Podcast- March 3, 2023

This week Jay & Tom go over the most updated stats for Frederick County real estate.  Is the market shifting? Are homes selling for less? We answer that plus much more.  You also won’t want to miss our house of the week located in Inwood, WV which has an open house this Saturday from 1pm to 3pm.

Tom Whalen:
I'm Tom with Jay Day of Jay Day and the Day Home Team of Real Estate Team's weekly real estate podcast man. Going from February into the new month of March. Jay, where do we stand in the real estate industry?

Jay Day :
Yeah, we took a pause last week for a much needed calls. St. Jude Radiothon was extremely successful. You guys raised a lot of money to help the kids of St. Jude. So anytime we need to make a pause for something that makes more sense, like being there and having that Radiothon glad to be tied in with that with you guys.

Tom Whalen:
You guys have been tied in with that ever since I've known you, man. You guys have been every time Radiothon answering phones, angel of the Hour. You're all part of it.

Jay Day :
Yeah, and it's funny, Tom, because you and I are very similar about being particular about any charities because we're skeptical. It's like what are these things really? And between that Christmas Cash for kids, there's just certain ones that we know because we've been tied to and we see how it really functions.

Tom Whalen:
Cash for Kids, toys for Tots. St. Jude. Yeah, that's mine.

Jay Day :
Yeah, no brainers. So let's talk about the real estate market. Last time we went into statistics, I was saying that the numbers were a little lower and they showed a dip, but I said I think it's probably all tied to seasonality and we wouldn't know until February closed out. Well, guess what? We were. That was the right prediction. So let me give you an idea, and today we're just going to talk about Frederick County and then I'm going to pop into something else too just to sort of touch on what's causing some of this. So our coming soons we're only at 33. We were down with properties that are going to be coming on the market and also the price went from $425,000 to $504,995. On those coming soons, active homes, we are down to 133. Last time we were 139. So our inventory is dropping again.
You hear the national news more homes are taking longer, there's more homes on the market, not in Frederick, it doesn't exist. Same thing. Our active homes we're looking at $475,000 as a median price where we were at $450,000 before. Contract, get this number, we were at 259, now we are at 260. And the interesting part with that is the price went from $400,000 to $419,450. So the prices of the homes that have been going under contract have increased by almost $20,000 and the day is on market. Last month when we talked about it was 20, now we're 8. So the homes are selling faster and they're selling for more money. Contract. We talked about contracts. So let's talk about sold. This is a big, big number and this is the one I was really looking at. So the prior month, 141 homes closed in February, 207 homes. And remember February is only 28 days, so it's a shorter month, and we had 207 closings and the median price went from $380,000 to $395,000. So a $15,000 spike, the median days on market was two weeks. Then we go another important stat of the homes that sold. How many of those homes sold above list or what's called asking priced the month prior 41, in February 80.

Tom Whalen:
Well, how do you explain all this, Jay?

Jay Day :
So well, let me give you of these stats are eye popping and then we'll get into the reasoning. So the prior month again, so it was double almost. It went from a median sold price for the ones that sold above list from $315,000 up to $3 93,625. So that is a massive, I mean that's almost $80,000 increase. And the days on market went from 14 days to 6 days. So their selling faster. Sold at list price was 45, now 65, and that was a median days on market of 12. And now how many homes sold below asking price, that number went up as well, 62 from 55. And that went from 30 days to 46 days. So what all this means, and I have to try and make sure people understand this, the homes that have sold in February when we look again, we had 207. So 39% of them sold over asking price. 31% of them sold at asking price. So when you look at that together, what do we have? 69% of those, or actually no, it's 70% of the homes sold for a at asking or above. That's huge. Does that sound to you like a market that's slowing down?

Tom Whalen:
This doesn't sound like anything you hear when you hear national real estate news.

