The Brad Weisman Show
Welcome to The Brad Weisman Show, where we dive into the world of real estate, real life, and everything in between with your host, Brad Weisman! Join us for candid conversations, laughter, and a fresh take on the real world. Get ready to explore the ups and downs of life with a side of humor. From property to personality, we've got it all covered. Tune in, laugh along, and let's get real! #TheBradWeisman #Show #RealEstateRealLife
The Brad Weisman Show
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What if the real estate market isn't destined to crash but to transform? Join us alongside our returning guest, Pete Heim, as we dissect the current trends reshaping the real estate landscape. We tackle the recent price reductions in high-priced and commercial properties, the ripple effects of hybrid work models on office space demand, and the perplexing issue of declining pending sales due to low inventory levels. Our discussion also contrasts today's market dynamics with the 2008 housing crisis, pondering whether we're heading towards a buyer's market or if a delicate balance can be achieved even with fewer homes available.
Next, we shift our focus to the Manhattan real estate scene. We delve into the financing hurdles faced by properties priced between $3 million and $5 million and contrast these with the luxury segment, where buyers often bypass financing altogether. National trends also catch our attention, from increased median days on the market to rising capital gains taxes on primary residences. We round off with some lighthearted moments, featuring quirky eight ball predictions and celebrating the upcoming 200th episode of The Brad Weisman Show. Tune in for a mix of hard-hitting insights and a few laughs!
"Never know what Pete and I are going to say or do, but just know you will have fun finding out the latest in the local and national real estate market. This episode touches on some balancing in the market, increased price reductions and lower interest rates". - Brad Weisman
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Welcome to The Brad Weisman Show (formerly known as Real Estate and YOU), where we dive into the world of real estate, real life, and everything in between with your host, Brad Weisman! 🎙️ Join us for candid conversations, laughter, and a fresh take on the real world. Get ready to explore the ups and downs of life with a side of humor. From property to personality, we've got it all covered. Tune in, laugh along, and let's get real! 🏡🌟 #TheBradWeismanShow #RealEstateRealLife #realestateandyou
Credits - The music for my podcast was written and performed by Jeff Miller.
from real estate to real life and everything in between the brad weisman show, and now your host, brad weisman.
Speaker 2:All right, we're back. We're back. Whether you like us or not, we are back. Thanks for joining us every thursday at 7 pm, though. We really appreciate it. Um, you know, once a month there's this person that just shows up in the studio, and you know, hugo and I have tried to call security to get him out. It just has not worked yet. But Pete Heim is back. How are you doing? I shoved the cot under the table. Is that where you're sleeping?
Speaker 1:now under the table.
Speaker 2:Well, you can't get rid of me, no, I can, it's just unbelievable.
Speaker 1:You're just like a booger on your finger yeah, right, yeah, you can't get it off, or a bad penny, whatever you know, but no, um, thanks for coming back.
Speaker 2:Ah, thanks for having me man.
Speaker 1:Yeah, I appreciate.
Speaker 2:It's always great doing this and things are starting to move and change. You know we're starting to see a little bit of pendulum change, so let's just start off with that are Are you seeing price reductions?
Speaker 1:Yes, not many, not many, but yes, most of the high price stuff.
Speaker 2:Most of the high price stuff.
Speaker 1:Yeah.
Speaker 2:I agree with that 100%. Commercial, yes, commercial. Well, you and I have a little experience with that recently.
Speaker 1:Yes, we do, don't we?
Speaker 2:We've done some research, I mean, on some commercial properties and man, they're really getting hit. They are in this area and also the office space and I think that's pretty common throughout the country.
Speaker 1:I think so. Yeah, so do you. I don't think that's going to change anytime soon. I mean yeah, unless something goes different than these hybrid. These uh companies are doing these hybrid things with changing like apartments or things or no. I mean they're um doing half. You don't need to be in the office all the time oh, I see stuff, so it has less use for office space. I agree, retail's still doing good. Industrial's amazing, like residential. I always look at industrial and residential about the same. Oh interesting, it's about the same.
