Latest / Ask The Experts / Inventory with Rock Realty

Transcript

Inventory with Rock Realty · Ask The Experts

0:06
Hey, thirty nine thirteen ten w I B A and ask the experts.
0:10
Hanging out this morning with Matt Heitman. He is with Rock Realty. Matt,
0:15
how you been. I'm doing great? How about you? I'm doing
0:18
really really well. And we've got we're going to be talking about uh markets,
0:22
uh specifically past present future. We're gonna be going through some really interesting
0:27
data on some real and people say interesting data, well, maybe kind of
0:31
boring, but some people getn't do it. It's it is actually I will
0:36
tell you, folks, I had a chance to kind of read through it,
0:38
and uh, there's some really interesting stuff out there. And one of
0:41
the one of the shames is as we look at some of this stuff,
0:45
unfortunately people don't always know how to digest the information. Like they'll see things
0:49
in the news or hear things on the radio about you know, little data
0:53
sets and not fully understand what those mean, and it holds people back from
0:58
maybe doing what's best for them. And we're going to talk about just kind
1:00
of the real estate market in other areas of course, as mentioned, Matt
1:03
comes to us from Rockrealty Online, Rock Wisconsin dot com. That's Rock Wisconsin
1:10
dot Com. Telph number six o eight six seven three fifty four hundred.
1:14
That's six seven three fifty four hundred. Before we get started on this week's
1:17
conversation, Matt real quick, let's talk about Rock Realty and talk about you.
1:21
Talk a little bit about Mike as well, a little bit on the
1:23
background of how you guys got started. Yeah, we've been in business now
1:29
for over fifteen years. It's me and my business partner, Michael Collins.
1:33
We've got two different offices currently, one's based up of Stote, the other
1:36
one in Janesville, and we've built the firm up to over forty agents.
1:40
And you guys are truly independent. That's a that's a really interesting and we've
1:44
we talked about it a bit last week, but you guys aren't like a
1:48
breakaway or anything. You literally said, we're creating our own thing from the
1:51
ground up, which which as you mentioned, been doing this fifteen years now.
1:56
There have been some obviously I've seen a maze in growth and it's one
2:00
of those areas where kind of fulfilling that dream. It always surprises me when
2:07
you hear some of these stories of like how do we get in and it's
2:10
kind of reflectable. We're going to talk about today with kind of the market,
2:14
past, present, future, kind of how you got to where you
2:16
are now. It's a pretty amazing story. Is you know, you have
2:21
this dream and then you know you do the work and you realize it's actually
2:24
working. It's actually very six. Did you ever, like, realistically,
2:29
obviously when we started this, you thought this is going to be a great
2:30
opportunity. Did you think fifteen years ago you'd be sitting here today and you
2:35
know, at the office with the with the other agents and that type of
2:37
thing. Was that what you envisioned? Yeah, I never thought i'd get
2:42
this large, to be honest, you know, eight o nine, it
2:45
was hard to imagine any sort of real estate career was going to be a
2:47
good choice. But yeah, I mean it's grown far more than I thought
2:53
it would. I'd say the first you know, three to five years or
2:55
certainly a struggle and taught us a lot of things and it's kind of helped
3:00
make a foundation for where we're at right now. It's pretty amazing. And
3:04
as we talk with Matt, don't forget you can learn more online Rock Wisconsin
3:07
dot com. Rockrock Rock Wisconsin dot com. DELFH number six So eight six
3:13
seven three fifty four hundred. That's six seven three fifty four hundred. So
3:15
let's talk today about the real estate market. Obviously, there's a lot of
3:20
changes in the past stuff four to five years, and I'm guessing a lot
3:23
of folks are kind of thinking, uh, where do things stand and where
3:25
is this going? Yeah, yeah, no, it's a good point,
3:29
you know, I guess to understand where the current real estate market sits.
