Real Estate and You w/ Brad Weisman

Pete's Point of View - A Guide to Understanding the Market

June 08, 2023 Brad Weisman, Realtor
Real Estate and You w/ Brad Weisman
Pete's Point of View - A Guide to Understanding the Market
Show Notes Transcript Chapter Markers

Pete Heim is back in the REAY Studio... with his POINT of VIEW (of course)!!  Join us as we sit down with the "numbers guy",  Pete Heim,  to explore the ins and outs of the housing market and share some vital advice for both homebuyers and sellers alike. 

We also tackle the real estate market's nitty-gritty, discussing inventory, interest rates and when you should buy a home (little secret: NOW).   Don't miss this eye-opening and entertaining episode, as we dive deep into the world of real estate, providing you with the knowledge and market information you need to make smart decisions.
#peteheim #bradweisman #realestate #realestateandyou #americandreamtv

The Real Estate and You Podcast is your Thursday Evening connection to all thing’s real estate. Hosted by Brad Weisman, a local Reading Pennsylvania Realtor and Partner at Keller Williams Platinum Realty with over 30 years of real estate experience, this podcast brings you interviews and insights from people all over the country who are invested in or connected to the industry.

From homeowners to investors to industry professionals, The Real Estate and You Podcast has something for everyone interested in learning more about real estate.

Also, When Brad isn't selling homes, or hosting the Real Estate and You Podcast you can find him on American Dream TV hosting a NEW show—Selling Reading Pennsylvania!

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Credits - The music for my podcast was written and performed by Jeff Miller.

Speaker 1: Hello, this is Brad Wiseman. You're listening to Real Estate and You. We are back and we had so much fun before we started recording and we're going to have fun while we're recording too, because Katsu's back in the house, that's right. Pete Heim is here and we're super excited to get started. Pete is here to talk about and bring up all kinds of information about the market and things that we kind of see in our market, which is really awesome. How you doing, pete? Good, brad, that's good. Good to see you, brad. All right, that's the end of the show. 

Speaker 1: No, I'm just kidding, great to see you all. Yeah, great to see you all. No, and actually we found out Hugo has a question today. Hugo had a question. Yeah, he actually tried to ask the damn question before we started, which was really weird. That is weird A little, yeah. It's like a setup Jumping the gun a little bit. What do you think? So many words I'd like to say, but I can't. Okay, So let's keep moving here. 

Speaker 2: It's just so good that we don't record the pre-show. Oh, it is good. That's all I got to say. 

Speaker 1: Well, we'd probably be fired, locked up, Let me see divorced. No, not divorced We don't say anything as bad against our family and wives. No, no, it's just a lot of other shit. Right, it's a lot of other shit. Yeah, it's just funny, we have such a good time with me. You and Hugo Almost said Hugo, hugo, hugo, hey, hugo. But now it's a good time because we get to really talk about the raw parts of our business and the raw parts of the numbers and who's saying stuff. And you had said to me about. 

Speaker 1: We have to be careful who we listen to, for the information. 

Speaker 2: You got that Right? 

Speaker 1: Yes, And once again, you're hearing that some people that are not in our industry are giving away information that is not really the truth, or not that the truth? It's just not, it's not. They're not backing it up, And I think that they're using, sometimes, the information they're giving for their own self, for their own advantage. Yep, Right. So you just have to be careful where you get any information from. You know, don't you know if you have a financial advisor? they do a great job with stocks and bonds and all that financial stuff. I mean, I know you know a couple of them. I know Matt Weber, I know John Conover. I know a bunch of these guys and they typically will come to me for questions about real estate and I go to them for questions about stocks and things like that. So, as it should be, the consumer needs to realize that too, and I need to understand it. Just be careful, you know, when it comes to investing in real estate, listen to your realtor. 

Speaker 2: Yeah, you know and also do your own homework, right, that's it. I mean, you got to bring it, that's it. 

Speaker 1: What do my dad say? always Trust but verify, yeah, that's it. You know, if you trust and you don't verify, you're just stupid. That's it. You know you got to. I mean, I trust everybody but I always verify. It's not that I don't trust them, I just kind of verify, make sure it's coming from the right source, Exactly Right. 

Speaker 2: Yep. 

