Show- January 7, 2023

Welcome to Real Talk Real Estate! Our radio show is all about helping you navigate the world of real estate, whether you're selling your home or just looking to stay informed. We cover a wide range of topics, including seller strategies, winter month sales activity, and the importance of seasonality in the market. Tune in to hear from industry experts and get the latest insights on what you need to know to make informed decisions when it comes to real estate. So join us and get ready for some real talk about the world of real estate.

WFMD:
930 WFMD is at your service featuring local business people who are experts in their field.

Introduction Music:
Cross a few creeks and a couple of little shacks. You have gotta get lost, way on out, crickets and frogs, yeah you are getting close now.

Jay Day:
Good morning, WFMD listeners, I'm Jay Day and

Christina Day:
Christina Day

Jay Day:
With Real Talk Real Estate and we are already in 2023. Woo. Man, I tell ya, time flies by.

Christina Day:
Yeah, happy New Year's everybody.

Jay Day:
So a lot has happened over the last year. The real estate market has changed a little bit. You've got all types of national headlines about what's going on with the real estate market. Seems like we get a lot of questions. There's a lot of misinformation that's out there. And one of the bigger things, I know you love stats, but one of the bigger things that we run into is people look at these national stats and go off of all of that information when realistically what matters is where you're selling your home. What's happening here is different from what's happening in other places. And for those that may be tuning in for the first time, we do real estate in multiple states. We're in Maryland, we're in Pennsylvania, West Virginia, and Virginia. And even in the States and get down to the county level, it's very different. So I know Christina loves talking stats. So let's get into some of the stats. And this is real information. It was pulled this week. So give our listeners here an update.

Christina Day:
So it's interesting cause we get asked all the time, what is going to happen? And if I had a crystal ball, we'd be really well off, right? Yes, as would all of you, because we could give you that forecast of what's going to happen. But there's no crystal ball for real estate. And I was talking with somebody just yesterday and I was saying there are so many things that influence what is happening in our real estate market right now. And you have to remember, just like Jay said, it's very localized. So the things that you see on the headlines are national. And we're not national here, we're local. And the reason the national numbers don't apply to us is that things like California and some of these other major metropolitan cities saw ridiculous growth over the last couple of years. I mean we saw a lot of growth, but they saw ridiculous amounts of growth. They're in a much more serious retraction phase because their numbers were so much bigger.

Jay Day:
I mean, I heard a stat the other day I think it was listening to a blog post or something, and they were talking about the national average. Now for days on market was over three months. And I'm like, huh?

Christina Day:
Right.

Jay Day:
We are definitely not at that stage at

Christina Day:
All. No. And even when we compare notes with our friends who run teams and brokerages around the country, I would say our area is really in a much more stable place as a constant. There are a lot of good things there for both buyers and sellers. If we look at the Frederick County area specifically, we'll start with Frederick County because that's where we are based. And also I think Frederick County has a pretty dominant spillover effect into the neighboring counties. We're a major destination place for people to look for housing. We're a great commuter location. So there's a lot of things that kind of spill over into those outer lying areas. For the coming soon activity, we currently have 20 this week that are in coming soon, the prior month we had 21. So that's pretty much a constant. We haven't changed much over the month over the month. Now, remember this time of year is a much quieter time of year. So you don't have a lot of people putting their houses on the market in December when Christmas is coming. Likewise, you have a slow uptick that will start happening in Janwhich which will feed us into February and March. So on a normal market cycle, we would see the lowest amount of inventory between December and January because people take their houses off the market.

Jay Day:
And that's one of the things that's really interesting too. When you hear the national news, they talk about, oh, this is slow, that's slow. But they don't talk about seasonality, which is one of the biggest things that has happened and has been consistent. We've been in this business for many, many years and it always slows down a little bit. That's, think about it. I mean it was funny because I was doing my podcast the other day and we were talking about there's just so much that goes on around the holidays that the last thing you're thinking of is, oh, I want to add extra stress. I've got the Thanksgiving stuff happening. I've got the family coming over, I've got Christmas happening, and oh yeah, let me just sort of buy a house in between the middle of that like that's the people that are moving because they have to move. And

Christina Day:
We did see sales in through our office in December which was really exciting to see.

Jay Day:
Yeah, it was funny because during the podcast I said we still had homes that went on the market. We still had homes that went under contract. We still had closings. It just was at a little bit of a slower pace, but it was still, I thought it was a very good pace and healthy pace considering the seasonality and what we are exactly what the expectation was.

