42
Speaker 1: Right. Let's say that you did it by three, right?
28:46
Speaker 1: What's the rule? What is that when they say that?
28:48
Speaker 1: What's that for the people that you were with in college? Yeah.
28:52
Speaker 1: Is that from American Pie? Something like that. Multiply it
28:54
Speaker 1: by three or divide it by three? So good, yes.
28:58
Speaker 1: But how many of those were investor? 75%, 80%.
29:01
Speaker 2: Yeah, it was primarily investors.
29:04
Speaker 1: Yeah, I mean, huge. I mean, you're number one source
29:06
Speaker 1: of business back then. Yeah, by far.
29:07
Speaker 2: Right?
29:08
Speaker 1: So first-time homebuyers represent 31% of sales. Sales... to me,
29:15
Speaker 1: that actually sounds relatively normal. I didn't say that sounds bad.
29:17
Speaker 2: I don't know if there's a trend on there, but
29:20
Speaker 2: that's got to be up.
29:22
Speaker 1: Yeah. So despite affordability challenges, first-time homebuyers are still entering
29:26
Speaker 1: this market. So again, what do first-time homebuyers need? They
29:29
Speaker 1: need education. They need financing guidance. They need negotiation skills.
29:32
Speaker 1: They need help from agents. And the agents that will
29:35
Speaker 1: do that will earn that business. Yeah, 100%. Homes have sat,–
29:39
Speaker 1: homes spend about 33 days on the market. Sounds bad, right?
29:43
Speaker 1: Agents have more reason to demonstrate their value. So, like,
29:46
Speaker 1: the biggest thing is I like to see an increasing
29:50
Speaker 1: days on market because what do sellers– when you sell
29:53
Speaker 1: it in day one, two, three, or four, they're like,
29:55
Speaker 1: what did you do to earn this commission?
29:57
Speaker 2: That's– yeah, I– there's always like the names of the
30:01
Speaker 2: clients that you feel like you did a great job for.
30:03
Speaker 2: And you never forget those names. Cause they're so unappreciative.
30:05
Speaker 2: I have like three that I'm thinking about right now
30:07
Speaker 2: that like we sold their houses for over.
30:09
Speaker 1: What's their name? Yeah.
30:11
Speaker 2: Within, within, I actually saw one at, uh, um, uh,
30:16
Speaker 2: the get my old chains, a quick car, like three
30:18
Speaker 2: weeks ago.
30:19
Speaker 1: Did you talk to him? Oh yeah. Yeah.
30:21
Speaker 2: We caught up for a referral. No, I poured, uh,
30:24
Speaker 2: I put a banana in his tailpipe on the way out.
30:26
Speaker 1: No, I'm kidding.
30:26
Speaker 2: Um, uh, but yeah, that's usually the thing is it's, Oh, this,
30:31
Speaker 2: you did such a good job that I don't want
30:34
Speaker 2: to pay you.
30:35
Speaker 1: Right. Or I'm just skeptical that I got the best deal. Right.
30:38
Speaker 2: We should ask for more. So, uh, yeah, I think
30:41
Speaker 2: that like around the two, six, two, 16, the 2016 era,
30:46
Speaker 2: when there was like an average of 25 to 30
30:48
Speaker 2: days on market and like, you still could get multiple
30:50
Speaker 2: offers of your price wall and stuff like that really
30:52
Speaker 2: felt like a very reasonable amount of time for a
30:55
Speaker 2: buyer to find an asset and make an offer. And, um,
30:59
Speaker 2: you know, the days of being a listing agent in 2020,
31:01
Speaker 2: it just felt like we were getting no love because
31:04
Speaker 2: the expectation was just so overboard. Like I remember our team, we, we,
31:07
Speaker 2: we would routinely get offers and Jesse was there, right?
31:10
Speaker 1: There were, we were, we would routinely.
31:12
Speaker 2: Get vastly over asking price offers and the seller would
31:16
Speaker 2: still not be happy.
31:17
Speaker 1: They'd be like, they would, they would, they would, they.
