Real estate outlook 2023: What buyers, sellers, and investors need to know

the outlook for housing and prices might still be gloomy in 2023 but for those of us needing to buy a home this year there are still some ways to prepare let's take a look at how to make the process more affordable and secure joining us now Yahoo finance contributor Vera Gibbons a lot of people looking at these house prices and wondering oh what could I do at this point right you know Rochelle that's the the top challenge for 2023 is is affordability so you've got prices still elevated you've also got mortgage rates significantly higher than they were a year ago we're at about seven percent now which was almost which is almost double what we were at the start of uh 2022 so that continues to be challenging but the good news is that inventories up a little bit uh fewer buyers are actually out there hunting so you might have a little less competition not to say that you're going to get a deal necessarily or a bargain it's still a pretty challenging Market but it's not going to be as crazy nutty as it has been over the past couple of years it's going to be more balanced according to the experts I've spoken to they say that's what we can expect not the frenzy crazy Pace nothing at all like last year or the previous year but a more balanced market so that's good news so what tips do you have for people in this environment how can they sort of edge out some of the competitioning and get a home well first things first of course you've got to you know get your financial house in order that means you know wiping away any outstanding debt boosting your credit score so that you can get the best possible rate on mortgages particularly important now since mortgage rates are so high the better your credit score the better mortgage rate you're actually going to get then of course you want to shop around to get pre-approved for that mortgage and you do want to shop around don't just go to one lender but once you can figure out what you can comfortably afford month to month shop around and see what kind of rate you can get that is going to meet your budget once you've got the finances squared away then you can hit the ground running but you don't actually have to run that's the good thing about the market in 2023 you can actually take your time to some degree you can look around check out the neighborhoods know what the crime situation is in the neighborhoods we search the school district because as you very well know home values tend to hold up better in a in a decent School District also check out the commute What is the commute to work going to be like are you going to have to commute you've actually got a little bit of time on your side so look at the whole picture and then also factor in additional Financial costs I think a lot of people Overlook things like homeowners insurance for example in a market where I am in Florida those premiums have skyrocketed because of the Hurricanes so that's something you want to factor in as well if you're mortgaging your purchase you do have to get homeowners but as I say in a market like Florida or even a market like California because the wildfires those premiums are extremely expensive so you want to factor that in as well as costs like the HOA fees property taxes I think a lot of people especially first-time buyers jump in feet first thinking oh they've got the down payment and they can figure out the monthly payments but that's really just the start of home ownership and then finally I would say make sure you're willing to make a long-term commitment because a transaction costs are moving in and out every couple of years is just not not worth it so make sure you're able to commit to three to five years make sure your job is secure and if your job isn't secure make sure you've got some extra money in the bank parked away okay so that you don't run into a financial pickle so there's a lot of different moving parts to uh to buying in 2023 but again the good news is that it's not going to be as crazy competitive bidding war type of situation that we've seen over the past couple of years so still complex but at least not as competitive as we've seen over the past year great stuff Vera Givens day Yahoo finance contributor thank you so much mortgage application demand jumping as mortgage rates drop application volume climbing 28 from the prior week that's according to Mortgage Bankers Association index meanwhile refinance demand was up 34 last week but that's still well below still 80 percent below where it was just about a year ago tomorrow we will get updated mortgage rate data from Fannie and Freddie but last week we did see the 30-year fixed mortgage rates fall to 6.33 percent it is remarkable to see rates continue to fall and it doesn't Shanna look like they're going to go back up above seven which is where we were when we peaked now are we going anywhere near the three three and a half we were a year ago no but it is surprising to see people get off the sidelines at this number most of them are still locked in a sub 2 mid 3 mortgage rate so it's surprising to see that thaw this Market at all I would not get too consumed by one weekly number like this I still think what we're looking at is sync proposes a single digit drop this year none of that panicky 20 Peak to trough fall that some have predicted yeah exactly and I think that also begs the question of what it's going to take to get some of those home buyers who are on the sidelines off the sidelines because when we even take a look or some of the sellers off the sidelines as well because taking a look at some of these inventory numbers this is according to Redfin data and now active listings is about 21 higher than what it was about a year ago but that's mostly because homes are now sitting on the market for longer we haven't necessarily seen more homes come on the market new home listings are actually off 22 percent year over year so it's going to be it's going to be interesting to see what it takes in order to really bring back some of the momentum in housing but I think it's safe to say it's going to be months away from where we are today we do have a number that could help in that capacity for the first time in a year home builders sentiment actually picked up yes first time in a year January saw an unexpected gain in single family sentiment Rising albeit slightly Four Points to 35 that's according to the National Association of home builders in Wells Fargo still anything below 50 is considered negative so we are still in that territory the sentiment was more than double a year ago registering 83 last January so we're a long way from out of the woods in a word the year in real estate saw wealth destruction given the rapid rise of interest rates but 2023 should bring falling rates and that disruption replaced or destruction replaced by disruption let's talk real estate with Heinz Global Chief investment officer David Steinbach he's with us now good to see you sir so you say disruption brings real estate opportunities play that out for us and where exists those primary opportunities great well look thanks for having me um yeah so Heinz is a 100 billion dollar Global investment manager we focus on real estate we're in about 30 countries around the world I'm actually calling from you uh here in Davos today um so I would say that disruption is is definitely a topic uh here as well um but yeah so um you know I think that investors right now are really uh seeing the the change that's already happened right interest rates um kind of riding this wave of low interest rates and uh you know the cap rate compression that comes with that is is over and now the hard work of asset management really begins and uh that's that's really what's in front of uh most investors today I think so the the general move that I'm feeling here in Dallas though is that I think the people are pretty somber um about the realities of the market and uh really starting to focus much more on uh the beginning of a new cycle rather than the end of an old one sure uh and rates that should we believe Begin to Fall are they optimistic about investment opportunities in real estate as we move forward yeah so I you know I think that the the way to think about you know the built environment is certainly one one is that you know for an Institutional Investor uh real estate is a longer term investment that that we're making so it's not something that you know we're we're flipping in and out of uh what like equities or bonds and you know most business plans are lasting five to ten years and so in light of that I mean interest rates are certainly a driver of value and they've had their impact this last year I think that obviously if if rates you know continue to move um in this coming year that'll also be a driver but I think what I'm saying though the focus is really on how to create the value at the real estate itself how to drive rents how to create something that is special and unique uh something that is is going to outperform within the context of particular Market uh but where the rates are today again it does affect value but I think most Real Estate Investors are thinking longer term when they're underwriting a deal today it could be a sector and a region in terms of housing that you are optimistic about as we move forward sure yeah so so Heinz is involved in really all the major product types we're in uh multi-family