Latest / Dishin' Dirt with Gary Pickren / Dishin' Dirt on 2025 Real Estate Outlook and Key Insights

Transcript

Dishin' Dirt on 2025 Real Estate Outlook and Key Insights · Dishin' Dirt with Gary Pickren

• 0:02
  Speaker 1: This is Dish and Dirt with Gary Pickren, south Carolina's only podcast dedicated to the real estate agent craft.
• 0:08
  Speaker 1: And now the host of Dish and Dirt, gary Pickren.
• 0:12
  Speaker 1: And greetings, welcome back everyone to another episode of Dish and Dirt.
• 0:17
  Speaker 1: I'm your often opinionated but rarely wrong host, gary Pickren, coming to you from the beautiful Columbia, south Carolina, offices of Blair Cato Pickrenan this the second week of 2025.
• 0:27
  Speaker 1: Big news on the horizon we're going to share with you here in just a minute about Dish and Dirt, but before we do that, let's remind you of the fourth annual Real Estate Success Summit coming up here January 29th in Columbia, south Carolina, at the Central Energy Building.
• 0:43
  Speaker 1: Tickets are on sale now and by coming to this event, you're going to get to see some of the best speakers there is.
• 0:50
  Speaker 1: You get to see Chelsea Pites, who has been on Inman News and Housing Wire, keller Williams C21.
• 0:57
  Speaker 1: You name the group.
• 0:58
  Speaker 1: She's spoken to them before.
• 0:59
  Speaker 1: In fact, she's named one of the top marketers in the entire industry by Inman News.
• 1:05
  Speaker 1: She is a beast when it comes to marketing.
• 1:07
  Speaker 1: We also have from oh Snap Social, one of our good friends, carla Nancron, and then Bill Sabata is coming back from Close Simple.
• 1:15
  Speaker 1: So we've got an incredible lineup of big host guests, and then we also have a lot of smaller TED Talk sections going on during the session as well, and so you're going to leave there with a lot, a lot of action items and good work put into place.
• 1:28
  Speaker 1: Now you can get your tickets check in the link below.
• 1:30
  Speaker 1: You can also go to blaircatocom, click on the button at the top that says Summit and order your tickets directly.
• 1:35
  Speaker 1: It's got the whole lineup, the schedule, everything is on our website there.
• 1:38
  Speaker 1: If you buy tickets by the 12th, you can buy a ticket for $59.
• 1:40
  Speaker 1: By the 12th, you can buy a ticket for $59.
• 1:43
  Speaker 1: You can also reserve your own table of eight for $430.
• 1:49
  Speaker 1: So $430, you get eight tickets and a table.
• 1:51
  Speaker 1: So a lot of you brokers in charge, a lot of you team leaders, go ahead and get you a table.
• 1:56
  Speaker 1: I had one person yesterday tell me they're going to buy four tables for their entire brokerage.
• 1:59
  Speaker 1: So we're starting to sell tables.
• 2:01
  Speaker 1: It's the best way to do it.
• 2:02
  Speaker 1: You don't have to worry about getting there early.
• 2:03
  Speaker 1: You don't have to worry about sitting by somebody you might not want to sit beside.
• 2:07
  Speaker 1: You can use it to bring people from your office, your team.
• 2:09
  Speaker 1: You can also use it to bring people you're recruiting to join your office or team.
• 2:13
  Speaker 1: Hint, hint, hint.
• 2:14
  Speaker 1: So that's what we got on that.
• 2:16
  Speaker 1: But now the big news about Dish Dirt.
• 2:18
  Speaker 1: Hopefully you have our brand new logo.
• 2:21
  Speaker 1: It is badass.
• 2:22
  Speaker 1: Katie Page, our new marketing coordinator, designed the new logo.
• 2:26
  Speaker 1: We're very excited about that new logo.
• 2:34
  Speaker 1: And now, if you're listening to Dish and Dirt through Buzzsprout as your podcast platform, you'll see in the notes a place where it says text us.
• 2:39
  Speaker 1: You can click on that button.
• 2:40
  Speaker 1: You can send a direct text message to Dish and Dirt with your comments, questions or ideas for another show.
• 2:55
  Speaker 1: But the biggest news is the 200 episode t-shirts are done and we're really excited.
• 2:57
  Speaker 1: We'll be able to give you a Dish and Dirt podcast t-shirt.
• 3:00
  Speaker 1: So how do you get them?
• 3:02
  Speaker 1: We've got 200 t-shirts to give away to you guys, and how you get them is you have to subscribe to Dish and Dirt Podcast on Instagram.
• 3:10
  Speaker 1: So go to Instagram, search Dish and Dirt Podcast.
• 3:14
  Speaker 1: All one word, no apostrophe.
• 3:15
  Speaker 1: It's D-I-S-H-I-N-D-I-R-T Podcast, all one word.