Speaker 1: So what do you got there? 

Speaker 2: Well, we're not like going to pick on any industry right now, but I know for sure that I am not a stockbroker. Yeah, absolutely, we are professional realtors. Yes, we are We. Our job is to make sure that we get good information into the hands of our clients and the public. Absolutely, is that. Is that sound fair? Yeah, so when you're listening to I don't know, should I say a stockbroker I'm going to say a stockbroker. So if you're listening to a stockbroker for real estate advice, I didn't say that by the way, just so you know I'm going to say it because He's a guest on the show And then I'm not. 

Speaker 2: I'm not saying every one of them, no, i agree, but I'm just saying that there's some bad advice going around there about waiting. 

Speaker 1: Waiting for houses. 

Speaker 2: Waiting for houses to come down, interest rates to come down. 

Speaker 1: Yeah. 

Speaker 2: We got to play that Barbara Corker and thing because that that was that was like solid Yeah. 

Speaker 1: Basically what Barbara said and it was very solid. If you get a chance, Hugo, maybe we can put it this as like a link or something on Facebook or something like that. But Barbara Corkin has a thing that's going around really right now. That's really cool And it basically talks about, you know when interest rates, if they would go up to, if you're saying, okay, I'm going to wait till the interest rate go down, If you're waiting for that, all of a sudden, if the rates would go, just think about this now, the rates went tomorrow down to 4%, Do you realize how much home prices would go up in such a short period of time? 

Speaker 1: Exactly, You would have a frenzy that you can't even imagine. You think it's bad now, with, you know, 10 offers, 20 offers. If the rates went down to 4.5%, you would be going nuts, Absolutely nuts. We'd be down to about 50 homes inventory, you know, And it would hyperinflate the prices, Absolutely, Absolutely. So you know, think about that. You know, be careful what you wish for. You know right now that the rates are hovering right around. Actually, they've gone up a little bit. Get there around. They were at 7. Something over the weekend I looked And now I think they're down to 6.8, 6.75, whatever it is. 

Speaker 1: So when you look at that, you know, think of that as being a little bit of a bonus right now, because typically in our spring market we'd have a ton more buyers out there Right now, believe it or not, even though it's very competitive and the buyers are hurting, you know, if the rates were lower it'd be worse, which is still below. Pick your poison right. Pick your poison. 

Speaker 2: That's what she says. She did say that, right, and that's what she's been doing for over 50 years. Yeah, right, exactly, she was explaining what it got to. 

Speaker 1: 18 19% oh, it did back in the day, yeah 70s. 

Speaker 2: Yeah, absolutely. We're still at seven or just below seven right now. 

Speaker 1: Yeah, below the 50 year average and I and I know and I think that's it's kind of that. We all think it's gonna kind of get to Five something and hover there for a long period of time. 

Speaker 2: But but the point is, please lean on guys like us for real estate advice. All right, yes, lean on your financial person for financial advice and for stocks and stuff. Yep, i wouldn't know the first thing about which stock to tell you to pick. I Totally agree We rely on guys like you know the art professionals that were that were involved with for that. 

Speaker 1: Yes, actually, john Conever has a really good podcast to the little plug for John I. I forget what it's called. I think it's called smarter than me or something like that I found that mistake. And so, john, there you go as a little plug for your podcast. Um, yeah, so, moving on, what else do we have here? What else you got Well? um yeah, it's a numbers. 

Speaker 2: I have some numbers and I did a, since it's June 1st, mm-hmm. I did a year to date. Oh, good numbers and average price so far this year. Well, in May, may of 23, the average price was 297, 75 in Berks County. that included city. Okay, okay. If you look from January to May, it was 270 something, okay, okay. 

Speaker 1: So, in other words, it's going up, yeah, and that's the thing that we know, the thing that we talked about with you know, keeping current matters has a whole Graph here which was really interesting and we kind of we kind of thought this might happen. You and I and we talked about this on the show just kind of looking at things. We're seeing that on a national level, not just locally That everything kind of dipped from like July of last year up until maybe, let's just say, december of This year. So if, like a six to seven month period, we were definitely feeling the effects of a slightly Depreciating market, now that doesn't mean it was it was going crazy down, it just did. It was not going up at the rate It was before, right, so it was going down into the red. 