we're in office we're in logistics retail and certainly for the in the housing sector I think particularly in apartments which is what we focus on with our institutional and Retail clients it's it's really um what what is interesting about that asset class is the fact that rents Mark to Market every year and that is different than the other major product types where investors are relying on a bit longer term leases and the fact that Mark the market every year means two things one is you are going to see as as fundamentals have come down in many markets particularly here in the United States you will see um you know Returns come down as well with that said on the other side of recovery it'll be the first to come back up uh because again you're marketing to Market at a much faster Pace than the other product types so look broadly I I do think that demands around multi-family while while it has slowed I do think that given this dynamic in in the lease term that it will be one of the first things that investors will be focused on on the other side um and and look fundamentals in the United States they are are declining so you you have to focus on the fundamental real estate you're buying and again think longer term I mean you're buying something today you're going to own it for five to ten years you want to make sure what you are going to buy today is something that will perform in that time frame let's turn to office now and one of the big question marks that lies ahead are you bullish or bearish and what's been the impact of remote work and do we know the true impact just yet sure so the way the way we are obviously investing is around the world and I think you know this return from work question is a really interesting one because when you zoom out and look at uh at the world in total and look at how everyone has responded uh postcovid um every country is not in the same place in terms of how much remote work that they're relying on so Asia for example would be one end of the spectrum and frankly the West Coast United States would be the other end and you know basically all the geographies are somewhere in between there with Europe being somewhere in between as well and so what that what that tells me is two things one is it says that you know whatever you might be experiencing today in your Market that you're you're you're seeing every day is not necessarily the felt experience of those around the world so as an investor you have to think you have to think globally in that in that perspective but the second thing is that what we're seeing is that there is a steady Trend back I mean I mean the the chart is up and the right and you know even markets that like in Asia where where it was no nowhere near like what it was in the West Coast United States for example um even that is is on on the right road if you will with that said what we're seeing as well is that you know particularly in the United States it it statistically seems to us that 90 of the tenants are chasing about 10 of the space and so if you if you own projects today in that 10 percent um what we're seeing in our portfolio is is they're actually performing really well I mean we're seeing rents um within that within that narrow band which is the highest quality obviously some of the highest rents that we've done we've got projects in New York um and you know it's it is surprising when you see the headlines and see the data but what's interesting though is despite that Dynamic the 90 chasing the 10 Capital markets seem to be painting a much broader brush across the product type and and really not seeing through that yet I think that'll be another thing that we're going to see evolve in the next coming quarters where investors are going to be looking a bit more carefully at what exactly is happening in fundamentals um and look at the data as they do their due diligence um I think that they'll take a turning view all right check back with us in a few months David Steinbach Hines Global joining us from Davos appreciate it sir we're here with Jason oppenheim owner of the oppenheim group and star of selling sunset on Netflix but before we get to selling Sunset we're going to talk about selling real estate so what I've been hearing is a lot of Doom and Gloom in the market give us a reality check what are you seeing out there I'm not the Doom and Gloom type I think we probably saw the bottom of the market at the end of 2022 probably saw the height of interest rates at the end of 2022 so I'm generally optimistic but I don't want to pretend that that means the real estate Market's going to be you know on the ascent I'd say we're probably in for like some type of homeostasis like just a not not much growth probably not much you know downward either do you think you said we've kind of reached what might be a homeostasis too for you in your business day to day what does that look like well it's we're going to have a rough couple of years I think because volume is down so when I when I look at real estate I guess there's two things prices which is really what what the people care about and then there's volume which is what real estate agents care about in terms of prices I think we're gonna there's gonna be some stability which is probably healthy for the market we can't have that kind of you know we don't want the spikes and downs so I think we're going to see a relatively healthy Market over the next few years in real estate as it relates to prices and we've got a lot of people that own homes that have very low interest rate loans and they're not going to be selling so we're going to have low Supply generally probably low-ish demand what are kind of some of the concerns you're seeing that transcend income brackets uh interest rates largely transcend income brackets although I think affect more the lower income brackets that is really the hard I mean people talk about affordability of homes I mean really it's it's the down payment you got to come up with a down payment that's always been difficult but now you've not only do you have the down payment now you got to pay a you know a five or six percent interest rate even on a five or ten year fixed I think that will come down in the next couple years so I don't think it's a big deal if someone goes in and buys a house and has a five percent interest rate and I don't recommend people getting 30 years anymore you should probably get a five-year probably you're going to be able to refinance in a few years and buying is always better than renting if you can hold the asset and you can ride the ups and downs and you can take you know advantage of the appreciation over a decade or two decades or hopefully three decades then I think buying really always makes sense doesn't make sense always in the short term you've got transaction costs um and you know you you're you're limited in your Mobility when you're when you're an owner you're dealing with a lot of hassles when it comes to the roof leaks not the landlord's you know fault anymore now it's your problem so if you're looking to own and just for a couple years you know probably consider renting here in La where you know when people are buying now in the situations where they are where where are you seeing the money come from where are they where What professions generally are they in are there any kind of Trends you've seen in the cases where people are are bucking the Bucking the overall Slowdown there's a lot of wealth out there still so um yeah I'm not concerned about the luxury Market honestly I'm not even really that concerned about any of the markets there was an open house yesterday for a 1.6 million dollar house up in the hills 300 people came by the open house in this in this you know environment with these interest rates so there's still demand out there I think it's good two years ago even a year ago everything was selling I don't think that's healthy I mean crap was selling and I think that developers and and people should be building quality product and I think people should be more Discerning and not being you know a year ago literally you'd get 10 offers on on a crappy house uh with no yard now I think again it's back to a healthier Market my son the what I'm kind of getting from you is that despite the the Doom and Gloom narrative out there um there is right sizing happening and there's also a lot of reshuffling going on from where you sit yeah I mean I think covid changed a lot in our psyches uh I mean the at-home work um people more willing to people focusing more on the house more willing to move out of the city I mean you look at some of these states that you know were laughed at a few years ago and now they are you know where everyone's moving I mean Austin Texas and Miami and Las Vegas and Like Scottsdale Arizona I mean these were not places people took as seriously as they do now um and I that trend is is not going to obviously we're going to see some some people coming back into the big cities I think New York and Los Angeles will be fine and I think those cities will have some difficulty the next couple years but they're on the map um and now there's competition you know you don't have to live in LA you don't have to live in San Francisco you don't have to live in New York you can now live in these other cities and I think that's going to be a draw away from some of the big cities if we can't get a handle on some of these macro issues that we're dealing with um I hope that