LIZ: YEAH, NICE RALLY HERE, DOW
STILL UP ABOUT 692 POINTS, REAL
ESTATE STOCKS, ANYWHERE REAL
ESTATE, ZILLOW, REDFIN, THEY ARE
ALL IN THE GREEN AT THE MOMENT.
ALL ON THE MOVE, EVEN THOUGH
EXISTING HOME SALES ACTUALLY
FELL TO THEIR LOWEST LEVEL SINCE
JUNE OF 2020.
ACCORDING TO THE NATIONAL
ASSOCIATION OF REALTORS, SALES
WERE DOWN 3.4% MONTH-OVER-MONTH,
MAKING IT THE FOURTH MONTH IN A
ROW TO SEE A DECLINE.
HOME BUYERS STILL ROCKED BY SKY-
HIGH PRICE TAGS THAT FEEL
LIKE THEY CONTINUE TO RISE.
I MEAN LOOK AT THIS THE MEDIAN
EXISTING HOME IS NOW COSTING,
AND THIS WAS THE MOST RECENT
NUMBER, MAY, IT HIT A NEW RECORD
HIGH OF 470, 600.
THAT’S A 16.3% YEAR-OVER-YEAR
INCREASE; HOWEVER, WITH HIGH
PRICES AND CLIMBING MORTGAGE
RATES, IS THE RED HOT HOUSING
MARKET STARTING TO SHOW A FEW
CRACKS IN THE FOUNDATION?
ONE OF THE MOST WELL-RECOGNIZED
NAMES IN REAL ESTATE IS HERE IN
A FOX BUSINESS EXCLUSIVE.
REMAX HAS MORE THAN 140,000
AGENTS, 9,000 OFFICES, IN 110
COUNTRIES AND TERRITORIES.
SO, REMAX PRESIDENT AND CEO NICK
BAILEY SNOWS EXACTLY WHAT’S
GOING ON ON THE GROUND.
NICK, GREAT TO HAVE YOU HERE.
THE EXISTING HOME SALES NUMBERS
YES FOURTH MONTH IN A ROW WE
KNOW INVENTORY IS VERY THIN SO
YOU HAD CAN PEOPLE BUY WHEN
INVENTORY IS VERY THIN BUT IT
FEELS DIFFERENT THIS TIME.
>> WELL, LIZ, THANKS FOR HAVING
ME AND YOU’RE RIGHT.
THERE ARE DYNAMICS THAT HAVE
BEEN CHANGING IN THIS MARKET BUT
LOOK THEY HAVE IN THE LAST
COUPLE YEARS.
WE’VE HAD 123 CONSECUTIVE MONTHS
OF A RUN-UP IN THIS BUSINESS AND
SO THE CHANGES THAT WE’RE
STARTING TO SEE AND TALK ABOUT
ARE THE REALITY OF THIS MARKET
RETURNING MORE TO AN EQUILIBRIUM
I MEAN LET’S FACE IT.
BUYERS AND THEY KNOW IT REALLY
WELL IN THE LAST COUPLE OF YEARS
THEY HAVE NOT BEEN IN THE DRIVER
’S SEAT.
THEY HAVE BEEN COMPETING AGAINST
OTHER BUYERS, MARKETS PROPERTIES
HAVE BEEN FLYING OFF THE SHELF
IN A MATTER OF MINUTES AND HOURS
AND THEY STILL CONTINUE TO DO SO
, DEMAND IS VERY HIGH AND
SELLERS HAVE BEEN DRIVING THE
MARKET.
I THINK WHAT WE’RE GOING TO
START SEEING IS BUYERS MAY NOT
BE RETURNING TO THE DRIVERS SEAT
BUT CERTAINLY MAY GET IN THE
FRONT SEAT HERE SOON.
LIZ: WHERE?
REGIONALLY WE KNOW THAT REAL
ESTATE IS ALL LOCAL, RIGHT?
SO TALK TO ME ABOUT WHICH AREAS
YOU’RE STARTING TO SEE A FEW FIS
SURES ON THE MAP.
>> WELL, WE SEEM TO BE COAST
LINE GENERALLY, CALIFORNIA,
ALWAYS SEEMS TO LEAD THE WAY, AS
THE WEST HAS.
THE WEST OVER THE LAST COUPLE OF
YEARS, THEY LED THE INDUSTRY
WITH DOUBLE-DIGIT PRICE
APPRECIATION, THE MOST NUMBER OF
TRANSACTIONS, AND SO WE’RE
STARTING TO SEE SOME OF THE
DYNAMICS OF INVENTORY LEVELS
STARTING TO INCREASE WHICH IS
GOOD FOR BUYERS, WE’RE STARTING
TO SEE THOSE HAPPEN IN THE WEST
FIRST.
