Scott Morris And Erica May Joined Keith Smith & Jerry Miller Live On "Real Talk With Keith Smith!"
00:00LinkedIn, good.Here we go, guys.Let's have some fun.Got to get Smith pretty good.I like that quarter of slip.I like that quarter of a bit, man.Thank you.Oh, okay.
00:15Sorry.Good Friday morning, guys.My name is Jerry Miller,and thank you kindly for joining uson Real Talk with Keith Smith.Today's show is live on 27 social mediaand podcasting platforms,and it's archived forever on the internet.
00:34This is evergreen content at its finest.Local content about a Charlottesville and Almarl County and Central Virginia community that's extremely dynamicExtremely sophisticated extremely fluid and constantly changingToday's program we encourage you the viewer and listener to help shape the show by putting your thoughts in the chat boxes or comment sections on any of the platforms you're watching uponWe want you to do this and this barbershop style setting or this you know watering hole style setting where it's just a conversationKeith Smith is here. He's the namesake of Keith Smith of Real Talk with Keith Smith.Judah Wickhauer is behind the camera and Keith's put together a panel of talented, talented professionals.We call them pros pros. I'll let Keith do those introductions. One of them's a household name. It's Scott Morris.
01:21Anything mortgage related should go through Scott Morris first and foremost on anything.His DMs are open. His text message in his phone numbers everywhere, emails everywhere.The other panelists, Erica May, you're going to meet.and you're going to absolutely love she's a pros pro as well when it comes to real estate.That's Keith's intro to do.Judo Studio Camera.I think you just did it.No, you have a way of doing it yourself here.
01:45I have a way.Our namesake, Keith Smith.I've been accused of having certain ways.So Scott Morris, Erica May, thank you very much.Scott, we've known each other from far too longand far too long to understand that six beer thing.And Erica is an associate broker at yes, really, the partner, so I'm excited about having this conversation.But I'm going to take a little executive producer, show namesake, prerogative at this given moment.
02:20And Jerry is extremely nervous.I can see it in his face.Because he's going to be nervous in a minute because I'm going to make him do something that he may not be comfortable with.Today is my mother's birthday.Oh, great.Happy birthday.Mom turned, well, up until I was in my mid-30, she had me convinced she was dirty.Right?
02:44Right.But I want to take a moment because mom watches the show, particularly when you're on, she always says, Scott, okay, he looks a little serious today.I said, when does he not look serious?When he's like serious.But I'm going to take a bit of a second, and I'm going to ask everybody on set to sing my mother, happy birthday.Oh, we're going to actually sing the happy birthday.Can we do this? Can we do this? On the count of three.Are we going for mom?
03:08We'll do mom. We'll do it. A name is Tina if you want to do, but a name is mom.Judah, if you can get that beautiful voice of yours to sing up a little bit on a count of three.One, two, three.Happy birthday to you.Happy birthday to you.Happy birthday, mommy, to you.Happy birthday to you.Thank you, Mom.
03:37I love you dearly.Have a wonderful day.Have a wonderful day.And I'll see you tonight.But anyway, thank you for doing that.For everybody, that's about a better shit that the show is going to get today because of my singing voice.But look, I wanted to do, you know, we usually do at the end of the month.I usually kind of kick off a little bit about what's going on with the real estate market the last nine months.
04:03months and I really kind of want to take a dive into that and then Scott of courseyou know what-to-watt on interest rates and see if you can get some magic fromyour six inches between the two years and what you're just some some tricksfor folks to use at this point in time and maybe where you're seeing going but youknow I took a look at the last nine months and that would be slide to Jude ifyou're ready to go if not that's okay we're actually up around 5% Euroover year in the car footprint.So this is all property types,
04:37right? This is all that, which wasrather surprising to me.But we're up about 5%.The median sales priceis up about 1.3%,but the average is downabout 1%.And I found that a little interesting.
04:54And maybeErica,you know, everybody's talking abouttempo and how the market's feeling.Maybe you can take that and run with itand see what your two cents says about that.So we're up in sales, median's up a little bit,averages down.
05:11I have a reason why I think the average is down,but the average is down.So run away with that.Tell me what you think.Well, I think, first of all,that it's very indicative of the community that we have here,that people want to continue moving into the area.I also think that the prices overall have continued to,
05:34increase and I think that goes back to who we have here in the community and what draws peoplehere not only in business but as a lifestyle as well. And I think one thing that's very nice aboutthe price cooling down a little bit is leveling off those sales prices, turning that market alittle bit more towards the buyer and away from the seller from our COVID days. So it's interestingyou mentioned COVID, butcan we go to slide three if you don't mind you?So I wanted to take a look at where the market was moving,and I'm glad that you mentioned that.
06:13I found it rather interesting.We are year over year, roughly 21% upin the sales between 500 and 750.We're down, which is no big surprise to anybody in this roomand watching this, we're down about 16, 17%,percent below 300 the one million in up market was pretty flat which I didn'texpect to see to be honest with you and I also saw when I did the numbers thetwo million and up is down about 12 percent so I think that's what's impacting the
06:47average right that that upper end because the upper end is about 12 percent 12percent down in sales with two million now it's not a huge number it's it'sroughly ten not quite ten units but10 units at $2 million is $20 million, which is a pretty big impact on the average.So I found those numbers a little interesting.I wanted to throw it out for the table and see what our good friend is Scott.Scott?I'm very curious what Scott thinks about this.