we can um like I said I'm generally an optimist I think that people that make money in real estate and pretty much anywhere have to be optimistic and last thing I wanted to ask you Jason in the middle of all this right selling Sunset blew up right I'm sure you haven't been asked about it ever yeah um I'm just surprised I took this line I took this yeah what can I do what can I say um I wanted to surprise you but I my question is actually not about selling Sunset itself but why you think it was so popular I've thought about that and I think it's because it checks a lot of different boxes for a lot of different people and I and I realize that because of the people that come up to me it's such a wide swath and a different uh you know demographics all the time like how wide are we talking here you just wouldn't believe well to every country I go to I've probably been to you know a dozen countries in the last couple years um and it's just every age group every ethnicity every I mean it could be from like a football player to like a seven-year-old girl to like a 85 year old man I mean it's so weird so I think again there's different check boxes real estate is just fun to watch you know that's my favorite thing about the show um and I think that's probably what ties in so many different demographics of people then I think the beautiful women and the oh okay fine just the beautiful women um and the fashion I think a ton of people love the the women's fashion and I'm trying to do what I can now um Los Angeles Sunset Strip you know all the kind of restaurants and and nightclubs and lounges and uh cafes and that kind of thing so it's just it's and then of course there's the real world drama uh among you know successful uh beautiful women that are really striving to you know take control their careers so there's a lot for for everybody thank you so much for joining us Jason yeah my pleasure thank you for everything [Music] in a new house for homes the number of homes sold is down 37 percent from a year ago that's according to Redfin data we want to take a deep dive into housing markets across the country and take a look at Denver and Indianapolis and at Charlotte we have Kathy Casey Caldwell Banker Residential Brokerage realtor in Denver Colorado Dan O'Brien realtor at True Blood real estate covering Indianapolis and Sir Ashley Harrison real estate broker at the Harrison group with fathom Realty in Charlotte North Carolina it's great to have the three of you here we want to jump right in and get to what you're seeing in your respective regions we're going to go around the horn pretty quickly Kathy let me start with you what are the trends what are you seeing in Denver so um Denver our Market is technical so typically the spring Market starts in January so we are already starting to see signs of the spring markets showing that it may be a heated Market um in December uh the market was kind of slow and buyers really were taking their time um they were able to really pick and choose what they want and they were asking for seller concessions and um and the contingencies that they haven't had the luxury to be able to ask for in the last couple of years Dan what about you what are you seeing in Indianapolis yeah things have certainly slowed down since the craziness of the covid market right so things are lasting a little bit longer on the market days on Market is up but the median sales price is still up uh nine percent or so year over year but buyer demand has certainly slowed down with those Rising interest rates and so it's one of those things where we've been seeing new listings coming on the market but they just take a little bit longer in the question like you were talking about is do buy or do sellers you know reduce the price do they play the waiting game so we anticipate still a busy year this this year and uh you know time will tell to see what happens sir how does this compare to what you're seeing in Charlotte pretty similar we're seeing more inventory but less new listings and buyer demand has fallen off and we are getting a lot more seller concessions but pricing has remained very sticky so I want to stay with you because we mentioned the top 10 markets all basically in your region North Carolina is on fire what do you make of it what makes North Carolina such a perfect storm for real estate markets right now well affordability you named it earlier in the segment affordability is the driving point and a lot of industry is coming to the Carolinas in North Carolina in particular just this past year North Carolina was ranked number one by Wall Street Journal as the number one place to do business so I think that's the main driving point Kathy when you take a look at Denver's housing market it's incredible taking a look at the prices because they have certainly exploded they're up 30 percent when you compare it to the levels that we saw back in March 2020 what do you what is that doing for demand and I guess where do you see prices headed how long until they really come back down so you know our prices uh luckily have been pretty much holding steady and we've lost uh about five percent since the interest rates started to have that uptick but um the prices are still holding steady because inventory is still low so um you know for buyers this is a great time because now you know the line's not as long for you to get into a house so you can get into a house much easier than you could months ago and you know we have a saying in our industry that is you know date the interest rate Mary the house so go out find a house that you like and you love and then you know wait till you know you can get that interest rate at you know that's more uh for 30 years it's going to be more appealing to you the inventory story has been Bleak across the country at best however not necessarily the case in Indy what are you seeing there Dan yeah so I mean year over year we're down about we're up 75 from this time last year however to put that in perspective we just now broke you know the the number where it was pre-covered so before March 2020 when the market went crazy we're just now getting back to then and at that time we were talking about low inventory anyways so you know a lot of people talk about the last six to 12 months but putting in a big big picture view we are still you know low in inventory it is technically a seller's market um but things are are looking pretty good leading into the year so you're right in the middle of one of the hottest housing markets if not the hottest housing market what are some of the tips for people who are interested in or maybe looking to buy in Charlotte yes I say right now if you have been on the margins and could not get your offer accepted in the past two years now is the time to move although interest rates are a little higher you're not competing with as many people so people the sellers weren't considering your offer now they will consider it and they may offer seller concessions concessions have been a theme across the country just like low inventory redfinch says 42 percent of home sales in the fourth quarter gave concessions Kathy what type of concessions are sellers forced to offer right now right now sellers are offering to help with the interest rate increase so they are offering 2-1 buy downs and if you don't know what that is basically what that means is for the first two years um your interest rate would be lower than what lower at you know at the market rate right now the current market rate so um they're offering that typically that costs somewhere between 10 and 10 000 to 20 000 depending on how much how deep they went to um cut the interest rate and that's what's really helping buyers really get into the houses that they want to because you know affordability is key here in Colorado are just to give you some perspective our home prices have doubled in the last 10 years and so you know wages just can't keep up with that so uh anything to help the buyers get into the house is what sellers are doing right now Dan what about concessions in India is that something that's becoming more and more popular and what are people offering yeah same thing here people are getting creative with the mortgage lending you know different banks are offering different types of mortgage products to help with that increased mortgage rate uh also sellers again similar are offering a credit for a 2-1 buy down or just in general to buy down the interest rate to that make that more affordable for a buyer uh you know now we actually have buyers that are being protected by contingencies like inspection and Appraisal where a lot of times those were out the window during the peak craziness of the of the covid market and and so it's not getting too crazy uh or anything like that but sellers are absolutely having to negotiate gone are the days of hey my next door neighbor just sold last year for a hundred thousand dollars over list price you know things are still happening where there are some hot areas that are demanding multiple offers in a matter of days but sellers are having to actually come back and and come to reality with negotiating like they used to Sir what are you seeing in terms of concessions and what in this market as we're coming out of covid really with the new Dynamic what's the number one one thing you recommend that helps move a house today yeah thank you for that um the concessions I see are paying for closing costs and