The Real Estate Market Is...

...in GRIDLOCK

sellers want their home to sell quicker

and buyers want to see even a larger supply of homes to choose from

so we have this conundrum of everyone watching and waiting for a breakthrough

and we find that most buyers on "PAUSE"

which is causing home sellers a lot of anxiety

and with that they are searching for ways to increase interest in the home

they prefer the easy list

• increase the advertising
• change the listing description
• change the order of the photos
• add or enhance the virtual tour
• do more open houses

as opposed to doing the things that they should do or have to do

and in a market where buyers are largely indifferent to making offers

there are only 2 levers that a seller has to make an impact

Time and Money

so unless sellers are willing to reduce their price or make capital improvements

chances are their efforts will not provide an acceptable offer

Let's Face it - There are only 3-4 Things that matter when selling a home

1. Location
2. Condtion
3. Marketing
4. Price

The reality for most home sellers is that a price adjustment

is a good idea but may not get the job done

and if that's the case

many will delay a price reduction until the market is "more ready"

which leaves us in a perpetual state of gridlock

today's show goes over how we got here and a way out this situation

The Biggest Problem In Real Estate...

...Might just be a combination of things

Whether its high prices, interest rates, or the homes available

It's Increasingly hard for 1st time home buyers to enter the market

and move up buyers are feeling the cost outweighs the benefit

die to the lack of available homes in the most sought after areas

combine that with affordable housing typically needing repairs and renovation

where those buyers don't have the extra money for after the closing

the majority of the buyers in the market is sitting on the sidelines

Interest rates are in a range very close to the historical average

and many would be home sellers are hesitant to give up the low rates

that they were able to obtain when the purchased the homes

economic uncertainty has many people unwilling to make any big decisions

until they have more clarity on the direction of the market

the gridlock is real and many people feel "stuck"

and yet somehow, there is competition for many homes when they hit the market

stay with me on this...

when the right home finally becomes available

where the location, price, and property condition shows up

it unlocks a segment of buyers that will be attracted to these homes

its also likely, that a lot of "pent up demand buyers" will make offers

which only further frustrates that group as only 1 buyer will get that home

the same can be said homes in the affordable housing areas...

home builders are slowing down new home starts

and allowing their inventory to decrease

so there is a possibility of a new homes shortage somewhere down the road

so what needs to take place for the market to get moving forward ?

buyers will have to accept the fact the its completely unlikely

that home prices AND interest rates will come down

interest rates appear to be the one of those 2 things to decrease this year

and with that I would anticipate that home prices will continue their long upward trend

could it actually be that the real "biggest problem" in real estate

is none of the many things discussed so far?

I would suggest that its definitely something different

The Biggest Problem is NAVIGATION

Finding a way to navigate the labyrinth of things discussed in today's show

requires a road map, or better yet -

a guide to get you though it all to safely arrive where you want to be

The Timing Of Interest Rate Changes ...

...is not affecting home prices

Once again the Fed decided to keep interest rates the same

While individuals, and businesses alike, want rates to be lowered

the Fed has signaled that they think rates are where they need to be

and unpopular of an opinion as it might be

there is some evidence that they aren't necessarily wrong

home values increased 3% in the 1st Quarter of 2025 as compared to the same quarter in 2024

There are only 4 meetings left in 2025

• July 29-30
• September 16-17
• October 28-29
• December 9-10

so if there is going to be surge of buying over the summer months

it will be based on the strength of the real estate market

and not due to the cost of money being less expensive

and with that, we would know with great certainty

that the housing market is solid

without manipulation of interest rates

so when the Fed eventually lowers rates

there could very well be a surge in the real estate space

if you have been playing the wait and see game

watch for 2 interest rate changes over the next 4 meetings

my suspicion is that you will see one in July or September

and the other one In October or December

with the likelihood that home values continue to increase

the monthly home loan payment will not see much change

listen for the explanation on how and why things are playing out

Your 1st Air Bnb Property...

...here is what I would be looking for when making a purchase

The 1st thing is don't over think it

Keep it fun and be passionate about creating amazing experiences for your guests

and whatever you do - beware of misleading "news headlines"

a recent article from a "major new site" said that investors were selling out

they mentioned that 11% of sales in 2024 were investor sales

the highest total in many, many years

what they fail to mention is that different investors bought them

so does that mean that investors actually bought in at the highest rate in years

so now that we have all of that out of the way...

one of the key things to keep in mind with short term rentals is convenience

you will compete with hotels and other short term rentals

excellent photos and descriptions in your marketing are critical

does the property have easy access to things that are location specific?