07:21So we're in an area that has had a significantincrease in the median income over the course the last five years so the all of theseincoming six-figure salary positions that have grown in the area have grown inhave allowed for a growth in the median sales price and these in these higher pricepoints to continue to grow.When you get into the outskirts, you're starting to see a decline because whenever we goand I think that we are in a, and I said a month ago, by the time we got to October 1stwould be seven and a quarter or higher in rate and we were six and a half then, we're
08:19at seven and a half today thereabouts.That's probably on the high side of average, but we're very, very close.The longer that sustains in the outskirts working in where there's not these, where the incomedoesn't support the higher values, you're going to continue to see a flattening or a trenddown in actual values.And I mean, you're seeing it on a national scale already.It's happening.When you look at national numbers where there's more concessions that have been given nationally
08:52than there have in years and you're starting to see a downturn in overall value.It's interesting. I just had a multiple offer situation.For sure.And to your point, we've been saying this for years.Micro Markets matter.We're on the contracts.I really don't want to get too much into the details, but it happens to be a cash transaction.It happens to be a boomer.
09:15It happens to be somebody relocating from outside the area.Check all the boxes of the typical buyer profile right now.It happens to be single level living.It happens to be close to downtown, right?And we were competing against five other, five other cash buyers.Isn't that to your point, the point you're making there, Scott?That's 100%.That's what are you saying?
09:42Yeah.I mean, the difference between a mortgage payment at 6% and 7% at a $500,000 purchase priceat $500 a month.So you've taken a large swath of people.who were qualified here and you've moved them down along with the move and expectations and we'vetalked about that for years and what we've seen in the we'll call it the McMansion market or uh whatsomeone thought they you know their idea of five hundred thousand dollars was five years ago versuswhat five hundred thousand dollars is now is such is so significantly different there's an
10:16expectation shock on top of a payment shock i'll throw this and then erika jump in the mixkeep jump in the mix in 2019 to scott's point in 2019according to HUD, median family household income was 85K.Now it's 140K.So from 2019 to now, that's what, seven years, it's a $55,000 delta.That's effing massive right there.Yeah.That's massive.
10:44But the price is tracked.That's actually exceeded it.Yes, the price, it has, yes, 100%.That's what supports the high valuations that we have in this micro market.when you go outside of that, do Buckingham.They haven't had a 60% increase in AMI,but their houses are getting sold for higher pricesbecause people that are working in Charlottesville
11:07are driving up Route 20 and buying out there.Well, and take a look at Spring Creek.How many homes are on the market right now in Spring Creek?Well, that's because people who bought five years agogetting their teeth kicked in because they still got new units coming on.That's it.Yeah.Spring Creek Resale Market is
11:24solve because they've got 600 more units.Sure.Well, take a look.This is right close to home to you.Look at the lake.Look at what's going on with values at the lake right now.Well, that's part of why.Lake Monticello.
11:38That's part of why when you take it slide three,we have a 16% drop at the $300,000.That's the price point you're talking about.That's the price point out in the surrounding counties.Compounded by 430 gas.Think about why that is, though.I've got some gas stuff for a little later.Part of the reason that you see that decline there is goes to the back to my expectation comment.
12:02You're talking about the 300,000.The 300,000.What somebody five years ago could buy for $300,000 versus what somebody is getting for $300,000 now,to them is $500,000.Like, now what they thought was $3,000 is now five,and the people who are qualifying to buy that three are the ones that are having,the most difficult time financially in this K-shaped economy.100%.
12:28And that's why you're seeing a decline in, one, those sales go into marketbecause they're being gobbled up by investors and turning into rentals and being held right now.And there's just less appetite for, or there's less marketability to the people at that income levelwho can actually buy that because they're also suffering from the greatest credit crunchand the position that they're already in.They're having to make choices.I mean, when you need to look out of your desired area, that's one thing you're giving up.If you can't be in the neighborhood or X amount of miles to work, now you're asking them to go double the distance.
13:09And when you look at the areas that are available, that can be impacting them in a lot of other ways that, again, come back to your point, Scott, that they're not financially able when they come to get a loan.and a mortgage. But now when they are qualified, what is out there in the areas that they canlive in what is affordable, you're asking them to make large moves. You just spoke about Buckingham.If you're working in Charlottesville, Buckingham is a drive.Oh, yeah.And it's probably not having your shopping, your friends, your family that are local and keepingthat close. So you're losing more than just the home.This question's come in for Scott.
13:55How does your underwriting factor in escalated gas when approving loans, especially if someone'slooking to buy a house that's far from where they work?That's not a consideration.That's not a consideration?No.Okay.The only consideration is the, when we talk about distance, it has nothing to do with gas.It's like lifestyle maintainability.
14:18If you're driving, so you can't exceed two hours or 100 miles.miles typically in distance from home to to work unless there's some sort of work from homecriteria yeah the approval that's been issued by the the employer and the reason for that is becausethat's four you know there's four hours in the car a day so there's nothing is less to do withcost but the fact that somebody eventually is going to say this is stupid I'm not going to keepdoing this and then where do they end up working just just talk to yasmina she's doing a shooton long island yesmina is a makeup artist she's doing his daughter doing a movie in long islandShe lives in Connecticut and across the Long Island Sound, it's 12 miles.
14:57She could literally see the town she lives in from where she was on Long Island.Took her two and a half hours to get home last night.Oh, I mean, that's like, you know, look, you know, there's parks of Northern Virginia that are commuting into D.C.at the wrong time of day.It can be like that.I was once driving into Atlanta and I could see like the GPS was like your three miles from her destination.This is a long time ago.And I called and I was like, yo, I'm three miles away.
