KGCI: Real Estate on Air - Market Predictions for 2025

Episode Date: March 27, 2025

You're listening to the Investor Agent Nation podcast, empowering agents and investors to collaborate effectively and grow their businesses symbiotically. Your host, Randy Zemnock and Eric Gross, share real-life case studies, trending tactics, and expert strategies that have helped them to accomplish over $1 billion in sales volume. Whether you're a seasoned agent looking to expand your business or an investor seeking to optimize your returns, you're in the right place. This is the Investor Agent Nation podcast. Awesome. So let's get into it. So like we said, today we're going to focus on market predictions for 2025. We do, Eric and I, we do have a crystal ball if you're wondering.

So, you know, these are going to be spot on. Like everything we're going to say, it's like it's exactly going to be that way. So, no, just kidding. But you just, you know, this is again accumulated through our personal experience. I have a team in San Diego. Eric's got a team in Cincinnati and in Tampa. So we operate in three different markets, three very different markets, very different markets. So we can speak from that personal experience.

And then, of course, the rest is just from being in the business for this long. I have a network of agents across the country. So those Eric. So we do get to interact with many realtors on the ground. And, of course, we also, you know, subscribe to different. different publications, podcasts. One of the podcasts I like to listen to is on the market by Bigger Pockets. That is a good one.

I know Eric listens to some Bigger Pockets podcast. He's been a listener for a long time. So that's one that I listen to weekly, really, and kind of get their perspective because they seem to cover a lot of grounds. So I like that one if you're interested. But I'm going to start with San Diego. And I'm going to go a little bit of looking back in this phase. But bottom line, for us in San Diego, what I've experienced and what not all, of course,

but many states experience something very similar over the years is, of course, in the fall slash winter markets, things always tend to slow down, at least for us in the Southern California market. And this graph really kind of shows you that the active inverts. inventory when you look on the bottom, anywhere it says December on this graph, you will notice that it's trending downwards. And then in January, the active inventory starts slowly picking up, right? And that has to do obviously with holidays, right? Agents expiring listings. Doesn't mean that all these properties are all of a sudden selling and there's nothing to buy anymore, right? There's just

less listing coming to market and the ones that maybe were on the market that haven't sold, right, because sales slowed down in November, December, quite a bit, they usually are expired and then they come back on the market in January. So you see usually an upswing in inventory over the last few years in terms of active inventory. So same thing is happening again now. We have a pretty big slide like we did in 2023 downwards for active inventory. right now. Same thing happened in 2023. Now, I must say we started in 2024 a higher number since we've been in the last three years, right? As far as active inventory, we actually surpassed our peak over the last three years that we had. So that's something that, you know, I want to

make sure I point out. But now it's trending downwards. And that really is the story across the country, I would guess, right, based on the information that I've read. Again, some states, some, you know, cities and little areas, you know, locally might have slightly different data. But at the end of the day, if you're looking at it from a national perspective, this you probably can assume is the trend in most. And in San Diego, that's what we're experiencing right now. Inventory is going down, which only will help with January when buyers start coming back. And to market. This is an interesting graph too to look at as expired listings spike. And when did they spike? And if you look at this, December always has the higher spikes, the highest spike of expired

listings, right? Things tend to sit there. They are not selling. So agents expire them, cancel them, and then they come back in January. So all last three December's, you see a spike in expired listings, right? So that was an interesting one to kind of look at. Another thing that I want to point out for Southern California, the median price per square foot in San Diego County, as of right now, we're actually down 6.3 from our June peak, right? Now, I don't really see a lot of panic amongst realtors, amongst sellers out on the streets in San Diego, which is what I did experience couple years ago. A couple years ago, there was panic on the streets. Last year, a little bit. This year, I really think what helped us and many markets around the country is that one month,

which I believe was September, when the rates, if you guys remember, dropped to 6% for conventional and people were able to lock up loans, FHA, VA, and like low fives all of a sudden, right? We had about 30 days of that. And Addison, you might correct me, on the dates. Was that somewhere around September, right, where we had like solid three weeks of low rates by about one point? Yeah, you're spot on there. And that was a great month.

Yeah. So, and then that, I'm truly, you know, a believer that that one month is stabilized us so we didn't have a bigger trend downward in Southern California and in many different states. That brought life into the market. market at a time when people usually pull back, right, and start slowing, and the market starts slowing down September, October, November, that literally brought life back for those 30 days.

