Home Listing Prices Fall for 16th Straight Week (and It Could Keep Coming)

0:00New listings are growing, creating more inventory and opportunity for investors. A massive new housing bill makes its way through Congress, and more and more agents are getting fed up and just quitting this business altogether. These are the headlines you should be paying attention to to grow your business, and it's what we're diving into here on On The Market today. I'm Dave Meyer, alongside Kathy Fecky, Henry Washington, and James Daynard. Today, we're breaking down the latest signals in the housing market and what they mean for real-world investing decisions over the next couple of weeks. This is On the Market.

0:37Let's jump in.

0:43What's up, everyone? Welcome to On the Market. I'm here with Henry, Kathy, and James, ready to break down today's week's headlines. Let's just jump right into it today. James, you've got a story for us about some housing trends you're seeing. Tell us about it. Yeah, I brought in an article from Realtor.com. And it's really it's pretty broad. It's the weekly housing trends. It kind of covers a broad range of what's going on with the market right now. We got interest rates jumping around inventory starting to increase. And, you know, I think these are really good things for investors to always be paying attention to, especially as you're doing dispos, because you got to set your expectations, right.

1:23But what this article talks about is the median listing price as of May was down 2.29%. So average prices fell 2.9%. Really? And this marked the 16th consecutive week of annual price decline in the 28th week flat down pricing. Wow. And so we're on this slow, slow skid. But that also makes sense because we're going into the summer months. That's true. be expected. But the year over year, that's a little bit more than I was thinking it was going to be because last year was pretty slow this time too. Yeah, this is when what all the tariffs came out last year. And it was like everything slowed down.

2:04Now we have the geopolitical stuff going on overseas exact same feeling. But I would say this feels a lot worse than it felt even with the tariffs and the tariffs felt pretty bad. It's like no one wants to make a decision. And with rates, I think are bouncing around a lot more than they were then. They were still moving last year, year over year, but this is getting pretty jumpy with the rates. So active inventory climb 2.3 % year over year as kind of more homes are coming on and less are selling. But the weird thing is right now, you know, we're really active in the market. I got listings in all different price points and there's definitely some sweet spots.

2:42And what I'm am seeing though, is the stuff on the lower end of any market doesn't matter if it's an expensive market or a more affordable market that stuff flies off the shelf it's gone yep but what i'm also seeing is a lot of canceled listings like right now showing velocity is really low there's not that many people looking in a variety of price points i can tell you that much anywhere from our listings range from 400 000 all the way up to 5 million nothing's getting a lot of showings in any of these price points all different areas. But the more affordable stuff is clicking off in the first three to five days, the more expensive stuff, that's where you're really, really sitting.

3:21And so what's happening is that the sellers are getting so freaked, because they don't get any showings, and they're canceling their listings. I'm seeing listings cancel 14 days, 20 days. And they're like, you know what, it's slow, markets not time to sell. And so I feel like there's a lot of FOMO sellers testing and pulling, which actually is not a bad thing when you're going to dispo, because it kind of takes inventory away from people's and it actually makes people have a little bit of sense of urgency. But, you know, inventory is starting to increase over and over and we're definitely starting to see it.

3:52Pendings are down, absorption rates are down. And then the interesting thing is though, year over year is homes only spent one day longer to sell on average days on market. I don't know how that logically adds up. Maybe it's just people are negotiating quicker. I feel like back in the day, you would probably wait 45, 60 days before you're going to significantly lower your price. But now, to your point, James, after two weeks, if you're not getting a lot of traction, people are starting to freak out. So they might just take a low offer sooner. I don't know. That's the only way it makes sense to me.

4:26I mean, you have got to price your property correctly. This is the time to be an excellent listing agent. You didn't have to be a great listing agent over the past decade. You just put out a signpost, be higher than the last comp. You'd get multiple offers. It wasn't that hard, but now you have to be an expert because buyers understand this. They see the headlines. They're not stupid. They know that this is a buyer's market. There's a lot of inventory and they can negotiate. So you don't want that. You don't want a bunch of people trying to negotiate. So just price it right. And that pricing it right does not mean you're going to price it at the price it was two years ago.