15:25He's like, I'll see you in two hours.I was like, ha, ha, ha, ha, I'll see you in three hours.And it was probably two and a half.Comments are continuing to come in.We'll highlight viewers and listeners like Wantsar, Miatto, Rob Neal,Thomas Taylor, Georgia Gilmer, Jason, Hampshire,watching the program, Your Lovely Bride,Jonas Smith watching the show.
15:45Hank, Martin, watching the program.Ray Cadell, Logan, Wells, Calelo,watching the program, folks at Nieless.Ness, Long and Fosteron the showright now. I see Real Estate 3 on the showas we speak. Erica, you want to jump in and thenmaybe go comments to the feed anywhere you want to go on stuff we've
16:03talked about so far?So...Sorry.So I'm going to jump in.But we've had this conversation around the office, right?We're hearing a lot aboutbuyers are waiting for something, right?But they don't really know what they're waiting for.
16:21So how do you have that conversation with somebody?Right?I'm a buyer, right?You know, everybody's seeing the rates go up, right?I'm finding that I got to go out further, and I'm just waiting, and I'm waiting for somethingthat I can't tell you what I'm waiting for.So what does that conversation look like?And then I want to do two other things once you finish that.
16:40Sure, sure.I think the biggest thing right now is the interest rates and how we need to take that interest rateand not throw it out of the conversation, but we need to move it aside.And the question to the buyer should be, what is comfortable when it comes to your monthly mortgage payment?Getting with a pro like Scott on the lending side, let's take a look at what's out there and let's see how we can be creative.Let's see what options might be more attractive to you in the lending world.Let's stick with your monthly mortgage.Let's focus on that.
17:14And we need to continue to educate people that for our area, the equity and the overall,appreciation and having a monthly mortgage that isn't going to increase has value.And your quality of life as well comes into everything that you do, whether that's homewith your family or whether that's in your business.And the home should be that foundation for you and your family.So we can get there.And I also find it fascinating that if you can dig a little deeper, if you get them to open upa little bit. There might be something
17:50else around the home conversationthat isn't directly related to money.Explainthat. Sure.Tagging off of what you said earlierabout people needing to move furtherout, thatpushes them in
18:06different ways that may be uncomfortable.If you are a family, if you have small children,your parents live in town,and they are part of your daycare program,they're part of your support system,you could be losing that.you could be losing your sense of community going so far away from where you are.And that impacts people's daily lives.
18:27So those of them, I'm going to, if you can tackle this, Scott,those have been watching the show for going on nine years.I do a market monitor every seven days going back.And I've saw something yesterday and today the first time in the eight and a half years I've been looking at this.So what that market monitor does every seven days is the car footprint.It shows what's new coming on, pending, price changes, this so forth and so on.I'm looking at it right now.The last seven days going back, we had 120 new homes come on.
19:01Everybody's waiting on inventory.Guess what?It's showing up.Our pending's at 60.I have never seen that ratio in eight and a half years I've been looking at it.It's always been more pendings than new.It's been pretty balanced.we have 50% of the last seven days, 50% of the homes that came on are now impending.
19:23And I just went over, hey, we're up 5% in sales and meeting went up.That is going to start impacting the market because that's not a normal trend.Usually it's a pretty balanced.Yeah, let's speaking to exactly what I was talking about.I mean, look, I'll tell you, I put a house on market seven days ago.And it's hidden all the metrics that I think it should.It's getting showings.but at the same
19:45I've got an open house to Marr. It's got to seem to have a lotof attention. It's just not doingall the things exactly thatI haven't had the offer yet.Okay, so let's let's get intosome hacks, right? Because we're lookingat this, we're all saying, I said inthe end of last year that we're going to be in a
20:01buyer's market. That is a buyer's market.That is a buyer's market. We've been in a buyer's market.I caught a lot of crap for doing that at the endof last year that. How can I saythat? Well, we're here. We're in a buyer'smarket so give me some hacks that when we're havinga conversation with that buyer for your home that and how do we get there toto make the paint let's talk about the payment not right that's you know let's
20:28get into let's how do we get to the number that we need you to be comfortable atis it do are there concessions involved that we used to to buy the rate down is itsomething where there it can we can buy the rate down in a number of ways itcould be a lender paid concession for a one-oh there could be a three to onewell explain a one-oh so people one oh so something that I've been doing withlisting agents who have a property who want to who are kind of like who they'vethey've they've exhausted their options with the seller in in price reductions orthey don't want to they just can't go
21:11further because of whatever reason they are too much money.Whatever, whatever, they can't do it.I will work with them to communicate with the seller to get approval to say, hey, look, ifwith the seller's approval, as long as the buyers are using me, I'm going to give a 1% ratereduction for the first year.This isn't an arm, this is an adjustable rate mortgage.This is a fixed product that gives them 12 months to go, okay, do we think things improvefrom here and I may be able to refinance?
21:39Give you an opportunity to refund.So let me sure I get this out there.So we're saying if we're able to figure this out,we're at seven and a half, let's pick a number, right?You're gonna do six and a half for one year.Correct.You're paying interest anyway in the first year, right?You're not really going much.
21:55Essentially, I'm paying the interest for you.So Scott's paying the interest.So you kind of went the route I wanted to go, Scott,and creativity.As the one that has the most gray hair hairand been around this block for 40 years,there was a time with what,you just described was kind of the norm, right, where sellers started looking at that.