And I do believe that had a lot to do with why, you know, our downward trend is only 6.3% from our peak and not 10% and not 15% that we were actually thinking might happen, right? So that was an interesting little caveat that kind of happened in September. And what that taught us, I think, and what I believe, you know, we got to look forward to in the future is that every, you know, there's so many unpredictable things. And just because something is trending downwards doesn't mean it's going to continue. And it doesn't mean they can't go back, right back up where it started a month prior. And we've seen that now over and over and over again over the last three years, really since COVID. And there's just, it's so very hard to predict.

Now, what has been pretty consistent over this whole year is rates were basically between 6 and 7% all year for conventional. Like that at least, you know, has been consistent. Now, that's a still pretty big swing, but it's not a swing that we, you know, that we experienced a few years ago where it went from 3% all of a sudden to 7% in one year, right? That was dramatic, right? That was that. No one expected that to happen.

Right. So we can live with a 1% swing in either direction within a year's time frame. I think people can get somewhat accustomed to that. It's the bigger swings that really get people confused. They pause, they freeze, and they don't want to make any buying decisions or selling decisions when that happens. So I do think that kind of helped us a little bit, even though the rates were so much higher than what, we were accustomed to previous years, right? And then one more graph is this is very telling. I was talking to Eric before this training or this mastermind. And basically showings per listings

in San Diego County have been dropping pretty consistently for the last two years, right? Since 2022, you saw, you know, that's where we had a pretty high incline of showings and interest. But since 2022, really, after about the first quarter, those showing started dropping. They went up a little bit in 2023, but since then, we went on a downward trend. And what that really just tells me, as far as at least for San Diego, is that we can't expect in the first quarter to have this big rebound than we had the last two years. Last two years in January and February, we had a pretty significant rebound in a good way in terms of appreciation, interests, and everything. However, I don't anticipate that to be the case this January. Now,

I do anticipate in San Diego, of course, that there will be an uptick in showings. There will be, you know, more activity, of course. But at the end of the day, there is going to be less buyers because of just the affordability issues, right? People just are not able to afford to buy homes, right, at these price points. And if you look at this, which, oh, not this slide, this slide. If you look at this slide, the peak we had in June in San Diego County surpassed that the peak we had in 2020. So even though there was a pretty significant drop in median price per square foot between 2022's peak to 2023 and end of end of 20203, it came back since then and surpassed it in 2024 in June, right? Which means what?

Now prices are elevated everywhere, right? All over, you know, on most states, most cities, most cities, this has been the trend as well. Well, guess what? There's less buyers that can afford it. No, I'm not surprised. There's just less showings per listing period, right? So when I look at this, that's very telling to me that there will be an uptick and activity, as always there is in January and February, but I can't anticipate a huge rebound and all of a sudden this big appreciation again, like we've experienced the last previous two years. and I'm going to now go to Mr. Eric to talk about Cincinnati. Yeah. So I've got Cincinnati and Tampa. I don't have the graphs. I couldn't pull it from the MLS, but they make it a little bit difficult.

So for this past year, what we saw in Cincinnati, I think Addison can agree was a steady but slow increase in inventory. So we started the year at around 1600 homes, active on the market. And Cincinnati remains one of the few places where it is a top 10 quick moving market. So we saw inventory slowly increases the year went on. I think right now we're about 300 listings higher than what we started the year at. And I think we'll continue to see that. It's still significantly, I think we have that graph we'll show here shortly, but it's still significantly below where we were at pre-pandemic levels. But it is nice to see it kind of steadily increase. Our days on market are still some of the hottest in the country as well for Cincinnati.

So our days on market were still below 10 days up until recently. So if a home hit the market, we were still seeing them sell quickly and typically sell at or above the asking price. And we also saw price appreciation increase about 67% locally for Cincinnati. So Cincinnati as a whole, you kind of have the metro and then outside of it. price decreases remain super low. Sometimes there's mispricing or if an agent tried to price it high, you would see that. But for the most part, price decreases weren't something we saw a ton of. And it is one of the things we're starting to see with a lot of our investors for Cincinnati.

It's almost impossible right now to find cash flowing properties. So it is actually kind of matching what we're seeing through the rest of the country. Cincinnati had a period where still made sense to find cash flowing properties. but now that we are kind of continuing on this path, I just think it's going to get tougher and tougher. So what we kind of see, do you want to do like kind of what we're expecting for 2025 as well?