Speaker 2:Interesting, yeah, and industrial. That's different than Amazon warehouse, though, right, or is it a little different, or is it the same?
Speaker 1:well, actually, that the warehousing does fall under industrial industrial okay, yeah, cool yeah, we got a lot of that, but that's always been good. Yeah, since, uh, the whole big box thing and amazon came up, came about.
Speaker 2:I mean it's been crazy since and I think covid put some steroids into that one oh my gosh, what do you think, hugo? Oh my god, yeah, see, hugo knows, hugo knows, yeah, yeah, so, um, so, let's move. Then let's talk about the numbers that you have.
Speaker 1:Yeah, you know, I was looking at the pending sales are down. Okay, you know I looked at that. Oh, I looked at the thing.
Speaker 2:Right there it is. I looked at the thing and that was in front of me.
Speaker 1:Yes, and it was interesting Q2, quarter two of 2022, there was 1,317 sale sale. This is, by the way, this is the bright mls region. Yes, it's our region which is which is pretty big pennsylvania, pennsylvania, delaware, maryland, some of uh new jersey jersey 13 17. In q2 of 2023 it was 11 46 and this past quarter of second quarter was 10 88, which is down uh five percent. And why, brad? Why? Because there's less homes on the market.
Speaker 2:Inventory, it's strictly that guys, that's exactly right, it's just inventory. And it just doesn't seem to get better. We're at 425 homes today. Now we were up at like 440 or something like that, for a little bit 445. And I'm like it's going the wrong way, it's going the wrong direction, it in the wrong way, wrong direction. It was like 401 that day. Yes, I was like what the heck you know? So that's just.
Speaker 1:I was really really hoping to see like 475 485. Yeah, you know, it would be nice to see that pushing five, yeah, because then it's going to start to get a little balanced. I think if we get absolutely five, six, seven hundred range, it's gonna it's gonna balance out I think I originally was thinking it's gonna be 1500, but oh, that would i,500, but I don't think it's going to go that. No, I don't see that in our lifetime.
Speaker 2:You don't think $1,500 homes on the market will ever come back.
Speaker 1:Unless something major happens Wow.
Speaker 2:It has to be something major.
Speaker 1:Yeah right, it's got to be a different type of crisis. Wow, that's interesting Like the lending crisis in 2008.
Speaker 2:It has to be something that big, something big.
Speaker 1:Because, dude, back then in 08, there was 1.6 million new builds. Yeah Right, Today, I don't think we have a mil. Nope, there was 4,400 homes on the market in June of 08. There's four, that's one. That's what? Is that 1%? No, it's 10% of that we have now yeah. Right, yeah, 10%, it's crazy, right. So I know. And then they always say, well, somewhere in the middle is balanced. Yeah, that was a buyer's market, this is a seller's market, so 2,000 is balanced. I think we could balance out around 1,000. Do you?
Speaker 2:think we'll ever see a buyer's market.
Speaker 1:I don't see, I don't you know what, I don't see that light. How is it possible? Right?
Speaker 2:I no, I don't, I don't. I see closer to balanced, which I think is happening already. Yeah, we're getting a little closer to balanced If you look at the graphs. We're getting a little closer, but we're pretty far away yet.
Speaker 1:We're pretty far away, but we're not in that crazy seller's market. No, we're not down the two anymore, and I think the location is very important.
Speaker 2:Oh, dude, that is so important when it comes to whether it's a very strong seller's market or a mediocre seller's market. That's right. I think a lot of it has to do with location. Oh, absolutely, it always does.
Speaker 1:Yeah, yeah. But the two big sectors that I see growing amazingly is the mom-moms and pop-ups. Yep, right, yeah, babies. The baby boomers are going into nursing homes and going to Florida. That segment's growing like mad, right, right. And also homesteading, but do you think?