3:32
It's always good to know where we came from. You know, if we
3:36
go back to COVID. Unfortunately we'll talk about COVID, but we go back
3:39
to COVID, you know, the whole world essentially shut down, and it
3:45
created a lot of pent up demand for products that weren't being produced. As
3:50
everybody knows, we came out of that with everybody looking to buy and whether
3:54
that was clothing, like a new car or a house. Yeah yeah,
3:58
everybody was looking to you know, get a larger space for their home or
4:02
maybe a home with a pool coming out of COVID. But that led to
4:05
a lot of price inflation, right and you know, that's what what we
4:10
saw coming out of there. You know, in twenty twenty, you know,
4:13
do do everything shutting down. We were actually below the two percent target
4:16
for inflation that the FED looks for. Interesting, but then in twenty twenty
4:19
one that skyrocketed to seven percent. Yeah. Well and what did you you
4:24
know going through that time? What was it like on your side, as
4:29
you know, working in real estate as an agent, what was you know
4:31
thinking of that COVID time? What was that like? How were I gotta
4:34
ask? How did you do showings and other things? How did that work?
4:38
Yeah, there's a short time period there where we were wondering how any
4:41
of us were gonna be able to you know, do our business. Yeah,
4:44
right, just like everybody else. Fortunately, especially in this area.
4:48
I think EVERS had made us one of the first careers or professions that they
4:56
would allow it to go out and under certain rules and under certain protections go
5:00
out and actually do showings and such, and so we were we were blessed
5:03
to be one of the few industries that was able to start right back up.
5:06
We think about what you do. That's it's a very personal thing too,
5:10
and that that makes it very you know, is when you think about
5:13
making a purchase of a home, you really want to have a good relationship
5:17
and having that that literally and figuratively that barrier at times with COVID it was
5:21
probably quite a challenge. So you mentioned kind of where those inflation numbers were
5:27
and then of course where they've gone. How does that then that inflation,
5:30
How does that matt affect real estate? Yeah, inflation. Historically real estate
5:38
is kept up with inflation. It's quite often a stay ahead of it during
5:42
inflationary periods. You know, hard assets tend to rise in value, right,
5:46
So real estate being one of the staples of hard assets. If there's
5:49
inflation, that means there's input costs for building, which means that it costs
5:55
more to build a home, which helps to raise even the pre owned market
6:00
and are described as that, right, So, you know, the inflation
6:03
does help real estate increase in price. However, there was a kind of
6:08
a negative effect that came along with that when the Federal Reserve had to take
6:11
action, you know, so you know, starting in March twenty twenty two,
6:15
and they went a little over a year, they did price raises or
6:19
i'm sorry, rate raises on their FED funding rate. So it went from
6:24
zero percent all the way to five point two five percent by July of twenty
6:29
three, and as a result, that also affected mortgage rates. And what
6:33
people don't always understand is is the feder rate doesn't app it's it's if the
6:38
fread change is right, that doesn't change what mortgage rates or interest rates are
6:43
per se. Obviously, ultimately it trickles through the financial system and has that
6:47
effect when you talk about inflation and you talk about real estate. One of
6:53
the things and one of the statistics in some of the really interesting you shared
6:58
a number of data sets and one of them is equity and equity gained.
7:02
You you pointed out to me that that three year number, and I to
7:05
me, it's it's it's pretty substantial for folks. Really really, you talk
7:12
about gaining equity, gaining some gaining some some real financial strength. It's been
7:17
a good time to have real estate, hasn't it been? Oh? Yeah,
7:19
absolutely, you know, and especially in Dane County. You know,
7:24
it was actually a little surprising to me when you kind of look at the
7:26
numbers for Dane County versus the US or Madison, I should say specifically the
7:31
US. Over the last three years, prices have appreciated for homes in real
7:36
estate by twenty one percent, which that's it's a large number. Yeah,
7:40
we're talking about the home prices we have today, but in Madison it was
7:44
actually twenty eight percent, and that that correlated to a lot of money.