Christina Day:
Exactly. And so one of the things to think about is that coming soon number I expect we'll start to climb as we do this show on a monthly basis, you'll hear that number continue to go up. I also think with the market being what it is, a lot of sellers now are starting to think, okay, I see that we're at the top of the roller coaster and I see that we're coming down the hill and maybe it's time for me to go ahead and put my house on the market. I might have missed a peak of a peak, but I'm not going to find myself down at the bottom. I need to start making some life decisions.

Jay Day:
Well, and it's because a couple months ago, if you were selling your house, you didn't really even have to do anything to get your house ready. And when I say that, I mean we still did, but a lot of people were able to get away with not updating the flooring, not updating the kitchen, not having things repainted because the demand was there and the demand is still there, but it's a little lower because the affordability is changed. So those that are selling now are just having to do a little bit more than you might have had to do last year.

Christina Day:
Yeah, you got to look good when you're hoping to get asked out to the prom, right? Yeah.

Jay Day:
And we're going to put lipstick on and we'll talk a little bit about these and numbers will give some answers, but we'll talk about strategies and things like that because there are still homes that are selling for asking their homes that are selling for less. There's, you'll get into details about how many people are getting closing help. All of these different pieces have fallen into the puzzle.

Christina Day:
And so speaking of the actives, right? So we have active homes currently 194 and then last month it was 216. The active price has ticked down just a smidge. It's by about $8,000. So not a huge difference in the price of those active homes, but a little bit

Jay Day:
Less. And there we go, exactly. If we're talking, if you listen nationally and they say there's over three month supply, our supply is down even more. So again, not relevant. You're listening to this national news and it's just not giving you real information.

Christina Day:
Exactly. Now the median days for those actives is 42 days. So that is just a hair over a month rolling into a month and a half. And of the actives, 79 of those actives have had a price reduction. So when we look at price reductions and we talk about price reductions, the interesting thing about a reduction, and I have this conversation with folks all the time, sometimes you push the envelope a little too far on your price and it happens. You have a number that you want. We have a number that we would like to see you get, but you never really know who your competition's going to be and how the market's going to respond to your house. So when an agent comes in and is giving you a price, they should be giving you a good ballpark of what to expect. And that ballpark might be a five to 10% variation up or down.

Jay Day:
So also when we're looking at this, one of the important things, and again, I keep talking about the podcast because I just recorded it but we talked about strategies being a part of our job. And it is funny, because in the podcast, Tom said to me, well, when you tell them what to do, and I'm like, well, we don't really tell them what to do. We say, here are the different strategies. Here's what you could expect. Worst case, best case from each, which strategy would you like to adapt? And which one do you want or adopt? And which one do you want done? And then if that strategy doesn't work, for example, someone wants to push the envelope and get a higher number, and we're out there and nothing's happening, it's not hard for us to go and to talk to them and say, hey, we warned you with this strategy.
This could happen. And at the worst case right now, so let's make this. And that sort of ties into the adjustments and how many homes have been reduced. Because I think the biggest thing is, and we get a lot of people that call us who were unsuccessful with selling their homes. And the biggest thing that I hear is that there was a lack of communication or not explaining by doing this, it could happen or that there was another option. Whether it's's pricing it's just below market value to try and drive things up. It's just an important thing that you have these deep discussions with your agent. And if they don't have different strategies or ideas that may not be the person you want to hire.

Christina Day:
You definitely need a plan A and a plan B. And I met with somebody last night and we had a conversation about this. They had a job relocation. They had just bought their house not that long ago. They had put money into the house thinking they were going to be there for a while, and the market has softened. So the reality of getting back what they have in it is unlikely. So we talked about, okay, plan A, you would like to try to get X amount of dollars. I don't think X amount of dollars is realistic. I don't think that we're going to find a buyer who's going to be willing to do it. I don't think we are going to have a appraiser who's going to bless it and send it to the closing table. So if we don't succeed with plan A, we give plan A, how long, and then we go to plan B.
And plan B is this price point and we hope that we can get something there. And if we can't get something there, then what is the next step? Because if you have to move, then the market response is going to be key. And we have to have a plan. We can't just sit there with our hands up in the air. And I can't say this enough, we talk to lots and lots of people who are selling, and you do not pick your agent based on the number that they tell you they think that they can sell the house for. That's not what you pick an agent for,

Jay Day:
Or the agent that says, I'll sell, I'll list it for whatever number you want.

