The Expert Podcast

is home-building back. So for the first time in really more than a year, The sentiment of home builders and contractors has gone up. And Diane Olak over at CNBC has a great article about this. That she's attributing to lower mortgage rates and that's part of it She's right there However, there's more to it than just mortgage rates. What builders and even buyers are starting to realize is even with higher prices which look real estate has gone up dramatically in the last two to three years and with higher mortgage rates…People still need to buy houses. Sure builders and realtors and contractors step back a little bit to kind of catch their breath and see what the consumer is going to do…First thing that we realized is prices Aren't going to go up much more right Real estate prices. Peaked. They went up dramatically The average price of a new home is well into the 400,000 range for median home prices I should say…And in many markets in. to get a halfway decent house you're spending six seven $800,000 to get a decent house. When mortgage rates were two or 3%. That was expensive but still doable because you had a payment of maybe two or three grand, 3,500. Now if you buy even a $600,000 house or six 50, At 7% interest. You're spending five or six grand a month on a mortgage payment. That's starting to get to where it's starting to filter people out, but what buyers and realtors and builders are finding is that peak. still need to buy homes There's still a shortage of home So builders are starting to cautiously Be optimistic. About being in the building game being in the development game. Realtors are certainly seeing less volume of sales. But there's still a pent up demand of buyers. As soon as buyers start to catch their breath and see look, the market's not crashing the sky is not falling prices Aren't collapsing. thne. they're starting to be a little bit more. Optimistic about buying a house. We'll do another video a little bit later about how…a 10% reduction in real estate. Home prices is expected. Even if there's a 10% reduction on a $500,000 house That's 50 grand. That's not going to change the mortgage payment that much. That's really just a. Correction of exuberance, right? It's not going to crash prices down to 2018 levels or 17 levels. It's going to just take the little sharp edge off of crazy prices and put them back a least a little bit in. In reality. The other thing you have to remember is for prices to crash. You have to have two willing partners, the buyer who doesn't want to pay too much but also the seller has to agree to it until sellers agree to slashing prices, prices aren't going to go down and most sellers aren't in a position where they have to crash a price. They have a low interest rate mortgage. they bought when it was cheap they have equity. They could Airbnb it if they need to. So. They're not going to crash Now that buyers are starting to see that the prices aren't…collapsing, they're stepping back into the market and home builders are stepping back into the market as a contractor, let us know what you think What do you see for prices in your area? is it a stalemate where buyers aren't wanting to buy but sellers aren't wanting to…blow out their homes either and discount their homes. How is that affecting builders in terms of building spec homes or doing major. construction of subdivisions.