Yeah, in Cincinnati market, yeah, I think from that experience, what you think is going to happen there. Yeah, so what we're expecting to see, or at least what I would probably expect to see is inventory is going to continue to increase. I think we'll actually see transactions go up. up, whether interest rates are lower or whether they're higher. I think what has happened was there was an initial shock when interest rates went from 3% to 7%. So, 2023 and 24 were almost, both of

them were almost the same amount of units sold nationally, but it was the lowest home sales since 1995. I think there was a lot of shock with increased prices and rates. But I think people have grown accustomed to it. I think they're used to their payments being elevated. And I think there's so much equity in homes that you're kind of trading one equity from a house to pay down another and keep the payments reasonable. So I think we'll see an increase in inventory. I think we'll see an increase in transactions. I think we will see an increase for days on market. I think we'll probably start to go into the few weeks, maybe to a month. I think there'll be buyers that are taking longer to make decisions and being a little bit more cautious just because they are going to be

paying so much. Cincinnati has a couple unique features where it has a really strong job base, P&G's headquartered out there, GE's headquartered out there, you have an Amazon fulfillment center, you have a ton of manufacturing jobs, you have a ton of new IT jobs that have been created. So I think there's a strong job base and it's still like reasonably price or average sales price in Cincinnati's 280,000. So because of that, I think it will remain a strong market. The Midwest is also one of those markets that doesn't have very many swings, even in not saying this is happening, but even in 2008, Cincinnati prices didn't drop like California, you know, 60 or 70 percent, and they dropped 15, 20, and in some locations, 30, 35, and it

rebounded quicker. The biggest thing I see, and I know we'll talk about this a little bit more, but the biggest headwind I kind of see for Cincinnati, but also for Tampa, is if interest rates continue to go up, which they can, there's no guarantee that they're going to go down this upcoming year. And with insurance. and taxes going up, there is an affordability problem that's starting to show itself. And I think me and Addison have talked about this quite a bit where we had, you know, buyers that three months, or not three months, but like two years ago, didn't have problems getting qualified.

And now we have a hard time because of taxes and insurance almost doubling. And you have interest rates that have increased and home prices. It's becoming highly unaffordable. And then I can go with it. How about Tampa? What do you have? So Tampa have a little bit more data for. So Tampa in 2024, the year over year sales were down 15%.

So median sales price we saw about, we saw a 0.2% increase, but luxury homes were still selling really, they were still actually a strong part of our market. So I do think that's skewed. What we've typically seen in most dip codes is a 3 to 4% drop. price. And that's over kind of the Tampa market. Days on market, it's up to 45 days locally. So we're right outside of, we're like in a suburb of Tampa. We're probably closer to 70 days. There are still parts of the subsection of the market where we can have stuff that goes really

quickly. But for the most part, we're seeing stuff set two to three months, which Randy, I know you can speak on this as well, but that's not out of the norm. I think what I've, the conversations I've had with investors lately is we're just going back to a normal market. Like this past three years, the best way I can summarize it is it's like I just term it COVID market. It'll never exist like that again to me and housing. Like it just it won't. Interest rates were at 2%.

I think that graph for showings is, you know, perfectly sums up what we saw, which was so many people had a housing like frenzy because it was almost free money to purchase a home. and over, if you look at the interest you pay over the 30 years of owning a home, 2% versus 7%, the amount you're paying the bank in interest is insane. So this is actually one of my favorite stats because I get this all the time. People call and they're like, well, I heard the Tampa market's crashing. I heard Florida markets crashing. I heard you guys are, you know, losing prices and all these other things.

Our sales to list price ratio is still 97%. So compared to where people list two, sell, it is still 97%. And we do see sellers tending to try and list a little bit higher than what it's worth for negotiation room. So that tells me we're still very strong. If we solve something 90 to like 85%, there'd be concerned because you'd have sellers taking these deep discounts. But sellers still know that they're kind of in the driver's eat. Even with inventory, increasing, it's still limited for the population that's moved here. 33% of the homes in the Tampa market did have a price drop. A lot of times we see sellers try and price at high, so that's not that crazy.

And then Tori is actually above where we were pre-pandemic. And me and Randy will talk about this here in a little bit, but I do want to preface that with. There's also been hundreds of thousands of homes built locally in the past five years in Tampa. Tampa was one of the hot spots for where everybody was moving when COVID happened. And the population, it exploded. So there was so many new housing development. So if you don't know that going into it, you would think that, okay, that's terrible. Inmetories back where it was in 2019, 2018, but that's with all of the new homes that have been built and then people reselling. So we're just starting to see more of a return to the normal housing market in general.