Speaker 2:well homesteading. Was that what you've talked about with moving in together? Was that?
Speaker 1:the moving in together. Yeah, the multi-generational thing.
Speaker 2:And that, I think, is going to get huge. Because here's the thing I don't if we have a baby boomer population that is aging and getting to, my parents are in that Yep, Are you on the edge of that or no? Watch it. I'm not trying to.
Speaker 1:I'm not trying this might be the last time he's on the show. My knowledge, my information, I get abused.
Speaker 2:Hugo, I think he just quit. I think he just quit, I am.
Speaker 1:I am 1962 and 1964 was the end. That was the end.
Speaker 2:Okay, so I'm at the very end of that Gotcha. So there's going to be a time and place where these folks cannot either, a, they can't stay on their own. So if they're not going to assisted living, they're going to end up going somewhere, whether it's with their kids. So that's going to free up some inventory. If you take a million people out of their homes across the country and put them in with family, that's a million homes of inventory that we didn't have before. Boom, right, yep. So we need to start going out to our parents and say these older people, yeah, my mom's like, oh, this is a great show. She listens every week, except for now.
Speaker 2:This is it? She just went click, he quit and my mom gave up the show All in one show. It's amazing. Quit and my mom gave up the show all in one show, it's amazing. So no, so you know, I think there's a point where they're gonna that's gonna start to happen and you're gonna get, you're gonna open up some inventory then I think I just got.
Speaker 1:This past week I got three calls from high school buddies interesting that their parents are ready to go ready to go like a lot. They're gonna stay alive nursing home yeah, no, yeah, yeah, right, yeah, we pushed them up, pushed him off a cliff.
Speaker 2:We just decided it was time Take him out to a field, get the proceeds.
Speaker 1:This is it. We're done with this.
Speaker 2:There's such a burden, such a burden, no, but I think, yeah, I think that that's you're going to start seeing more and more of that, absolutely, and that's a huge.
Speaker 1:And that's just me, I'm not just little old me, I'm sure there's a ton of that going on right now. There's going to be. There's going to be.
Speaker 2:And I have one actually, that I might be getting too the same kind of thing, it's somebody I know that she's in her late eighties, nineties, and. But don't worry, mom and dad, I'm not coming after your house, I am not Keep paying the mortgage. Hey, if business gets slow, I might just throw a sign in the yard. You know what I mean. Just put a sign there and say by the way, you're selling and I don't know where you're going, but let's keep moving forward here.
Speaker 1:This was interesting.
Speaker 2:Number of homes having their prices reduced. Oh yeah, okay, you were starting to yeah. So January 2024, this past year was 182,000 homes had their prices reduced in that month, nationally.
Speaker 1:We're talking nationally.
Speaker 2:Nationally, nationally, fast forward to July, it's almost double 326, 540. Yeah, so I have been seeing definitely more and a lot of it I've seen in in wilson, actually in the people are coming in listing it like the 480, 490, 500, 525 and all of a sudden it's on the market two weeks, three weeks and it goes down by 20 grand. It has to yeah yeah, but I think we that shows that. I think we've hit that there's. You know, no matter how much of a shortage there is, there is a point where it ends.
Speaker 1:Yeah, you can't just put it for price. People can't afford it.
Speaker 2:I mean, you look at, you know what it costs interest rates, things like that. Now, if rates drop back down into the fives, that could change things again. Yeah, which we talk about. How many times we're going to talk about it again? We're going to talk about it again how? Many times. We're going to talk about it again. We're going to talk about it again. Hugo, get ready. We're going to talk about it again. But no, brad, I mean Makes me want to drink, yeah.
Speaker 1:Absolutely. I thank you for that. Yeah, absolutely. But what brings it up, though, is it's in a seller's market, which we're in still. Yeah, it overprice your home, oh my gosh, because price, condition, location still have to match. They do have to match Absolutely. And it goes back to looking at the list prices instead of the sold prices, like we talked about ad nauseum. Was that last week or the last time we were together? I forget what it was? I'm sick of talking about it, but you can still overprice a home, oh absolutely.