to buy down the interest rate right now and it really depends on the loan the buyers getting and how much concessions they can ask and seek from the seller the main thing I think buyers can do moving forward is to one study the market know exactly what's happening don't assume just because the Market's totally different than last year study the market but also surround yourself with trusted professionals that's the biggest thing cut the investor activity has been a huge story when it comes to housing a lot of the pricing being driven by the jump that we certainly have seen in investor activity how much of that are you seeing in Denver well you know I can tell you I probably get a call at least three or four calls a day from investors will even have anything off the market that I can that they can fix up and flip because it's really that tight for investors right now to find anything where they're going to be able and you know pricing is kind of a I guess and I don't want to say a guessing game but you have to be really strategic you have to really know how to price things so investors you know want to make sure they're going to be able to get that return on investment so they if they can't get it for a really just awesome price then you know it's really not worth it to them because the uncertainty of the market has got them a little waverings uh in their decisions for um investing into the market right now Dan what's the investment activity in the circle City yeah it's been uh very heavy uh it's jumped from I think in 2020 it was about eight or eleven percent of the purchases were to investors and 2022 is over 25 so one in four houses is being sold to an investor right now and you have some of these billion dollar companies tricon BlackRock all these people with billions of dollars and they can park it into a hard asset like real estate and it's made it really difficult especially for first-time home buyers to compete with these all cash no inspection no appraisal offers and it's also made it difficult for the rental market as well you know rent is up gosh 20 year over year and and so it's been a really difficult thing to combat how do you uh you know can you create laws to prohibit some of these big billion dollar companies from doing it but not impede on individual rights first you know people that want to own investment properties as uh financial planning but uh investment has definitely been a difficult um topic here recently it's certainly amusing uh to really take a look at the uptick in activity we want to go around the horror and once again quickly just get your thoughts serve first to you your top prediction for the housing market this year I think interest rates will come down to the low fives but it'll be harder to get a loan and it's going to at least in my area of the country uh prices will level off but 10 upward Kathy no I predict that we have about 90 days of this interest rates will still be kind of maybe even owned up thick and then I think that they will come down as well um and I believe that our prices will continue to hold and so if you're in looking to buy don't wait because you want to get out there before the rest of the market jumps back in that's been on the sidelines Dan you got the final word your top prediction for 2023. yeah very similar so I think mortgage rates will level off come back down towards the end of the year buyer activity will then pick back up I don't anticipate any kind of decrease in value anything like that maybe Plateau but normalized back to a a normal level all right Dan O'Brien Kathy Casey serastity Harrison nice to have the latest from Indianapolis North Carolina my hometown of Denver thanks to all of you [Music] what you are looking at is at all the top real estate markets to watch this is according to the National Association of Realtors and Dave way in here because my first take obviously a lot in the South but Breathe Here in the Southeast yeah what really stands out is what is not covered on this map basically anything west of the Mississippi the entire West Coast is left out also New York Boston Philadelphia in the Northeast and why is everything converging in this basic region no matter what list you see it's based on three things affordability jobs and of course quality of life and that comes down to weather that comes down to outdoor things to do and that comes down to even the commute that you're not having up in the Northeast and in California and that's why all the top tens are centered right there yeah foreign [Music] let's talk more about mortgage rates with Melissa Cohn William Ravis mortgage regional vice president Melissa nice to see you thanks for coming on where do you see these rates flattening out and what do you think will be enough to really thaw what has become a frozen housing market [Music] we are seeing that inflation is moderating and cooling as we saw this morning with the CPI number I know we're seeing other signs of weakening in the economy and that means that bomb yields are coming down the 10-year treasury was at a 345 the last time I looked at it and you know mortgage rates have declined by almost a full percentage Point since they peaked in November and I think that we can expect mortgage rates to go down another quarter or even as much as a half a percent over the course of the next month it's the beginning of 2023 everyone is back to zero in terms of meeting their goals and everyone has to you know bring loans in the door and I think banks are going to sharpen their pencils they're going to tighten up their margins and do whatever they can to bring volume in the door and and lower rates will bring you know more real estate transactions we also saw another figure that refinancing was at the highest level it's been in a while as rates have declined do want to follow up on that refinancing in a second but what would you tell those buyers who have been sitting on the sidelines waiting for rates to return to that mid to low three level in order to get back in on this Market well I think people can't expect that we're going to go back to a three percent 30-year fixed rate you know that happened because of covet and the pandemic and we don't want to find ourselves in that position again you know if we can get interest rates to go back to where they were pre-coveted call that anywhere from three and three quarters percent to four and a half percent that would be a home run but buyers need to you know my favorite expression is you marry the house and you date The Raid so they want to find a way to get into the house today you'll generally find them when Real Estate when mortgage rates are higher excuse me the real estate prices tend to be a little bit softer and when interest rates do come down and they will come down more than just a quarter or a half a percent over the course of the next year year and a half real estate prices will start to go back up again and there'll be more competition for the homes on the market Melissa for the first time home buyer I think applying for a mortgage sounds very daunting a lot of people don't know where to turn what is your advice to that first time home buyer in terms of what they need to know when doing that well I think that they need to first of all be willing to take into consideration looking at an adjustable rate mortgage you know looking at a five or a seven year adjustable that means that that rate's fixed for the first five or seven years and it's the same thing as a fixed rate for that initial period but the rate is going to be lower and it'll make the home that much more affordable they also need to make sure that they've done everything to keep their credit scores as high as possible because it's not in many banks price rates based on someone's credit score and to make sure that they have sufficient money for the down payment and for reserves we find a lot of first-time home buyers getting stuck because they maybe have enough money for the down payment but haven't taken into consideration all of the closing costs and what you need to have for reserves and the last thing is you know in terms of looking at your credit make sure you have enough credit so many people today especially younger people tend to live off of a debit card or perhaps just one credit card and many of the bank with better rates are going to want to see someone having you know three to four different active trade lines on their credit history those arms adjustable rates certainly come with the downside what's your word of warning to people that do go that route well I think the risk that you have with an adjustable rate is that either that you've had some sort of negative work issue where you no longer qualify to refinance or for whatever reason if the value of that home drops you may not have the equity to refinance but if you're locking in for you know I say a seven year adjustable is a a safe period of time you're going to mitigate those risks you know really the goal is what can you do to get into a house today and then be prepared to refinance when fixed rates get down to a more acceptable level if you think you're going to be in that home long term most first-time homebuyers are not in their home from 10 or 15 years the average you know tenure of that home is probably closer to seven or eight years going back to that advice here for the first time home buyer you mentioned the down payment how critical that is people need to think