Christina Day:
That

Jay Day:
Is because that happens quite a bit too. Cause we'll ask them, how did you come up with a number and or what made you list it at this? And they're like, well, the agent told me that I could, whatever number I gave 'em was fine. And I'm like, did they show you any data to say this is doable? Or say you do get that offer and it doesn't appraise. But that conversation has never happened. And right now we're in a market where you're not seeing the appraisal guarantees or appraisal gaps or things.

Christina Day:
Or not.

Jay Day:
Not. Things have changed. I mean

Christina Day:
Actually, well, I will say I had multiple offers on one of our listings that we took about a month ago. It was during December and we had multiple offers, one of them did offer, it was modest, it was like $2,500, but they offered a modest appraisal gap. And I thought, I haven't seen one of these in a few months. Yes, it's been a minute. And so the issue isn't even worrying as much about appraisal unless somebody is really pricing their house or the buyer is offering way over asking. And then that's also a conversation, is it actually going to make it to the closing table? So back to the actives and the reductions, that's a 64% of the or a sizable portion of the actives that have had a reduction in their price. And so we know if you're having to reduce the benefit of getting it reduced in a timely fashion is you will attract an audience of people that you might not have been attracting before.

Jay Day:
And that's all within a price range. That makes sense.

Christina Day:
And so if we compare the active median days of 42 and the actives that had reductions, those that had reductions have been on the market longer. They've been on the market an average of 70 days. So it has to do entirely. If you want to push the envelope or try to get that higher number, totally fine with that. But just keep in mind that's going to keep you on the market a little longer. And if you're okay with that, that's great, but you have to have a plan. So contracts we actually saw a real dip in the contract activity. Again, totally expected with the seasonal approach of holidays and everybody being busy with their life. So this current period, we had 173 contracts that are currently pending, and a month ago we had 265. So that's a big difference. That's almost a third difference in the quantity of contracts out there.

Jay Day:
And I mean we also see a little bit of a mad rush that high, that 265, there are a lot of people that try to rush to get something done before the holidays, before the end of the year. So that number does always tend to spike up quite a bit. And we've seen that over, like I said, over many, many years. That's just sort of common practice.

Christina Day:
So the median prices on those contracts went from $415,000 the previous month down to $395,000. So a little bit bigger drop there with regard to how much people were getting under contract.

Jay Day:
It all ties into the interest rate changes. Absolutely. I mean, cause it's all about payment.

Christina Day:
We just had that conversation last night too.

Jay Day:
Yeah, all about payment. Now the off market, the homes that were removed from the market was pretty high. But again, that's not unusual because a lot of people during this time of year, I'm done. I don't want to have my house on the market. I've got Christmas coming up, I've got this happening, I've got family coming into town, I'm just not dealing with it. And that number was 149 people said, I'm done. I'm taking a break. I may be back, I may not be back.

Christina Day:
That's a lot when you compare that to 194 actives, right? Yeah, that's a lot of people who gave up. And so the sad thing for me as an agent, and the sad thing for me as a real estate professional in the community is when you see people give up, they had a dream, there was a goal, there was a plan, there was a destination and they gave up because of whatever reasons. Maybe it was not enough traffic, maybe it was bad feedback, maybe it was just an overall negative experience. But when you've had a situation where you've had your house on the market and you've given up, that didn't necessarily mean that your plan changed, right? You still have the dream of being wherever it is that you need to be, or you still have the obligation to be wherever it is that you need to be, or you still have the goal of selling that house and taking that equity and moving it somewhere else. And so if that's the case, I would say definitely reach out and let's talk about what that really looks like.

Jay Day:
And you mentioned reach out and we normally don't do many plugs in here, but you can just easily go to our website day home team.com or call 866-702 9038 and schedule a free consultation On that note, let's take a quick break and we'll be right back.

Break Information:
All right. Hello, this is Jay Day with Jay Day and the Day Home Team of Real Estate Teams. You've heard the DJs on the station talk about me and recommend me and my team for over 10 years. Now, I'm sure you've also heard a lot in the news and are very concerned about the economy interest rates and what's happening in the housing market. And rightly so, with so many mixed messages, it can create anxiety over what is the right move right now, this is not the time for gimmicks. Now more than ever, you need a realtor who you can really talk to, an agent who will give you options based on your situation. An agent who intimately knows the area and the changing market, a small and dedicated team with over 50 years combined experience in over 6,000 transactions under their belt. An agent who has been through numerous market conditions, recessions and thrive, while helping clients buy and sell in the most uncertain of times. Our mission is to service our community. Our agents have real conversations where we combine your wants and your needs with our expertise to create a real solution. We care about you and your move. You can reach us at 866- 702- 9038 or connect with us online a at dayhometeam.com and experience the difference of day makes.