I think Tampa is actually one of the few places where that's kind of what will continue to happen. And then what's to expect in 2025, we've actually seen. a really big increase in activity on the market for the end of November and December right after elections. We're actually heading into our busy season, January, February, and March are very busy seasons in Florida. So I think we will see it pick up then. There's three major headwinds, which I kind of mentioned with Cincinnati, but I think they're very big what ifs in the Tampa, but also just Florida market. And that's going to be interest rates. Obviously, if interest rates decrease at all, I think we'll see demand pick up. But if they continue to

increase, it might really put a hamper on the market. Insurance is the biggest, what if. So after the two major storms we had that hit the west coast of Florida, and we also had a tropical storm that came through and did some flooding, I think that there's a good chance. Insurance is going to get very unaffordable in some areas. And I think part of that migration we're seeing is a lot of people moving inland. So I think we'll see our inland counties pick up, and then our coastal counties will slow down, and then property taxes. I think that's a national thing, but property taxes are absurd

because you've had homes double in value in five years. So the taxes have doubled in value. So because of that, it's quite a big difference. And the way that Florida runs their taxes, it's not assessed every three years, like in an Ohio county. It's as soon as a sales done, that next year your new tax assessed value goes up. And I think there's probably a bit of that fear

the people that were planning on maybe moving to Florida from other states, they might put a pause on that or have because of what they've seen in the news, the last time's, right? And that does scare people, but not forever, right? So that does change pretty quick. People forget very quick. And what's kind of funny is there's been a lot of surveys done because there's a lot of agents that have wanted to see what happened. Most of the people that are local and experienced the hurricane have, and survey, would state that they would be open to moving from the state because they just experienced a major hurricane. You saw flooding and damage. Most of the people that were surveyed moving from out of state into Florida stated that it had no effect on their move to Florida. So I think there was people that didn't experience it don't really have the like, okay, yeah, it was, you know, it was crazy, but it's just a day. And then after that, the people that were actually here experienced it, didn't have power for four days, going to find gas. I think are more likely to say, I don't ever want to go through that again. So it's kind of funny, but the surveys that have been done,

anybody that's moving, people that are moving to Florida are more likely to continue with their move, whereas people in Florida are more likely to consider moving out of state. I think it would be good to go into this map, explain what we're looking at, because this is pretty telling to some data that we can use maybe for prediction, right? Yeah. So I actually found this on on somebody posted on twitter but it is i checked into the source it is backed up so any of the states that are like in the brown reddish brown color that is that color states that their inventory is lower than it was pre-pandemic and then any of the states that are in the light blue um those are these states that have inventory that's increased beyond the pandemic um and i will say

me and Randy talked about this before we jumped on. If you're just taking a look at this, you would think Florida, Tennessee, Texas, Arizona, Boise. Like, you would think, or Idaho, I mean, you would think those states are, the prices are crashing. I mean, Florida's got 15% increased inventory. Tennessee's got 20. Texas has 17.

Arizona has 18. But all of those states are states that most people migrated to during COVID. So you kind of have to look at the background of it. And with all of those states that have increased inventory, they've also had a mass increase in development of homes. So I guarantee the transactions in those states are higher. Like even when I was pulling Florida data, the transactions year over year have been higher because there's more people.

So that means there's more inventory. There's more people to list homes. There's more people to buy homes. There's more developers. So I think you kind of have to take it the greatest all. And though, I will add, I do think it's, there is definitely some pretty good accuracy to it, because again, I listen to a lot of podcasts on this. And one of the things that I, I found, you know, from just the data out there is that, uh, there's definitely, you know,

values are declining in Florida in general. Uh, in Austin, uh, in Texas, not all of Texas, but Austin is one of the, the ones that's kind of dragging Texas down right now. because so many people went there once during COVID, right? And now all of a sudden it's just been overpriced, right? So now there's a pullback there. And then same thing with Arizona, right? So there's definitely some truth to some of this information as you look at it. And then when I speak to realtors on the Northeast, they're like, oh, man, we're in a strong market.

Like we have no inventory. But then when you look at this, they're like, oh, crap, they're right. Look at it. They're still between 40 to 60% below where they were pre-pendemic. Still, today, which is crazy. So that just makes sense to me when I speak to them and they're like, Randy, like, you know, because I deal with a lot of like assumable loans, right, with different clients wanting to buy a house and take over someone's a assumable loan. and those work very well in the buyer's market, right, where sellers can't sell, but they are sitting on a low interest rate,

and they would be just eager just to get the house sold to somebody, right? So it's very attractive, potentially to that buyer, be like, you know what, I'll pay you what you're asking if you can help, if you allow me to assume your interest rate, right? And again, that works very well in the buyer's market. But when I start talking about assumables with agents in the Northeast, they're like, Randy, that's not happening here. We don't have any inventory. And the people can't find what they want to begin with. Never mind, you know, sellers agreeing to do an assumable because those take usually two, three, four months sometimes, right? So it's just a longer sales cycle. And most sellers are not going to wait. And they have other buyers eager to buy it as is like this with a regular mortgage

close in 30 days. So even just my conversations are kind of equal to what I'm seeing on most of this, right? So I do like this one a lot. Like it's very telling, you know, because when I asked to, you know, again, the podcast, the agent I speak to, it does match what this is telling me pretty well. Now, what you do have to look into though is where in Texas, right? Where in Arizona? Where in Florida? Because not all of it is all of a sudden going to have a big and negative impact just because Florida is in the blue here and Texas is in the blue here.