5:04And that's where so many people's heads are at. Or even three months ago, three months ago when rates were lower, you might've had a little more flexibility on pricing. But not right now. People are scared. You've got interest rates high. They've got to be able to add that in to the cost of what the lender's going to look at, which is the costs, right? Can this person afford it? And so you better be able to price it right so that it adjusts for the higher mortgage rates. That's the bottom line. There's numerous reasons why some homes sell faster than others, right? And like Kathy just said, you got to have a good broker that can really break down your pockets and neighborhoods and be able to identify what your house is versus another property.

5:47Because if they can't explain that to the buyer, it's going to be a serious problem on getting them to pay what it's worth. because buyers a lot of times don't know the quite difference between maybe a zip code or even what this street's worth versus this street or what this pocket's worth. And you really have to explain it. But like right now, things are still selling, but you have to separate yourself. And so, you know, I think a part of it too, like what we're doing right now is we're trying to build in a little bit of extra budget up front to throw in splash items to make it that, hey, this house has this and everything else doesn't have this.

6:22you know whether it's an outdoor kitchen or um it could be we just installed this really cool wet bar for the show and we did like this like almost like rustic bar with pleated glass and walnut cab it's like you got to make it to where you have a lasting impression when they're leaving because buyers that are looking right now are serious but they are also have every excuse in the world not to buy that house right they're looking for the reason not to buy and you have to solve that by either price, quality, or how do you separate that off? And so we're spending a lot more time as we go into the summer months.

6:57You know, even if we're going over budget, we're throwing an extra$5 ,000,$10 ,000, which is like 5 % to 10 % of our budget at these houses to pop it up and just try to move them faster because the debt is really killing all the deals. It's just understanding a buyer's market versus a seller's market. And people get so confused about the difference between those two. But when it's a seller's market, you have the power. You could just put your property on the market as is. People weren't even doing inspections when it was a frenzied market. It's not like that today. It is a buyer's market. The buyer has the power.

7:28The seller has to submit, right? You have to really appeal to today's buyer. And own your strategy. If you're going to price your home heavy because it's a unique property or it's on a great location and it's different than everything else, you might not sell in the first week, but don't be that irrational emotional seller that's like cut the price after two weeks if if your home didn't sell in two weeks you either overprice it if you're cutting it or but buyers look at that they see the emotional drop and they're like oh time to go get there's blood in the water yeah and so like if you don't sell in the first two weeks and you push the price own it because you're just giving away money if you start cutting price that quickly so if i'm hearing you guys correctly you're saying you need to hire an agent that is good at their job and knows what they're doing.

8:17And then as the investor, you need to be good at your job and know what you're doing. These expectations are unreasonable. Don't hire your sister or your best friend because they just got licensed. My aunt just got their license. I have to use her. Well, actually, let's talk about that in a minute because that is the article I was going to bring I want to talk about. So let's get to that. But before we do, we're talking a lot about selling. The other thing people should recognize is like days on market going up, the increased inventory, the increased new listings means there are going to be more deals.

8:54Like that's, you know, we're talking a lot about the difficulty of selling, which is true, but these things work hand in hand, as Kathy said, they're yin and yang. And when it's difficult to sell, it's easy to buy. So I think that is an important thing to remember. You obviously want to buy deep and figure out, do the right things. But the idea that inventory is going up is encouraging to me. It's still super low. It's below pre-pandemic levels in most places. getting back to a normal amount of opportunities to look through as an investor to me is exciting. I'm happy about that. I will say though, given everything you just said, James, I don't expect this to get better soon.

9:37I don't know about you, but I'm not holding my breath that we're going to see a big uptick in activity. When the war started, I said, I think pendings and total sales might go down this year, which is crazy because we're at a super low level already. But it's really hard for me to imagine demand picking up in the short term because rates are super volatile. Inflation came out yesterday. It's accelerating, right? So Fed's not going to come to anyone's savior. The bond markets are kind of revolting. There's new articles out about the savings rate in the United States is plummeting. Credit card delinquencies are going up.

10:14It's like all these things are happening. it's hard to imagine demand going up except maybe from investors like that's i think the one place where we might see activity is like investors typically buy in any kind of market and are willing if if sellers are willing to negotiate that's where i think the opportunities are going to lie but i wouldn't expect uh i don't know about you guys i'm not holding my breath for a wholesale recovery anytime soon no not at least till labor day guys market sucks until labor day why labor day just seasonality we always get a jolt and that's the thing like as you're going to sell know your markets where where are the pops right like i'm even holding on to a couple houses to list them right now and see if they work out this deal overseas to maybe drop some of the energy costs down right maybe we get some relief there timing is really important labor day always gets a jolt you go dead time labor to get to pop and then right after thanksgiving we get another pop and then it goes into slow, steady, dead till January.