Speaker 1: What's interesting with you and I have noticed now is that if you look at some of these new charts and it's through core logic FHA, faa and K Schiller are now saying that we have pretty much Turned around. And then the thing it said here just five months ago, prices were declining or seasonally adjusted, month over month basis in 92% of all major markets. That was they were declining. Yeah, that was five months ago. Fast forward to March and the situation has done a literal 180, with prices now rising in 92% of markets from February. So there you have it. If you were waiting for things to come down, i don't think that's gonna happen. 

Speaker 2: Yeah, I think it's a mistake to wait. Yeah, I think so too. We've been saying that since we've been doing this pop you have well, i think that's always the thing of real estate. 

Speaker 1: Don't wait, yeah. What are you waiting for? you need, if you need to go, you need to. You go, that's exactly right, and jump in at some point. Yeah, because if you don't jump in, you're gonna be watching the boat go by and you're gonna shoot. I should have gotten on that boat and I didn't. 

Speaker 2: And now this poor client of mine Who got bad advice from her broker, her financial broker, is now needing to find guess what another place, another place to rent and tell it. 

Speaker 1: Tell a little bit about how The somebody had given her advice of not buying and told her to wait. Yeah, and what was the price of the house 370,000 new construction and they said do not do it. Bad investment, bad investment, shouldn't do it. What's the price? 

Speaker 2: today. Give it another year or two. What's the price today? 

Speaker 1: Four and a quarter. Yeah, that's the problem, not the problem. That's what happens. 

Speaker 2: It's bad advice, it is. It's just she took advice from the wrong person. Yeah, exactly That's basically all it is. 

Speaker 1: Yeah, so just be careful, please just be careful, just be careful, yeah, days on market 23. Oh, it's still pretty much where it is Absorption rate one month. 

Speaker 2: Yeah, we're pretty steady there. Yeah, it hasn't really changed And it all has to do with inventory. Yeah, We have 365 or 369 homes on the market right now, which is incredible, which is incredibly low. What do you want? I want to use the Brad Wiseman pad of paper example. So before that, before that we started airing this, brad said you know, pete? 

Speaker 1: it's like I've got two. You can see him. Ok, now we can see him. 

Speaker 2: You're true, we've got two, two Brad Wiseman pads of paper sitting here And nobody wants any of them. No, no, In reality that's true. 

Speaker 1: Yeah, this is true, i'm just playing around. I'm just playing around. 

Speaker 2: I sympathically There's 15 people that want these two pads of paper. What's going to happen? I'll give you $100 right now, brad, and I'll take it right now. Oh no, i'm going to give him 110. 

Speaker 1: That's what's going on the real estate market. And here's the other thing that happens, like I said. Then people say, ok, fine, but now two people just bought. Let's just say, two people just bought those two. 

Speaker 2: Yeah right. 

Speaker 1: OK, everybody's like well. Ok, well then, there's no more. Then that lowered the amount of buyers in the place. 

Speaker 2: No, there's two more that come in to replace those Right, but there's 13 others, but there's not two more. You didn't get it. 

Speaker 1: But there's not two more tablets, that's right. 

Speaker 2: The tablets are gone. 

Speaker 1: The tablets are gone And there's 13 people that lost. By the way, if you need a tablet, let me know. I have plenty of them. They're sitting in a box collecting dust. 

Speaker 2: QR codes. 

Speaker 1: This is why you should buy yourself with me, that's OK, that's what we do, that's what we do. 

Speaker 2: But no, i mean, that's the point. Yeah, it's inventory Inventory is so low. And here's the other news flash I got, which is this is all. Hey guys, now this is all information that's out there. It's out there. Right, this is came from a local newspaper, i'm not going to say which one. If you know where we're broadcasting from, you can figure it out. They had an article Shedding Neagle, yeah something like that. 

Speaker 1: It rhymes with shedding. It rhymes with shedding, shedding, neagle. 

Speaker 3: Yeah, yeah, i've heard of that one. 

Speaker 1: It rhymes with that. That's what I heard. We're not going to say the name. No, of course not. 

