Podcast - 8/25/23
🏠🎧 Exploring the housing market's connection to jobs and wages? 📈 Tune in to our latest podcast episode for a comprehensive understanding of how these factors drive buyer demand and impact your selling strategy! 💼💰
💼 More Jobs, More Buyers:
The economy's robustness continues to create jobs, strengthening the job market. With 187,000 jobs added in July, more people with steady incomes are entering the market, opening up opportunities for potential homeownership.
💰 Rising Wages, Higher Possibilities:
Steady growth in hourly earnings empowers buyers with increased purchasing potential. This rise in income counterbalances affordability challenges, making homeownership dreams more attainable.
And don't miss our "House of the Week" spotlight—a stunning brand new home, just waiting for you! 🏡💫 Situated near the lake, this home boasts 6 bedrooms, 4.5 baths, and a host of luxurious features, from a gourmet kitchen to a covered deck. Experience the best Lake Linganore has to offer!
With valuable insights and a featured home you won't want to miss, this podcast episode is a must-listen. 🎙️🔮 #realestate #podcast #housingmarket #jobs #wages #buyerdemand #homeownership #houseoftheweek #LakeLinganore #realestateinsights
Hey, it's Andy Webb.
And Jay Day.
And this is the Tom and Jay Real Estate podcast. I'm Andy Webb filling in for Tom Whalen, who is out this week. But Jay, you and I are here, and I will obviously bring up a big point that everybody already knows. Interest rates are high. That goes without saying, but normally that would slow down the market doesn't seem like that's happening. Why is nothing making sense?
Well, I mean, you and I have talked about this offline many times since Covid. Nothing has really made sense. We haven't gotten, we don't even know what normal is yet. And I don't know if we ever will know what the new normal will be, but you're right. Typically, when interest rates increase, especially if we look back, we were, and it's funny because I'll hear people say all the time, well, historically our rates aren't bad. That is very true. However, when rates were 12%, houses were maybe a hundred thousand dollars, not 700,000. So what's caused this, and there are a whole lot of different things, but the more interesting thing in my opinion is this demand is still insane. Meaning we're having a lack of inventory. And what causes house prices rise? It's supply and demand, period. Same thing that happened with the car industry during Covid when you couldn't get cars and even used cars were selling for way more than they ever did because people just needed a vehicle because they were out. They didn't have the inventory to build. And the same thing happened in construction where lumber was just not being produced. It wasn't available. It wasn't accessible. So all this stuff has that impact. And what we're seeing, and you and I chat about a little bit, is the more jobs and better pay is allowing people to be able to afford these higher payments. If you would've told me what some of the pay is that some jobs that you and I mentioned, we won't give specific things, but sometimes you drive around and you see a place that's paying over 20 bucks an hour and giving a five or $10,000 bonus if they stay on for 30 days. That was unheard of. So when you look at that, that brings those numbers up and gives people a little bit more comfort. And the companies have to make adjustments because you can't bring somebody in new, for a dollar less than someone that's been there for 20 years, has 20 years experience. So that's one of the reasons. And according to the Bureau of Labor Statistics, 187,000 jobs were created just this past July. That means more people are finding work and the unemployment rate is lower than it's been. It's 5.7, is the average. And we came in July at 3.5. So if the average for unemployment was 5.7, we're coming in at 3.5, that means there's more people working, are making more money, their earnings are going up and hourly earnings are increased about four and a half percent from last year, is what we're seeing. And like I said, we're in this situation where we have so few homes available and think about it, new construction is coming into play. It is helping offset some of that. However, let's say you own your house, and we have these conversations with people all the time. Well, Jay, I'm in my house now. I owe, I have 10 years left of my mortgage. My interest rate is only 2.875. I don't need to move. Why would I move? And the answer honestly is, if you don't need to move and it doesn't make financial sense for you, then don't move. And it's funny, people will think, oh well, you're in real estate. Your job is to convince people to sell their homes and to buy homes. That's not how our team operates. I mean, I was just sitting with some people in Bunker Hill, West Virginia, sitting out on their back patio and we're talking through things and he's like, it sounds like you might be talking yourself out of listing my house. And I'm like, no, I need to know what your goals are because it may not make sense for you to make that move right now. And once we got down to getting into the nitty gritty, it did make sense for him because, and I'll give an example. If you have credit card debt, well, one, he has a lot of equity in the house he's going to walk away with, I say a lot. He almost has 50% equity in the house from what he owes and what he paid for it. So he's basically almost doubling his money. And he was looking at it. He goes, but I have three credit cards and those are 23% interest. I have a car payment that's 9%. So when you add it all up, he was smart enough to understand, like hey, I'm paying a ton of money. That's not even getting me to the goal line where I'm sitting on this right now. And I could make close to a hundred thousand dollars and be able to pay off every bill that I have. And then I'm just going to rent because I don't know where I want to be and my kid needs to finish school, doesn't have a whole lot of time left in school, four years. And he's like, and I may want to go down south. So he's talking through this with me. And it did finally make sense where he was like, I don't want to stay here. It's not going to help me achieve my goals. He goes, because my credit card debt is going to continue to climb because the interest rates are what they are. And he's like, and I don't need to buy. I just want to rent something. So maybe it does make sense for me to sell. And we ended up doing paperwork the next day. But it's really trying to understand that. And when we talk to people about selling, they do need to really try and think about, why am I, do I want to move? Do I need to move? What are the pros? What are the cons? And one of the biggest things people are afraid of doing is calling realtors because they know we're trained salespeople and trained salespeople are trained to get you to sell things.