about not only what they're putting down but also budget for what they will be paying on a monthly basis going forward 20 that often is a number thrown out is that the best number aside from obviously an all-cash offer for a person that is buying a house to put down well I mean the benefit of putting 20 down is that you don't have to have the mortgage insurance so that saves you on a monthly payment if you are a first-time homebuyer for a conventional loan which now goes up to 726 thousand dollars uh except in the high cost areas where it's even higher over a million dollars you can put down as little as three percent so but you obviously the less you put down the higher the payment and the higher the mortgage insurance that you're going to have to pay on top of the mortgage payment the insurance the taxes Melissa Cohn William Ravis mortgage regional vice president thanks so much for joining us here this afternoon [Music] for the last hour we have been looking at all aspects of the housing market taking a look at the various regions what is driving the housing market indeed despite the challenges that remain in the near term one overall theme I really took from today's special is the fact that so many people are upbeat about what we would likely see at the end of 2023 going into 2024 and the advice that we got from some of the Realtors at the start of the show especially in Denver saying that don't necessarily wait until the housing price drops right now she's not expecting that to Really Happen anytime soon her advice to buyers was get in now you can always refinance she said date the rate marry the house saying you could always refinance when rates drop so that was her advice today I love that I think what my big takeaway is here the pandemic has well changed everything for everyone but it really has remodeled the real estate market and it's changed the entire map it's changed where we want to live and how we want to live and primarily it's put quality of life back where it ought to be on top of that list and that's why we see maps just like this but we see it across the country Boise Idaho we see it in Phoenix Arizona we see it in Nashville Tennessee people are moving to places that their quality of life is now higher and they're also making the same Renovations that make their quality of life and I too think the dire predictions will not come true low single-digit home declines in 23 this Market's resilient it's going to be fine affordability really the key driver here in the housing market going forward all right one thing we know for certain is buying a house this year may be a lot harder than buying in 2022 Yahoo finance's Ali garfinkel spoke to some hopeful buyers and real estate experts about what it's like navigating today's market what do we learn hi Dave to put it simply it's rough out there here in Southern California you know I'm standing in front of this sign that's a for sale sign right part of the problem is there aren't enough signs like this there's to put it simply a massive inventory problem so what's happening is that it's making things even more difficult for home buyers take a look we've been looking for a home for I would say two years more or less give or take Danielle Cohen and her husband David jarvey from Los Angeles are facing the same dilemma as home buyers across the country it just came like to a grinding halt when interest rates went crazy and now we're just not finding a lot on the market so a lot of I think a lot of people right now are afraid to list their house so if they don't have to they won't the average 30-year fixed loan is hovering around six and a half percent but as the Federal Reserve pulls back on the pace of its aggressive rate hikes The Mortgage Bankers Association expects the 30-year fixed to drop to 5.2 percent by the end of this year that's well below the historical average of seven and three quarters percent Ed Fitz is a real estate agent and partner at the agency in Los Angeles buyers are really holding off the moment for a variety of reasons including the new interest rates that's changed things dramatically since last spring uh nobody quite knows where the market is going next either in Los Angeles or California or even nationally also freezing the market sellers are reluctant to drop their prices in real estate the asking price is often as much about psychology as it is about reality Fitz has gathered data on this through an app he launched called domicile game of homes sort of like the Price Is Right For Real Estate people who are not actively in the market who are just guessing the prices what's the asking price up to the ultimate selling price are guessing higher than the house actually sells the mind of the average consumer hasn't caught up to the realities of the market right now but sellers are being forced to cut prices realtor.com estimates one in five sellers Nationwide are lowering their asking price the states with the biggest cuts the western part of the country Arizona Nevada and Utah topping the list realtor.com predicts the 2023 housing market could become a nobodies Market not friendly to buyers nor to sellers every time she's around the energy changes we caught up with Jason oppenheim star of the hit Netflix series selling Sunset I think we probably saw the bottom of the market at the end of 2022 um probably saw the height of interest rates at the end of 2022 so I'm generally optimistic uh but I don't want to pretend that that means the real estate market is going to be you know on the ascent for Danielle and David they're hopeful they'll find a great home soon yeah it's just waiting but the higher interest rates definitely affect buying power right the reality is this while it's incredibly difficult to find a home right now it's not just a matter of finding your dream home it's a matter of completing the process all together back to you in the studio certainly isn't as tough in this environment Ali garfingle thanks so much [Music] all right thank you Sean to the combination of hot inflation and Rising mortgage rates have really Frozen the real estate market on both ends one way to heat things back up well sellers are looking to give concessions away let's talk about this phenomenon with Redfin deputy chief Economist Taylor Marr as part of our real estate report brought to you by Intuit Turbo Tax it's good to see you Taylor so let's talk about these concessions first historically speaking how significant are these concessions and what types of things are sellers giving away to buyers yeah thanks for having me on I really appreciate being here so what we've seen is a huge increase in concessions given to buyers in order to close the deal sellers are having a really tough time out there what we see in Redfin data is that 42 of recent offers uh had a conception where the seller gave money back to the buyer in some form and that's up from about 30 percent or less uh historically so it is a record high and we're seeing this really increase concessions can amount to five or ten thousand dollars on average to basically go to fix a roof or pay down a mortgage rate and make it more affordable for the buyer to to have that mortgage are there particular markets where you're seeing this more so and where are they yeah certainly so the markets that are cooling down the most in reaction to higher interest rates and inflation and the weaker economy those are all out on the west coast we see in the news a lot of tech layoffs it's impacting places like Seattle San Francisco Phoenix San Diego Vegas those are all markets that have seen a big increase in these conceptions and overall they're cooling down fast so these are ways that sellers are trying to not have to lower their price too much Taylor why are we seeing the opposite go into effect cities where we are certainly not seeing this according to your data Austin Philly New York City and Chicago why do you think that is it's a great question you know concessions are more common when the Market's cooling rapidly and ones that are more sensitive so where we see prices falling the fastest so these are places Chicago New York Philly these are also places that have been a bit more resilient we haven't seen the market cool down as rapidly they've been more stable Austin's a weird exception and I'm not exactly sure why we're not seeing more concessions I think one reason might be because sellers are actually aggressively cutting their price uh rather than giving it back in the form of concessions and it had a big boom in equity and real estate prices so sellers might be just a little bit more willing to cut their price aggressively in Austin I've heard of some concessions being made where they are waiving inspection which this real estate agent urges you not ever to do no matter how desperate you are so the question is are these concessions enough to kind of thaw this Frozen market and that comes down to mortgage rates what point do you think mortgage rates will get some action going again and when do you see them leveling out that's an excellent question mortgages have been the key driver here in both cooling the market and you know what will be the key factor to bring buyers back in I think this Redfin data about sellers concessions actually points to some really good news that buyers are able to get a better deal than might be realized when you first just look at the data of what they could afford they're getting significant