22:18Are we at that point right now?I mean, in 2018, it was not out of the norm.No, no, I'm going back.I know what you're doing.I know, way, way, way back.Even then, it wasn't, it was.I think it's 1820, I'm talking about it.It wasn't strange to say, hey, look, let's make, let's go see if we can get some concessions
22:37on this and just got it on what, whenever,we asked for depending on how we structured it and then we went through this period where that justwent away and no home inspections and then here's a letter about how much i love you in my firstbornchild is named after you and all these things so so brian buffini explains this veryaptly the anaconda ate the real estate market back in the how long does it take to get the pigthrough the python there you go and that that is going to take years to do that but you know therewas a world back when and i'm i'm going to get this out ofthere and I'll get some hate mail and emails and we'll see if Smith is right or not
23:16watch an agent notes and listings going forward you're going to see sellers saying heyI'll pay X amount of your closing costs it's in the marketing material it's not evenin the agent notes anymore it's I get e-newsletters I get I'm on the list serves I thinkfrom every real estate brokerage in town and in the newsletter marketingmaterial, it's like closingcosts.We're offering half clubmemberships.
23:45They're even including furniture and stuff.But you're going to see more on thedollar end of it. You're going to see more ofwhat Scott's talking about. Do me a favorJudah, go to slide one, becauseI think this is an important slidefrom what we're about ready to say.This is the last 28 days from
24:01yesterday back.And then the same, thank you, buddy,same 28 days last year.Take a look at price changes.The price changes are up by 50%.So sellers, and I think they're starting to realize that this is where the market is and they're starting, you know, they go in a little too high and they start adjusting it.New listings are up 50%.We were at 242 listings back in, back last year, 2025 for the same time period.
24:30We're up to 364.pendingare up a little bit from last year27 versusexcuse mependings were up last yeara little bit by 12%but the big thing I wanted to focus on
24:47is the sellers are starting to realizethat they got a price itthey got a price it rightit's not only price I meanyou've got toI hope you'reif you are thinking about selling a piece of propertyI hope you're working with a professional
25:00because the professionalsshould be coming in from the getwith our partners, educating the seller on what today's market looks like.If you're not in top condition, if you are not priced competitively,and if you are unwilling to meet the buyer where they are, you're going to be sitting on the market.Don't be offended.30, 45 days down the line when you, as the person in control of your property,isn't allowing some flexibility for the buyer.
25:33Well, that's a conversation that I have.Whenever I've got somebody who has to sell in order to buy, it's like, what, do youwant to sell it or do you want to list it?Because there are two different things.100%.And you can, you don't have to take my advice, and I'm only going to go so far.You need to talk to your agent, but I'm likely going to support whatever they say.And these are the things that you need to be thinking about in order to get this ready.
25:56Again, gone are the days of like some schmuck walks up, take cell phone videos, photos, andpost them on the MLS and your house is sold.Like, I mean, you haven't cut your grass for the photos.Like, you need to put together a well-groomed product that is priced competitively in order to make a sale.So this property that I'm working with this client for in the perfect location was priced exactly right, just a hair on the market, got multiple offers.They went through and got the house totally tuned up new roof, new HVAC.See, the house was built in 2009 and everything.And they did it just to your point, Erica, they did everything right.
26:41They got multiple offers.This is in the city?No.Where is this?It's a Nalmore County.Okay.Urban ring?Yeah.
26:49Okay.Kind of at the edge of it, but let's call it the urban ring.Right location, right features, right condition.Timing is right.I've done a couple of shows back, and I just haven't crunched the numbers for this one,where if you go in at the right price,with all those things I work here you're talking about,we're above list price.
27:09Right?Not by much, but just a hair, right,of where we're at.And to your point, if you price it right,get the condition right,and has the right features,there are multiple offer worlds out there.If you don't,
27:28we did the numbers.You'll stay longer,and your return will just keep on dropping.But I'm really interested in other hacksbecause this conversation is just going to keep on coming up.Because it ain't getting that.If I could, hold on one second.So, Scott, you said you've just listed a property.
27:46His property. He owns it.Okay, fantastic.So have you ever sold property before?Great.This is the one you did the beautiful kitchen remodel.Yeah, this is a great house.What have you done personally with your expert?expectations of this property.
28:04I was going to go on 5% higher than I actually did before.Like this wasn't an agent going, I think maybe you need to be here.I was like, I knew, all right, look, here's where we can be.I've got metrics that I believe need to be met, use in the apps, realtor.com, Zillow, etc.If you can't generate 100 saves and 1,000 views in two weeks, you're off.If you generate 2,000 views and 50 saves, you're off.If it's got that many views and you've got to generate 12 showings.So 12 showings, 100 saves, 1,000 views.
28:45That typically is the metrics for a sold property in my mind.In two weeks.In two weeks, 14 days.That's good data.That means you priced it right.And people show up and they like it.And you hit those metrics?I'm like very, very close.
