The Negotiator's Market: Why Now Is The Time To Buy Before Rates Drop | Real Estate Market Update w/ Martin Perdomo

Ready for a real estate reality check? The extreme market swings we've witnessed for years are finally settling into something resembling balance. In the notoriously volatile Bay Area, median home prices have dipped 4% to $1.3 million, homes are sitting for 30 days instead of 18, and only one in five properties faces a bidding war—down dramatically from the two-thirds that sparked frenzies in 2021.

This cooling trend creates a strategic window for prepared investors and homebuyers. While today's 6.58% mortgage rates have lowered typical monthly payments to $2,668 (the lowest in seven months), buyer demand remains surprisingly muted. The smart money sees this hesitation as opportunity. Sellers don't want their homes lingering for 40+ days, creating leverage for negotiating concessions, closing credits, and rate buy-downs that simply weren't possible during the pandemic boom.

What makes this moment particularly significant are the demographic shifts reshaping the housing landscape. Homeownership among 25-34 year olds sits at just 39%, while nationwide rentership has climbed to 36%—its highest level since 2016. Combined with JP Morgan's prediction of four Federal Reserve rate cuts by year-end, we're looking at a potential strategic sweet spot: buy with negotiating power now in a cool market, then refinance when rates drop. Remember the fundamental truth of real estate: when rates decrease, prices typically increase as affordability improves. Most consumers buy mortgage payments, not houses—meaning this window of opportunity won't stay open indefinitely. As I tell my students: words are loud, but numbers scream. And right now, the numbers are screaming opportunity for those willing to move while others wait. Follow me on Instagram @TheEliteStrategist for more market insights and strategies to navigate this shifting landscape.

Chapters

• 0:00 Bay Area Market Cooling Down
• 2:19 Homeownership Trends and Rental Market
• 5:59 Mortgage Rates and Buyer Demand
• 9:02 Investor's Market: Strategy Moving Forward
• 11:00 Final Market Update and Takeaways

Transcript

Speaker 1: 0:00

The Bay Area is finally normalizing after years of extremes. More Americans are renting, as ownership stalls and mortgage payments are coming down, but demand is still weak. What's up, guys? This is Martin Perdomo, wealthy AF, the Elite Strategist, here with your weekly real estate market update, and we're going to jump right. In the Bay Area, one of the most volatile markets in the country over the last five years, is finally cooling into balance. The median Bay Area home price is $1.3 million, down about 4% year over year 4% year over year. The days on the market are averaging 30 days compared to 18 at the height of 2021. Frenzy, only about one in five homes is facing a bidding war back from nearly two-thirds in 2021. In the highest cost metros like San Francisco and San Jose, sellers have recalibrated.

Speaker 1: 1:08

If you're hunting luxury flips on long-term holds, have negotiating room. You have negotiating room you didn't have years ago. Cash buyers in particular are getting price cuts instead of escalating clauses. First of all, I think it's way too risky to be buying in this market. Luxury flips up. There is a market for it. There is a buyer for it. But if the affordable homes are sitting, luxury flips are sitting even longer. Right, with interest rates so high. There is not a lot of buyers for that. There never really is a lot of buyers for that. There never really is a lot of buyers on the luxury side, because that's a small percentage of of americans that can really afford those types of property. But I think for me, I'm not a flipper anymore. I no longer flip. However, those that do flip, I think that's really.

Speaker 1: 2:03

However, if that's your game and that's what you're doing right now, it's definitely a great time because the data is telling us. Nationwide, the home ownership rate in Q2 sat at 65.8% Unchanged. But here's the real story In the 25 to 34 age group, ownership is only 39. Now, this data here is by red fin. It's a little bit skewed because I've heard I've heard different data points in 2016 I just saw some data point, a different data point that in 2016, the average 30old in the 30-year-old bracket it was a 40% homeownership rate and that today, 30-year-old bracket, it's only 14%. So I'm not sure where this data is coming from, but we'll go with it. This is Redfin's data.

Speaker 1: 2:59

The rentership is climbing in metros like Phoenix, atlanta and Tampa, where affordability has been absolutely crushed. I can speak for Tampa. That is correct. In Tampa, roughly 36% of households nationwide are renters the highest share since 2016. For investors, rental demand is not softening. If you own single-family rentals, you're is not softening. If you own single family rentals, you're in the sweet spot. Multifamily, even stronger Rentership growth means occupancy rates will stay tight and rents will have support even if home prices wobble. This is why Blackstone and other institutions are doubling down in single family portfolios right now.

Speaker 1: 3:47

Now boots on the ground and I am small in comparison to the whole market. However, I am an active investor in the market. That is not my experience and I'm talking to you. Know, I have two different property managers in two different markets and I'm constantly talking to the managers. I'm constantly talking to the lenders Boots on the ground. I'm on the ground. I'm looking at my portfolio consistently. I got to tell you that that is not my experience. It doesn't mean that that's not the data.