points paid onto their mortgage to make it more affordable and what is likely to happen is rates are we expect in 2023 that rates will continue to decline in fact after Friday's jobs report we saw a big drop in the bond market affecting mortgage rates and so already we think that's going to bring some buyers back and they might be encouraged to know that there's a lot of homes that are dropping their price out there they might also be able to get some concession now I did mention these amounts are relatively small about five thousand dollars on average but that could be more advantageous to a buyer than a five thousand dollar price cut so buyers are a bit more willing to negotiate in a seller's concession than they are to accept a lower sale price um or or get a bargain that way and so it might actually be worth more both to the buyer and the seller that way um and at the same time you know as the market starts to recover a little bit when rates fall uh we'll start to see this moderate out too and speaking of home prices Taylor some have had some very dire predictions about the year ahead talking about a 20 Peak to trough how significantly do you think the drop will be nationally in home prices in 23. so our outlook for 2023 is that home prices will fall about four percent relative to the previous year uh that will certainly be sharper in some metros in Seattle San Francisco home values have already fallen more than 10 percent and there have been some homes some segments of the market where values have fallen 20 or 25 so there's definitely weakness out there reacting to the market conditions but overall nationally things still aren't going to be that dire compared to 2008 so our Outlook is that even as prices decline uh there will still be some affordability challenges for buyers out there and you know we'll be in a tough market for at least the first half of the Year all right Taylor Marg great to have you Redfin deputy chief economist the luxury home market now according to the Wall Street Journal seven homes are worth a hundred million dollars or more closed last year they were sold compared to eight the year before that of course though is the wealthy uber wealthy high-end part of the market because the luxury home Market is not impervious to the changing economic landscape let's talk about what to expect in this space going forward for that we want to bring in Philip White he said that he's International Realty president and CEO Phillip it's great to have you here let's talk about what you are seeing because you're out with a new outlook in terms of what we could expect in 2023 we certainly did see a drop in 2022 overall looking at the real estate market what are you expecting to see this year well thanks for having me uh it's really great to be on the show so uh you know 2022 uh was somewhat of a tale of two markets the first half of the year was strong it tailed off uh in the second half of course we're coming off of two incredible years uh 2020 and 2021 uh 21 was it was a historic year uh so you know it's not unusual to you know consider the fact that the market will uh kind of stabilize what you did in 22 um you know 23 remains to be seen um you know the forecasts really honestly they're all over the place uh whether it's Fannie Mae uh the National Association of Realtors Goldman Sachs they all have different uh projections for 23. so it's really hard to really gauge it I think you know the the concern that that I have and that my agents have um is really inventory um inventory levels are historically very very low and some of the most desirable markets there's only a one month or maybe two month supply of inventory that's not expected to change too much part of it is that many people locked in uh very low interest rates um during the last you know low interest rate environment we've been in so they hesitate to let that go and buy another property so you know that's kind of a two-edged sword that we're dealing with um but at the same time you know I I feel good about 23 I think we're going into it um you know in a in a strong way I think what we're seeing also um is that there's a divide between the the buyer and the seller uh the seller is is you know really wants the multiple bid activity in 2020 and 2021 and the buyer is you know looking at the volatility in the stock market um and you know those kind of headwinds and uh that's that's where we are are right now let's talk about the raids 6.48 on the average 30-year fixed down from 7.08 but still more than double to your point what they were a year ago how much is the luxury Market impacted by the rates we have today well you know Dave I mean the interest rates you know affect everything obviously um you know for the high-end buyer uh the impact is more seen you know from a stock market point of view uh with these high interest rates as we all know have impacted um you know some of the certainly some of the high-tech companies and and you know have had have caused some portfolio declines for some of the ultra you know high-end investors so um you know I think that's you know when their portfolio gets hit I think that's more impactful than the interest rates because the you know the the high-end buyer that we deal with um is certainly much more capable of buying uh with cash and we are seeing that we're definitely seeing it in New York City um and you know but we're seeing it in other markets as well um so they have that flexibility you know they have a portfolio as well so you know they can sometimes borrow money um against their assets you know at lower rates as well and Phil the activity that you're seeing the people that are buying you mentioned New York City being one of those places that's still seeing some demand where else are people buying right now well they're still buying in Florida uh with you know no state income tax is just a you know and the climate um and there's still affordability I mean there's affordable properties in in Florida uh not everywhere but uh and certainly part many parts of Florida there are um so Colorado is still very strong um and I talked to our big company out there this morning um and you know they they had a strong 22. I feel good about 23 as well so Texas um is still strong so they're uh you know the the resort markets are still you know strong I mean some of them uh have not had as good a year as 21 first for sure but I think they've been holding up pretty well even in light of the fact in some markets prices you know if you take Jackson Hole Wyoming prices have gone up uh in some cases 50 to 70 percent uh just during this you know span of time and certainly ever seen a huge price spike in some of those hot spots that you were just talking about Philip White Sotheby's International Realty president and CEO thanks so much fit your Jerome Powell saying inflation in the housing market could start to Cool by the middle of 2023 but will another 50-point hike further punish the housing sector joining us now is Zillow senior Economist Jeff Tucker Jeff good to see you how will today's decision by the FED impact the housing sector that the Fed chair said quote had weakened significantly yeah you know today's announcement was not a surprise in terms of the actual 50 basis point hike so I think that news of slightly taking his foot off the brakes had been priced in for mortgages and 10-year treasuries already so it still seems like a small step in the right direction we've seen that 10-year treasury working its way down from over four percent to three and a half percent and critically for housing that has brought the mortgage rate down on a 30-year uh mortgage from over seven percent back down to about six and a third that's really major progress in terms of improving affordability for home buyers and you know this it's so it's a long road for us to get back from this high inflation High rate environment to a more slow and steady low inflation less costly environment and we are making progress in that direction at this moment Jeff you mentioned the progress that we're making the drop in mortgage rates do you expect that decline to continue and where do you think rates are headed then if in fact we do see that decline continue I think that is the base case scenario right now we're seeing a lot of you know Goods inflation kind of turning the corner and we have a lot of Reason To Expect shelter inflation also to turn the corner in the new year the Zillow rent index year-over-year growth peaked back in February that takes time to flow through to the CPI rent index so we expect sometime in the first or second quarter to actually see that begin to decelerate on a year-over-year basis that's the single biggest component in services in the CPI so putting that all together I think the base case has to be that inflation kind of continues on this trajectory downward so what does that do to mortgages I think that does bring us back into the five to six percent range over the course of 2023 the more optimistic scenario is that we make a lot of progress toward the lower end of that range the less optimistic scenarios that we end up stalling in the upper five uh upper five point something percent range for mortgages yeah really it's hard to imagine rates getting much below five uh in terms of housing prices what's your prediction for 23. yeah our forecast right now looking a year ahead is for prices to Fall by maybe half to one percentage point from now uh 12 