And it's up 15 or 17 or 18 or 20 percent than before. It might be very pocketed driven based on different cities. Like I know for a fact, Texas is Austin is that one city that's dragging Texas down. But anyway, I want to just kind of share it. because I do think this is very powerful to use as you make your decisions if you're an investor and want to look at properties where potential opportunities might be, you probably won't find much in the Northeast, right, or the Midwest, right? It will be very hard to find some good opportunities versus like Florida right now, you can find some good opportunities potentially, right? People are a little

bit more eager to sell certain parts of Texas, right? These, the blue states, there's definitely more opportunity there that we see here on the map. So go ahead, Eric. Anything else going to? Yeah, just from that map, I mean, other than that, I think you'll kind of see some migration patterns. I also would be interested, and I don't have anything for it, but I would also be interested to see how many of the increased inventory in those states are people that migrated because of remote work for their job.

And now that a lot of jobs have said, hey, you can't remote work anymore. if there's people moving back to where they left. Like I know New York was one of the New York and even California. Like California's population, California had the largest migration out of the state last year. And their inventory is still down 14%. So I wonder how many people left and then came back because of remote work or something along those lines. So just to try and tie in, you know, you always want to kind of look at these and then come up with reasons for it. And then if you kind of compound on this, some additional data that I've been, you know, hearing,

and it's all based on not just pure speculation, it's also based on current data trends, right? And then based on that, they predict. And it's been heard, I mean, I heard on pretty much every podcast is the Northeast. They are expecting a year-to-year increase in prices. in terms of values. And they're anticipating, you know, somewhere close to even 5% potentially in the Northeast. States like Connecticut, Providence, Rhode Island, Midwest is going to, they're predicting that that is also going to have, you know, three to four, five percent potentially.

But then there is markets like New Orleans, San Francisco, Austin. They're predicting that they will have actually negative growth. in terms of appreciation. So again, but then and then that does match with what we see here when it comes to the colors on the active inventory growth pre-pendemic to now. So there's definitely overlay and it does start matching up when you start looking at it from that standpoint. And one of the things that I found also is this.

The top 10 metro metros where home values are expected to decline or grow the slow, lowest in 2025 is New Orleans, San Francisco, Austin, Texas, Sacramento, which is, again, those are the states that on that map had the highest increase in inventory, you know, compared to pre-pendemic, right? So no wonder. And then mainly Northern California, not so much sudden where my team is, is because the prices there are just completely ridiculous right now. It's so high, right? So anyway, it's just good kind of to see it from this perspective and then kind of start overlaying data on top of each other.

Anything else you want to add on that, Eric? No, I don't, yeah, I don't have anything on there. I do think it's interesting to see what they're expecting them to increase and decrease by, but. And a lot of things I also looked at, well, this is from Zillow. So one of the things that Zillow predicts is that the buyer's market will spread to the Southwest in 2025, as inventory continues to come, unstuck in relatively affordable markets. So that's where we're going to see some movement.

And one other thing that kind of stood out to me that was interesting is that more Americans will embrace small home living. So the pandemic era need for space is coming to an end, basically. That's what they're communicating, is that during the pandemic, people wanted more. space because they felt stuck at home. But now because it's unaffordable for most people to buy a home, well, how are they going to convince themselves to become homeowners? Well, they might talk themselves into a smaller home, right? That might be something they could actually afford. So they will give up some of that comfort of space for homeownership, right? So that's the trend that is most

likely going to come back so those smaller homes might actually be more valuable in terms of if you're a seller having those type of properties because it's going to look relatively lower price compared to everything else right so you might get a lot more buyers looking at those properties right so another interesting fact the word cozy is appearing in more listings 35% more in 2024 compared to 2023. So just to kind of support that new trend, right, of small home living. And then any couple of things you probably wanted to add, Eric, you had some thoughts on multifamily. You found some good information on the default rate there.