• 3:19
  Speaker 1: Go ahead and subscribe.
• 3:20
  Speaker 1: Go ahead and subscribe and then, in the Instagram podcast page, direct message us the size of the shirt you want.
• 3:29
  Speaker 1: Our sizes are limited.
• 3:30
  Speaker 1: We'll try to accommodate everybody we can and which one of our eight offices you would like to pick the shirt up from.
• 3:37
  Speaker 1: Remember, in the upstate we have Spartanburg, greenville and Malden.
• 3:40
  Speaker 1: In the Midlands we have Columbia, lexington, chapin.
• 3:49
  Speaker 1: In the PD area we have Camden and we have Myrtle Beach.
• 3:50
  Speaker 1: If you guys in Charlotte Charleston, sumter, if you will let me know where you're from and that you can't come pick up the shirt in one of our offices, I will try my very best to put a package of the shirts together after a couple of weeks and send them, hopefully, to the local Realtor Association there or somebody we know in those towns so that you can pick them up there.
• 4:11
  Speaker 1: We don't want to leave you out, particularly our guys up in Charlotte.
• 4:14
  Speaker 1: I don't know if you all know this I've never talked about it before but the second biggest number of listeners of this podcast on a weekly basis come from the Charlotte area, where Blair Cato does not even have an office.
• 4:25
  Speaker 1: So we welcome you Charlotte guys, and if y'all want to get a shirt, let me know.
• 4:29
  Speaker 1: We'll figure out a way to send up some shirts up to the Charlotte area.
• 4:31
  Speaker 1: We may send them to one of our lawyer friends up there and let you pick them up at her office, but we'll figure out a way to get that done.
• 4:38
  Speaker 1: Let's go ahead now and look at 2025.
• 4:41
  Speaker 1: Before we go through the individual items I want to talk about today, I do think it's important for this year's prediction to look at it in the general sentiment of what these experts think about 2025, particularly in light of the completion of 2024.
• 4:56
  Speaker 1: And I think if you look at NAR the National Association of Realtors and how they succinctly summarize what they believe 2025 is, I think it kind of sets the pace for what we'll be talking about today.
• 5:07
  Speaker 1: Lawrence Young, who is the NAR's chief economist I've seen him speak several times.
• 5:12
  Speaker 1: He says homebuyers will have more success next year.
• 5:16
  Speaker 1: The worst of the affordability challenges are over, as more inventory, stable mortgage rates and continued job and income growth will pave the way for more Americans to achieve homeownership.
• 5:27
  Speaker 1: Ramsey Solutions says if you were concerned about a potential crash in 2025, you don't have to worry about that.
• 5:35
  Speaker 1: You can put those worries to bay that there will not be a crash at all.
• 5:39
  Speaker 1: The main reason they believe that is prices are not going to drastically come down anytime soon.
• 5:45
  Speaker 1: In fact, they quote the Federal Home Loan Mortgage Corporation expectations of a price growth in 2025 is the reason why we are going to avoid any type of crash.
• 5:54
  Speaker 1: The main thing they want you to know about the housing market is that home prices are determined by inventory, obviously known as supply and demand, and that's going to keep a potential crash from not happening.
• 6:06
  Speaker 1: Forbes, on the other hand, they have reported that for the best possible outcome, we have to first see what the inventories of home sales will be and whether or not that will be considerably higher.
• 6:18
  Speaker 1: Keith Gumbinger of HSHcom.
• 6:21
  Speaker 1: He tells Forbes that additional inventory would ease the upward pressure of home prices, leveling them off and perhaps helping people settle back in, helping these rates settle back in from peak or near peak levels.
• 6:33
  Speaker 1: They also, in that same article by Forbes.
• 6:36
  Speaker 1: They discuss mortgages and how that's affecting the general market.
• 6:40
  Speaker 1: Obviously, mortgage rates, in their belief, need to continue to decline.
• 6:43
  Speaker 1: They've seen some movement in the last month, but not very great movement, but experts are still, according to Forbes, very hopeful that we're going to see movement and great improvement into the next year.
• 6:56
  Speaker 1: Obviously, gumbinger says that as rates cool off, so will your surge in demand, and as your surge in demand comes, it could wipe out the inventory if that happens too quickly.
• 7:06
  Speaker 1: Most important aspect that everybody seems to be talking about is this housing supply, which everybody says is the key to the recovery.
• 7:12
  Speaker 1: They see little risk, however, the mortgage rates cooling off too quickly.
• 7:16
  Speaker 1: They think it will be continued steady decrease and they will continue to sound the alarm about historical low inventories, particularly as you have millennials and other young adults finally striving to get into the housing market.
• 7:30
  Speaker 1: Freddie Mac, the economic and housing research group at Freddie Mac, say that they anticipate mortgage rates to gradually decrease in 2025.
