Podcast - February 17, 2023

Tom Whalon:
I'm Tom with Jay Day, and the Day Home Team of Real Estate Teams with our weekly real estate podcast. We had a great podcast last week, Jay, but when a seller calls you these days, what are sellers asking you guys?

Jay Day:
Well, it's interesting because one of the things that we've started to get questions of and people are thinking about is, should I sell my house? Or with these low-interest rates I have, should I turn it into an Airbnb, a short-term rental.

Tom Whalon:
I do see Airbnb and VRBO commercials. Yes. And I've always wondered about that.

Jay Day:
Well, and I mean, we have a place in Florida, and we do that with our place in Florida because it's a high vacation area. I mean, that area down there, people go there from Tennessee, Arkansas, Florida all over. It's like a destination spot. So that makes sense. And I've, I know some people that have done some of that here in Maryland, but it all depends on, there's a whole lot of things to figure out. First is, are people really going to be coming here that need to stay? I have seen some in downtown Frederick, but one of the big things is, and it's interesting because what we're finding too is there's some polls that are out there and it says about 28% of people are considering doing a short term rental. So one of the first and most important things is if you're in this area and you have an hoa, you need to look at your HOA rules.
For example, lake. It is very clear in their rules that you are not allowed to do that. If you're found doing that, that is a violation of the HOA rules, and that would be one of the places that you could probably get away with it if you have a waterview, if you're access to the lake, things like that. And it's just not allowed. So first thing, if you're in an hoa, you need to check your rules and see if you're even allowed to do it, because people in Langor have done it and the neighbors complain because sometimes people have parties. The police end up showing it can could be a mess. Well,

Tom Whalon:
What else are you going to do unless you're going to have a party and trash the place. So I'm sort of just kidding. But that can be a lot of kids. You got to be careful of that kind of thing. Oh

Jay Day:
Yeah. I mean, the other part is it can be time consuming, and I can speak to this very clearly because when we first bought our place in Florida, I did a lot of the management myself and the amount of handholding, the amount of being responsive, chatting with the people that are there, giving them hints of, Hey, here's the restaurants to go to. Here's this to do, here's that to do, because you want to make it a great experience for them because the goal is that they come back after one season of doing that. I then hired a property manager to handle all of that. I thought, I'm like, oh, I'm in real estate. This is no big deal. I can handle this. I just hit a button and send a message to the cleaners to go clean. But yeah, it's telling you from even someone in the business, managing a short term rental is a lot of work.

Tom Whalon:
Have you regretted renting to somebody with your property in Florida?

Jay Day:
No. Okay. In the beginning it was a little weird, but when we buy stuff for it, we realize this is not, is in a property that other people are going to be staying in. We have an owner's closet where we take some of our stuff out that we don't leave out for everybody to use.

Tom Whalon:
Fascinating.

Jay Day:
And we realize that sometimes people are just going to trash things, so you're not going to get the super expensive tv. It doesn't matter. You can still get a nice hdtv, you can get it at Walmart. You don't need to go to Best Buy and

Tom Whalon:
Spend, no,

Jay Day:
Yeah, spend a thousand bucks. You can get a decent size one for two, $300. Sure. Absolutely. So it's really making that adjustment of, like Christina wanted to change the dining room set, and I'm like, ah, I don't think so. I'm like, this one's holding up. Well, let's just keep it because the other type could get messed up. So that's one of the things, the time consuming side of it. But at the same time, I get it, if you have those low interest rates, so if you're thinking about considering that, reach out to us. I'd be happy to chat with you, give you some of the pros and cons of what I've seen. The bigger thing is if you're running your margins, you have to put in there that you're going to have a property manager handle it, because I think you'll get overwhelmed. It's very easy to get overwhelmed, especially if you don't have any experience with it.

Tom Whalon:
So if somebody's thinking about doing this, they would call you a real estate agent.