months ahead either way you know it's it's approximately flat I know there are more bearish forecasts out there of more significant price declines I think the number one factor in our model stopping us from that prediction is the low inventory that inventory has not built up in a big way a lot of sellers are just staying put in their homes so it actually means out there in the market you don't see a glut of homes for sale that has kind of helped keep a lid on you know some of those those processes where prices actually begin to fall rapidly there's definitely local color to this of course where West Coast markets and some of the Inland West like Phoenix and Las Vegas they've already fallen maybe close to 10 percent from a peak back in about May or June and I I think they still have a little bit of room to come down but at a national level we just don't see this kind of inventory pressure of forced sellers or really motivated sellers if anything sellers are motivated kind of stay put hunker down down and stay warm by their three percent mortgage that they locked in back in 2021 Jeff what does all this mean then for the rental market because price is still substantially higher year over year I guess in a month over month basis you're starting the data that Zillow put together starting to see some improvement so what does that mean in terms of rental prices and how long until we see that reflected in the CPI data yeah we have seen rents asking rents actually begin to decline month over month in the last you know basically this winter uh even beyond the normal seasonal Trend so it looks like there's a bit of mean reversion of uh where that rent growth is cooling down really sharply that is great news for renters it's great news for the inflation measures but it's really at least a 12-month lag from that slowdown in our asking rent index filtering through the CPI for rent and owner's equivalent rent it's um it's hard to say but I think the maybe the best case scenario was that February could turn out to be the the peak for year-over-year CPI rent growth that would just be 12 months after our rent index peaked um there could be a bit of a lag maybe it's sometime in the spring uh but we do know this is already bringing relief to renters either getting renewal uh renewal letters or going out there considering a new apartment to move into this winter yeah interesting really to see where they're uh following the fastest New York and Seattle among the top five not where you typically expect it uh speaking of regions um the Midwest uh appears to be the best place for first time home buyers according to Zillow data why so it's all about affordability affordability has been holding back the housing market especially holding back home sales volume all around the country that one-two punch of price appreciation and higher mortgage rates means that places like Seattle New York Miami uh that mortgage is just Out Of Reach for a large swath of home buyers at the moment so we looked around the country and where is the last kind of regional Bastion of affordability it's the Midwest these are places where middle class families income is still enough to qualify to buy a nice family-sized home nobody likes paying higher interest even in the midwest but uh there's a lot more folks who can qualify to buy a home there and where it's it's still looking like um you know they're they're just in a good position to buy in those markets I thought it was striking too that those were some of the same markets you just highlighted where rent is now growing the fastest these are the markets where Young Folks setting out looking for a place of their own weather renting or buying they're finding more opportunity and kind of in the Heartland in the midwest in the Great Lakes regions uh so in terms of housing market activity that's where we expect it to be the busiest in the year ahead Jeff what about the trends of buying with family and friends that's something that stuck out to me a lot of us questioned it whether or not that's a Smart Financial idea I don't want you to weigh in on that but that momentum really I think just signals exactly what's going on in the housing market right now and the fact that so many first-time home buyers simply cannot afford it no matter where they are in the country that's absolutely right it comes back to affordability and this is a generation of Americans you know entering their mid-30s now the core of the millennial generation is very numerous there's several million extra people in their early 30s and late 20s right now and they're just as determined as previous generations get into home ownership but they're running into the biggest affordability Challenge in a generation maybe that we've ever seen thanks to that one-two punch of prices and mortgage rates so people are getting creative they're thinking of other ways to get into Home Ownership we have seen you know some other kind of Life Milestones are delayed for the millennial generation uh things like marriage and having kids so that kind of creates this the situation where there are folks you know in their early 30s or late 20s who might think okay how about if you know my parents go in on a house with me how about if my friends and I go in on a house together we've got a place to live uh we know that the price you know that our monthly rent isn't going to keep going up like if we stay in the rental market so it's kind of folks looking for ways to get into homeownership and I'm definitely reassured that that the way that they're doing it is not you know what we did in 2005 and 2006 with Ninja loans and no underwriting and uh you know balloon payments mortgage underwriting Is Still Rock Solid and very strict frankly for home buyers that's why people are looking at these methods of you know just thinking okay who can I buy a house with if I if I can't just do it alone right now I don't know still sounds a bit risky to me just in terms of owning a home with friends or other family members I don't know maybe on the LIE or there Jeff Tucker great to have you thanks so much for joining us this afternoon an interesting finding out of redfin's predictions for home sales in 2023 released today our home prices will see their first year-over-year decline in a decade and home sales will fall to their lowest level since 2011. we're here with more on the future of housing is Mark Norman associate dean of the shack Institute of real real estate at NYU School of Professional studies good to have you on so I first want to get your take on these findings from Redfin are you seeing Trends going in that same direction uh we are seeing Trends going that same direction thank you for having me by the way um but at the same time we have a supply problem with housing so there's still so much housing that's Out Of Reach for Americans that we'll we'll see the price declines but I think the income gains that we're seeing lately still aren't keeping up with the prices that we're seeing in the market in most markets and as you mentioned that Supply issue then how how much imbalance is there between the buyers and sellers demand and selling right now yeah I mean it's really interesting because there's been this sort of uptick but we for the last 20 years have under built the housing I think the housing crisis actually exacerbated that um in 2008 right we saw that the sort of demand go down but it never came back in terms of supply and now that we're in this inflationary environment I feel like we're in a place where the housing can't um keep up with the demand so even though we see this decline in prices I don't know that we've seen more people that can actually afford houses and that's really the issue right now because there really was that fear of coming out of the housing crisis that led to the underbuilding really not sure what was going to happen with the housing market but I want to ask you in terms of policy wise is there something whether it's zoning or other ways that could help perhaps alleviate some of these stresses yeah I mean I think there are a couple of things and I think it's interesting because it's less on the uh the federal level and more on the state and city level and that's trying to increase that supply and also trying to sort of ease some of the restrictions on Builders so that that housing can can be built quicker so that at our current capital markets conference um you know the mayor of New York announced you know a number of different ways that they might work to speed housing we're also seeing in places like California uh this switch to allow multi-family units in single family neighborhoods um and then we also see alternative lenders coming in to say um we'll actually you know evaluate buyers in different ways than the traditional Market might so maybe not looking at a steady income over time but um creating a space so that those gig workers and contract workers uh that might have steady incomes but not as legible as a you know a standard worker you might be able to have access to housing in ways that the banks aren't really underwriting and that could be a real game changer because we know how tough it is for first-time home buyers at the moment and even when you look at mortgage rates we're seeing that the average 30-year fix has roughly doubled from the start of the year what are your expectations going into 2023 in terms of affordability and what we might see with mortgage rates yeah