31:20
Speaker 2: Would either be super unreasonable during the repair negotiations, or
31:25
Speaker 2: they just think that, you know, There was a time
31:28
Speaker 2: period for like 18 months there where the asking price
31:30
Speaker 2: was just a suggestion. You needed to be way over that,
31:35
Speaker 2: and the sellers still weren't happy.
31:36
Speaker 1: Well, even during that time, you found the agents that
31:39
Speaker 1: you didn't want. You knew their negotiation tactics would be
31:42
Speaker 1: go high, beat them up later, or that they– there
31:47
Speaker 1: were so many different ways that you were like, all right,
31:50
Speaker 1: you start– our value became having to actually vet who
31:53
Speaker 1: had cash and who was, who was lying about it. Um,
31:57
Speaker 1: and because you're, you're looking at 30, 40, 50 offers,
32:01
Speaker 1: which can be overwhelming. It's a good over a good
32:03
Speaker 1: thing to have, but these sellers who, who said, Hey,
32:07
Speaker 1: we don't actually don't need an agent because we'll can
32:09
Speaker 1: just throw a sign in the yard. Those were the
32:11
Speaker 1: ones that went for sale one or that I still
32:13
Speaker 1: think they left money on the table. Yeah, I think
32:14
Speaker 1: so too. A hundred percent. I agree. Um, What was
32:18
Speaker 1: that statistic again? I know I forgot where we're at. Oh,
32:21
Speaker 1: first time homebuyer?
32:22
Speaker 2: Oh, days on market are 33. I think that's a positive.
32:27
Speaker 1: A big positive. No, I think, look, I want that
32:30
Speaker 1: to increase a little bit more. It's designed for, it's
32:35
Speaker 1: a leveling out of pricing. It gets you better with
32:40
Speaker 1: how you're going to market your properties and actually just
32:44
Speaker 1: going to show your expertise. Yeah. It's expertise on pricing
32:49
Speaker 1: it out of the gate correctly, knowing that, all right,
32:51
Speaker 1: if average days on market are 45, 46, 47 over
32:54
Speaker 1: here in this neighborhood, but I know that I'm consistently
32:57
Speaker 1: in the 20s, I'm beating the market average by 20 days.
33:01
Speaker 1: But not just by coming off and going as the
33:04
Speaker 1: lowest priced home. But it's strategically positioning your home with
33:09
Speaker 1: the right price right out of the gate where most agents,
33:14
Speaker 1: and there's times that I do it too because we
33:16
Speaker 1: have to, but most of the time they agree with
33:19
Speaker 1: the seller's price in the beginning and then they have
33:20
Speaker 1: to chase the market down. And that additional gap is
33:23
Speaker 1: what's causing that homeowner to lose 3, 4, 5, 10,000,
33:26
Speaker 1: maybe a little bit more than that. 100%. All right.
33:31
Speaker 1: Best lead sources in 2027. What do you think that's
33:33
Speaker 1: going to be? I think.
33:35
Speaker 2: I don't know the lead sources change that much as
33:37
Speaker 2: far as the best one. It's always going to be
33:39
Speaker 2: your sphere of influence. And my personal opinion is going
33:44
Speaker 2: to be prospecting your expires, cancels, and FISBOs. It's going
33:47
Speaker 2: to be people that have already raised their hand and
33:49
Speaker 2: they worked with an agent who could not solve their
33:51
Speaker 2: problem or did not have the fierce conversation with them
33:56
Speaker 2: to set them up for success in the beginning. And
33:59
Speaker 2: now they need an expert to come in and actually
34:01
Speaker 2: help them solve their problem.
