Tripp's Take on Real Estate: Episode 54
I trust you had a nice relaxing time over the Thanksgiving weekend. I was able to get away with my family to visit the in-laws in Georgetown, KY. The picture above is the update to a favorite photo of mine from four years ago which I referenced in last week’s email.
Can we talk about all the food? I was 88% successful in not overstuffing myself on all the wonderful fixings (Southern word). I’m always a sucker for that sweet potato casserole with marshmallows on top (slightly burned). Mmmmmm.
Enough about me. Howabout you? How was your Thanksgiving break? What was your fave side dish? Sooo many options.
Scrolling through the socials Friday morning, I saw a friend of mine, a firefighter in Utah, dousing the fire on a home in his community. This newer home was completely destroyed. Thankfully the family was away on vacation…but there’s so much that they’ll have to put back together when they return.
And that’s the point of being thankful and focused on what's ultimately important. The stuff that was burned can easily be replaced.
Let’s pivot away from Thanksgiving to focus on a couple areas regarding real estate: current interest rates, timing of when to sell and exactly who is buying up all the homes out there?
We’ve got some great content below. Hope you’ll weigh in and hit me up with any questions or follow up. And share with a friend if you find this helpful.
Is Blackrock and Wall Street Buying up all the Homes in the US
There have been a lot of headlines lately giving off the impression that private equity institutions are buying up all the homes across America. And while they are buying a lot of properties in bulk, the fear of them buying everything is just fantastical.
The fact is, there are approximately 82 million single family homes (excluding condos and townhomes) across the country. Of those, nearly 83% are owner occupied and the remaining 17% - or 14 million homes are rentals.
If you look at the four type of investors (mom & pop investors with 1-9 properties, regional investors with 10-99 properties, smaller national investors with 100-999 properties and institutional investors with 1,000+ properties), 80% of the rentals (11.2 million) are owned by mom & pop investors. Only 3% are owned by institutional investors and another 3% are owned by the smaller national investors.
So, no, the numbers don’t tell quite the same tale the headlines do.
As you listen to the news, take it with a grain of salt. Because what sells headlines? Sensational half truths.
What’s the lesson in this? If you’re looking for an invesment property to pick up, where do you think you should be looking? Who do you think might be interested in seller financing to help you into your first, second or more deal? That’s right…mom and pop investors!
Having just done my first seller financed deal on a small multi-family property, it feels great to be the bank. If you own properties that you’re thinking of selling, and maybe you have questions about this, let’s talk.
Thinking of selling next year? Read this first!
This question came up earlier in the week and I wanted to address it. Is it better to sell now or wait for next year?
And my response is this: it depends on your needs. If you have to sell, there’s still a demand for good, quality inventory. Yes, interest rates aren’t favorable, but there are still intellegent buyers out there wanting to avoid the craze of multiple offer situations. So if you have to sell, get at it.
The spring is naturally the better time for strong sales prices with more buyers in the market looking to move with jobs, family needs, etc. The unknown there is how will interest rates be months down the road?
There are two points I want to make and they're applicable for buyers and sellers. Listen up.
Buyers, if you need to buy, do so as soon as possible. If rates drop 1% or more, you’re living in a new world. Competition, bidding wars and multiple offer attempts will make high mortgage rates look like amateur hour.
Sitting on the fence will cost you. Jump in and lock in the home price and work on the mortgage as rates improve.
Fence sitting has already cost cautious buyers hundreds of thousands of dollars by watching rates and holding their breath on prices dropping.
Sellers, I know you have a 3% interest rate on your home. But if you need to sell, don’t let that deter you from making the move you need to make.
My point here is this: if you’re planning on selling a home in 2024, do not, and I mean DO NOT WAIT for the summer to sell. If you do, plan on riding that home into 2025 - or get ready to pay extra for someone to take it off your hands.
Why? Glad you asked.
Having done this for nearly 20 years, I’ve been through a number of presidential election cycles. The uncertainty that comes from a potential administration turnover, a change in bodies of Congress creates widespread uncertainty.
If you’re a government contractor, staffer - anyone who derives income from the government, you know you may not have a job or a funded contract if priorities shift with a new administration. I remember the months of uncertainty I experienced every two years as a congressional staffer. It wasn't fun.
I’ve seen it time after time. If you get into July and beyond, everyone is watching the polls with the politicians.
So start the conversations now. If you have to sell, let’s talk about how we can get you sold and potentially stay in the home for a couple months after you close (if needed).
Mortgage rate update
The mortgage interest rate (at close of business Monday) on a $500k home (with 20% down and a credit score of ~750) for a 30-year fixed-rate mortgage is 7.676%.
This is down .393% from two weeks ago. This isn’t earth shattering, but down is good.
Thanks for staying with me this far. If you have any questions you'd like to discuss, let's catch up over coffee, zoom or a phone call. Contact points below. I look forward to connecting.
P.S. Happy Holidays to each of you out there. My family and I are grateful to you for your support and proud to be a part of your network. Let me know if there's anything I/we can do for you!