Speaker 1: 4:16

My experience as boots on the ground is that rents are softening in Tampa and up north and in the northeast and the northeast region of Pennsylvania. So for me to hear this and my students right, I have a bunch. I have a community of students that are actively buying and selling and renting real estate and I have real time data with a small, small portion, I must say it's a small portion. We don't. We don't have the whole market cornered, but just from our, from my perspective rents are softening. We're seeing lots of concessions. So I totally disagree with this part from Redfin where Redfin is saying that the rents are stable, and I don't agree there. They are not. They are definitely softening.

Speaker 1: 5:02

When you see rent concessions in the market, if your rent's a thousand dollars a and I'm going to give you a month free if you sign the lease this month what does that mean? That means that instead of me making $12,000 a year in rent from that apartment, I'm only going to make 11. So if I take that and divide it by 12, I average my rents are soft, my rents are lower than what they should be. So I don't see that. I'm not seeing that myself in the market, even in Tampa. Even in Tampa, where places that are unaffordable my portfolio in Tampa we are doing concessions and there is a lot of developers and investors in the market that are doing concessions. And if you're in the Tampa market, you know this. I'm going to take a guess, a wild guess, and I don't know this for sure, but I'm going to make an educated assumption that it's probably like that in the Atlanta market and in those other markets as well.

Speaker 1: 5:59

Now let's talk about affordability. The average 30-year fixed rate is 6.58%, down from 7.08% in May. That drop translates into a typical monthly payment of $2,668, based on the medium home price, currently the lowest in seven months. For context, the monthly payment at this time last year was $2,829, the average monthly payment based on where rates were last year. That's nearly $160 a month less in buyer outflow, but buyer demand has not roared back yet. Pending sales are still down 1.2% nationwide year over year and Redfin's report only a modest 2% uptick in tours. It's definitely a step towards the right direction. 2% uptick in tours We'll take that right.

Speaker 1: 7:03

I'm a real estate guy. If you're listening to this, I'm assuming you're a real estate person, or you want to be a real estate person, or you're looking to buy real estate. So this right here is leverage. Retail buyers are still hesitant, which means you, the investor. If you're an investor or a buyer, a regular homeowner, home buyer can negotiate concessions, closing credits or even rate buy downs. So it's a great time to buy if you're prepared because you can negotiate.

Speaker 1: 7:41

I don't believe that the market will stay this way for much longer. As interest rates come down and we're expecting there's a 94% chance based on JP Morgan that the rates will come down here in September that there'll be a rate cut and another three rate cuts. So we're expecting four rate cuts based on JP Morgan's prediction, four rate cuts by the feds. If we get four rate cuts this year, that's an amazing thing. When that happens, we are going to see a warming up and heating of the market. I think that next year this time so next spring, summer we're going to have a hot market. We're going to have definitely a hotter market than where we are today. So prepare if you can buy now, right. If you can negotiate now, when the market is cool, you should do that now and then refi later.

Speaker 1: 8:34

Most people if you're an investor remember most people if you're a flipper most people buy mortgage payments, not houses. So they look at the house first, or they'll look at what they're approved for and what their mortgage payment is going to be and then they'll go look at houses in first, or they'll look at what they're approved for and what their mortgage payment is going to be and then they'll go look at houses in that category. People buy mortgage payments, not houses. Sellers don't want their homes to sit for 40 days or longer, so they are dealing today. This is why it's a great opportunity for you to buy. So that's a wrap. Here's the playbook from the numbers. This week, bay Area median price is $1.3 million. Price is softening. Seller's realistic Time to negotiate in high-cost metros. Caution if you're flipping, because if you're flipping in luxury homes, just be careful, you're going to sit longer. 36% of households are renting. According to Redfin. This means that this generation is stuck at 39% rental demand, at 39%. Homeownership and rental demand is your long-term friend.

Speaker 1: 9:44

I am still very bullish on buying and holding. When rates go down, my assets will go up. It's just a fundamental, guys. It is a fundamental you need to understand. Rates go up, prices come down. This is what we're seeing right now. We're seeing softening of the of prices. Rates come down, prices go up. This is what you're gonna see. It is fundamentals. It's like supply and demand. Rates come down, prices go up, prices go up. Sellers demand goes down, right. Rates come down, right. Prices go up. Rates come down.

Speaker 1: 10:23

Remember people buy mortgage payments, not houses. So when those rates come down, then sellers can ask for more for their houses. Right, buyers come in. Demand goes up. That pushes prices to go up. So mortgage payments are 2668, your typical payment right now lowest in seven months. But demand is muted. Use this moment to buy with leverage while others hesitate. This is an investor's market. The numbers prove it. Words are loud, but the numbers scream. That's this week's real estate market update. If you want the numbers, the strategies and my playbook for navigating this shifting market, follow me on Instagram at the Elite Strategist. Stay sharp, stay strategic, stay wealthy. Catch you next time, peace out.