Jay Day:
Well, they can call me if they're thinking about selling or do they want to do a short term rental, and I can just give them the pros and cons, what I've been through. Fascinating. And if they want to do the short term rental, go for it. If they decide they want to sell, we'll be happy to help them. But it's totally up to them. And I'm unbiased because I have won myself and like I said, I've learned a lot over time and we're looking to get more, but we have no interest in getting any more. We want vacation areas where we know we'll have a great turnaround and a great return on investment. But like I said, we've met people. They only owe a hundred and some thousand dollars on an older home in downtown Frederick. It's not in an hoa, and their interest rate is two and a half percent.
Their mortgage is super low. They could have somebody help pay that mortgage off. There are times where it may make sense. So like I said, I'm very open to answering questions. Just go to our website. You can shoot me a message. You can ask to send it directly to Jay, and I'll be happy to schedule a time. You can come in the office so we can talk through it. One of the other things I wanted to talk about quickly was what the experts were forecasting for the housing market in 2023. So the Christian DTIs, the Deputy Chief Economist for Moody's Analytics, the current state of the housing market is that it is certainly in transition and we've been transitioning. Transitioning. It went slower, faster. It is in transition. I'll agree with him on that. Susan Walker the professor of real estate and finance at the University of Pennsylvania, Wharton School says housing is going to ease up.
She thinks 2023 will be a turnaround year. I think it is easing up in certain markets, and it's not in others. Lawrence Jones, who we've talked about multiple times, the chief economist with the National Association of Realtors says mortgage rates have fallen in the recent past weeks. He's hopeful that the worst of the home sales is probably at an end. Now, realistically, this just came out a couple of days ago and interest rates were below 6%, and then they went right back up above 6%. So we're starting to see the Fed hadn't done anything in a while. They did an interest rate adjustment. The markets responded. I mean, we're still, we're not at the highest. We were over 7% at one point. We're still in the sixes, but it's fluctuating, and I mean, I don't know if we'll get below six. Again, it's all going to depend on what happens with the economy.
The one thing I can tell you is our market has picked up. We are seeing more sales. If you listen to the podcast we did last week, it gives all the details and what it boils down to is people saw the rates had dropped, they took advantage of it, and you've got to pay attention to that. When the rates get to where you're comfortable, jump out there. Don't be afraid because there's no guarantee that the rates won't go above 7% again, then there's no guarantee they won't go below six. We just, it's again, you and I used to joke about this, Tom, if the one thing we learned in the last couple of years is nothing is truly predictable, and things change constantly. I mean, yeah, nothing follows any type of old norm like, oh, this is how, this is what would happen. It's

Tom Whalon:
Always moving. The interest rates are always moving up down. We don't know when they're going to start moving in what direction or how long they're going to move in that direction. That's one thing as a layperson, I've learned.

Jay Day:
Yeah, and the one thing is, if you're listening to this, some people don't realize the mortgage rates. It's not like it changes once a week once a month, once a day. It's changing and fluctuating throughout the entire day. It can go from start in the morning at 6% and hit 6.75% by the end of the day. That's why

Tom Whalon:
You call the

Jay Day:
Pros. Yes, yes. And we've got great lenders we'll connect you with that can keep their pulse on that and let you know what's happening. You ready for the home of the week? Anytime. All right. I know that was a lot of stuff to talk about. 113 Patricks Court in Smithsburg listed at $300,000. I'm going to give you some details here. This is a fixer upper opportunity. It is located in Whispering Hills community. Great community. A lot of people like to be in there. It's close proximity to schools, parks, and local amenities. It's a four-bed, two and a half bath. Colonial has an open concept, kitchen and family room, a wood burning fireplace, kitchen island and pantry, granite counters, stainless steel appliances, rear deck, patio, and fence yard. The master suite has a walk-in closet, an attached bath, and the, there's a partially finished lower level that has a spacious rec room, laundry area, generously sized storage room. Additional highlights are a two car attached garage hardwoods. See the large backyard, mature trees with some TLC. You can bring the sparkle back to this great property and it can be enjoyed for years to come. Hard to find something out there in that neighborhood for $300,000. Like I said, it's priced because it does need some TLC, but if you've got the ability to make it shine this could be an amazing home for you. I'm Tom. I'm Jay with the Weekly Real Estate Podcast. Thank you for listening and tell your friends all about it.