Jay Day:
And we're back, WFMD listeners. So we talked about those that were not successful. I think an important thing is when we're getting into, again the stats and people thinking our home selling for under what's going on, I think it's really important to talk about some stats we have on here of in Frederick County, how many homes sold? How many sold for over asking how many sold for under and how many sold at list, right? So I won't steal your thunder, I'll let you run with those numbers.

Christina Day:
So we had 224 sales and the median price on those was $401,000, right? So that's right in line with what we have for contract pricing for the most part. And the percentage of those that actually had sold above 86 out of the 224 sold above. Now interestingly enough though, the things that sold above were priced a little bit less. The median on those was $387,000 and the median days on market for those was only eight. So if you're priced a little lower, right, and you, you're going to get it done quicker and you have a chance of getting more money for the house than if you were hanging out. Now, this also means that some of the lower priced homes are also the things that are getting absorbed more quickly, the things that are a little bit more universally affordable. Now, those that sold with a decrease, almost the same 73 out of the 224, and they were on the market for an average of 30 days, and the median price was 420. So those that had a decrease, it appears are the ones that have a slightly higher price and they had to come down a little bit and they had to spend a little bit more time on the market. Now, those that sold Atlas, we were right on the money with the pricing and the market responded accordingly. So those were 65 out of the 224. So like I said, not it's almost, that's a third. A third, a third. Almost.

Jay Day:
Almost. Yeah, that's the 29%. Yeah. I mean we're looking 29%, 33% and 38%.

Christina Day:
So very similar proportions if you were cutting up a pie. And so the medium price on that was $375,000. So again, little bit lower price points there.

Jay Day:
Those data on market were

Christina Day:
12, only 12. So less

Jay Day:
What is the moral of the story?

Christina Day:
The moral of the story is don't overprice your house,

Jay Day:
Right? You don't need to.

Christina Day:
And also if you have something that is in that more what we call like a universally appealing price point, the price point for person who's a first time buyer, especially in Frederick County, if we look at what our medium prices are here, if you're just below the medium price, you're going to get a lot better activity. And so one of the things that we want to think about is also the shift in expectation for sellers of seller help. We haven't heard that term a lot in the last three years.

Jay Day:
No, we haven't. And shockingly enough, I'm pretty sure. Hold on, I'm going to flip through my stats here. No, it's not one other county that's higher than Frederick County that sellers gave closing help, but I mean it's the highest in the three counties in Maryland that we primarily focus in. So do you want to drop the number or

Christina Day:
Yeah. So 48% of the transactions had closing help. And what closing help is if you're unfamiliar, it's where when the buyer writes their offer, they're saying, we'd love to buy your house at this number with these terms, but we need you to help pay some of our closing costs to help us get to the closing table. Now, over the last couple years in the frenzy of the market, we didn't see that at all. In fact, we saw quite the opposite. We saw buyers offering to pay sellers closing costs. Yeah. Now they're saying, I need a little help. Now, this is also very much tied to the situation with the interest rates and the financing aspect of this, because buyers are having to absorb a much higher interest rate, which affects their monthly affordability, or they're having to pay more in closings costs in order to get that interest rate down a little bit to make it more affordable over the long term.

Jay Day:
And I mean, we're focused a lot on the seller side on here. So again I've been plugging all types of stuff on this one. And I just want to point out next Friday, if you go to the WFRE site, the sister station here, you can actually go, and our podcast is all about if you were thinking about buying, you're a renter right now, you've got to decide, am I going to continue to lease or am I going to buy? Why would I buy with the interest rates the way they are? Some of these stats are going to be fed over into that to explain on the buying side why it might be a really nice spot to be in certain areas based on these stats. So sorry to steal your thunder on that one.

Christina Day:
No. And so sellers, the numbers are kind of baked in. And so three years ago, the conversation we would have with you is this is the price point. Expect a 3% variation on that price point with what to expect with an offer. It could be that they want to negotiate the price down a little bit, or it could be that they're going to want or need closing help in order to make this happen. And so we're kind of returning to that. And that was a normal market. That was a normal healthy market three years ago. And there's nothing wrong with those numbers. If you're going in with the expectation that it's going to be a piece of the financials at the end of it, then you have a good reasonable expectation of what is your cash going to be at the end of the day.