Yeah. So every subsection, like every single person, families, multifamily, like residential, multifamily commercial is going to be all different. And in every state, it's going to be different. So, but one of the stats that I actually heard this come out about recently that I thought was super interesting was that two to four unit multifamily, so smaller multifamilies have the, uh, had the largest or highest default rate since 2008. Um, and that was this year. So, um, and I, I actually, when I read that, I called Addison and I was was like, how many like two to four unit deals do you think you've done this year are in the past

couple years? And he was like, I mean, probably like 70 to 80, which I feel like it's kind of uncommon, but it's become really popular to do house hacking or to live in one unit and rent the other. And we have personally seen it where we've advised clients, hey, this deal doesn't make sense and it's okay that you want to like limit your mortgage. But if you're going to be purchasing it, you're overpaying for somebody's multifamily. So that was one thing that we thought was super interesting. The other part of it, and I know we talked about this, but I do think transactions will increase going into this upcoming year.

I think that will bode well for a lot of people in the real estate industry because the past two years have been two of the lowest consecutive years ever. It's insane to think. And when you say it's the lowest amount since 1995, think about how many homes have been built from 1995 until now. So it's dramatically lower when you compare it to the fact that there's been new homes getting built during that time. So we're at. Yeah. They're pulled up the stats so you guys can see what that really means in terms of the last few years, right? The last six years, 2018, 5.3, 19, 5.3, 2020, 5.6, 2021, 6.1, 2, 5.2, 5.1, 2, 5.2.

million and then it started going down. 2023 now they were talking about that they were predicting that 2024 was going to be actually lower than 2023 based on some of the data but they just announced it literally this week that with the new information they just got for November sales it looks like we're actually going to surpass 2023 so 2024 is no longer going to be called the lowest as of right now the lowest since 1995, as of right now, 2023 wins that medal as of right now. So, which is a significant amount of less sales than what we're,

you know, we were somewhat used to of $5 million, between $5 and $6 million over the last previous four years, previous to 2003 and 2024. Yeah. Go ahead. No, I was just going to say, I mean, it's a million homes less that are transacting. So I think that was a huge kind of, one, it kind of kept prices elevated in the market, even with interest rates going up. And that's the thing that so many experts have talked about is with inventory staying low, transactions have stayed low.

And because of that, there's still this really high demand. That's where I think this year we might see some inventory increase. I think we might see appreciation numbers be less. I think the average I've seen for the most part has been on the low end nationally, you know, one to two percent of appreciation. and then on the high end, 6%. So they've kind of cooled off the numbers. I know even going into 2022, they were expecting like 15% appreciation.

So it's definitely interesting. And then, yeah, this is, we're looking at, in terms of sales this upcoming year, there's a lot that are still ranging in that low 4 million. NAR has it at 4.9. I think we'll probably slowly increase. I don't think we'll see a large jump in that number, but I do think it'll be helpful to have more homes and inventory to choose from.

Yeah, my prediction is we'll probably end up somewhere around 4.3 number. So we'll probably have an increase, you know, somewhere around quarter million, maybe 300,000 units additionally. That's my prediction. NAR is very aggressive on their prediction, but Eric and I spoke again previously and we were just like, well, you also have to keep in mind some of these publications, they are very pro-home ownership, right? So they might lean to be a little bit more optimistic than others. Right. So you got to also keep that in mind when you source data, right? So you never want to just source data from one place, you know, look at it from collective perspective. And when we look at it that way, you know, this graph kind of tells

you a lot that most of the sources here, there's somewhere between the 4.2, 4.3 mark, right? And I think one of the really good indicators that you can look at where there's not going to be some bias or some wanting to kind of wear rose-colored glasses is that builder confidence, which I think we have that little excerpt that we can, if not, I can always share it down the road. but so like builder confidence in November was at 48. So that's actually something that kind of helps us out in terms of what the confidence rating is or it's 46. So it's kind of turning back up and they're actually expecting it to go up going into next year. And that is a huge benefit because they're expecting, I think, like a six point increase or nothing too crazy.

But that sentiment, the builder sentiment is a huge, it's a huge kind of point of what we expect to happen in the year. if builders aren't very confident, they usually have a very good broad feeling of what the market's going to do, whereas if their confidence rate increases, they feel good about the homes they're building. They hold a lot of risk. There's a lot of development and holding costs. So if their confidence goes up, then we can kind of see that. It has kind of bounced around though for the past year. We've been like 40s and 50s, I think, early in the pandemic, or in between the pandemic. So 2021 and 2022, we were in the 60s and 70s. It was extremely. highly high. So I think it's pulled back to a more normal rate. Yeah, I think that that has a lot to

do with honestly, the new administration coming in. I do feel that a lot of the builders just feel like the regulations are going to ease a bit. And that's also being predicted for 2025 that there should be an ease in some of these red tapes that a lot of businesses and developers, you know, on the real estate side have to jump through. So I think that that's also where the builder comes. confidence is tied to is the post post election, right, with the new administration coming in. There's a lot of talks of just like, you know what, let's rip off some of this red tape. Let's get things moving. Let's come on.