• 7:39
  Speaker 1: And that will loosen up the lock-in effect and that will obviously increase inventory and boosting sales.
• 7:45
  Speaker 1: So what you're seeing is, as a general sense, the main concern is going to be inventory.
• 7:51
  Speaker 1: As the inventory goes, the housing supply will be the biggest obstacle that everybody has to overcome in this housing market recovery.
• 7:59
  Speaker 1: If the inventory can expand, then obviously the effect on home sales and everything else will fall right into place.
• 8:07
  Speaker 1: So today, what we're going to do is we're going to look at five areas what are the experts telling us about sales?
• 8:12
  Speaker 1: What are they telling us about mortgage rates, the inventory, house prices, and then I call the others, the others.
• 8:19
  Speaker 1: There's some other issues that we have to talk about, but I want to start today with home sales, and let's talk about what the so-called experts are telling us.
• 8:26
  Speaker 1: First of all, about home sales.
• 8:28
  Speaker 1: So the question on everyone's mind as we enter into 2025, well is will home sales rise?
• 8:34
  Speaker 1: We anticipated that 2023 was the bottom of the market, and what we found is that 2024 was kind of still the bottom of the market as well.
• 8:42
  Speaker 1: There was not this great improvement in sales numbers from 23 to 24.
• 8:45
  Speaker 1: And so are we looking at more of the same, or can we look into some expectations?
• 8:50
  Speaker 1: I'll give you a brief overview of kind of a group of experts before we go into the detail.
• 8:56
  Speaker 1: But it seems to be all good news.
• 8:58
  Speaker 1: Mortgage Bankers Association expects 5.1% increase.
• 9:01
  Speaker 1: Zillow is predicting a 7% increase.
• 9:04
  Speaker 1: Fannie Mae 4.2% bump.
• 9:07
  Speaker 1: The National Association of Realtors is very bullish.
• 9:10
  Speaker 1: They think it's going to be a 9% jump, and they quote the 4.1 months worth of homes per sale on the market in 2025 as being one of those big factors.
• 9:21
  Speaker 1: Again, it goes back to the inventory, so let's start with NAR and look a little bit more detailed into this.
• 9:26
  Speaker 1: They believe in 2025, existing home sales could be 7% to 12%.
• 9:31
  Speaker 1: If we hit 12%, guys, it is going to be an absolute tremendous year and in 2026, they have the numbers at 10% to 15%.
• 9:40
  Speaker 1: So that would be very good news.
• 9:43
  Speaker 1: Now Yun says the big factor here is the improving job numbers and recent gains in the stock market, meaning more Americans will have money to be motivated with.
• 9:52
  Speaker 1: He's predicting in 2025, 2 million plus new jobs and another 2 million in 2026.
• 10:00
  Speaker 1: And that looks good for the home market as well.
• 10:02
  Speaker 1: If that happens, when you look at pending home sales only had a 3% year-over-year gain in September.
• 10:09
  Speaker 1: He says that might actually show that the worst is over.
• 10:13
  Speaker 1: We're actually starting to see that little increase.
• 10:14
  Speaker 1: Inventory for both new and existing homes in the US also has grown by $70 million from 1995, even though the home sales remains at the same level as 1995 levels.
• 10:25
  Speaker 1: That still is signaling there's a pent-up demand.
• 10:28
  Speaker 1: So his forecast at the NAR, as I said, is 9% year over year and you can see new home sales approximately 11%.
• 10:39
  Speaker 1: So this is a good number to see from the NAR.
• 10:43
  Speaker 1: Now Realtorcom, on the other hand, expects sales to be just over 4 million new homes and as a result, they're only looking at about a 1.5-year over-year increase not as bullish as NAR.
• 10:54
  Speaker 1: Now let's look at the US News and World Report.
• 10:57
  Speaker 1: They're expecting existing home sales will rise, but it will be constrained.
• 11:02
  Speaker 1: They look at the years from the pandemic years forward and they say after falling sharply in 2023 and into 2024, that those were some of the lowest levels that we've seen in almost 30 years.
• 11:13
  Speaker 1: They expect that these numbers will remain low as long as mortgage rates are well over 6%, so they are tying the home sales directly to the mortgage rates.
• 11:24
  Speaker 1: According to recent projections, they said the Federal Reserve does not see inflation subsiding to 2% until early 2026, and that will also have a downward push on sales.
• 11:41
  Speaker 1: They say this will mean higher but gradually declining short-term interest rates throughout 2025.
• 11:45
  Speaker 1: So not enough to overcome the constraining effects to make the existing home sales rise at a higher level.
• 11:49
  Speaker 1: Now Redfin says home buyer demand index, which tracks all of your tours and services requested from agents, was up 7% year over year during the first week of December and that was the highest level we've seen since September 2023.