11:16And know those market times because if you're trying to dispo something, you might want to hang onto it. Might make sense for two weeks, drop it at the right price, get the offers. All right, well, great, great topic here. This is something we got to watch because everything's just changing. Like inventory was down a month ago. Now it's up. Like we're just seeing everything change so rapidly. So we'll obviously keep you all posted on the market, but expect a slow summer. I think that's the main headline here for sales. And for buyers, there's going to be motivated sellers. So keep an eye out. Be patient.

11:47Go shopping. Exactly. But I was going to go last with my story today because you brought that up, Henry. I'm going to just go to my story here, which is an article on the front page of the Wall Street Journal today saying that real estate agents are quitting the industry right now because of... Henry doesn't need an article for this. Because it's hard. Well, honestly, I was kind of surprised. They were like, agents are quitting during a slow market, which, by the way, always happens, right? Like this is just kind of what happens. But they said that NAR, the National Association of Realtors, has seen a decrease in their overall membership from 1.6 to 1.4 million in the last four years.

12:33And I was like, man, I would have thought more agents had quit by now. Like 200 ,000 in the last four years. this is the hardest four years since 2010, right? You know, like in 15 years. And most of these people aren't doing deals anyway. Like we know this anyway. It's what is it? It's like the 80, 20 rule, 80 % of, you know, 20 % of agents do about 80 % of the deals and NAR is expensive, right? Like you have to pay dues. So I'm just curious what you guys are seeing in terms of the quality of agents or James, Kathy, I know you are agents, Henry, you work with them all the time. Like Who is succeeding?

13:10What kind of agents are doing well in this kind of market? Look, man, it's hard out here in these investment streets for everybody. But first and foremost, it doesn't matter what the market is doing. You should be shopping and looking for a quality agent no matter what the market is doing, because a quality agent is going to be worth more than the commission you're going to pay them for the deals that you're going to do with them. But it's absolutely the 80-20 rule. 20 % of the agents are doing 80 % of the deals. So you need to figure out who that 20 % is. And so my take on this is talk to title companies about who the repeat agents are, who are the agents who are doing volume, doing volume of deals, who they see on a consistent basis and see if you can connect with them.

14:00They'd be happy to pass their names on because agents work on a referral basis. And so your title companies are going to see the same faces over and over again. That's the person you want to start with talking to. Because you're right. If you're doing deals in this business as an agent, you are doing something right. Either you're great at farming for leads, but it's not just getting the lead. You've got to keep the business once you get it. You've got to serve your customer. And most agents, I saw a stat recently that the majority of good agents' business is repeat customers and repeat clients.

14:36In other words, they're not going to be doing volume unless they have people who are coming back to them over and over again. And if they have people coming back over and over again, that means they're good at their job. So once you find who these people are, then it's our job to be able to ask the right questions. you need to know enough about the real estate market to ask your agent questions about the market. Not just what's the average days on market, but understanding list price to sale price ratio. What's that trending at right now? What did it look like last year? How much inventory do we have on the market?

15:11What constitutes a buyer's market and a seller's market based on the amount of inventory we have on the market? These aren't questions that should throw a good agent for a loop. Most agents should be able to either answer them off the top of their head or be able to get back to you pretty quickly with that information. And then also asking your agent about strategies that are working to sell properties in this market. What ideas do they have about listing a property aggressively at a lower price point? One of the things that we do is we strategically undercut the competition, right? So we're pulling the comps.

15:48We're seeing what they're listed at, and we list lower. We try to make our property look better. What does that do for us? It guarantees us showings. And in any market, a good agent should be able to tell you how many showings it takes for you to get an offer on average. So if you can increase the amount of showings you get in a short period of time, you should, by default, increase offers in that amount of time. In our market, it's about nine showings to every one offer. So if I can get 10 showings in the first couple of days, I pretty much guarantee, air quotes, guarantee myself getting an offer statistically, right?

16:23These are things your agent should be able to tell you. If you can't have these kinds of conversations or they sound like they don't know what you're talking about, then you need to move on to the next one. Totally agree, Henry. And it's a great time for people to reconsider and make sure that they are working with a great agent who's going to help them through this. I also just want to say to all the agents, I know we have a lot of agents who listen to this show. First and foremost, I'm sorry. It sucks out there. The market is really brutal for real estate agents. It stinks. It does. I mean, volume is down so much.