7:47
Average equity. Average equity over that three year time span was an increase of
7:51
one hundred and eighteen thousand dollars. That is amazing. That is really amazing
7:57
to see. And you know, you think about when's the best time to
8:00
buy a home. It was a good It's a good time to buy a
8:01
home, isn't it. It's almost always always exactly it's talking this morning with
8:05
Matt Hyman. He is with Rockrealty Online, Rock Wisconsin dot com. That's
8:11
Rock Wisconsin dot com. There's Telfing number six, so eight six seven three
8:15
seven six seven three fifty four hundred. That's six seven three fifty four hundred.
8:20
Before we get into kind of a little bit more into those into those
8:22
mortgage rates and and kind of what they what we've gone through and working through
8:28
that with these with these type of you know, as we just talk about
8:31
paying for homes and and kind of how that works, do you guys have
8:35
certain people that that you oftentimes will say this is you know, these are
8:39
the people that we've worked with in the pact, we talk about that importance
8:43
of that, you know, very personal relationship with your agent as a home
8:46
buyer home seller. But also it's important to get that right mortgage person as
8:52
well, isn't it? Absolutely? Yeah? Having the right team, yeah,
8:56
is important, especially when you're dealing in a seller's market. So if
8:58
you're if you're a buyer and you know you're already at a bit of a
9:01
disadvantage because of the market, it's important to have the right people behind you,
9:07
get the right loan type, have all the options and clauses available to
9:09
you. So, yeah, can you guys help folks find that right person?
9:13
How does that? How does that work like? Because I think sometimes
9:16
either obviously first time home buyers, it's a completely new experience. But for
9:20
a lot of us, this is not something we're doing regularly. It may
9:24
have been a number of years since the last time we bought a bought a
9:26
home or sold a home, and we're talking about obviously markets change hourly daily
9:33
some cases, it's definitely a very different thing. Can you help folks kind
9:37
of guide them and say, you know, these these are particular things available.
9:41
This may be the right person for you to work with. When it
9:43
comes to financing. Yeah, so you know, obviously, over the last
9:46
fifteen years, we've had a lot of experience with you know, different lenders,
9:48
title companies, insurance companies, and it's it's allowed us to hone it
9:54
down to who we feel are our best preferred partners is what we call them.
9:58
Have have titled companies has gotten any easier. They still bring out a
10:01
bucket of pens when you when you sign that. You'd think it'd be all
10:05
electronic at this point, but no title companies. Unfortunately, you still have
10:09
to get cramps in your hands as you signed for an hour, Yes you
10:11
do. Talking this morning with Matt Heyman. He is with Rockrealty Online Rock
10:16
Wisconsin dot com. That's Rock Wisconsin dot com delph number six to eight six
10:20
seven three fifty four hundred. That's six seven three fifty four hundred. We'll
10:24
talk about what happened with mortgage rates during during those years. We'll get the
10:28
details from Matt next. Of course, the meantime, I've been to the
10:31
website, yed check out Rock Wisconsin dot com looking to buy, you're looking
10:35
to sell, maybe you're just looking to check things out, see what the
10:39
market looks like. It's a great website, Rock Wisconsin dot com. More
10:43
of asked the experts with Rock real team next here on thirteen ten though,
10:46
but eight fifty one thirteen ten WYBA and ask the experts with Rock Realty hanging
11:01
out with Matt Hypeman. He is with Rock Realty the website Rockwisconsin dot com.