Let's build some houses. Let's get people in houses. Let's get them, let's make it more affordable, right? So we'll see. So there's a lot of positivity right now, I feel like just in general, right? And we felt it, right? We also felt it literally right after elections. I mean, there was a spike in showings, things that were sitting on a market,

at least San Diego, started going on the contract all of a sudden, right? I know you've experienced that as well, right? Right, Eric? Yeah, I mean, the past, I would say the past month, we've seen it, like just listings that were sitting, we've got showings that we didn't have before. We had buyers come out of the woodworks. We've got people that have reached out and ready to list. So that was almost like a collective exhale as soon as the elections were over.

Yeah, and I think we'll see a continuation of that. that energy starting like second week of January on, you know, because I, you know, people unnaturally slow down right now, obviously because of the holidays. But again, don't get overly excited, right? If you're an investor and please do not count on some crazy appreciation. Like we might have experienced the last couple first quarters, right? So just be cautious. I would advise you to operate with caution. If you're an agent working with investors, you know, same thing, like, you know, run your numbers based on the sales data we have currently. I don't think you necessarily have to adjust down right now if you're, you know,

locking up deals right now that are going to be ready, you know, in March and April of next year, you know, there's no reason to necessarily lower that amount of ARV after repair value, unless, of course, again, your local market tells you differently, right? So you got to look at your local market trends. But on the national level, we're anticipating there will be probably a steady, nice, you know, three, four percent appreciation across the country, right? Now, locally, you've got to look. And, you know, one of the things, of course, like Eric already mentioned, a lot of areas with climate risks, like they will be, you know, that climate risk will be priced into those individual homes, right? And so like coastal Florida, it might have very different

pricing than inland in Tampa, right? Yeah. In terms of the range of, you know, where maybe the values on the coast, you might see that they might either stay level or go down, who knows, even 10%, but then you go 30 minutes inland in Tampa and they might be completely stable, right? So we'll see a of that, same thing in California, where you're close to fires, right? Same thing. In those pockets, you might see depreciation, even in the first quarter of next year, where when you're then in San Diego, further away from the fire zones, it might be beautiful, right? In terms of activity and buyers getting into the market, which is what we experienced the last couple of years in January, February, March, right? But I still don't anticipate even then

for the market to all the sudden boom 10, 15% like it did the last couple years, right? So that would be my predictions. Like, don't get overly excited because, oh, we, you know, we didn't have massive drops. I think we kind of made it out of the fourth quarters, you know, pretty good. Like, so we should have a pretty big uptick in the new year.

I don't think so. I think it's going to, there's going to be more activity, of course. naturally that just happens. That's seasonal, right? People are going to get into the market. But if rates stay where they are, which I do predict, they're going to kind of hover between the six and seven all year. I don't really see it going down much below six at all.

That's just, you know, my opinion based on, again, data and listening to a lot of different podcasts and publications. I don't foresee that changing much over the next year, right? And people are somewhat, you know, get comfortable with that and they'll get creative. There might be some other creative ways of them getting into the properties with maybe down payment assistance. Maybe there will be some grants that will be issued. So there will be ways I think that the economy or the real estate economy will be stimulated maybe in a different way instead of just all of a sudden going from a 7% rate to 5, right, within a few months. And I'm, go ahead.

Well, so the one thing I would add is if you're looking for investment properties, if you're flipping, if you're doing anything like that, the one thing that I do think is going to change this year, and I think we will see it across every country is like our every state is going to be like holding times or days on market is going to increase. Like at some point, there's a point in a healthy market where 10 days on market just doesn't make sense. Like buyers one time to look around, they'll have more options.

If inventory increases, like every article we've read and, every statistic we've pulled, stuff will sit longer. And I think that's okay, you know, that's going to be okay. If a home sits for three or four months, that is the norm. It's not the norm for you to list a property. I think we've all gotten kind of so accustomed to you list a home and it's sold in a day and you're happy. So just if you're an agent, if you're an investor, if you're somebody in the market, whatever it is, expect stuff to sit, expect some patience and time that into deals and know that that's going to become the norm again. And here's what I would do,

knowing that this is probably normal in most cities, that showings are going to be down, period, and going to potentially keep trending down, right? We'll have an uptick again in the beginning of the year, and then it will probably start trending down again if rates stay between six and seven because of affordability issues. How do you combat this? How do you get the buyers out there to your property?