28:58And we're eight days.And if you're 2,000 views and you're getting some of the showings, it means people love, you priced it correctly, they drive by it, they don't like the neighborhood, they see the house, and the house did not justify the photos.And then so it gets all this love, but nobody actually likes it.They smoke a mirror of the photos.Yeah, yeah, yeah.So that's something to be concerned about.And then if your seller, if you're two weeks in, your seller goes, well, what's going?on and you go, you've had a hundred people, when people view it on the apps, they pass right by it
29:35because they already think it's overpriced. Like, that's telling the story for you as an agent to yourseller that you and gives you all the validation in the world. Like, it's right there. Look at allthese ones around it. Like, there's your problem.Real estate agents and sellers that are watching this, that is exactly the best piece ofadvice to give somebody exactly the best metrics to do it. So fantastic data points that anyonecan see on the apps. And the struggle though, Erica, is now you've got to have this conversationwith the seller. You know, it's part of why we were down, what was it, 49, 50%, you know.Make it part of your listing presentation. Yeah. Well, I'm just going to say this because Mrs. Smith
30:19will yell at me. But we as real estate professionals, got to be honest with people, so this,isn't the number. You know, gone are the days of, well, let's, to your point, let's throw it and see whatthe next two weeks to. You don't have two weeks, right? If you miss it in the first two weeks,coming back to recover from that is going to be extremely difficult and it's going to costyour money. Well, especially at Q, the start of Q4. Would you agree with that? Yeah, though,it depends on like how aggressive you are willing to be after the fact, but likely at that point.But it puts you in, if you price it right and you have all the matrix right in the beginning like you did.You take less loss than bloodletting that goes on that.
31:02That's what I was going to say.We negotiate for a living.You've done it all right.All of a sudden, now you're in a position of strength and negotiate.Once you get beyond those two weeks, once you get beyond that metrics,and once you do your first price drop, you just now are not in a position of strength andyou just gave up that ability to negotiate in strength.The buyer now has that, has that thing.
31:23So the matrix you laid out is absolutely perfect.And if you're out there and you don't follow all that.you've just given up your ability to negotiate.Are we going to see 8% on the interest rate?I mean...Where's the 10 year right now?Is it over 5?Because you've predicted this very accurately.
31:46Are we going to see 8% and how, if we do, how high does this go?So it's going to take 7% to...7% on the 10 year before it dramatically affects the equity market.So we're still away from that.Yeah, you're at 5.2.The equity market is more afraid of some Fed governor coming out and going, you know what.Part of it is, and I touched on this a little bit last time, the money in the AI trade is largely what is been driving the economy.When you look at not people
32:29Data Center, Data Center,the construction jobsthere's so muchprivate fiscalstimulus if you wouldor you could evencall it, let's call it privatefiscal stimulus that's being pushed into the economy
32:49from the AI trade.Should that fall apart,that would be what really breaks all of thisand if the trade has another 12 months in it of this level of strength,it's going to continue to drive inflation if we associate also the high gas prices that we're dealing with.So I think we could get to 6%, which would put us at 8% interest rates.So yes, it took me a long time to get there.So we're at 5.2. I'm looking at it right now.
33:20That's 7.5 right now.We're 7.5 on the 30 fixed, depending on the applicant,depending on their credit profile.And if that tenure goes from 5.2.We're going to be at 8 plus.We will be at 8 plus.I got a follow-up question for you.You're brutally honest here.
33:34This is going to be one that's going to make his took us clenchwhen I'm asking this question.But you're brutally honest.That's why I respect you tremendously.Are we at all in a wait period with potential buyers of considering leasing for a year,running for a year before jumping into this market to see what happens?It depends on who you are. It depends on your level of income. So for somebody whose home purchase is likely going to be the largest asset of their entire life, for them to burn another $24,000 to $40,000 in rent out the window, it is not advantageous for them to continue in the rent.rent versus own cycle. However, if you are an earner of, let's say, over $400,000 a year and willing
34:37to take some kind of lifestyle concession, it is probably advantageous for that person to rentand invest the money that they would have tied up in a $6,000 a month mortgage. So it dependson who you are. If you are a two-household, two adult, whatever earner, you're not a dink,a dual income. No kids.Dinks, dinks, go rent.You know, probably advantageous to you fiscally if you're earning a combined $400,000 or more.If you are somebody who is earning less than that, it's probably in your best interest to purchase a home.File a class, go ahead. Do you want one?
35:18No, no, you go. I go. You go, because I'm going to.I know you're going to push back on that. I got to.I'm not going to push back. I actually. Go ahead.A follow up on the follow up here.Then I follow up.Midterms are five weeks away.It's not a show about politics.Clearly, there's one party that is trying to keep our ecosystem and our economy
35:41and as precarious a position as possible to use that as leverage to push midterms in their favor.I think that's obvious to a lot of people that follow this.Once midterms are behind us and we get into the first quarter of next year,we have some clarity with the House and the Senate,but Iran, what does that do with potential interest rates and how that could impact housing?So traditionally, if you look back the last 40 years, there's only been two election cycleswhere the opposing party has taken full control of House and Senate.In both of those cycles, you saw a market increase of less than 5% in the preceding 12 months
36:35and virtually no move in the, like, no effect to the mortgage market whatsoever.So let's say that Democrats would take the House and Senate.You see very little change at all going forward.They're in the run-up, too, there's more anticipation by the market on what they think is going to happen.and Kalishi and those the betting apps have been pretty accurate when it comes to that.Calci and Polymarket.Yeah, yeah, yeah.So the prediction market.