ample parking - wifi - and evertyhing that the renter will need for an amazing stay

and here is a huge one - where a lot of 1st timers get it wrong

is your list of checkout rules so long that you scare away renters

as far as selecting the right property

do the research to be sure that there is not a restriction against you renting it short term

independently verify that the property qualifies

and know that its very likely that some licensing and/or registration will be required

review the rental history of the property and look for red flags

• are there large gaps between rentals
• is the property highly seasonal for travel
• is there an over supply of rentals in the area
• check the availability calendars of competing rentals

if you are considering a condo then it is paramount to know about special assessments

and how future building maintenace will be scheduled and how much it will cost you

whether you specialize in beach locations or cabins in the mountains

you would be well served to provide local information for your guests

to explore the area, and seek adventures

be a great host and leave them a few bottles of water and make sure the ice maker is working

everything that your property doesn't provide for them is a negative review waiting to happen

and decreases the chance of them being a repeat guest

we take it real deep in today's podcast

this is one that you will want to save

I Just Read That Real Estate Investing Is Dead...

...from a self proclaimed real estate guru

I went through their missive with an open mind

and what I found was that I believe that they are off base

Don't get me wrong

I have some common ground with their views

• The cost of an investment property makes it hard to cashflow on 1st glance
• rental markets are feeling the pressure of inflation in the economy
• and the short term rental market has changed dramatically

A different writing states that Investors are exiting the market at the highest rate in many years

Apparently 11% of all sales in 2024 were investment properties

so while they use that stat to say that investors are bailing out

I can't help but notice that those homes were bought by real estate investors

so is it possible that the most investors in a long time were actively buying in 2024?

It takes 2 to Tango and the fact is that they didnt say what a typicial years % was

If you choose to look at things differently

• you could pay cash for a home and have instant cashflow
• you could put enough $ down when financing to have a positive cashflow
• you have a great opportunity for an increase in property value of 3%-4% annually
• your renter pays down your mortgage balance each month and builds equity for you
• you may be able to write off expenses and use depreciation at tax time

and that's most likely the exact reason that those buyers jumped in at record rates in 2024

its all about how you want to view things

the greatest transfer of wealth has been proven to occur in down markets - not up markets

it sure seems like the smart investors are making moves that others are afraid to make

Today's podcast goes much deeper on how and why

Insurance Cost Going Down...

...which is great news for home owners and investors

this comes on the heels of many years of sharp increases to premiums

and large amounts of policies being cancelled by the providers

there is a growing number of companies that are holding the line on renewal costs

an increasing number of agencies are now actually reducing the annual cost of coverage

Citizens Insurance continues to be a solid resource for older homes

This safety net has been super important in the state of Florida

as many homes do not fit neatly into the insurance boxes

now that things are settling down in the industry

rates are more affordable for many home owners

which means that monthly payments can go also go down

and at a time when inflation is causing almost everything to cost more

this is a welcome situation for pretty much everyone

its also helping buyers purchase homes with insurance in place

as opposed to passing on the deal due to high risk concerns

Today's show talks over the changes that are happening now

NAR Economist Says Market Is Heading...

... Upward with median home prices increasing by 3% in 2025

and that they will grow another 4% in 2026

National Association Of Realtors Chief Economist Lawrence Yun

made these statements at the 2025 Legislative Meetings at NAR

Interstingly enough - these predictions mirror

What I have been saying on this podcast for the past year

Yun goes on to mention that inflation is keeping interest rates high

Which is "killing the housing market"

The Federal Reserve has not wavered in their target of 2%

Inflation was at 2.3% in April 2025

So the Fed continues to stubbornly refuse to lower rates

One of the biggest things holding back the real estate market

Is that home owners with low rates are reluctant

to trade their 2%-4% loans for 6%-7% loans

meanwhile home prices continue to increase

while many cling to the hope that prices will drop

it doesn't seem likely to happen within the next year or so

based on a growing number of economists projections

Today's show examines how this is affecting the direction of the market

Home Prices Up 4%...

...despite the fact that interest rates haven't come down

all the while inventory levels continue to increase

FHFA - Federal Housing Finance Agency completed a study

That compared home prices in 1st Quarter 2024 to 1st Quarter 2025

They found that home values were up 4% nationwide

49 of 50 states saw prices increase

with Hawaii being the lone exception

The top 5 states with the highest increase were

1 - Rhode Island

2- West Virginia

3- Connecticut

4- Ohio

5- Wyoming

So here is where it may get very interesting in the 2nd half of 2025

A lot of the things that have held back home buyers may change

• Interest rates are likely to drop over the next 6 months
• Tariff concerns will ease as it appears there are several deals emerging
• Congress is heading toward a resolution to "The Big Beautiful Bill" talks

The market is playing out the way that we predicted on this podcast

At the end of 2024 during our forecast for 2025 episodes

Home prices didn't drop, despite all the forces against it

and now that we have evidence that prices went up

we have a real time scenario where the market might just surge forward

If you have been waiting patiently for interest rates and home prices to drop

Your patience may not be rewarded