Speaker 1:You can overprice a home on any market and you might need to paint that living room now, like we talked about.
Speaker 2:Condition didn't matter for a very long time. Condition's starting to matter.
Speaker 1:Yep, yeah, it's starting to matter and if you have a rotten carpet situation will you have?
Speaker 2:hardwood underneath. I was going to say rotted carpet, yeah, wow, please get rid of the rotted carpet. Yeah, because the hardwood be on, been hasn't been touched yeah, exactly, absolutely so, anyway.
Speaker 1:So what else you got?
Speaker 2:so I did I did an interesting, I got that. Did you see the luxury luxury?
Speaker 1:homes. The luxury market yeah, a luxury market. For everyone who doesn't know what that that's.
Speaker 2:Is that relative based?
Speaker 1:on location though. Right, well, yeah, it's the top five percent of your prices in a specific area, gotcha okay, nationally, nationally, get this, though. This is interesting the United States top 5% raised 9% over the last year, year over year.
Speaker 2:The top 5%. Went up 9%. Went up 9%. Okay, which?
Speaker 1:took it to $1.18 million house. Okay, so that's the average of the top 5% in the United States. You follow that, got it. So 88.4% of the homes are valued over a million dollars in the United States.
Speaker 2:Okay, so 8.4% are valued over a million dollars. Right now that's everywhere in the United States. Okay, so that has to be up too.
Speaker 1:Well, that sector yes, that sector, sector, yes, yeah, that sector for single homes went up 14.82%.
Speaker 2:Oh.
Speaker 1:And for attached homes it went up 11.35%.
Speaker 2:Wow Right.
Speaker 1:Attached homes Yep, and that's January to July Amazing. Yeah. So obviously there's a million dollar attached homes. Yeah, you've got the beach and stuff. You've got million dollar properties down there, yeah.
Speaker 2:Right, yeah. So when you said hey, pete, did you answer yourself. I said, sure, let's check it out. So for Berks County, what?
Speaker 1:does this mean for Berks County?
Speaker 2:What's our top 5% Our top 5% is over $585.
Speaker 1:So our top is $585 and up If you are at $585 and up that's 5% of the homes that are sold your luxury are at 585 and up. That's five percent of the homes that sold your luxury as yep. Between january 1st yep and july 30th of this year, there were 2,277 homes sold right and that five percent, that's 114 of them right wow. So I went through it and I said, sure enough, 585,000 and up is our, is our luxury market. Wow. So if you have a house that's worth $650,000, you're luxury.
Speaker 2:That's incredible In Berks County In Berks County, yeah.
Speaker 1:We are an affordable county. Yeah, and this is the point. Yeah, guys, $1.18 million in the United States is considered luxury. Yeah, in Berks County it's $585,000 plus.
Speaker 2:That's crazy.
Speaker 1:You get a lot for your money here.
Speaker 2:That's amazing. It's a nice place to live.
Speaker 2:So let's so to segue. I'm trying to. No, that's incredible. I thought that was a cool thing. I was just talking to somebody, a realtor in New York, and he's hopefully going to be on the show soon again. He's on the show owning Manhattan. Oh, yeah, yeah, jeffrey, and he said that we were talking a little bit about where their market is. So we're trying to get an idea of what we want to talk about, and he was saying that their, their market between like one and 3 million or 4 million, is the market that is is hurting because they're still getting financing the market. The market above that, from five to like 12 million or seven to $12 million, is actually doing fine because those people are not financing most of it.
Speaker 2:They're usually getting it from other investments or taking money out of something or here to pay for here, but the ones that have to finance that, that sector, which is funny. There's like a little, there's a little gap in between. Yeah.
Speaker 1:Yeah, it's crazy, right Price?