37:06Keep an eye on that.But, I mean, I think it has more to do with, you may see more effect in if Elizabeth Warren and the rest of they get their clause into what happens on the AI.front and if that slows that stimulus and then shifts the market's bullishness onthat trade I think that there's a lot of downturn associated with that and ifthat were to happen I'm also curious to see today in fact it probably came outat 10 o'clock was Michigan's consumer sentiment came out today like what thatlooks like I think that a shift there could be superbeneficial to us because if in the eyes of some sort of collapse because that would drive
38:00unemployment as well we would see the the Fed shift their priority if especially if we along withthat did it's going to take a combination of things we'd also need to see some sort of shift inin energy with this iran situation it fell today just was released 51 7 to 481 which obviouslyis the that's not the concern of inflation fuel tariffs and political split ondriving that. You, I know, want to jump in here. I have so much I can continue.Yeah, I know. It's your show. Not necessarily a pushback, but it's just to take a looka little bit differently. So a lot of, I don't disagree with anything that you were saying,you know, I think you're right. I think people are tired of renting. I think what's happening
38:47now, which may be a good thing. I think people now understand three percent's not coming aroundanytime soon so that reality is a good thing I think sellers realizing that this isyou're not looking at double-digit year-over-year increases but I think you need to lookat who the buyer is these days right and is the consumer sentiment is the marketimpacting the majority of the buyer and the majority of the buyer let's face it when youwhen your first-time homebuyers at 40 right majority of the buyer are me the boomerswhich control most of the wealth at this point.So that's what you're going to see a lot.
39:26Those pyres are going to still buy and sell.But we talked about this in the office the other day, Erica,and I'd love you to jump in.You know, I've been going over the 5Ds forever, right?Diamonds, diapers, divorce, downsizing and death.That's changed, right?It always was, the first two was you got married,you had kids, you bought a house, right?
39:50And then we went through of it.Divorce is number one.Design, downsiding is number two, and death is number three.That's who's buying homes right now, right?There's people that are divorced downsizing, they're retiring, and a lot of those peoplegot enough cash that 8% doesn't matter for them, right?You know, they'll put either buy the whole thing down or they'll pay 50% of it.But people that have to move will still move.
40:18people that have to sell will still sell because these five Ds, the orders have changed,have been in play for as long as I've been in this business.Am I off base or?No, not at all.And I think when you look at the younger demographic, Gen X millennials, we are discouraged from the purchasing process.We have been renting for so long.And if we were lucky to get in where we felt that it was affordable,then we feel like we have an opportunity and a bright future
40:53to invest in upsizing, to invest in investment property,to use that money to fuel our life in a lot of different areas.If you are 40 and younger and don't have the ability to purchase,the news of 8% will also continue to be discouraging.If you can get with the professionals,if you can find that monthly payment that does work for you,we're all here to help you make that happen.And I think time is a consideration as well.
41:31If you're a transient, if you're coming in for one to two years here in this area,it may not be a good time to buy for you.But if you're here for the long run,then the equity and appreciation is going to benefit you down the road.And it's our job to help you get in there.I like to think, I like to think that most, a lot of people that I talk to, like, they don't,they shouldn't be scared of 8%.The focus needs to be on, can you afford to purchase or not?
41:56And it is, does it benefit you in the long run?And if that's the case, then let's focus on a monthly payment.And then let's focus on finding a house.It does not, your first house does not have to be your final house.It's not, you know, and that's something that I think people get so focused on.And if we find something, you know, let's go find a diamond in the rough.Like my favorite song, I'm just an old chunk of coal.Like, I'm going to be a diamond someday.
42:20Like, come on, like, let's go find that.And we'll do a renovation loan.We'll stick some.You're already a diamond, buddy.Well, you know, may they start.A little rough on the edges.A little rough on the edges.But you're all.
42:32But we go and put some LVP, paint, and new appliances in, and you'll, you know, it'll feel.like a new hour. We're not there yet. Do your ownflip. We're not there, but I'm going to introduce you to thisclient because we've got to do it. I havea 21-year-old couple.It's unusual. Married.They've been working.They never did the college route.
42:51They went to contracting route.Saved up a substantial amountof money.And, you know, these are thisGen Z kind of mentalitythat at least I'm talking to.And they got, exactlywhat you just said, Keith, I just need something.
43:07to get started. This isn't my forever house. This isn't what I want to do. Now, finding somethingthat, you know, the contract is, you do a lot of work on it, you know, the 203, what's that loan?Homestyle or 203K.Two or three K loan is kind of what we're looking at, but obviously they're in the 3, 350,I can't even find something that meets that criteria. So that, before you jump in,NAR, this was as of April of this year, all home buyers, average median age was 59,repeat buyers was 62, first time home buyers was 40.That's just unbelievable age stats.
43:48I agree with what you've both just said about finding the opportunity,showing them how they can get in the game.There's no magic wand here unless you have several million.and can purchase exactly what you want and where you want.If we can help people get in the game, then they'll be in the game and can continue to getperhaps more of that magic wand down the road.100%.Like that's the ticket.
44:16So any other hacks for interest rates that other than what we're talking about that you areoffering this program and anything else that we could be talking to buyers about to helpthem get over this hurdle?I'd focus less on rate and more on have you seen what payment gets you into a house thatfit your needs.I think that we just even when rates are low, unless you're doing it as some sort of teaserto get somebody's attention, rate is not the conversation because it does not change.So when people talk about, well, you know, in 1984, interest rates 18% when I bought it.
45:01a house. The house was $35,000. And you could live off a one income salary. But, but not just, but, but, but here's,here's the reality of that comparison to where we are today. When you look at the $50,000 salary,the 18% interest rate and the $35,000 house, the amount of monthly income as a percentage that youwere earning that went into purchasing that home was the same as what we're talking about today.I was one of those.Yeah.So if you can get, let's get away from the rate concept and focus on how much of your, like, what payment can you afford and then let's apply that to a property?It's not about rate because as long as home values continue to fluctuate up or down, the rate conversation is less pertinent than how much can you afford and what does that affordability apply to in an actual physical building that you can put the key in, turn the door, walk in, and put your kids to bed in.