And I'm telling you, like, I've been doing this strategy for a long time, is you have to price your house below what everything else is selling. So like the house that we're going to put on the market that I recently just bought that I shared on the beginning of this mastermind is we know we could probably get $8.50 for it based on the cops. But we're not going to list it at $8.50, right? Because I understand there's less buyers. there is less showings. So how do I get everybody's attention? Right. We're probably going to hit the market at 830. Right. And that's how we get everybody's attention. The few buyers are out there looking. They're all going to look at my house. And that's the goal in that type of market is how do you price, use the pricing as a strategy to get everybody that is actually still looking to your property. And then guess what? You bid it up to the 850 number. And you potentially sell it even above a.

50, right? And I've done this over and over and over again. It works amazingly. Sometimes it's difficult to communicate that to communicate that to some newer investors because they're so nervous, right? They're like, well, I don't want to leave money on the table. What if we listed at 830 and someone submits an offer I 820, right? I'm like, trust me, the demand will drive the price up. The house is worth what people are willing to pay and there is comms to support a higher value and the communication. When I list that type of a property and I get agents calling me, I can speak from confidence like, hey, we decided to list it below market value. We know it's worth more. We're getting a lot of activity. So if your client is interested in this property,

you know, just be mindful of that. Right. Now, I'm not going to be so confident. that all of a sudden we're going to get all these offers above list, but based on activity alone, I can leverage that already and speak that way to that buyer's agent that might be calling to get information like, hey, how is it going? Are you having a lot of interest? Because that usually what happens.

When you have one listing that's like priced low, lower by 20, 30,000 than the rest, agents start calling you to figure out what's the scoop here. And then, of course, I'm going to say, like, look, we have a lot of activity, activity, my client decided that we want to price it below market value. We know it's worth more, but we want to get everybody into our property. And then the agents that are professional, I've been doing this for a while, they're like, oh, I get it. I see what he's doing. Right. And then

they're, they're going to educate their clients and tell them like, look, this thing is going to go way above 830. It's worth minimum 8.50. So if you're planning on submitting an offer below 830, you can, but you probably are not going to get looked at. That's my professional opinion to you, Mr. Client. That's what happens when you do that. Not the other way around what some sellers might think. Like, oh my goodness, is everybody going to offer below my 830? No, they're not.

And it happens over and over again. And sometimes I have to show my clients that are nervous about that strategy past case studies. And sometimes if it's not even your case study, that's okay. Show them some case study. from the MLS that literally shows like, look, look where they listed. They listed here and they sold here. They went under contract in three days. Why do you think they went under contract in three days

when everything else is selling in 20? Right. And why do you think they sold above, you know, 20,000 above list? Because this worked. This got all the attention, and the listing agent and the seller drove the price up, right? So in this type of a market, where rates are higher,

there's less buyers, there's less showings. houses are still selling and a lot of times they're going to still sell for market value. How do we get it? Well, and how do we sell it faster than the standard days on market? That's how you do it. And that's what we're going to do. We're going to list that property probably at 8.30. We're going to drive it up, sell it for 850.

And the ones that have just list for 850 and or 860 with the hopes of getting 850 are going to sit there for 20 days. And they might get one or two offers, right? And then they might end up selling for 840 because. that one buyer is going to negotiate the seller, right? Where we're having a bidding war in a, you know, in a market where there's less buyers. So that would be my advice in this type of market. If you want to sell your properties and go against everything else, against what the days on the market tell you, that's how you do it. Anything you want to add and we'll finish here,

Eric, on that thought. But any final thoughts on that? No, I think that was perfect. But just know, you're going to get resistance from a lot of sellers when you, when you, when you, bring the strategy up. And I would say, the last thing I would tell those sellers, we're like, look, what do we have to lose? You can say no to the offers. You are in control, Mr. Seller, right? Or Mrs. Seller, you're in control.

So if you don't like the offers that come in, you say no. And then if we want to change the price later to your price, we can do that. But I know that's not going to have to be necessary because you will get interest and you will get offers when you do that, right? but at least it calms them down that they are still in control and they still have options, right? And that they're not going to leave money on the table.

So let's end it there. And everybody, Merry Christmas. Happy New Year. Have an awesome, awesome end of the year. And let's get ready for 2025. I'm excited. I got like four or five listings hitting the market in a second week of January, one of them being my flip. so I'm looking forward to my own predictions being right.

Merry Christmas, everybody. For more insights and to join the Investor Agent Nation community, visit Investoragentnation.com. If you like this episode, please subscribe to the podcast and leave a five-star rating to help Randy and Eric continue delivering valuable content that resonates with you. Thanks for listening to the Investor Agent Nation podcast.