11:05
That's R O c K Rock Wisconsin dot Com to album umber six oh
11:09
eight six seven three fifty four hundred. That's six oh eight six seven three
11:15
fifty four hundred. Before the break, Matt, you were talking about between
11:18
March of twenty twenty two in July of twenty twenty three, the FED really
11:24
really quickly bringing up bringing up rates. So what kind of happened then to
11:28
mortgage rates during that time? And then kind of where do we stand right
11:31
now? Yeah, as as you had mentioned, even when the FED raises
11:39
rates, it doesn't directly affect the mortgage, but it leaks into that,
11:43
right, Yeah, it does affect it over the long run. Right,
11:46
So, in March of twenty two, as many of us remember, the
11:50
mortgage rates for hovering around three percent right still near all time lows, and
11:54
then as the rates raised it it's I recorded pretty quickly to you know,
12:03
I'd say around eight percent was probably when it was topping maybe the Peaka last
12:07
year, late last year. I would it with that. And and by
12:11
the ways, as people that are like like, oh three percent, was
12:16
I all three and then they're like, oh eight percent, oh I fred
12:20
Fred Fredd eight percent historically, I mean, if you look correct me if
12:26
I'm wrong, eight percent is actually quite quite low for if you look back
12:31
to the eighties and you know other decades as well. I mean it's still
12:33
not it wasn't a bad, horrible rate, was it. Yeah. No,
12:37
I mean obviously it's it's been much higher. Yeah. I would say
12:39
eight percent historically is is near average, right, I mean in I think
12:43
in two thousand and three when I bought my first house, they were sitting
12:48
around seven percent. And that's yeah, and and and that's as we talk
12:52
about this stuff with Matt Heytman with Rock Realty, as we kind of break
12:56
down some of those numbers, let's kind of get then how locally this is
13:01
affected thing and affected the market here in Dane County, Rock County, southern
13:07
Wisconsin. Well, for the last ten years and maybe a little bit more,
13:11
we've had more of a seller's market, you know, means there's more
13:16
buyers than current inventory home listings. With the higher home prices, and then
13:22
also this increase in rate, it's had a big effect on home affordability,
13:26
right, So we've had different first time home buyers and such have to drop
13:31
out of the market, right with these higher costs, And it's showing just
13:37
recently some leveling out, if you will. Right in June of the last
13:43
year, we had a year over year decrease of twenty two percent in actual
13:48
home sale numbers, right, and that's in Dane County and fifteen percent in
13:54
Rock County. But last month we had a change in that and we've seen
13:58
the change in that in the first quarter here, so we've actually had an
14:01
increase in home sales by ten point one percent in Dane and nine point six
14:05
percent in Rock Counting. So it is indicating the market might be leveling out
14:09
a bit. Well, that's good. It's good to hear to kind of
14:11
get that get that balance. We're actually to talk about that word balance in
14:13
just a moment. But I got to ask you too, Matt. With
14:16
obviously current homeowners they're you know, eating this stuff up. They're saying my
14:20
property value, my home value, it's gone up. It's a nice time
14:24
maybe to be looking at that step up home or maybe even cash nowt a
14:30
bit, maybe doing a little downsizing, especially if the kidos are out of
14:33
the house. What about like for first time home buyers, how does that
14:35
access ramp work now? For them? Are a lot of them obviously working
14:39
with the right lender and the right programs. Are a lot of them also
14:41
working with parents and grandparents to maybe get them, get them kind of going
14:46
as mentioned, kind of use that word that on ramp into real estate.
14:48
Yeah, that's a good point. You know, a lot of people are
14:52
having to compete with you know, cash buyers and such in this market,
14:56
people with a lot of money down So oftentimes first time home buyers will lean
15:00
on you know, their family for you know, help with that down payment
15:03
and such, just to make their offers stronger so they have a fighting chance
15:07
in the market. Does it work better to having an established agent, somebody
15:09
that kind of understands the different markets. I know, I don't think we
15:13
talked about it on the air, but last week during one of the breaks,
15:16
you and I were talking about some of the some of the markets around
15:18
the area some of the you know, every different area has different different things,
15:24
and there are certain gems out there that people may not always think of.