46:00Get uncomfortable with your finances, really.Most real estate agents don't ask.No, no, but everybody needs to get uncomfortable with their finances.And the buyer specifically, we need to dig in and understand the debt-to-income ratio.I'd love to sort of ask you that and see what you're seeing there.I know for myself and my family, we sit down, me and my husband, yearly, and we are scrubbing through the finances,and there is some subscription somewhere that we have forgotten about.And it feels really great to delete that and get it off of the books.
46:34But I think you need to stretch.Or Yona goes, you're not buying another bike.I think you need to stretch yourself.And I think you need to allow the professionals like yourself and put your cards on the tableand let us help you see some opportunity within your personal finances as well.100%.Nothing like I find, like, I hate these conversations where someone, an agent will refer a leadwho lets an internet source
47:01to something where there's not there they aren'tstrong in that sensebut I'll have the conversationand they go look I've reallyI want to I want to do this in likethree more months I'm likedo you have any ideaI just haven't found a house I like I was like
47:16so what happens when you find a house that you likeand then you find out that you're notin the position to do what you wantbut you would be in another three monthswell and three months how the marketchanges in three months it's a completely differentmarket. I mean, look at it in 2026. We've had three different markets in 2026 and we'refinishing September. We're not even in the fourth quarter yet. 100%. I can't let the,
47:39let the old boomer thing go. But before I say that, I'm working on a series of shows for Octoberand November where I'm working on bringing in Gen Z and millennial buyers and boomer buyers.and we're going to sit here and have this conversationbecause I've said this on the show before.Is the boomer one going to be called boomerangand it's just going to be like a high-pitched noiseand everybody's going to go, what?Are you making fun of my hearing?
48:05No, I just, I just thought it was,I thought it was good.Let it go.I thought it would be a good episode.That's all.I think you're making in front of a disabled veteran.One disabled veteran marine to another.I think you're making it in front of one.
48:18But I want to do that because I want to have that100% right about the interest rate, right?Most conversations we've always had, and back when I bought, when it was 18%, and we were paying $80,000 for house, we were making $5 an hour, both Yon and I were work, and we had a two-year-old, one-year-old kid, right?We were scared beyond belief that could we afford to do this.So that dynamic hasn't changed, right?the numbers are just way bigger and that's what's really scary I know if I was a young person right nowthat I would be just as scared today as I was in 1987 188 when I bought my first house so I don't want to discount thatthat is a real live thing but I want to have that conversation between the gen z and the millennial
49:14to see because I think there's a conflict going on underlining all of thisthere is this dislike from the younger generation of my generation.I'd like to have that conversation.Well, we're different.And the generations that we grew up and the things that you grew up withand that I am growing up with and our kids are going to grow up with are very, very different.And my 83-year-old mother was growing up when she was 18, 19 years old, 100%.Mm-hmm.
49:48Definitely.And I find it actually interesting that as I speak with that younger generation, home buying is on their mind.It is.They're looking to come out of college.They're looking to come out of high school into the job force with that as part of their plan.They're big on safety.That means something to them because of who they are and the world they're growing up.And they don't know a world without school shootings.
50:19They don't know that.They were also raised, they saw their parents fight stroll come through the real estate crash.They saw that firsthand.Absolutely.And that generation is also more sophisticated nuance perhaps than ever because of the ubiquitous nature of information online.Both to your point.My 40-year-old and 30-something-year-old daughters were hugely impacted by that now personally because of our law.Because you worked in the business.
50:50We lost 17.Well, but it just didn't impact.It impacted the whole nation and the world.It was a big thing.This is probably not the time for this,but I'm getting a bunch of texts about dairy market and Jewberry.Maybe we saved that for a different show.People have been asking me for my opinion on that.
51:09So we can either tackle it or just save it for a different show.But very rarely do I get texts from people while I'm talking.and I happen to be getting them.So I just wanted to let people know that are texting me that I got the texts.So other than the hacks that we outline, work on what you can afford per month,look for the house that you can afford.I think you need to circulate this 1% a little bit more.I think that's a pretty exciting option.
51:42It could save 1% on a half a million dollar loan for one year.can be a substantial savings for one year and take the bet that in one year the rates aregoing to decrease go ahead and refinance it that's what we ended up doing back inthe ancient days any other product lines any like arms coming back anything elsethat that you can put on the table for folks to consider for buyers yeah I mean Isee more interest in in arms but I think there's also some hesitancy from somepeople in who did live through 2008 the time of great and pleasantness and so it is anoption I think it I would advise it more for somebody when we talk about somebody
52:26who's coming into the area for a short time or somebody who knows that they'vetheir plan is to exit in five years that may be certainly a good option for themthat brings up an interesting question you know Eric and then andAnd we're getting close to wrapping up here on timewise.But when you're sitting down talking to a buyer,do you eventually have this conversation?Like if you're looking to sell in two years,this is the reality where the market might be,
52:58you know, because people are looking back in the unicorn yearsor the anaconda years when we were having year-over-year double-digit,you know, realistically, right, right?Scott, if you've been in the house for two yearsand your finance,how the house appreciate enough to break even is pretty unrealistic.Are you having those conversations with buyers?Yes, I am.