Jay Day:
Oh yeah. And realistically, Maryland is one of the most expensive areas. Well, it's definitely out of the states that we handle as far as closing costs for a buyer. So that does come into play. And again, like you mentioned a year ago, it was a little different, the closing help, you weren't even getting there. If anything, you were having to put more money down, do different types of financing, all types of stuff.

Christina Day:
And so in looking at these numbers and as we compare them to the numbers of the neighboring counties, everybody's kind of in a similar ballpark. Washington County has a little bit less activity, and of course their price point is a good bit less than Frederick County historically. So if you're a seller in Washington County, your expectations might be a little bit different, but you also have less competition. That's active sales and things of that nature. If you're a buyer, Washington County can be a great place to look. Also looking in West Virginia, and we do have a lot of people who cross the line into West Virginia looking for a better deal or better opportunities. However, the interesting thing is in West Virginia, their numbers aren't that far off from our numbers. For Jefferson County, for example, their numbers are relatively close to what our numbers are in many cases.

Jay Day:
And I mean those that had to give closing help was a little bit lower. It was 34%. The closing cost in West Virginia though are much lower than they are in Maryland. Yes, they are. So that's an interesting fact with what's going on there. And honestly, the inventory has really not changed much. It's a slight change in Jefferson County that it's down a little bit. And same with the contracts. That was probably one of the most stable counties out of all of them. There wasn't a massive drop at all.

Christina Day:
So I mean, I think the kind of the moral of the story for as we launch into the new year is if you're thinking that this is the year you might want to sell, then you probably want to get thinking about it sooner than later because I think a lot of people are thinking about getting their house on the market this year. And I think a lot of people are thinking about capitalizing on that equity. So my recommendation to folks is always try to get on in the earlier part of the year because as the months tick by, the inventory generally will tick up

Jay Day:
The seasonality of that. Yes. I mean, right now we are at a low, low inventory. If you're thinking about doing it, and we've said this for years not even getting into the details of this year, but we've always said, let's go on the market in February, March at the latest. You don't want to go on in April because you're going on with everybody else, and your house is going to have to look even better then because you're going to have a lot more competition. So it really makes it a challenge. And the joke is, we sell homes in the wintertime. We sell them on the holidays, we sell them all the time.

Christina Day:
You're almost like a Dr. Seuss story there. Yeah, I'll sell your house here. I'll sell your house there. I'll sell your house anywhere.

Jay Day:
Exactly. And a tree on a boat with a goat, all that good stuff. But don't think that homes don't sell in the winter. Christina mentioned it. We had homes that went on the market and went under a contract in between Christmas and new. I mean, people are out there looking. Absolutely. So don't be afraid. If you reach out to us, we're not going to be, Hey, we need to get to your house today, and we're going to bring paperwork and sign.

Christina Day:
Unless you want us to show up today, then I'll figure it out. Somebody will show up.

Jay Day:
Well, the bottom line is we're not going to rush you. We work at your pace. You never have to feel like you're forced to do something and we'll give you options. And we've had people that we've met with and they don't list their house for a year

Christina Day:
Even more than that sometimes.

Jay Day:
Again, in this business, we've been in it for a long time. We're not going anywhere anytime soon. So we will work with your goals, your plans, and your timing. Yes. What else do you want to close this one out with?

Christina Day:
Well, I just wanted to take a minute and just give a big old high five to our team because they had a really amazing 2022. We have a small but mighty little group of people who work their tails off to deliver excellence. And I just want to say thank you to them and thank you to all the people who supported us and were clients and customers and affiliates. We ended the year out with about 211 sales on our resale division. We also have a new construction marketing division. We don't count those numbers in there, but 211 households served in the area. So that was really it's funny, there's a lot of people who are like, oh, who cares? That's a lot of experience. That's a lot being in service and it feels good.

Jay Day:
And a big thanks to our backbone in our office that holds it together and keeps everything rolling. Our sales people are out there working their butts off and there are office people in there trying to keep everything together, make sure everything is buttoned up tight. Eyes dotted, ts crossed. So we're looking forward to another great year 2023 has, it's what you think, what you put into it. So don't be afraid of the real estate market. We're here to help. And again, you can reach our website at dayhometeam.com. You can call us at (866) 702-9038. I'm Jay Day and Christina Day with Real Talk Real Estate, and we'll be back at you next month. Have a great one.

WFMD:
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