• 12:03
  Speaker 1: So they think things are moving in the right direction and in addition, when you look at Fannie Mae's home purchase sentiment index, it rose in November to the highest level since February 2022.
• 12:14
  Speaker 1: And according to the US News World Report.
• 12:16
  Speaker 1: That is a sharp rebound from the all-time survey's lowest set just over two years ago.
• 12:23
  Speaker 1: So we're starting to see demand increasing.
• 12:25
  Speaker 1: Obviously, demand increases.
• 12:26
  Speaker 1: So will sales.
• 12:27
  Speaker 1: Forbes also offers some good news, they say after hitting a 14-year low in September, monthly existing home sales did rise 3.4% in October and 2.9% year over year.
• 12:37
  Speaker 1: This puts your seasonally adjusted annual sales right at 4 million 3.4% in October and 2.9% year over year.
• 12:41
  Speaker 1: This puts your seasonally adjusted annual sales right at $4 million 3.96%.
• 12:43
  Speaker 1: That's up from the abysmal $3.83 million, not tremendously through September, but marks the first annual sales increase since July 2021.
• 12:52
  Speaker 1: So that is some good movement as well.
• 12:56
  Speaker 1: Now back to Redfin.
• 12:57
  Speaker 1: They have a little bit more.
• 12:58
  Speaker 1: Redfin says there will be more home sales in 2025 than 2024.
• 13:02
  Speaker 1: That's good news.
• 13:02
  Speaker 1: They're expecting home sales to tick up next year, ending 2025, with an annualized rate between 4.1 and 4.4 million.
• 13:10
  Speaker 1: Remember, this year is right on four, so that's not a real big increase, but it is an increase.
• 13:15
  Speaker 1: This is about between 2% to 9%.
• 13:18
  Speaker 1: 2% would suck.
• 13:19
  Speaker 1: 9% would obviously be very good.
• 13:22
  Speaker 1: And they say the reason they're giving you this very wide sales range, which is not what they normally do.
• 13:26
  Speaker 1: Usually they'll say 4% or 5%, not 2% to 9%, that's 7%.
• 13:30
  Speaker 1: That's like saying the weather is either going to be 80 or 90 degrees here.
• 13:33
  Speaker 1: It's not that precise they're giving you there.
• 13:36
  Speaker 1: But they say the higher housing costs are going to continue to price some buyers out of the market, but on the other hand there's a large amount of pent-up demand.
• 13:44
  Speaker 1: So what's going to win the higher housing costs or the pent-up demand?
• 13:48
  Speaker 1: That's what's really going to affect as to what sales will be this year.
• 13:52
  Speaker 1: So hopefully the rates will come down and we'll get both of those.
• 13:57
  Speaker 1: And they gave a couple examples.
• 13:58
  Speaker 1: They said home buying demand jumped in the weeks after the November election, despite mortgage rates sitting around 7%.
• 14:03
  Speaker 1: They said that was partly because buyers were waiting for the uncertainty of the election to pass before making big purchases.
• 14:10
  Speaker 1: Always cracks me up like somebody's not going to buy a house for four years because their person doesn't win.
• 14:15
  Speaker 1: But they said it was also partly because many people felt more financial confident with the promises of the Republican-led administration.
• 14:21
  Speaker 1: I'm not getting into politics.
• 14:22
  Speaker 1: I will tell you this.
• 14:23
  Speaker 1: It is very interesting.
• 14:25
  Speaker 1: For the first time in the years that I've been doing this, there is a lot more talk about politics in this than ever.
• 14:30
  Speaker 1: Usually, there's very little to no politics in this.
• 14:32
  Speaker 1: On the one hand, you have a lot of people that are, and these experts are talking about the loosening of regulation, the decreasing of the inflation, the pro-growth positions of the president, and then you also then on the other side, have the other side of the media saying, well, the possible tariff war and the possible deportation of illegal immigration is going to push it all down.
• 14:55
  Speaker 1: So depending, I guess, on which side of the aisle you sit, as to whether you believe that it will make a difference, positive or negative.
• 15:02
  Speaker 1: Business Insider said home sales will surge.
• 15:04
  Speaker 1: They said the housing boom of 2022 and 2023 was wiped out after, because of the housing affordability, all tanked.
• 15:12
  Speaker 1: But they're saying that they believe the mortgage rates will go lower and higher supply is going to spark a turnaround in our housing industry.
• 15:20
  Speaker 1: And they quote Leah Perea, who is our good friend over at EXP, saying that he expects a 10% increase next year, and I think Business Insider is going along with that.
• 15:30
  Speaker 1: They believe that Donald Trump's policies will have a tailwind for sales activities.
• 15:36
  Speaker 1: According to their economists, they're expecting tax cuts and deregulations and that will spur the market Again.
• 15:42
  Speaker 1: I'm not getting into politics here.