53:20And I think the JAG officer is a good example of someone who comes inand comes out of our area.They could have a one-year term.They could have a two-year term here.And that's a really important conversation to have.So the expectation, I think, moving forward, now there's pockets, right?There's certain pockets that will have much higherand when we do our year-end show,
53:41well, sure, where the micro markets we're doing.But in general terms, you know,we're going to probably be running between 1 to 6% year-over-year increasedepending on where you're at.So if you've been at a home for two years,depending on the location,it could be anywhere from, you know, 2 to 4 to 12%over what you've boarded for,
54:02and you've got to have to do the math.So I have a conversation with a buyer right now.Well, I'm only going to live in it for two years.I go, brother, where you're at,I don't think I'm going to be able to sell the house for what you buy.You're not going to walk away with a check at the end of the day.He was not very happy to hear that, and I don't think he wants me to help him.But that's a whole different issue.
54:21That's two-year credit.You've helped him.We've educated him about what the situation is.I don't want that phone call two years from now.That's right.People shouldn't work with you because you did that.I don't think there's anybody here at this table today that would enjoy for themselvesor for the person on the phone.
54:39that calls and says, Scott, I feel like I've made a really bad financial decision with this house.Can you help me get out?Those are not the phone calls we're looking for.So what's happening right now with sellers and you're going to start seeing this is because we're in this five to seven year recycle.We're starting to see this now.People bought homes sight on scene, without home inspections.And they're like, well, hold it.I didn't do it.
55:07and that whole world has changedand to have that conversation.The expectations are different,and you listed a property now.When was the last time you sold a property prior to this one?Two years ago?How have you adjusted your expectations in those two years just for yourself?I mean, I understand what the market's like.
55:31So I'm not, I don't have blinders on to, like,you have realistic.He's an anomaly.Yes.He's an anomaly all right now.I'm sure that they've adjusted slightly.I'm sure that your expectations two years agoaren't exactly the same ones that they are today.
55:49And you're in the business, and you're in the world.But for everybody who isn't, I think that's part of this game.So adjusting it to be reasonable for today's market.100%.But, I mean, mind you, so these are conversations that I, like, coach to with clients.So my expectations are,I'm kind of a cold person sometimes.Like, I just get what F is going on here.
56:15So it's like, I'm, you know.But that sale isn't emotional for you.It's an investment problem.No, I would be more emotional.Because it involved in an emotional time of life,and I renovated it.And if I rented it and somebody went in there and destroyed it,I would be so pissed.
56:32Yeah, 100%.Yeah.But at the same time, like, I created a nice product.I understand, like, where the deficiencies are.I priced it appropriately and it was go sell a house.And, you know, that needs to be like what anyone's like modus operandi needs to be when they get into a situation like this.It's like take an honest evaluation.I think something that would probably suit a lot of like, it's a difficult ask, but to have people,
57:00and I talked about this quite a few years ago and less about it now,is getting your stickiest seller to have a home inspector come through the house and.rip it apart, let them paysomebody. And so they geta good understanding of what they'regoing to be up against once the buyer hastheir inspection so that you don't get this personwho you can already tell is going to be in their feelings.
57:22They get afront run of what their concernsneed to be. So that way, atleast when they getthat list from the other side, they're preparedfor it. Or you doand we recommend all our sellersdo that and we're at a point right now.
57:37But they don't do it. Well, we actually pay for it.to go ahead and do it, right?Because it's going to cost me on the back end anyway, right?So what we do is we go do that.Now I'm a building, a recovering, building, developer.I can walk in a house in five minutes and tell you what needs to get done,what doesn't need to get done, but having a form of reports important.But we get the seller to make these improvements.
58:01I'm not talking about redoing your kitchen or whatever, but if I go and we look at...The GFCI didn't work like replace the album.replace the other. Or you look at a roof and half the granules are missing off of it.Guess what? The roof is shot.They may not like that conversation, but you have to get that house as close to perfectas you possibly can. Go ahead and do it. But I think we need to wrap up.How about closing thoughts for everybody or how people can find our panelists?Erica, you kick off. How can people find you?
58:34Oh, people can find me at the Yes Realty Partners website.I also have my own with my partner Michael, Eric and Michael real estate.You can find me there as well.Facebook, Instagram, smoke signal.Wherever you need me, just sue me a message.There's probably something.You know what?As a matter of fact, there's certain things.
58:55I actually have people, I don't know how they found out how to do this, but they'lllike, I'll get calls on teams through Microsoft through one of like the links in him.I'm like, man, I don't know how did you got this, but like please just text me.like from my cell phone where I'm going to see it and not accidentally ignore it.So I gotta say this out loud.Are we getting tired of these spam phone calls?I've had two dozen of them since we've been sitting here.Somebody needs to do something, something about that.
59:27Guys, thank you for those that have been texting me about the two other topics.I will text you directly and talk to you about that.So thank you for sending the text.This show is about Scott and the text.and Erica. I do want to close on a bit of a somber note. Please keep Bill Tucker's familyin your thoughts and prayers. He lost his son T. Tucker a few days ago. So Bill's been a frequentguest here, a deep personal friend of mine over the decades. I only can imagine what he and his family are going.through but so in your thoughts and prayers if you can keep them in your thoughts I appreciate it
01:00:13and on a happy note happy birthday mommy thank you everybody uh real talk with key smith archivedonline at real talk with keysmith.com keith eric may and scott moors judawick how are behind the camerawe appreciate you watching and listening to the show and the i love seagull show is up at 1230 so longeverybody he's going to tell us when the mics and cameras are wrong
There aren't comments yet for this episode. Click any sentence in the transcript to leave one.