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welcome to Deerwood Realty YouTube channel I'm John Schink founder and managing broker of Deerwood Realty in St Louis, Missouri well we have we have gotten a record a record in St Louis a record around the country what is that record well let's get to the article right away it says pending home sales drop to a record low even worse than during the financial crisis so congratulations everyone I just know from my own experience that the last couple months have been ridiculous not only have the transactions fallen off a cliff due to the 8% mortgage rates but we're being sued left and right by every single person in the United States it seems I guess it's a class action suit so I mean it's just been a really wonderful time to be a real estate agent um you know I remember what it was like after the uh the great financial crisis they said we need to get our fingers printed we needed to get fingerprints that was the net result of that now who knows what's going to happen but I'm just saying off the top not a lot of transactions is not good right not good and even for the economy like I don't I don't like this boom and bust you know the FED is responsible for booms and busts right we don't want that in our economy uh but but you know they've got the Mandate and they manage to to screw it up every time uh I would just like a nice balanced Market I would like buyers to be able to look at a few houses and find one that they really like pay a good price for I would like sellers to make a profit on every sale of every house uh that warrants it I mean if it's a like a a hoarder house I don't really I don't really feel like paying a lot of money for that but I'd like I'd like everyone in the marketplace to do well I don't I mean I I represent both sides I you know I I just I did not enjoy this recent Run for the buyers uh because it was so brutal and for the sellers to be honest I think some of them were a little greedy I mean that's that's where I'm at so let's get into the article a little bit here it says pending home sales a measure of signed contracts on existing homes dropped 1.5% in October from September that doesn't seem so bad right they hit the lowest level since the National Association of Realtors began tracking this metric in 2001 meaning it's even worse than readings during the financial crisis more than a decade ago sales were down 8.5% from October of last year now look I I think the problem is there's not a lot of homes for sale I do think it's an inventory problem and I've I've talked about this a number of times but it's it's it's tough to um it's tough to explain the way I want to but there is a lack of homes available for sale okay so you could say that's a lack of supply all right my my main point has been there's plenty of people that own houses okay they're just not selling them right now there's plenty of what I would call Phantom inventory there's plenty of rentals and things of that nature that just aren't being sold because right now the profit motive is still there I suspect as we go on that the profit motive will decline when you get your new tax bill for the year uh and when you get your new insurance bill for the year I think that you know some of this stuff is going to come to an end but right now you know when I take people out to to look at houses the people that I do take out now understand 8% mortgage rate we we haven't been taking many people out but even when you do go out the houses are just just seemingly overpriced uh for what you're getting and then on top of that um it's just the the overprices it's not just that but there's so much work that has to be done to the homes to make it even livable uh it's it's one of those things that that's that I I do understand the inventory uh issue firsthand I mean I I can see that it says because the index measured signed contracts it's the most recent indicator of housing demand it reflects the buyers who were out shopping in October which was when the popular 30-year fixed mortgage rate briefly shot higher than 8% now that's true I mean it did shut things down now we've had a we've had things come off the the 8% now we're down below 7.5% on a 30e fixed but I don't know that that really matters once you got to this level where it became uncool to buy a house people stopped buying houses it's kind of weird uh but again it's the human nature so it says the Realtors continue to say it's not just High rates but still very low supply of homes for sale that is deflating activity I do agree with that if there were more inventory okay the the there would be more transactions it's just what what is out there isn't what somebody really wants to buy it says recent weeks of successive declines in mortgage rates will help qualify more home buyers but limited housing inventory is significantly preventing housing demand from being fully satisfied lawren y Chief Economist for the National Association realtor set release multiple offers of course yield only one winner with the rest having to continue their search and there are still places where there are multiple offers it's crazy I mean especially this at 8% I mean and the and the rise and home prices it's just crazy it says tight Supply and still strong demand have kept pressure on home prices which not only continue to hit new Highs but appear to be accelerating in their gains now look this cannot go on forever I mean it just can't it just can't I I it's just a bad situation what's going to have to happen is that people just don't buy houses that's the only way the price is going down now that's not good for me on either side and you say well John no one's buying houses now that's why the transactions are still low but there's just so much Pence up demand people still would want to buy if they could find something I'm not sure that um that this