34:02
Speaker 1: So I'm looking at, so of course, database analysis. will
34:05
Speaker 1: always stay. That should never be... Like table stakes. Yes, right. One,
34:10
Speaker 1: we shouldn't bring that up. That should just be a
34:13
Speaker 1: common sense one. But open houses. So I've been interviewing
34:17
Speaker 1: a lot of agents lately, and I'm seeing more and
34:21
Speaker 1: more using this concept. We're doing the 100 open houses
34:26
Speaker 1: in 100 days. Yeah. And the common... that I'm actually
34:31
Speaker 1: seeing from this is that 90 days after completing the
34:36
Speaker 1: 100 open houses in 100 days, that typically that's when
34:39
Speaker 1: they see, 60 to 90 days in, they see that
34:42
Speaker 1: first closing happening. But in the coming months, they're about
34:46
Speaker 1: $ 5 million in closed production within those first 12 months
34:49
Speaker 1: of completing the 100 open houses in 100 days. Again,
34:54
Speaker 1: that's a minimum $ 150, 000 at GCI for- What? I mean,
35:01
Speaker 1: for doing those open houses, getting those people signed in,
35:04
Speaker 1: putting them in the database, putting them on drip campaigns,
35:06
Speaker 1: following up with them, it's just doing normal work. Yeah.
35:10
Speaker 1: But what I'm hearing is most people hear that and
35:13
Speaker 1: they're like, that's a lot of work. I don't want
35:15
Speaker 1: to do that. Yeah.
35:16
Speaker 2: Juan, that's such a good point. I didn't even think
35:19
Speaker 2: about open houses, but I think that's killer. This is
35:23
Speaker 2: where Like the rubber meets the road. This is what separates,
35:28
Speaker 2: as it were, the men from the boys or the
35:30
Speaker 2: ladies from the.
35:30
Speaker 1: Whatever it is. You know what I mean? Keep digging
35:33
Speaker 1: that hole. Yeah, I know. Damn.
35:35
Speaker 2: The day and age of the easy real estate life
35:38
Speaker 2: is not this day. If you want to succeed in
35:41
Speaker 2: real estate in 26, 27, and probably a few years beyond,
35:46
Speaker 2: you are going to have to treat it like a
35:48
Speaker 2: true career that you get up every single day and
35:50
Speaker 2: you go work your butt off for it. If you're
35:52
Speaker 2: just one of those agents that got into this to, quote, unquote,
35:56
Speaker 2: be your own boss and, quote, unquote, work your own hours,
35:59
Speaker 2: and you still believe that you're going to make far
36:02
Speaker 2: more than the national median family income, I think that's
36:08
Speaker 2: physically impossible going forward.
36:10
Speaker 1: You have to show up and do the work. What
36:12
Speaker 1: I hear out of that is if we surveyed a room,
36:18
Speaker 1: of anybody looking for a job that said, hey, this
36:21
Speaker 1: is a $ 150, 000 a year salaried position, who would take
36:24
Speaker 1: this job? I would say, do you think almost everyone's
36:28
Speaker 1: hand would go up? It would be the vast majority.
36:31
Speaker 1: The vast majority. But what we're not wanting to do, again,
36:34
Speaker 1: the 100 open houses in 100 days, what I've found
36:37
Speaker 1: so far is that it's that $ 5 million in production
36:41
Speaker 1: in less than 12 months. Yeah. Let's call it a 2.25%. referral,
36:47
Speaker 1: like commission, right? You're still over a hundred thousand, you're $ 125, 000.
36:51
Speaker 1: And an open house is not a full day event.
36:55
Speaker 1: Three hours. Yeah.
36:56
Speaker 2: I mean, you're going to have your follow-ups and you're
36:58
Speaker 2: actually have to serve your clients, things like that. But
37:00
Speaker 2: those are the things you want to be doing. You
37:01
Speaker 2: want to be signing the clients. You want to be
37:02
Speaker 2: serving them. That's why you got into this business.
37:04
Speaker 1: Eight hours. You work at a job eight to 10
37:06
Speaker 1: hours salary for 150,000, but we're not going to do
37:08
Speaker 1: an open house for three hours. Do the follow-up that's
37:12
Speaker 1: less than an hour.
37:13
Speaker 2: Yeah.