15:28
But if you talk to a really good agent, they'll say, have
15:31
you thought about, you know, maybe twenty minutes outside of Madison, this
15:35
great community, it's got all you great schools, great it's got a nice
15:39
little restaurant, a nice little grocery store. You think about that. Working
15:43
with a good agent can really help point those people in that right direction,
15:46
can't it. Yeah. Absolutely, there's a lot of buyers that are very
15:50
pigeon holed on looking in a specific city, specific school districtions like that.
15:54
If you have an experienced agent, they can recommend, you know, something
15:58
that's worked for other clients that felt in the past right, And maybe,
16:02
like you said, it's teer them to a suburb a little further down the
16:03
road or maybe a slightly different school district, but you know, still be
16:07
able to find that affordability that they're looking for. So, Matt, let's
16:11
talk about you use that term or maybe I one of us used, maybe
16:14
we both did. We're going to say we both did use that term balanced
16:15
inventory. What is that balanced level? What are we looking at? There.
16:18
How's that defined? Yeah, So how that's figured is the number of
16:22
months of inventory of home listings compared to the number of buyers that are in
16:29
the market. Right, So typically you'd have five to six months of inventory
16:33
for the buyers in the market, and that's considered a balanced market. But
16:38
at this time last year, we were actually sitting at point eight of one
16:41
month of inventory, less than a month's worth of mind less than a month,
16:45
right, very skewed to the cell side. Last month we had increased
16:49
that to one point two months of inventory. Obviously, still very seller signed.
16:56
However, it does look like it's starting to level out, and I
16:59
would think that, you know, with the price increases that we've seen as
17:02
well as the mortgage rate, that would that would be a reason why it
17:06
may be leveling out a bit. Very fascinating stuff. And if you miss
17:08
any today, any of today's program, don't forge. If you had on
17:11
over to w I b A dot com and they ask the experts podcast section,
17:15
you can listen back to all this information. Speaking of websites, Rock
17:18
Wisconsin dot com, that's Rock R O c K Wisconsin dot com. Tell
17:22
for a number six seven three fifty four hundred that's six seven three fifty four
17:26
hundred. The website Rock Wisconsin dot com. That's rock Wisconsin dot com.
17:32
Real quick met before we wrap up this week, just a little bit about
17:34
you and and we talked about I know you're softball dad, right, it's
17:41
gettos, gettos playing the sports for for families right now that are that are
17:45
looking you know, at the market and working with somebody that that's been you
17:48
know, maybe your We talked about good schools, I know, also having
17:52
having uh, you know, good sports facilities, those type of things.
17:56
I mean, does it get that individualized for like folks saying, hey,
17:59
my my daughter, my son, they're really into a certain sport we want
18:03
to be you know, I think of football and I'm going to say football
18:06
and want a key, and we get myself in trouble with some folks.
18:07
You think of some of these you know, you think about what they've done
18:11
into forest, Oh my goodness whatever over there, Like yeah, do you
18:15
get parents that are like, hey, this is where I want to be
18:17
with my kiddos? Oh? Absolutely yeah. And obviously some sports you know,
18:21
do better in different cities. So yeah, yeah, you'll have uh,
18:23
you'll have parents that are looking for a specific school because of a sport,
18:27
yeah, or at least within driving distances. So no that that happens
18:33
a lot. And it's always important to have an agent that understands, you
18:37
know, the sport, the sports locations, the complexes, you know the
18:40
ins and outs of it. So all the all the cool stuff that's available
18:42
out there. And today's a great day. Van check out the website.
18:45
Head on over there now Rock Wisconsin dot com. That's Rock R O c
18:49
K Wisconsin dot com. But think about buying home, but think about listing
18:52
your home right now, it's time. Give them a call at Rock Realty
18:56
six O eight six seven three fifty four hundred. That's six seven three fifty
18:59
four one hundred, Matt. It's always great hanging out with you. You
19:02
enjoyed this beautiful day, all right you as Wilser News comes your way next
19:03
year at thirteen ten WU IV eight