Jay Day :
Yeah, no. And only 29% of them sold for under. Now the interesting part is the ones that sold above list, again, 6 days, the ones that sold at list 12 days. That means if you price your home correctly at the start in Frederick County, you will have known if you priced your home properly, because it should have sold in within two weeks, actually less than two weeks. If you're on the market for longer than two weeks, you probably overpriced it because again, the ones that sold for under asking the average day is on market was 48 days. So that's over a month. I mean, we're talking a huge difference. So what does that mean? What that means is should, and again, agents we're starting to run into this again, we had a decent amount of time where we weren't getting phone calls from people that their homes didn't sell. Almost everybody's house was selling. We're getting more and more calls from people who are not getting their home sold and they're saying, our agent says the market's slow. I don't know what's going on. I don't understand what's happening. They said, not many people are buying homes. Their rates are horrible. It's just a slower time of year. Those statistics, if you're in Frederick County, that does not say any of that. So the really important part is that if you're going to hire an agent, you want to make sure they know what's going on locally. They're not following what's on CNN or Fox News or any of those news stations or anything that's on social media because numbers don't lie. And that's really where we are. So the one thing is interest rates have increased, however, they've been hovering around 6.5% at the peak of when we've had this big spike in interest rates, we were looking at 7% and a little bit over 7%. So the good news is that these rates have sort of leveled out in the 6s. Again, not as great as what it was a couple years ago, but we warned everybody that's not, don't expect that. Now, one of the interesting things is fha, we weren't seeing many FHA loans. We're starting to see more of those FHA. They just made an adjustment to their mortgage insurance premiums. So that impacts what your monthly payment is. They've reduced that number. So now your monthly payment will be a little bit less because they reduced that amount, which is a good thing because the interest rate is what it is. But we're in a situation still as we talk about absorption rate again. So if we look at it combined comings soon and active, we have 169 homes, 260 went under contract. We do not have enough homes hitting the market for even a month of inventory. We're still below a month now one, there's two big reasons why we're having situations like this where there's a lack of inventory. We had it during Covid and that was the uncertainty. Nobody knew what was going on. No one knew what to expect. We have two reasons, two primary reasons now why homes are not going on the market at the speed and the pace that they need to. One is, and I saw the statistic and it shocked me, and I've talked about it like, oh yeah, a lot of people, they've got these great interest rates from when the rates were low. But get this, Tom, 65% of the mortgages out there right now have an interest rate below 4%. 65% of the people that have mortgages have an interest rate below 4%. When we go up to five, it's 85% of all mortgages are below 5%. So if you've got an interest rate that's super low and now you want to buy something, but your interest rate is going to be 6.5% roughly that's a hard pill to swallow. So it almost requires more of what we're finding is people that are getting divorced, people that are having health issues, people that have passed away. It's more of the life situations that have happened that have forced them to sell relocation for work.

Tom Whalen:
But if you're going to go buy another house and your interest rate is going to be double what it is now, that's going to be hard to swallow. That's going to be a change in your lifestyle.

Jay Day :
Oh yeah, it is. And the second reason is, and we talked about this before too, the second reason why there's a slowdown in the inventory is honestly, most people have no idea where they're going to go. There's nothing available for them to go to and that's a realistic thing. But where we're seeing sellers break loose is again, people that have urgent things going on or there's a fair amount of people that have realized they've got so much equity in their house, they can use that money and maybe purchased and not have a mortgage or have a very, very low mortgage. It actually came out that 48% of mortgage residential properties in the US are considered equity rich in the fourth quarter of last year. Meaning that the combined estimated amount of loan balances secured by the properties was no more than 50% of their value.
So roughly they had over close to 50% of the homes that are mortgaged, it's their value is 50% higher than what they owe. So that's a lot of money that people are sitting on. So I mean, the bottom line of this is, and I say it all the time, don't trust the national news. If you really want to know what's going on with the real estate market, please reach out to us. You can go to www.day team.com we'll be more than happy to talk with you. There's no obligation. We just want to talk with you about your plan to see what your current situation is and to come up with a plan that makes sense to get you where you want to be when the time is right. So that was a whole lot of talking. Did that sort of break it down for you?

Tom Whalen:
That was amazing, Jay. I mean, you bring it every time I listen to these, we've done these hundreds of times and it changes so quick from week to week, these stats.

Jay Day :
Oh yeah,

Tom Whalen:
That's what you got to call the pro.

Jay Day :
Yeah. So you ready for the House of the week?

Tom Whalen:
Home of the week? What do we got?

Jay Day :
Got 97 Layer way and Inwood, West Virginia. Actually a really cool thing. This one is a just coming on the market and we are actually having an open house this Saturday. Look on Facebook, you'll see if you listen to the podcast and you listen to the station, one of your old favorites will be there. Brian Mo will be there doing the open house. So if you want to see him pop in and again give you some details on this. This is a well maintained three bedroom, two full bath rancher. It's in Inwood, West Virginia. It's a cute Home, has an open floor plan. LVP flooring throughout private deck, walk-in closets, plenty of parking, main level living. You can enjoy everything conveniently on one level and the home is nestled in a little bit of a cul-de-sac community, but it's also close to restaurants and major commuter routes. Schedule your private tour today and this home is being offered at $270,000. You can go to WFRE.com, look up Tom and Jay's Real Estate podcast and you'll be able to see all of the photos of the home. If you like what you see, you can pop into the open house on Saturday or you can schedule a private tour by clicking the button online. I'm Tom. I'm Jay.

Tom Whalen:
Tom and Jay Day of Jay Day and the Day Home Team, of Real Estate Teams Weekly Real Estate podcast. Thank you for listening, tell all your friends about it.