• 15:44
  Speaker 1: I'm just telling you what these so-called experts are saying.
• 15:48
  Speaker 1: Moneycom says home sales over the past two years have been sluggish only about 4 million units sold.
• 15:54
  Speaker 1: Compare that to a typical market of around 5 million home sales.
• 15:57
  Speaker 1: They think if the current trend continues, those numbers should improve into 2025 due to rising inventory and more moderating financing costs.
• 16:05
  Speaker 1: Cnbc says you also can expect more sales in 2024.
• 16:10
  Speaker 1: They believe pent-up demand is going to drive the transactions.
• 16:13
  Speaker 1: They say people have waited long enough.
• 16:16
  Speaker 1: People need to move on with their lives.
• 16:18
  Speaker 1: They found new jobs.
• 16:19
  Speaker 1: Housing is more suitable for their lifestyle.
• 16:22
  Speaker 1: Their life changes and they will be hitting the market.
• 16:26
  Speaker 1: So that is certainly good to see.
• 16:28
  Speaker 1: And then, finally, yahoo Finance says the housing market will in fact stabilize.
• 16:33
  Speaker 1: They quote Tammy Carter from Engel and Volkers in Atlanta saying they expect a period of stabilization and modest growth, with home prices will likely grow slower, which will increase the demand, and she believes that prices should remain flat and we should see an increase in sales.
• 16:51
  Speaker 1: So the general sense on sales is we should have more.
• 16:55
  Speaker 1: Everybody's predicting between 2% to 10%.
• 16:59
  Speaker 1: I personally think we'll see between 5% and 6%, so we'll see how that plays out.
• 17:05
  Speaker 1: Now let's move over to our next issue, which is interest rates.
• 17:08
  Speaker 1: And in general we're going to talk about the National Association of Realtors.
• 17:13
  Speaker 1: They're saying interest rates in 25% and in 26%, to be near 6%, somewhere in that low 6 range the lock-in effect will continue to lessen.
• 17:23
  Speaker 1: As you all know, the lock-in effect is that people have low mortgages so they don't want to sell and they believe that's going to end.
• 17:30
  Speaker 1: And they cite some research here that says 84% of homeowners had mortgage rates under 6%.
• 17:37
  Speaker 1: That's going to fall to less than 75% by the end of the year and so that will have a lessening effect on that lock-in rate.
• 17:45
  Speaker 1: As Laura Shun says, people have marriages, growing families, job changes, retirements, death and more and that's just simply going to take over.
• 17:53
  Speaker 1: That precedent is going to take over the lower mortgage rates.
• 17:55
  Speaker 1: And I think he's right.
• 17:56
  Speaker 1: Life goes on and as much as you like that lower rate, if you've outgrown your house you've got to move to a larger house.
• 18:03
  Speaker 1: So I think we will see that as well and if the economy does continue to improve, then more people have money in their pockets and they can continue.
• 18:10
  Speaker 1: The USA Today cites Redfin and Fannie Mae.
• 18:14
  Speaker 1: They cite Redfin saying mortgage rates are likely to remain in the high sixes throughout 2025, but they believe the average for the year will average out around 6.8.
• 18:27
  Speaker 1: So they're thinking close to 7.
• 18:27
  Speaker 1: Fannie Mae Impulsenomics LLC says that consumers should expect mortgage rates to remain elevated but modestly decline over the course of the year down to what they believe will be 6.3.
• 18:37
  Speaker 1: That's also what Realtorcom says and Mortgage Bankers Association also says 6.4.
• 18:45
  Speaker 1: Az Big Media says that they believe that, due to the aggressive rate hikes in 2023 and 2024, that that's going to all settle down and while they don't expect a return to the ultra-low rates of 2021, they do believe a modest decrease to get you around 6% is where they're looking at, as I mentioned earlier, the mortgage bankers.
• 19:05
  Speaker 1: They're very optimistic.
• 19:07
  Speaker 1: By spring of 2025 that factors will line up and we'll see increase in inventories and we could see some decreases in mortgage rates.
• 19:16
  Speaker 1: According to US News, they said that they believe that death, divorce and debt the big three Ds are going to affect people getting out of this rate lock issue and that more people will start buying houses and that interest rates will continue to come around and they believe that that will actually drive sales and the rates will come down.
• 19:37
  Speaker 1: Cnbc says they're expecting a bumpy and volatile year for mortgage rates.
• 19:41
  Speaker 1: I'm down.
• 19:43
  Speaker 1: Cnbc says they're expecting a bumpy and volatile year for mortgage rates.
• 19:46
  Speaker 1: The experts which they've talked to said it will be bumpy for the entire year and probably hover around the low 6% range.
• 19:53
  Speaker 1: Freddie Mac says their average 30-year fixed rate has ranged from 6.08% to 7.4% over the 52 weeks and they believe that there are a lot of things going on in terms of budget deficit.