37:13
Speaker 1: Like we're still actually working part time. And so open
37:18
Speaker 1: houses are going to, as a massive player on this list,
37:22
Speaker 1: there's two other ones that are really popping up. Google,
37:27
Speaker 1: local SEO, and AI search visibility. And this is something
37:31
Speaker 1: that you and I are really deep involved in. And
37:37
Speaker 1: I presented at, we had an event last week. Were
37:41
Speaker 1: you in Vegas last week?
37:41
Speaker 2: Yes.
37:42
Speaker 1: Yes. So last week I had to present, um, Brian's presentation.
37:47
Speaker 1: I think I, I heard I did actually really, really
37:49
Speaker 1: well on it.
37:49
Speaker 2: Yeah.
37:50
Speaker 1: Yeah. Nice. No, I heard that too. Did you hear
37:53
Speaker 1: that from you? Oh, I mean, I gave myself five
37:58
Speaker 1: out of five rating. I love it. But it was
38:01
Speaker 1: when I asked the room, how many people are focused
38:04
Speaker 1: on this? A few hands went up, like less than three. Yeah.
38:07
Speaker 1: And I, and then I said, how many people are
38:09
Speaker 1: focused on their Google business profile? Um, Less than three. Yeah.
38:13
Speaker 1: And they don't understand how... to really focus on getting
38:17
Speaker 1: ranked with AI because I can tell you right now,
38:21
Speaker 1: I've gotten real estate agents to join our team because
38:25
Speaker 1: of AI recommendation. I've had leads that have signed up
38:28
Speaker 1: and have come and purchased with us because of AI
38:31
Speaker 1: recommendation already in the last 90 days. Yeah. It's super important.
38:35
Speaker 2: We're really heavy into it for all of our businesses,
38:38
Speaker 2: but it's totally different than SEO, which is obviously search
38:41
Speaker 2: engine optimization. Like AI is looking for the answers it
38:45
Speaker 2: can give you. So you need to be creating content
38:47
Speaker 2: in a way that answers questions very directly for your ICP,
38:53
Speaker 2: your ideal customer profile.
38:55
Speaker 1: And what they don't understand, though, when you answer that,
38:57
Speaker 1: it matches up with other answers that you've put out there.
38:59
Speaker 1: And if those don't match up, it actually discredits you
39:02
Speaker 1: and pushes you down. So this is where your consistency
39:07
Speaker 1: in understanding the knowledge Your consistency in saying how many
39:11
Speaker 1: homes that you actually sell, the consistency in everything else,
39:14
Speaker 1: and your brand using the same phone number, the same email,
39:18
Speaker 1: the same look, that will rank you higher and not
39:24
Speaker 1: become boring. It's actually what AI wants. Yeah. It's running
39:28
Speaker 1: your business like a business, right?
39:29
Speaker 2: And your marketing strategy, your content strategy needs to be consistent.
39:34
Speaker 2: I do think that's a big gap where you'll see
39:37
Speaker 2: a lot of agents start to fall behind and then
39:43
Speaker 2: some people really rise and they'll build their businesses to
39:46
Speaker 2: really big levels just based solely off of doing that well.
39:49
Speaker 1: And we've talked about this with the increase in investors,
39:53
Speaker 1: investor and absentee owner relationships and understanding how to get
39:56
Speaker 1: in front of those. Yeah. Right? Especially with the way
40:02
Speaker 1: the rental... The rental market is not... Even with this,
40:05
Speaker 1: typically what you see is less demand increase in rental demand.
40:11
Speaker 1: And that hasn't correlated. In fact, we've actually seen a
40:14
Speaker 1: decline in rental prices. Yeah. We've seen... It's taking longer
40:22
Speaker 1: to rent out. And so these absentee owners are getting
40:27
Speaker 1: tired of footing two bills, and now they're wanting just
40:30
Speaker 1: to cash out. Agreed 100%. I didn't think about that
40:33
Speaker 1: one either.
40:34
Speaker 2: The good old days are back when it comes to
40:36
Speaker 2: absentee owners.
40:36
Speaker 1: Man, that makes me want to go print up a
40:38
Speaker 1: whole bunch of yellow letters.
