Real Estate Market Update

The housing market isn’t crashing…
 but it’s done rewarding sloppy decisions.

Price growth is slowing.
 Inventory is rising.
 Homes are sitting longer.

And the real problem?
 Rates.

When rates stay high, deals stop penciling.
 Affordability breaks.
 And sellers are forced to adjust.

From retail buyers in the mid-6% range
 to investors facing 7.5%–9%+ DSCR rates…
 the math is changing everything.

This is no longer a momentum market.
 This is a margin market.

🎧 In this episode, we break down the latest data and what it actually means for buyers, sellers, and investors.

If this gave you clarity, subscribe, share, and drop your biggest question about your market.

Transcript

Market Snapshot And Big Headline

SPEAKER_00 0:00

Welcome back. Here's a real estate market update based on the latest published numbers from National Association of Realtors, ZillowRealtor.com, Redfin, Freddie Mac, and the Fed. And you're going to learn a lot of things that's happening in the market. And the biggest thing right now is we have new Fed chair, and we're going to talk about that. We're going to talk about prices, inventory, days on market, et cetera, all the things that matter, all the things that matter for real estate. The headline is simple. The market is not breaking, but it's clearly losing speed. Prices are still holding nationally, but barely. Inventory is rising. Homes are taking longer to move. Buyers are still active, but they are payment sensitive and selective. This is no longer a market that rewards laziness, weak pricing, or sloppy underwriting. Start with prices. Let's start there. The National Association of Realtors says the median existing home price in March was 408,800, up 1.4% year over year. Redfin says U.S. home prices in March rose just 1.7% year over year, which it described as the slowest growth rate on record. Zillow's March data shows the typical U.S. home value at 365,545, up 0.8% year over year. Inventory is improving, and that matters for buyers. The National Association of Realtors reported 1.36 million existing homes for sale in March, up 3% from February and 2.3% from a year ago with a 4.1 month supply. We're getting close to what we're supposed to, which a normal healthy market is six months of inventory. Realtor.com reported 1,002 nine hundred and thive active listings in April, up 4.6% year over year. Days on market, homes are moving more slowly. Realtors.com April report shows a median 51.5 days on the market. Yikes, which is two days slower than a year ago. That's still a long time compared to where we were in 2021, 2020, 2022. Things were flying off the market. This is normal. 60 days. 90 days is the normal, but it's just feel like we were doing 90 miles per hour and now we're doing 45. That's the equivalent of what this feels like. Redfin's late April four-week snapshot put median days on the market at 44 and four days a year and four days longer from a year ago. This isn't a frozen market. It's just a more deliberate market. Buyers are still there, but they're taking longer and demanding more value. Sales demand is mixed, not dead. National Association of Realtors says existing home sales fell 3.6% month over month in March to a 3.98 million annual rate, and were down 1% year over year. But NARS pending home sales rose 1.5% month over month in March. Though they were still down 1.1% year over year, Zillow's March data shows 300,398 newly pending sales, up 3.7% year over year. Mortgage rates are still the choke point. That's what's killing this whole thing. This is what's killing the whole market. This is what's slowing everything down. This is why deals don't pencil. This is why buyers can't buy at these prices and these rates. The market will get locked up. I'm predicting that we're not going to be at 1.3 million. We're going to be at 2 million by the end of this year if rates don't give in. We're going to have 2 million units. With 2 million units, that's going to be about eight, nine months of inventory on the market. And you're going to see a real slowdown if the new Fed chair doesn't do something. And this Fed, this Fed doesn't do something about rates. Rates is a problem. It's becoming a real problem. It's a nuisance right now for us. Mortgage rates are still the choke point. Freddie Max says 30-year fix averaged 6.3% on April 30th, up from 6.23% from the prior week. Mortgage News Daily had the daily average around 6.44% on May 1st. Redfin noted that the daily average was 6.45 on April 29th, down from 6.64 about a month earlier. Guys, even these rates is not what the the for investors, these rates don't apply to us investors. We're buying, if you're buying with an entity, you're buying with DSER loans. Our commercial loans, commercial loan rates are higher than this. For DSER rates right now, you're looking at 7.5% to 8.5%, in some cases, 9.5. How do you buy a million dollar, a$2 million property,$1.5 million property, a 10 unit, a 12 unit, a 15 unit with a DSER rate, if you want to go with a DSER loan at 9.9, 9.5%, at 8.5%, how do you make that cash flow? It's hard. It's very hard to make a cash flow. So the problem we're all having from regular retail buyers to investors is that rates are just unbearable and the numbers don't pencil. Therefore, in order for deals to get sold, for properties to get sold, sellers have to drop prices down. That's just what happens. When interest rates go up, prices must come down because mainly real estate is a leveraged product and you have to go get loans. So if you have to go get loans, the higher the interest rates, the higher the payment. That means the lower I have to pay to be able to have a field to pencil and make money. What the macro backdrop is doing, the macro story matters. The Fed held its policy rate steady and said uncertainty remains elevated, with developments in the Middle East contributing to the uncertainty. Reuters reported in early April that mortgage rates jumped as inflation's fears rose alongside higher oil prices. And Reuters reported against again last week that mortgage rates track Treasury yields, which were pressured by the conflict and inflation concerns. So housing is not just reaching, it's not just reaching and reacting to local inventory and buyer demand, it's reacting to bond markets, inflation expectation, and geopolitical stress. This is a real problem. I watch the 10-year Treasury every day. And whenever Trump comes out and says we are involved in priest talks, boom, the 10-year Treasury drops, interest rates drops. When uh Iran comes out and says, we that's a lot, that's a lie, we're not involving in any talks, interest rates immediately, the 10-year treasury goes up. The next day, the interest rates go up. And finally, I have to share you, I share this with you, that finally we are going to start to see some of the cost of materials start is starting to show up at the store level. Gas prices haven't gone up to where they are, inflation going up as as it has been with oil prices. You will now start to see materials at the Home Depot, the lows, or wherever you buy your materials for investors that are doing that are doing construction or homeowners that are doing construction in their home or doing remodeling. The prices have already hit the store. Go pay attention. What does all of this mean? For buyer, the window is better than it was during the frenzy. You have more inventory, more time, and slightly more negotiation leverage, but you still need tight standards because financing costs are unforgiving. For sellers, the market is less tolerant of fantasy pricing. Boy, don't I know that. If the home is average and the pricing is arrogant, it will sit. For investors, this is a margin market, not a momentum market. Weak deals are not going to be rescued by appreciation. It will not happen, ladies and gentlemen. Discipline, standards, identity. Here's a deeper point. In a market like this, discipline matters more than optimism. Standards matter more than stories. Identity matters more than emotion. Weak operators get exposed when rates stay elevated, when demand gets selective, and when deals require actual underwriting instead of hopium, as I like to call it. The people who win are the people who stay patient, price it honestly, buy carefully, and refuse to abandon standards because the market got noisy. So the latest market update is this. Prices are still holding, but barely. Inventory is improving. Homes are still sitting longer, demand exists, but conviction is thin. Rates remain the main pressure point, but this is not a broken market, it's a disciplined market. And if you want to build wealth, this is the kind of environment where you need to operate with standards and not emotion. Thank you for listening. Thank you for watching. Appreciate you.