number is going to be I don't think that this number is significant in the sense I think that it's going to go even higher as far as number of uh uh higher as far as there's going to be even fewer transactions going forward understand seasonally in real estate we're in like a slow month I mean once you hit about middle of September things slow down at least in the St Louis Market until April of of next year I mean that's not unusual that's I mean you make your money in the summer save your money during the winter and go back out and try to make money again it's not it's a very cyclical deal here and so you know with November being you know historically bad or October being historically bet November I don't think is going to be that great based on based on the phone calls I've gotten uh then you get into December and January you know it's not looking real positive uh there are seasonal reasons why the numbers could get even worse says the realtor noted that the sale of homes priced above 750,000 have been increasing simply because there's more Supply on the high end of the market and you have to ask yourself why is that why is there more Supply in the high in the high in numbers well quite simply you try to finance a house at 8% at $750,000 and see what your payment is it's ridiculous so that was the article I had a few I had a few little questions that I thought we could go over um as soon as I get to the right page um says what strategies can potential buyers use to navigate this Market effectively well look I've always I mean my the way I look at houses and the way I help buyers is simply it's it's we go look at a bunch of houses okay we physically go see houses and we compare them with with the other ones in the market and I'm telling you time and time again you will see the one house that it makes sense okay you you'll it just it happens every time there's this always this one house that makes perfect sense now during the busy times earlier the problem was 30 other people saw that same house but during a normal Market you can buy a house and not feel regret basically you want to find a house that you can you can enjoy from the minute that you buy it as soon as you find that what difference does it make what it costs over 30 years I me understand that we have to be thinking longterm on our purchase and then how should sellers adjust their expectations and strategies in response to the market shift I I believe that you have to you have to have pricing that's like relevant and recent I don't feel like um I don't feel like what somebody got when rates were 3% is what people are going to get now I've been proven wrong it hurts me to say that I've been wrong but I've been wrong price is still keep going up so I mean I it's to me that should be qualified by the inventory and what I mean by that is if you're providing a new movein ready home or a nice movein ready home okay that house is going to get a premium to the house that needs to be remodeled you know since it hasn't been done since the 80s because nobody seems to want to take on those projects right now and pay a premium for it that's that makes sense to me I I'm I'm totally okay with that um

you know the one of the questions was how do current market conditions compare with the predictions made earlier in the year and I think people did assume that home prices were going to continue to rise but I also think that they thought mortgage rates were going to go down I don't think that people thought that they were going to continue on their March higher now at this 7% rate who knows what's going to happen even it goes even if it goes down the prices have gone up so much that you're not really getting any sort of value there um and then it was an interesting question going forward is what long-term strategies should be considered to stabilize the housing market I'll be honest with you I think one of the things that should be looked at uh very seriously is if it's an investment home okay and an Define an investment home as one in which someone else a non-owner occupant is living in the home and there's rents being collected um you know that should be taxed at a different rate I I just don't and a at a higher rate I just don't think what's going on right now is is good uh for for the the overall country I mean I I think investing in real estate is great I have no problems with that but what I'm seeing is is so much so much competition from Wall Street to you know just people around town able to buy so many houses out from underneath what be what would be a family or you know a single person or anyone it's just making it unaffordable for everyone uh so I think that would be a long-term strategy that should be be considered but I I also know that it probably won't be and then as far as my predictions for the housing market in the next year I think we will see more inventory because I think sellers have you know held off on selling uh for a while now and I think people just get to the point where they just give up they like you know what I want to move I'm selling done um that also happens with death and divorce so you're going to see it in in those spaces all the time so that's what I have for you tonight um I don't know what do you think put your put your comments down in the you know in in the discussion area below and uh and you know let's just let's just talk about it I mean it's not good if you're a real estate agent right now I don't know anybody else but I know that it's been a struggle for me over the past couple months it's just been it's been brutal but I understand Market cycles and I've kind of prepared myself for this for years so it's not so bad for me but others I'm sure are hurting I know lenders are just getting killed with that I'm going to head on out thank you for watching thank you for listening and I'll catch you on the next one