• 20:06
  Speaker 1: There's less money available, the government's borrowing much money and, as a result, the large budget deficit will prevent mortgage rates from going much below what they are now.
• 20:17
  Speaker 1: Narda, cap mortgage rates have been all over the place and they believe that there will be constant uncertainty in mortgage rates that everybody needs to prepare for Now.
• 20:27
  Speaker 1: Ramsey Solution we talked about them earlier.
• 20:29
  Speaker 1: They said they expect a lowering of the funds rate to continue, which will eventually affect the mortgage rates will continue to go down, but they believe that will be very slow.
• 20:39
  Speaker 1: As I mentioned, redfin believes in the high sixes 6.8.
• 20:43
  Speaker 1: Zillow Mortgage expects an ease, but it's a remain volatile as well.
• 20:49
  Speaker 1: Our educated guess is that mortgage rates will be lower by the end of 2025 than they will be at the start of the year, with a possible volatility in between.
• 20:56
  Speaker 1: So they're expecting it to be a lot like 24, where rates go up and down throughout the year.
• 21:00
  Speaker 1: Business insiders think they will say that rates will stay above six.
• 21:04
  Speaker 1: They will not get anywhere close to the historic lows, but they do believe next year's economy will be typified by lower interest rates and steady growth.
• 21:11
  Speaker 1: And then, lastly, yahoo Finance says that mortgage rates could drop finally in 2024.
• 21:19
  Speaker 1: Fannie Mae predicts that, however, that they're going to remain around 7% through 2024 and then start easing down from there in 2025.
• 21:26
  Speaker 1: So what you're seeing is everybody believes in the 6s, whether it's upper 6s or high 6s, they don't know.
• 21:33
  Speaker 1: I'm going to lean more toward the low 6s.
• 21:35
  Speaker 1: I don't think we'll get into the 5s.
• 21:36
  Speaker 1: It may dip in the 5s for a short period of time.
• 21:38
  Speaker 1: My prediction is 6.25 will be kind of where we average out.
• 21:43
  Speaker 1: So now let's talk about inventory.
• 21:44
  Speaker 1: There's not as much on inventory to go through.
• 21:47
  Speaker 1: The general consensus has been that the supply is tight and it's going to continue to be tight because a lot of things are against us in this.
• 21:56
  Speaker 1: In general, what we're seeing is, despite the fact we have more resale and new homes that are in the market, the for-sale inventory still remains, after all this time below the pre-COVID averages, according to Freddie Mac, and likely these headwinds are because of the ultra-low mortgage rates that people were locked into and didn't want to get out of Then.
• 22:17
  Speaker 1: Demand simply was outpacing the housing supply and the mortgage rates obviously will continue to have an effect on that, whether those rates go up or down.
• 22:27
  Speaker 1: So, according to Rick Sarga, who is the CEO of CJ Patrick Company, which is a market intelligence and business advisory firm, he says I don't expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down around the 5% range, and we've already said we don't believe that's going to happen in 2025.
• 22:46
  Speaker 1: So we could be in for a long wait there.
• 22:49
  Speaker 1: Now, on the other hand, the National Association of Realtors says that housing inventories have been making sizable gains, with listings up 20% annually in October, and their economists are expecting an upswing to continue in 2025, because they believe more of these home sellers and homeowners have been delaying sales and they're finally getting motivated and mortgage rates stabilizing and improving market conditions is having a big effect on that.
• 23:17
  Speaker 1: In fact, they believe they're projecting that the historic annual average of 1.5 million units over the next couple of years by the home builders will also ease some of that concern.
• 23:28
  Speaker 1: Now the US News and World Report says that this housing efficiency is going to last throughout the 2020s and that the pin of demand is about 4.5 million homes.
• 23:39
  Speaker 1: And so, even if our builders were willing to produce the supply, they've got to find the land, get through all the regulations, the skilled labor, find the materials, financing, and that's just not going to be an easy and quick fix.
• 23:51
  Speaker 1: Business Insider says the market's going to be very high on housing supply, so they actually think that the supply is going to have a sizable increase in home and apartment supply.
• 24:03
  Speaker 1: An 11.7% jump in existing home inventory and a 13.8% surge in single-family home starts will usher in what they call the first balanced housing market in nine years, and that's according to Realtorcom.
• 24:16
  Speaker 1: Now think about that.
• 24:16
  Speaker 1: If that is to happen, what would that mean?
• 24:19
  Speaker 1: It means we would have a market where neither the buyer nor the sellers have a disproportionate leverage against the other.
• 24:25
  Speaker 1: In 2025.
• 24:26
  Speaker 1: We would have an equal market for the first time in almost a decade.