Speaker 2:Yeah, I think it was actually $3 million to $5 million is what he said. $3 million to $5 million is hurting a little bit. And those are Manhattan apartments and those are basically two-bedroom, two-full baths, 1,200 square foot. Well, they call them all apartments up there, which is kind of funny, but it's just interesting where things have gone with that. Ah, that's something.
Speaker 1:I would think it'd be hard to get financing for that. Oh, I would think so. That totally makes sense to me. Yeah, it's amazing, yeah.
Speaker 2:Wow, pretty crazy, right, woo. So one of the other things that was on here. Now, these are national numbers, these are not local numbers. I always like to do the difference between the two. The median days on market has definitely gone up, but, what's interesting, it was worse in January. Yeah, it was worse in January, went down, down, down down. Now it's back up to 50 days, which is still nationally, which is still amazing. We would have killed for 60 days on the market about what? 10 years ago, whatever, whatever. I think about nine months. We literally signed listing contracts, hugo, for one year. Yeah, we would sign contracts for a listing for one year. The reason being is because sometimes it didn't sell in a year.
Speaker 1:Yeah, yeah isn't that crazy. Eight months yeah yeah, it's crazy.
Speaker 2:And when we would take a listing for six months, people be like you're crazy. Why would you take a listing for six months? You know what I mean it's like, well, you know. Would you take a listing for six months? You know what I mean it's like, well, you know cause they were like you know what you might not ever make your money back.
Speaker 1:That's right. I'm still kind of in that one year mode but you don't need it.
Speaker 2:Well, you're old school, I am.
Speaker 1:He still uses an MLS book.
Speaker 2:Just kidding, I use it as a floor mat. Yeah, exactly, exactly. So no, this is a really interesting one. Listen to this one. This was in Keeping Current Matters. You know, for most of the time when somebody sells their house, they don't have to worry about capital gains tax. That's right. Okay, because there's a-.
Speaker 1:Private residence.
Speaker 2:Yeah, because capital gains tax exclusion, which allows you to pocket the first $250,000 or $500,000 if you're married, and gains on the sale of your home without having to pay taxes on them. It says that is at the highest percentage ever. Yeah, that people are paying capital gains on their primary residence because they're actually making more than 500,000 when they sell their home. Yeah, isn't that crazy? That's crazy. I mean, I've never heard of that. We always used to say to people don't worry about it, you're never going to make that much. Right, it's happening. It's happening. It's happening. They're going to probably have to raise that soon. And the biggest one is for somebody that's on their own filing singly $250,000.
Speaker 1:That doesn't go very far no.
Speaker 2:And you could easily have a house that makes more than 250, you know well, you're talking these numbers.
Speaker 1:Yeah, nationally, now it's it's way. I mean 250 doesn't go anywhere, especially in that luxury area I, I, it's, it's, it's pretty crazy, pretty crazy that'd be interesting to see what happens with where the candidates that are coming up in the election, where they stand on stuff like that, because I haven't heard anything come out yet well, one thing we don't need is money into the system to bet to have more people buy homes.
Speaker 2:That's right.
Speaker 1:We don't, we don't, we don't need that and we don't need that.
Speaker 2:So let's just get that message out there everybody. We don't need that. We don't need that, because that'll just make it worse.
Speaker 1:It will.
Speaker 2:Yeah, it'll make it less affordable and it's a whole other thing. Oh, yeah, yeah, so you have anything else.
Speaker 1:Let's go back to the rates thing again. Yeah, because I did catch a Fed rate cut thing, lawrence Yoon. He had a podcast the other day, I forget what it was. He's predicting it's going to be six to eight cuts in 2025. Six to eight cuts? Yeah, this is just off the shelf.
Speaker 2:That's his prediction, which would take us Wow.
Speaker 1:Now today we're at 6.35. Assuming quarter point yeah, right, yeah, exactly. Quarter point, exactly. Well, you know where that takes us. That takes us down into the five-ish area For the prime rate, right? But he's saying that if it doesn't do that, we're still going to be in the 575 to 6.5 range regardless For mortgage rates.