40:40
Speaker 2: But yeah, those lead sources that went away for a
40:43
Speaker 2: long time, You weren't seeing very many absentee owners sell
40:46
Speaker 2: in the early 20s. They were just holding on to
40:48
Speaker 2: those things because they felt like they were going to
40:50
Speaker 2: appreciate forever. Rents were going up every single year. They
40:54
Speaker 2: were sitting pretty. There's a whole bunch of people in
40:58
Speaker 2: that position now that call them absentee owners. Call them
41:03
Speaker 2: absentee owners, landlords, sometimes accidental landlords. A lot of them
41:07
Speaker 2: have become accidental landlords. And if they're in the accidental
41:10
Speaker 2: landlord category, a lot of them are not cash flowing
41:12
Speaker 2: right now. So they're probably looking to liquidate at some point.
41:16
Speaker 2: You can only carry those two mortgages for so long
41:18
Speaker 2: for a lot of people. So it feels like a
41:22
Speaker 2: lot of things that disappeared are coming back, like a
41:23
Speaker 2: lot of lead sources that disappeared are coming back. But again,
41:27
Speaker 2: it takes a lot of expertise. It takes a lot
41:31
Speaker 2: of knowledge and education to be able to solve their
41:34
Speaker 2: problems and be able to speak their language and be
41:36
Speaker 2: able to have those conversations. And I think that that's
41:38
Speaker 2: where Agents are maybe a little too focused on making
41:41
Speaker 2: TikToks and not enough on becoming very learned at what
41:44
Speaker 2: they do.
41:46
Speaker 1: The last of this is, as we wrap this up,
41:48
Speaker 1: is we're getting ready for business planning. And business planning,
41:53
Speaker 1: every year, it's motivational. It's getting commitments. It's about re-honing
42:00
Speaker 1: your discipline and what are you going to commit to.
42:05
Speaker 1: And what I'm seeing is like, we're talking about this.
42:09
Speaker 1: All right. How do you learn AI? How do you
42:10
Speaker 1: learn SEO? How do you learn absentee owners? How do you,
42:13
Speaker 1: how do we attract first time home buyers? What do
42:15
Speaker 1: I say to my database? Like, Everything starts with a
42:18
Speaker 1: day one, no matter what, right? We're all brand new
42:23
Speaker 1: real estate agents. We all start as day one as
42:27
Speaker 1: new agents. We all have to learn this. And the
42:30
Speaker 1: only way that we get better is by staying consistent
42:33
Speaker 1: in the lead sources and then find out where your
42:35
Speaker 1: niche is. Where do you want to go build it?
42:38
Speaker 1: What other lead sources do you want to add? How
42:39
Speaker 1: do you get really good at converting that? And the
42:42
Speaker 1: only way that we can do that is by what?
42:44
Speaker 1: We just do it every single day. Yeah, 100%. And-
42:47
Speaker 1: I think, I think the COVID market to, to keep
42:50
Speaker 1: beating a dead horse on that. I think the COVID
42:52
Speaker 1: market screwed that up on, we got, we got fat
42:56
Speaker 1: and lazy on our work ethic and we would much
42:59
Speaker 1: rather who doesn't be at home or be out and
43:03
Speaker 1: try to get a COVID check. Yeah.
43:05
Speaker 2: I don't think there's a lack of knowing like the, the,
43:07
Speaker 2: the kind of default question that agents really always ask
43:10
Speaker 2: whenever they, you know, are seeking guidance.
43:12
Speaker 1: It's like, what do I do?
43:14
Speaker 2: Who do I, what lead sources, all this type of stuff.
43:16
Speaker 2: And it's like, it's, It's always been there right in
43:18
Speaker 2: front of you.
43:18
Speaker 1: It's your sphere of influence. You need to be prospecting.
43:21
Speaker 1: You need to be looking at hand.