I mean I think mortgage rates are going to stay high um and you know and actually when I say hi they're going to go back to probably what's a new normal right I think we really got used to a low interest rate environment over the last 12 years um but if we look at the last 30 we're actually coming into a place that's more in line with traditional mortgage rates but I think we have to get used to that it's going to take probably a number of years to for prices and housing stock to adjust to that kind of mortgage environment but the you know six to seven percent interest rate isn't an anomaly unless you're just looking back at that last 10 years I think one of the other things though is that we don't build starter homes in the way we used to um so homes got bigger prices increased and the market met it there but that really put housing Out Of Reach for a lot of uh first-time buyers especially and Mark I do want to ask you about the rental market because obviously renters also being squeezed as there isn't enough for supply for them to be able to get into houses what are your expectations there and any sort of policy things we know that in parts of Asia and Europe there are some regulations on rent growth that could help people anything that potentially could help here in the U.S yeah I mean once again it's so City by city in the sense of right California New York have rent stabilization programs that might keep the sort of inflation and rents in check but also my constrained Supply um other places you don't have those uh sort of limitations on you know how rents can increase but you also in places like Texas actually have that increase in Supply that keep prices relatively um stable um except of course hot markets like Austin and now Dallas but um but it really is a matter of supply and to the extent that we don't have the supply I think we need the supports um we're also seeing those support some of those supports uh diminished right so the eviction moratoria or the pandemic programs that that helped uh renters get through this period are going to be expiring so I think we're going to see a little pain in the housing markets for a while especially among the low and moderate income uh renters and and borrowers for for mortgages tough times ahead indeed a big thank you for joining us Mark Norman associate dean of the shack Institute of real estate at NYU thank you for bringing your insights all right we're going to do a little Deep dive on the commercial real estate market now and breaking it down in three distinct categories multi-family industrial and Office three markets in one region really stand apart from the rest Nashville Tennessee Raleigh and Charlotte North Carolina you have this entire massive country and yet these are the three in one particular very isolated region all three cities are considered Cadre MVPs or the Triple Crown of real estate if you will why well let's talk about that with Ryan Williams he's the Cadre co-founder and CEO who joins us now in studio that was very interesting information to see why this small region we have this whole country most of which I saw enormous growth in 20 and 21 what stands out about those three markets and that region sure and thank you for having they're really two key drivers one is demand seconds affordability demand job growth number of people making trips Leisure and affordability you know the cost to live the cost to visit the cost to reside in those two markets and so those are the two variables that made those three cities are triple crown and how do you quantify that sure we quantify a lot of it using third-party data so Census Data a lot of demographics data how many Millennials moved in moved out we also have some proprietary transaction data we underwrite real estate around the country and we get an insight into which properties are performing which ones are not so we know what pricing is in and around certain markets as well and then we look at like Mobility data geospace data and aggregate everything and we say which of these markets around the country on a relative in an absolute basis do we feel are growing the most and are most affordable that's the the magic intersection okay so let's take that that the region out and those three cities out and just talk about the three sectors of commercial real estate which we had up to begin which has the best Outlook in the economy that we're headed into yeah we we um uh are investors across an array of sectors but we we do believe in Focus especially at this point in time when affordability is uh more challenging than it's ever been more people are being priced out of buying homes given where rates are and so out of the multi-family industrial and office sectors we like multi-family the most it's one of the most resilient sectors because people always need somewhere to live and in a time like this people are renting more and so what we're seeing is renewals at all-time highs around the country and more and more people saying you know what I'm going to Kick the Can on buying a home and what we're doing is we're buying more apartment buildings multi-family and building letting people buy fractional Stakes versus putting up money for a mortgage when you know mortgage rates have gone the roof now I talked about those three cities in that region that stood out what other what else stood down about the lists as there was no New York there was no Los Angeles no San Francisco no Chicago the biggest cities in the United States and the biggest metropolitan areas why so why are they absent from those lists affordability that's that's the name of the game I mean in New York City for instance where I've rented for a while um you know rents have been at an all-time high despite the lack of demand and so many employers moving outside of the city um La Chicago same Dynamics and so because these places are still relatively less affordable than some of the other markets and geographies they're they're lower on our lists and we think they have much more bearish prospects going forward an interesting piece in the Wall Street Journal today described commercial real estate market on the on the precipice really it described investors yanking money from several enormous funds are you bullish in spite of that about the commercial sector we are multi-family Industrial in particular but not necessarily office not necessarily certain types of office we actually think their Suburban office assets and buildings that are interesting Life Sciences is a niche that we've liked historically and we think there's opportunities to convert some Office Buildings into residential but big city office we still think many landlords haven't adapted to the realities of this new um I want to say Post cover but almost post-covered world yeah how does remote work factor in and change the outlook for office well really what it does is it changes how people think about space you know it used to be how much density how many people can you fit into a given space now it's how few people can you fit to give people that that uh that space that they need to feel safe and feel comfortable and and the like and so we're now focused on Office Buildings selectively where there are large floor plates there's open space there's good amenities but for the most part multi-family is what we focus on and you brought up the redemptions point from you know those two big funds we've always been focused on giving liquidity to investors that was why I started the company and so I think you're now seeing in times like this when individuals need flexibility platforms that can offer that such as ours are the ones that will ultimately be able to serve the needs of individuals you mentioned amenities never before have they been more important in terms of the things you have to provide to get people to office I want to close because you study such a broad spectrum the residential sector what is the impact you're seeing from increased fed rates increased mortgage rates basically I'm going to do this some people think it's going to crash a 20 percent drop others think we're just going to level out we're still up 10 percent year over year in terms of median home prices what do you see around that yeah look I don't think this is an 0809 I don't think Leverage is as out of control as it was at that time and you'll see a huge crater I do think there will be a correction we've seen residential assets correct 10 15 20 down from where they were just months ago and I think you'll continue to see a minimal decrease in the single family space over the next three to six months and then I think you'll see you're talking about low single digits over the single digits um over the next three to six months um because I actually believe that Banks were a lot more responsible this go around and a lot of banks are pulling back and so you're not seeing the same subprime issues you saw and there still will be micro opportunities that's the beauty of real estate that's what we tell our clients all the time is even amidst these challenging macro times there's always micro opportunities and this is where a lot of wealth can be created if you pick the right sectors got to be very very selective is Ryan Williams the co-founder and CEO of Cadre good to see you man thank you thanks for coming in studio appreciate that

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Length: 74min 17sec (4457 seconds)

Published: Sun Jan 22 2023