Speaker 2: We didn't So. But the thing is, it's said in this article that the sky is falling. Affordability is going through the floor now because you ready People are using 30% of their income for housing. Do you know what that number is? Housing, principal interest, taxes and insurance on your mortgage payment, utilities, maintenance, repairs, i can go on and on. You're using 30% of your income, which is actually good, which is extremely good. 

Speaker 1: It's actually very low And it's actually a very well qualified buyer actually, because years ago, what's what people don't realize is that we used to have FHA we'd actually loan you money based on 52% of your income. On all those things including your debts. 

Speaker 2: Including your debt. So credit cards and the card payment. 

Speaker 1: So if you added up all your monthly obligation, you were only allowed to spend, or you were allowed to spend 52% of your gross monthly income, and this is just saying 30%. They're acting like that's a problem. It's not a problem. 

Speaker 3: Be, careful what you listen to. Well, this is the thing They don't know. 

Speaker 1: They don't know. They pull that 30% number out thinking that's high. 

Speaker 2: That's right. What do they sell? That's right on. 

Speaker 1: They sell newspapers, they sell headlines. We sell real estate. That's it, that's right. 

Speaker 2: That's all it is That's right? Absolutely, boy, i'll tell you, we are on a rant. 

Speaker 1: Hugo, wait a minute, hugo. We heard you have a question Or a comment. What's your question or comment, or something? 

Speaker 3: I was wondering, like, if, if, when a person buys a house and it's a register or the loan says there's a single family house and then you add a living unit to it, when does that become a duplex? Like, like, if you rent the other living space that? you built and you add it to your existing building. Does that become a duplex or is just enough? 

Speaker 1: I just say it's a two unit. See, there's the. I think with that you're saying so I have a place, clarify that. And I add, and I add another living, a separate living area. 

Speaker 3: Yeah, a separate living area. 

Speaker 1: That you're renting out. Yeah, okay, that you're renting out. So now it's two separate living areas. Yeah, it's a two unit, so it's a two unit. So the thing about the thing about that is terminology. in in, in. in certain parts of the country, if you say duplex, that's not. we call it a semi-detached Right. A lot of people call that a duplex. 

Speaker 2: I think right, Yeah. 

Speaker 1: Whereas we call, but sometimes also, or twins sometimes people think that duplex means a two unit. I don't think that a two unit is a two unit. So what you're describing right there and this is just my opinion, his opinion is is that you described a two unit. Okay, you described another separate living area that was rented out, so that's a two unit. 

Speaker 3: On the same deed on the same day. I got it Two separate deeds would be. 

Speaker 1: Would be would be a semi-detached or would you? 

Speaker 2: say, or twin, yeah, Does that make sense? Yeah, yeah, very good, very good, okay. And if it's residential, you're allowed up to four of those. Before it turns commercial. if it goes to five, it's commercial. Yeah, And then you have a zoning problem. Well, you actually always check zoning when you do that anyway, And you can buy. 

Speaker 1: you can actually buy a four unit building via FHA. 

Speaker 3: You can Wow. 

Speaker 1: Because it's yeah, and VA because it's considered. It's not considered commercial yet, like he had said, it's a considered residential property. A lot of people, hugo, actually buy that way because you know the reality is, if you can find it's a good actually a good topic to bring up. 

Speaker 2: This is a great topic, great topic to bring up. 

Speaker 1: If you're having a hard time finding a single unit to purchase, you might want to look up two units, multi units. There's less people in the market probably for a two unit and a three unit to purchase as a personal residency and then ran out to the two. Plus you have no mortgage. Basically, yeah, if you buy a two unit or a three unit and you purchase that property, most likely those two units that you have besides the one you're living in will end up paying the mortgage, especially with the way the rentals are up. 

Speaker 2: Yeah, exactly, i got that stat too. Oh, you do So that, but that's a really good that's a really good thing. 

Speaker 1: Yeah, I never, you know. I'm just thinking of that now as you said it. I'm thinking, you know, if you can't, if you're, if even, if you're at most of the time too, if you're, if you're somebody that's like maybe single, or somebody that's just a spouse in yourself, you know, if you start having more people in the house, a two unit might be a little tight, you know to purchase, But but what a great, what a great way to look at something. That's a great way. 

Speaker 2: Yeah, thank you for that. Yeah, good one. 