• 24:29
  Speaker 1: Additionally, business Insider expected new single-family homes are expected to reach at least $1.1 million, which would be the most since 2006, and that should also help with the inventory.
• 24:41
  Speaker 1: Moneycom says that while the inventory remains still below pre-pandemic levels, it's slowly improving.
• 24:47
  Speaker 1: According to the Federal Reserve, there was a 4.3-month supply of active listings in the market in September and just to compare that for you, in January of 2022, we had a 1.6-month supply, so almost three times where we were almost three years ago.
• 25:04
  Speaker 1: Ramsey Solutions says that when it comes to the housing inventory for 2025, things are currently looking up.
• 25:11
  Speaker 1: October 2024 marked the 12th straight month of inventory growth and even better news was the number of homes on the market in October was 29.2% higher than a year earlier.
• 25:23
  Speaker 1: That's insane.
• 25:24
  Speaker 1: That's really good.
• 25:25
  Speaker 1: And if inventory keeps increasing, we don't believe it'll be anywhere near pre-COVID levels.
• 25:31
  Speaker 1: So don't get your hopes up too much that it's going to be a major price adjustment.
• 25:34
  Speaker 1: But they do believe it's great signs to see that the market overall is getting healthier.
• 25:39
  Speaker 1: Overall, buyer demand has stayed steady over the last two years, but since 2022, demand has gone up during the summer and down during the winter.
• 25:46
  Speaker 1: We could see demand increase in 2025 if those interest rates continue to fall.
• 25:51
  Speaker 1: And then, lastly, in this section here, az Big Media says a persistent housing inventory shortage will remain to be the defining characteristic, that we'll see some improvements.
• 26:00
  Speaker 1: We expect inventory levels to increase by 10% to 15% compared to 2024, but still remain below historic averages.
• 26:07
  Speaker 1: I agree with AZ Big Media I can see a 10% to 15% increase in the inventory levels, but I still think it will be in that three to four-month range which will be below our historic levels.
• 26:21
  Speaker 1: All right, let's move now over to our next to last topic, which is home prices.
• 26:25
  Speaker 1: So with home prices, let's talk about that in general.
• 26:29
  Speaker 1: First, the National Association of Realtors.
• 26:31
  Speaker 1: Their medium home price, they said in 2025 would go up 2% to $410,700, and again 2% in 2026 to $420,000.
• 26:42
  Speaker 1: Goldman Sachs predicts a 4.4% increase in 2025, which is down from 4.5% in 2024.
• 26:51
  Speaker 1: Business Insider predicts a 1.3% to 3.6% increase from 2024, while Zillow predicts a 2.9% increase from October 2024 to October 2025.
• 27:04
  Speaker 1: The USA Today Red Fins expects a 4% rise in median home sales prices.
• 27:09
  Speaker 1: Fannie Mae is forecasting a 3.8% gain.
• 27:13
  Speaker 1: The National Bankers Association is expected of a gain of just 1.5%.
• 27:18
  Speaker 1: Looking at it a little bit more in detail, when you look at what Forbes, they believe that the prices over the last five years have surged nearly 40%.
• 27:27
  Speaker 1: Principal and interest payments are currently 82% higher than they were before COVID.
• 27:31
  Speaker 1: When you add property taxes and insurance, it's very understandable why home ownership is completely out of reach for many people.
• 27:38
  Speaker 1: However, their experts believe the recent slowdown in price growth is an encouraging indicator that this trend is now tilting in favor of the buyers and will likely persist into 2025.
• 27:49
  Speaker 1: Forbes is saying under their housing forecast, the US home prices posteda 3.9% annual gain in September, down from a 4.2% annual growth in August, and their chief economist believes that they will continue to see cooling and it will likely continue through mid-next year to slow to a 2.3% increase by August of 2025.
• 28:12
  Speaker 1: A little bit more detailed into Goldman Sachs.
• 28:15
  Speaker 1: Their analysts are expecting an increase in the forecast of US home prices to 4.5% this year and 4.4% in 2025.
• 28:22
  Speaker 1: And their estimates previously were 4.2% and 3.2% respectively, back in April.
• 28:27
  Speaker 1: Yahoo Financing says that they believe prices could finally stabilize.
• 28:33
  Speaker 1: It doesn't look like they'll drop in 2025.
• 28:36
  Speaker 1: Narada says that the Zillow forecast of 2.6% is their home value growth in 2025, and that is similar to what they saw in 2024.
• 28:46
  Speaker 1: Redfin is predicting 4% in 2025.
• 28:49
  Speaker 1: They believe that prices will rise at a pace similar to those of the second half of 2024 because they don't expect there'll be enough new inventory to meet demand.
• 28:57
  Speaker 1: Zillow has home values going up modestly.
• 29:00
  Speaker 1: Home values nationally are forecasted to grow at about 2.6%.
• 29:04
  Speaker 1: A softening that would be welcome news for many stressed home buyers.