Yeah, it's your job.
That's our job. So the approach that we've had for the longest has always been we want to know your why. We want to know what's going on, what has you even thinking about it again, because if we understand that we can help communicate, we can help educate, we can talk about the pros and the cons, and then ultimately it's up to you to make that decision of what makes the most sense for you or you and your family. So if you're listening to this and you're curious, or I'm sitting on the fence, I'm waiting. How many people were waiting for home prices to drop, interest rates to drop? None of that is happening.
No, not anytime soon.
Yeah. And we've been hitting over 7%. I think it was two podcasts ago I talked about the predictions where the specialist and experts in the fields swore that we weren't going to go over seven, and we've already been over seven. I said, I'd be shocked if we don't hit eight or eight and a quarter this year. And again, I'm no economic person. That's not my thing. But the common sense of seeing where things are going, the trajectory of real estate, it's very easy to see us being able to hit that. Because if you talk to those people a year ago, none of them thought we would've went from three and a quarter to seven and a quarter. It just wasn't even in the, they were thinking we were going to tap out at like five maybe, and they were dramatically wrong. And when you listen to the Fed, the Fed is talking that they're still going to have to raise rates because, and this is the interesting part, they're going to have to raise rates because the jobs people are making too much money and the unemployment's too low. It totally doesn't make any sense. But that's how economics works, I guess.
Right, to the common man.
Yes. Yes. So you ready for the house of the week?
I would love to hear the house of the week. So if you are looking to move, this might be a viable option.
Oh, if you were looking for new construction, but you didn't want to have to do the waiting, 6750 Accipiter Drive in New Market. This is in the Aspen Village of Lake Linganore. So if you're listening to this and you have no idea what Lake Linganore is, it is a planned community in New Market. The amenities are amazing. There's multiple lakes. You can do kayaking there. There are multiple pools. There's beach volleyball, there's beaches, there are pickleball courts, tennis courts, you name it, they have it. And they even have private concerts. They have all types of events. They have their own 4th of July firework celebration. But this home is listed just over 1.1 million. Six bedrooms. Five of those are above grade, four full bathrooms, one half bath. There's a Z line, 36 inch professional gas range, a massive kitchen island, quartz counters. There's a beverage center in the island in the kitchen. From this home, the front of your house, so when you're in your family room, your formal living room, your master bedroom, and then another bedroom, you can have seasonal lake views when the greenery is gone from the tree. So you'll be able to have water views. They have a walk-in pantry. This builder builds an amazing house, walk-in pantry with solid wood shelving. All of their closets, not just the pantry, have all solid wood shelving. None of that wire stuff that things fall off of. We all go to put our cans in there and you can't really stack. Yeah, it makes the difference. There's a main level office, there's a massive family room with a fireplace. There's a covered composite deck and porch. Like I said, it's an absolutely gorgeous home. If you go to wfre.com, look up Tom and Jay's real estate podcast. Not only will you see photos, we actually have full video with drone footage and everything. So you can see what's surround the house, what the house looks like. If you like what you see and you want to see a private tour, you can just click right there and say you want to schedule time to see the home, and someone on our team will meet you. We also, as I keep running here, well at least the mouth keeps running, this weekend, Saturday and Sunday. It is being held open from 11:00 AM until 4:00 PM. So 11:00 AM to 4:00 PM, you could actually just swing by the house. 6750 Accipiter Drive in New Market, Maryland. If you like what you see, let us know. We'd love to get you into the home.
I'm Andy Webb.
I'm Jay Day
and this is the Tom and Jay Real Estate podcast on WFRE.