Speaker 1: Yeah. 

Speaker 3: Good one. 

Speaker 1: We should include them in the show sometime. 

Speaker 2: I think we should Yeah. 

Speaker 1: Oh, did you want your microphone on? They just think we're talking to nobody, right? Yeah, just keep the microphone off. I'm like, oh yes, sorry, hugo, i forgot to hit record. No, no problem, thank you. That's a good one, really good information, or good question, but what? 

Speaker 2: do you have on the rents? though They're up a month over a month, they're half a percent. So that's going back up year over year, it's 0.9. So it's almost, and that's going to follow. That's going to house prices. 

Speaker 1: Yeah, because I know there for a while rents were coming down last six to seven months. What does that sound like? Prices of houses, and now what you're going to find is that's going to follow it. It is Because if you can't find a house, you're going to have to rent. You got to live somewhere, it was what 18%, last year I think it was. 

Speaker 2: Oh, my god. 

Speaker 1: Yeah, i don't think we'll see that this year. I don't think so. I really don't. I think the one thing that is going to put a little bit of a cap or a ceiling on appreciation this year are the interest rates. It is going to do a little bit too. A little bit, yeah, not much. That's why we said it before Don't wait till they come down, because then it'll go crazy. Right, yeah, exactly. 

Speaker 2: But if you believe that, that third factor of people's income that they use for housing, if you believe the shredding shriegel, whatever the shredding needle. 

Speaker 1: The shredding needle, It's not even a word. Shredding needle 30%. 

Speaker 2: Still pretty good, right, yeah. And the banks allow 20, 28 for just the payment. Right, that's just your housing payment. That number was all things that you need to support your house, which was ridiculous. That means the affordability is still up, guys. 

Speaker 1: It's still good, absolutely, absolutely. 

Speaker 2: Because of that still a good number. 

Speaker 1: So they made it sound like it was bad. It goes falling down. It's crazy, unreal, it's unbelievable. You can look it up. Yeah, it's crazy. 

Speaker 2: Go ahead, you guys know what I'm talking about. 

Speaker 1: Yeah, exactly, go ahead and look it up, exactly, exactly. 

Speaker 2: Units sold. Yeah, i thought I went back the last, since this is five years, mm-hmm. Okay. So far this year, from January to then to May, we had 1489 homes. So Okay, okay, okay. Last year, same time frame, 1860. Wow. 

Speaker 1: That's a lot different 2021, same time frame. 

Speaker 2: You ready, yeah, 2008. Wow, okay, 2020, 1599. 

Speaker 1: Well, that makes sense for that, because of COVID 2019. 

Speaker 2: I've been always going back to 19. What is it? 

Speaker 1: That's a pre-COVID normal year. Yeah, what is that? 

Speaker 2: It's not a unicorn year Yeah Right, 1,935. Oh interesting. 

Speaker 1: And the interest rates were 3%. 

Speaker 2: Interesting Right. 2.5%, 3%, right, yeah, they were 3%. 

Speaker 1: And that's interesting. 

Speaker 2: So we were about 500 units behind that 450 units, that's a lot. 

Speaker 3: 450 units Yeah, that's amazing, it is. Yeah, it's crazy. It's all inventory driven Yep, absolutely. It is Inventory inventory. 

Speaker 1: Inventory, yeah, used to be location, location, location, now it's inventory inventory inventory. That's right. All right, i think we're good. We good, hugo, are you good? I'm good, are you good? We'll turn your mic on next time, hugo. Okay, all right, there you have it. That was a good time. 

Speaker 2: That was a good time. That was a really good time. It was awesome. Hope somebody learns something. Yeah, I hope so too. You know what's? 

Speaker 1: amazing. This shows you that we're in sales. We had nothing to talk about, and 18 minutes later we filled up a show with very important information. So well, we think it's important. We think We'll let somebody else decide that too. All right, there you have it. Thanks so much for watching the show. We are here every Thursday. We changed our time now It's every Thursday at 7 PM and not 1 PM. 7 PM. We like to keep it in the prime time area, so that way, maybe when you come home, you can watch the show live. Okay, that's about it. Thanks so much. We'll see you next Thursday at 7 PM. All right, bye. 

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