• 29:08
  Speaker 1: Cnbc also says they expect home price growth will return to pre-pandemic levels and they believe will rise about 4%.
• 29:17
  Speaker 1: That's going to be the normalization as compared to accelerated growth we saw last year through what we last saw in 2020.
• 29:25
  Speaker 1: So everybody is expecting a growth in prices, but not a dramatic growth.
• 29:30
  Speaker 1: I think the 2% to 3% is probably very accurate.
• 29:33
  Speaker 1: And so this brings us to the final issue, which I'll just call other issues that are going to affect our market.
• 29:39
  Speaker 1: Obviously, one of the big things that were cited by the expert were the real estate commission procedures will change.
• 29:44
  Speaker 1: Again, they're still predicting the commissions will go down.
• 29:46
  Speaker 1: I think that's crap.
• 29:47
  Speaker 1: I don't see any evidence that commissions are going to go down at all.
• 29:51
  Speaker 1: Cost of homeownership is going to be the biggest factor moving forward, and it's not just mortgage rates, it's property taxes, home insurance, maintenance and things of that nature that are just pushing the people out of the ability to buy a house.
• 30:06
  Speaker 1: We're also going to see a different type of buyer emerging over 2025.
• 30:11
  Speaker 1: You're going to see more and more buyers skipping out on mortgages altogether.
• 30:14
  Speaker 1: In fact, 31% of repeat buyers pay all cash for their next home purchase.
• 30:19
  Speaker 1: First-time homebuyers are getting older.
• 30:21
  Speaker 1: The median age and this will blow your mind of a first-time homebuyer is now 38 years old.
• 30:26
  Speaker 1: That's an all-time high.
• 30:28
  Speaker 1: Think back when you bought your first house, how old you were.
• 30:31
  Speaker 1: You probably were not 38 years old.
• 30:32
  Speaker 1: 25% of all first-time homebuyers are using gift funds or loans from a friend.
• 30:37
  Speaker 1: 20% are taking money out of financial assets like stocks, 401k, cryptocurrency.
• 30:42
  Speaker 1: 7% are using inheritance.
• 30:44
  Speaker 1: All of those are record highs.
• 30:46
  Speaker 1: First-time homebuyers are coming up with the highest down payment in nearly 30 years, which is 9%, in order to afford the higher home prices.
• 30:54
  Speaker 1: You're also seeing buyers pooling their money.
• 30:56
  Speaker 1: Multi-generational households now have surged all-time high of 17% over the past year.
• 31:03
  Speaker 1: Single women buyers continue to outpace single men buyers.
• 31:07
  Speaker 1: We have seen a tremendous drop in marriage rates, which is terrible for our society and that has triggered more consumers entering the housing market on their own.
• 31:14
  Speaker 1: Single women held a 24% share of home purchase market over the past year.
• 31:19
  Speaker 1: Single men was at 11.
• 31:21
  Speaker 1: So what we're seeing is a tremendous change in what is our typical buyer, and you'll need to plan on that when you are creating your marketing strategies.
• 31:32
  Speaker 1: So there is your predictions by the experts for 2025.
• 31:37
  Speaker 1: Overall, it looks fairly good.
• 31:39
  Speaker 1: It looks like home sales will go up.
• 31:42
  Speaker 1: I love the very aggressive numbers of NAR.
• 31:45
  Speaker 1: Looking at that 8%, 9%, 10% range.
• 31:47
  Speaker 1: If that happens, we're all going to have a stellar year.
• 31:50
  Speaker 1: House prices will stay the same or go up slightly, so that will also be good for everybody.
• 31:54
  Speaker 1: Inventory should go up.
• 31:56
  Speaker 1: That's going to be good for our buyers and mortgage rates unfortunately don't look like they're going to go down a whole lot, but if we can get them out of the sevens and get them steady in the low sixes, I think that will also trigger a buying response.
• 32:09
  Speaker 1: So, overall, the predictions for 2025 look good.
• 32:11
  Speaker 1: I believe 2025 is going to be a very good year.
• 32:15
  Speaker 1: We've suffered through 23 and 24 being just kind of eh kind of years, and I think this is where we're going to finally see the big growth back to where we want to be.
• 32:23
  Speaker 1: So buckle up, get ready, get your planning done, be ready for 2025.
• 32:29
  Speaker 1: Let's hit the ground rolling.
• 32:30
  Speaker 1: And, of course, the best and smartest advice I could ever give you is to use Black Cato Picker and Cashline on all those closings to make sure they get closed and they get closed on time.
• 32:39
  Speaker 1: That's what we do.
• 32:40
  Speaker 1: Y'all have a great weekend.
• 32:41
  Speaker 1: Come back and see us again next week for another episode of Dish and Dig.
• 32:45
  Speaker 1: Y'all take care.