Speaker 2:For mortgage rates. These are strictly now 30 yeah, 30 year fixed mortgage rate. So just make sure we're straight on that. The fed rate is, he's saying, we'll go down six times right, and the mortgage rate and a half which is a point with the mortgage rate will be about, will be or stay around where it is right now. It's like it's six and a half, I think isn't it?
Speaker 1:it's at 6.35 today. Yeah, and just so you know, in may it was 7.22. Wow, today we're at 6.35, so it's sliding you go where's your rate?
Speaker 2:749? 7.49. We're at 6.35. So it's sliding, hugo. Where's your rate? 7.49. 7.49. You're getting there, kid, you're getting there, you're getting there. So you know, and that's the thing that really you want to watch, if you bought a house you bought last year, right?
Speaker 1:Yeah, one year.
Speaker 2:Yeah, one year no-transcript. We got plenty of good ones around, so we do so. You know that's something you might want to look at, but, hugo, that's interesting. So you're, you're getting there you getting there.
Speaker 1:So what this will do this will ease that lock-in effect that we talked about. Yeah, the reason why people don't want to leave their two or 3% mortgage rate and get a 7% rate, it's as it's easing into the fives. It's going to help those people make a little bit better decision to say, yeah, you know what? I think I'm ready to do that. And also buyer activity obviously is going to be boosted.
Speaker 2:And one more thing, hugo, I just thought of, just to bring this up in the conversation, is, you know, not only do, should you be looking at it because of the rate going down, something we need to look at and a lot of buyers should be talking to the realtors about did, how much, did you improve the home, if you can? Remove P if you can remove PMI and save a point and a half in your rate, or even a point, it might turn out to be a really good decision.
Speaker 2:You know what I'm saying, because you're removing PMI, Because I can tell you right now you gain value in your home. I mean, that's a definite for him when he bought. So it's something we have to look at.
Speaker 1:Yeah, we'll have to look at that. You got the right realtor.
Speaker 2:No, because I think the difference between those two yeah, really ramps up the the urgency of refinancing. That's a good point because the pmi would go away, because you're getting the spread, you're getting that pmi going away plus you're getting you're getting the point and a half, maybe off the rate that's you could be there.
Speaker 1:Yeah, you could be, there's right. Yeah, that's right. That's something to think about yeah, what else, anything else to think about, but trying to time this everybody. Yeah, get it. That's's true. It's impossible. Yeah, because this might not happen. Yeah, true, right. So these are the prediction. We do have this, though. We do have an eight ball. It's a red one too.
Speaker 2:Yeah, it's a red eight ball, which I heard is really truthful. Okay, does Pete know anything about what he's talking about?
Speaker 1:That's going to be a no.
Speaker 2:Ask his wife.
Speaker 1:That's really weird. That's a strange one right. Never saw that on an eight ball before, did you? That's funny, that was really weird.
Speaker 2:Really weird. I always thought they were just yes or no kind of answers right. This is a good one. No.
Speaker 1:The red one's more expensive and it's actually. It tells more, it's a KW. Yes, of course, of course, yeah.
Speaker 2:Anyway, all right, we ready to wrap it up? I think so.
Speaker 1:Yeah, I think so too. I think we're good.
Speaker 2:I think we're amazing, actually. So thanks for coming in, man. Thanks for having me. Yeah, thanks for coming in. Hey, by the way, this is going to be, I think, the last it really is. September 19th will be the 200th episode of the Brad Wiseman Show. Pete, you've been with us for a long time. Thank you, I know you're going to be there that night. Oh, absolutely, because my wife has a new schedule. We'll ask her about the question we had then. Hugo's going to be here. We've got Stephanie Taramina that's going to be here. We've got all kinds of people that are going to be here that night.
Speaker 2:It's going to be a good time, so make sure you check in Thursday 7 pm, September 19th, just like every other Thursday, and we're going to have a good time. All right, that's about it.