16:55It's hard. There is a smaller pie for people to compete over, but you got to compete. As a real estate investor who works in multiple markets, the difference between some agents I work with and others is completely night and day. And I will just say the biggest difference between the ones I want to work with and choose to work with on a repeated basis and the others is just simple proactivity. Like I will reach out to agents and I'll have to keep asking them like, what happened this month? Like, are you seeing anything? I'll, you know, they'll put me on a drip feed that anyone can do, but I'll send them to and be like, can you give me a writeup on those?

17:34Whereas other people are selling me deals. They say, Dave, I analyze this deal. Here's an analysis of it. Here's why I like it. Here's the strategy you should use to go buy it. In other words, they're just making it easy for me. That way, I don't have to look through the 40 listings that came up on Zillow this week. They've picked the two or three that they think are the most useful for me. That should just be standard, in my opinion, if you're working with a real estate agent. But a lot of people don't. I would say less than 20 % of the agents I contact do something like that. These are the opportunities you have to go out and sell yourself.

18:10And as an investor, you should expect that. And if you don't get that, don't work with that person. It's like being a small business owner. Every single real estate agent, you're a small business owner. You need to know how to market yourself. You need to know how to go above and beyond to serve your clients and stand out, just like Dave said. You guys, brokers in today's market, here's the questions you want to ask. before you hire them. If they ask you what you want to sell the house for, go the other way. Brokers are supposed to be hired as professionals that give you honest communication and feedback.

18:46Yeah. Like that's an easy one. Yeah. That sounds great. And then you end up overpricing your home. You need honest communication. And sometimes a broker is not going to tell you what you want to hear, but they're telling you what you need to do to sell the house. And that's based on experience, knowledge, and what they're doing, right? The next question I love to ask brokers is, what are you doing to sell the house? Because if they come up and they give me their pack and they go, look at my marketing thing. It goes into Zillow. It goes into Realtor. It's like, who cares? It all does it. I could do that.

19:21Yeah. In a market that's flat, your broker needs to be proactive. Just like Dave was saying, with working the leads. If you want to get a deal done, be proactive, take care of your clients, but also you have to pick up the phone. Sales is done on communication. Selling properties is done by talking to people, getting a read, and bringing things in. If your broker's not calling people and they're waiting for them to reach out, you have to have a proactive broker get rid of them and move on to the next one. If people can't tell me tangibles of what you're going to do to sell, then you're just waiting for someone to throw an offer on and ask me how low I'll go.

19:59I don't need that. If someone's not shooting you straight, this is not the market to be fluffy in. It's a real market that has real issues. If you don't price correctly, make sure the broker doesn't cause that because they're too afraid of you. It is important because you have to think about it from a volume perspective. Less buyers, buyers have more options, which means every single showing you get is crucial. It is crucial to you actually being profitable or making money or selling your property. So if you don't take this seriously and you end up with a bad agent, you don't just waste your time.

20:35You waste the good leads that you get when you first list. Like it is so much more important now than it has ever been. Yeah. I want to say one more thing. Get someone local, y 'all. What are you doing trying to get an agent that's not from your area? I see this a lot. Maybe you look up a good agent in the area, but they need to be really an expert in your little neighborhood. Look for recent sales in the neighborhood where you're trying to sell and see who did it. Because the other thing to think about is when you're a listing agent, you have open houses and you're collecting all these names of people in the market, people who are trying to buy, and you've collected those names of local people.

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23:55Welcome back to On the Market. James, Kathy, Henry, and I are here discussing the latest headlines. We've talked about big picture trends in the housing market. We've talked about agents quitting the market. Let's turn our attention to what's going on in Washington. Henry, tell us about your story. Yes, I do have a story about the book. Wait a second. I've got something coming in right now. Oh, I have got Destiny's Child on the line. Destiny's Child, they are saying that due to the increase in gas prices, a man hanging from the passenger side of his best friend's ride is no longer a scrub. he's just a man making smart financial decisions can i kenry if you're gonna quote scrubs it's tlc not destiny's child oh you're right you're right i screwed it up it wasn't destiny put a ring on it or something like that that was the other song yes they didn't want to put a ring on it but yes but they would not have put a ring on a scrub but now they might i mean man our pop culture references suck.