LIZ: IN THE WEST, BUT
SPECIFICALLY, HOW MUCH AND HOW
MUCH DO YOU ATTRIBUTE THAT SORT
OF RETRACEMENT TO CLIMBING
MORTGAGE RATES, BECAUSE THAT IS
CERTAINLY GOING TO PUT A DAMPER
ON ACTIVITY.
WE DO HAVE THE 30-YEAR FIXED
AVERAGING 5.78%, THAT’S A 51%
YEAR-OVER-YEAR CLIMB, SO TELL ME
EXACTLY HOW AND WHAT KIND OF
ROLE HIGHER MORTGAGE RATES PLAY
IN COOLING OFF THIS MARKET.
>> YEAH, HERE IS THE ONE THING
WE HAVE TO LOOK AT, THE RISE IN
MORTGAGE RATES WILL LIKELY
OFFSET THE PRICE INCREASES THAT
HAVE BEEN AT RECORD LEVELS, BUT
RIGHT NOW, IT SEEMS LIKE WE’RE
ONLY TALKING AND COMPARING THE
30 YEAR FIXED RATE.
WE HAVE TO KEEP IN MIND THERE
ARE ALTERNATIVE MORTGAGE OPTIONS
OUT THERE, AND SO I BELIEVE THAT
WE’RE GOING TO SEE THE
ADJUSTABLE RATE MORTGAGE
, THE 5-1, 7-1 ARM LOANS
MORE FAVORABLE ON RATES HELPING
PEOPLE WITH AFFORDABILITY IN A
TIME OF RISING RATES, AND I DO
BELIEVE WE’RE GOING TO START TO
SEE SOME OF THOSE PRODUCTS BE AT
THE FOREFRONT, NOT JUST THE 30-
YEAR FIXED RATE.
LIZ: WHERE ARE THE HIGHEST
PRICES RIGHT NOW?
>> HIGHEST PRICES ARE IN OUT OF
THE REMAX HOUSING REPORT WE
ANALYZED ON A MONTHLY BASIS 51
METRO AREAS, AND CERTAINLY, LA
IS LEADING THE CHARGE, BUT YOU
LOOK AT AREAS IN UTAH, SALT LAKE
CITY, BUSINESS E, IDAHO LET LAST
YEAR IN OVER 24% PRICE
APPRECIATION SO THOSE AREAS
LIKELY WITH THE HIGHEST INCREASE
IN PRICE APPRECIATION WILL
LIKELY COOL AT A FASTER RATE AS
WELL.
LIZ: AND TELL ME, NICK, WHAT IS
THE NUMBER RIGHT NOW AND THIS IS
A KEY NUMBER IN REAL ESTATE.
THE AVERAGE DAYS THAT A HOUSE IS
ON THE MARKET BEFORE IT IS SOLD,
OR SNAPPED UP.
>> WELL, THAT’S WHAT’S CRAZY
RIGHT NOW.
DEMAND REMAINS SO HIGH, WE ARE
ESTIMATING AROUND 4 MILLION
HOMES THAT WE’RE SHORT AND SO
RIGHT NOW, DAYS ON MARKET IS 16
DAYS.
IT CAME DOWN ONE DAY FROM APRIL,
WHICH WAS 17, BUT A YEAR AGO IT
WAS 17, AND SO THE REALITY IS,
WE REALLY HAVEN’T HAD AN
INVENTORY PROBLEM PER SE
BECAUSE WE STILL LAST YEAR SOLD
OVER 6 MILLION HOMES.
WE’VE HAD A DAYS-ON-MARKET
PROBLEM FOR BUYERS SO A COUPLE
THINGS ARE GOING TO HAPPEN.
WE’RE GOING TO HAVE TO SEE
INVENTORY LEVELS INCREASE.
WE’RE GOING TO HAVE TO SEE DAYS-
ON-MARKET INCREASE
BEFORE WE SEE PRICES STOPPING TO
RISE.
LIZ: LOOK, I DON’T THINK WE’RE
GOING TO SEE INVENTORY RISE
UNTIL THE HOMEBUILDERS BUILD
MORE HOMES AND PEOPLE START
SELLING THEIR HOMES, AND WHO
KNOWS.
MAYBE GOING INTO RENTING.
IT’S A VERY WEIRD MARKET RIGHT
NOW, BUT QUITE HISTORIC I’M SURE