43:22
Speaker 2: Raisers and whether that is hand raisers through open houses,
43:26
Speaker 2: hand raisers through expires, hand raisers through absentee owners, hand
43:29
Speaker 2: raisers through paid leads, whatever it is, it's still going
43:32
Speaker 2: to require you to get up every single day and
43:33
Speaker 2: go talk to human beings about the purchase and sale
43:36
Speaker 2: of real estate. I think we've just gotten away from
43:37
Speaker 2: doing that at a very, very, very high level. Like
43:41
Speaker 2: we've got to do that a lot. You got to
43:43
Speaker 2: have a lot of conversations to build a business in
43:45
Speaker 2: this market. And so you're either willing to do that
43:47
Speaker 2: or you're not, but there really is no other way.
43:51
Speaker 1: Here's the last of this is if you're waiting for
43:54
Speaker 1: mortgage rates to drop, I want to read this for you.
43:58
Speaker 1: Fannie Mae forecast for October a month earlier anticipated rates
44:04
Speaker 1: in 2027 to be at 6.7%. they've readjusted that now
44:09
Speaker 1: for seven and a half percent, all of 2027. So
44:16
Speaker 1: all of 2027. So if you are, if you were
44:19
Speaker 1: waiting for interest rates to save your business, um, don't
44:24
Speaker 1: have good news for you. It wouldn't.
44:26
Speaker 2: Anyway, you guys can understand this. Interest rates are incendiary.
44:29
Speaker 2: Meaning if we dropped interest rates to zero tomorrow, you'd
44:31
Speaker 2: see a spike in buyer activity, uh, uh, for a
44:35
Speaker 2: small period, and then asset prices would go back up
44:37
Speaker 2: until they got unaffordable again. It's like, this isn't rocket Scientology.
44:41
Speaker 2: It's asset prices and wages.
44:44
Speaker 1: If you pay it for the higher levels, do you
44:46
Speaker 1: get the lower rates? Yeah, but you have to sign
44:48
Speaker 1: a billion-year contract. Yeah. You have to stay in your
44:50
Speaker 1: house for a billion years. All right, great show. I've
44:52
Speaker 1: got to go to a parent-teacher conference. Nice. Yeah. You
44:56
Speaker 1: do something wrong? No. I'm assuming it's all good. Okay.
45:00
Speaker 1: They send them to school today from... seven 50 to
45:04
Speaker 1: 10 30. Cause the rest of the day is parent
45:07
Speaker 1: teacher conference and they're off tomorrow. So I'm like, what's
45:09
Speaker 1: the point of going to school today? Oh geez.
45:11
Speaker 2: Yeah.
45:11
Speaker 1: Yeah. So hours. Interesting. Yeah. Um, and make sure to
45:16
Speaker 1: support our sponsors. Go to homeward, dfw.com best property management
45:19
Speaker 1: company out there. Overwhelmed Dana. When she loves, look, she
45:22
Speaker 1: loves those nonpaying tenants.
45:23
Speaker 2: Yeah.
45:24
Speaker 1: Her life's been too easy lately. Yes.
45:25
Speaker 2: Whole new team members coming on. They're doing amazing. She's
45:29
Speaker 2: in too good of a mood.
45:30
Speaker 1: We need to overwhelm her again. Homeward at DFW.com. And then, again,
45:35
Speaker 1: all your make-readies, all your repairs, anything from ground-up construction
45:39
Speaker 1: to roof, HVAC, ProCare Home Solutions. Go to ProCareDFW.com. And
45:44
Speaker 1: then get that home warranty on it. Once you do
45:45
Speaker 1: all that work, once you sell that buyer a house,
45:47
Speaker 1: get a home warranty from Armadillo Home Warranty. Theron Smith
45:50
Speaker 1: will hook you up. Armadillo.one. Tell them that the crew
45:54
Speaker 1: from this week in DFW Real Estate sent you over there.
45:57
Speaker 1: And then the podcast. Do it. Tor Studios. Jesse will
46:01
Speaker 1: make you look better than us. He guarantees it. Another
46:04
Speaker 1: episode in the books. Appreciate y'all. We'll see y'all next week.