20 Planning Matters Radio - THE HOUSING MARKET W DEBBIE BLOYD

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Welcome in folks. This is Peter Rishon with Rich on Planning. Planning Matters Radio and we are going to discuss the housing market on today's segment of the program. We have a special guest, the owner of DLB Mortgage Services, Debbie Bloyd, joining us on the program. Debbie, welcome into the show.

Thanks so much for having me, Peter. Well, we want to get some insight from somebody on the inside of things. Debbie, let's talk about what we already have seen, what we know. 2019, how was the health of the housing market?

What were you seeing? Well, you know, I'm still slammed with loans, so there are people buying houses. I don't want everyone to believe the media that no one's buying houses.

Everybody's buying houses. The problem is they're having to look harder than before if they're in certain income brackets. If they can only provide and qualify for a starter home, those are harder to find. There are more fix ups out there, but the people that are buying those first time homes, they want to move in with everything perfect. They don't want to fix it up themselves. When I bought my first house, I had to pick up the carpeting, repaint, sand the wood floors.

Nobody wants to do that anymore. So because of the lack of homes that are ready to be moved in and no one wants to do the work, there is less than ever. A lot of our Americans are aging in place.

We've got long-term care. That keeps people living in their homes longer. A lot of these cute little homes are the homes that our first time home buyers used to move into. So when grandma moved out to live with her family, they would sell the house and that would be a great first time home buyer house. They're usually smaller, they're older, they're what people can afford. Those aren't available right now because people are aging in place. You've got the million dollar plus homes and depending on the city that you're in, those may be moving fast or they may have tapped out. I'm in the Dallas area, so anything over about 1.5 isn't moving very fast, but the price between 300 and 1.5 is brisk. We cannot build homes fast enough in the city of Dallas-Fort Worth metroplex to keep everybody wanting and getting in a house.

We're two or three months out of even starting. In that quote affordable range, the starter homes, really a tough market, especially since, as you said, nobody wants to do the fixing up. Maybe it's not that they don't want to, it's maybe the demographic that's moving into that and looking for that kind of home. They don't know how.

Those that do know how maybe don't want to anymore and then the new home owners, they've never done anything like that before, but that affordable... They haven't. They're younger. They're millennials. Yeah, they don't know how to work with their hands. They really don't.

They couldn't read tile if you made them, and they don't want to. They think that their time is better spent in other ways, so a lot of them would rather rent apartments and make the world a better place and be social than set tile in their new house, and so it's just, I think, a different set of priorities. So let's talk about the future, what we see coming. 2020, what is your feeling with your hand on the pulse of the industry? How do you see the 2020 housing market playing out? Well, I think as people, it's going to slow down for sure because consumer confidence is going to wane.

It's an election year. It's very volatile right now. You couple that with the tariffs on the products that we need to build homes, and the builders can't build fast enough.

They can't get enough work crews because there's not enough skilled workers to go around right now, and I think this always comes down. I say real estate is local, but it's also very personal. If your family dynamic is doing well, you've gotten raises. Your job is secure. You're going to go out and buy a house.

If you are not secure in your job or you're having more kids or your health is not good, you're not going to go purchase a new house or upgrade. So as the families feel the strength of the political scene, I think people are going to say, you know what? We're going to hold what we have.

We're not going to move. We don't know who's going to be coming into office. We don't know what's going to happen with the election. We don't know what's going to happen with the elections and the presidency right now. So it makes people nervous. The only people that are not nervous are the people that don't pay attention to the news. And there are several of those. It's a large portion of society. Yeah, I mean, they just don't pay attention. If they have enough extra money to upgrade their house and they have a secure job, they're going to do it.

It doesn't matter what the election looks like. Again, talking with Debbie Bloyd, she is owner of DLB Mortgage Services. Debbie, can I ask you about a few mythologies of the housing market, at least that I have heard, and you can verify if this is what you have seen? Of course. I have heard that the week between Christmas and New Year's is actually the time to get the best deal on a house, maybe not the hottest housing market, maybe not the most houses sold in that week, but one of the best times of year to get a better deal.

Yes, I agree. And I agree because, well, right now, the month of December has been a great month to get deals, because a lot of people have had the houses carried over from the summer. They're maybe making two house payments or it's a relocation company.

The house is vacant. They want to get it off their books before the end of the year. So they start discounting the houses in November. December, you're going to go out and see a lot of for sale by owners right after Christmas, because something has happened and people just want to get through Christmas before they have people come in their homes again. But if they're under duress, they're going to put that house up for sale right after Christmas. So now is a great time to buy something at a reduced price because people are now whatever has caused them to make this change.

Now they're motivated. They've gotten through the holidays. So for a lot of people, holidays is a is a benchmark.

And once they get through Christmas, now they can move on with their life. So a lot of people are on hold right now. So really, right after Christmas is a great time before the housing market heats up in the spring.

And it is so it will heat up. So maybe the decline that we have seen over it's slower right now. Maybe that's just the seasonal trend and things will boom again and pick up significantly in the spring of 2020. I have 10 closings this month.

It's not slow for me. But again, now I'm in the Dallas area, Houston, Austin, College Station area. I kind of run this big rectangle. Well, we're in the Raleigh Borough market. So it's also a pretty booming market. So if businesses are moving in, companies are still relocating. The traditional boom in the spring is because families want to continue living where they're at until school's out and then they'll move. But you know, corporate relocations don't always happen at the end of the summer or the beginning of the summer to get you moved over the summer. A lot of company reloads are during the during the year because they don't really care. They're in their company. They're picking up everybody. So families are uprooted.

And that's where we get the buying power now. People without kids or people that are making a transitional change with their businesses make it any time of the year. But the traditional uptick is wait till the yards look prettier.

Wait till the flowers come back. If you're in snowy areas, no one wants to get out and get, you know, sloshed in the snow to go look at property usually unless they're relocating. So those those things automatically uptick in the spring takes prettier pictures. Houses look their best. You know, it's hard to look past the clutter of the houses during Thanksgiving and Christmas with all the stuff everywhere. They like it cleaner. And in the spring, everything gets spruced up a bit.

So that's normally why. And then they just hold off closing until May when the kids are out of school, if that's what they're up to. Debbie Bloyd, again, owner at DLB Mortgage Services, who we're talking to about the housing market. Debbie, we've talked so far on on this segment of the program a little bit about seasonal boom and bust with with the housing market on this program. We talk a lot about demographics and maybe this is a little bit longer term, but we've got the baby boomer generation right now that is at the peak of their earning years, the peak of their buying years, and a lot of them, in fact, turning the corner into sellers and downsizing maybe a little longer term. They are the baby boom.

The boom is in their title. Do you see a bust coming in the housing market as there are more vacancies, as there are more sellers and eventually as the baby boom generation leaves us? I think we are going to see a lot of traffic with the baby boomers in the next 10 years. So I'm at the end of the baby boomer age. I'm 55. I didn't even know I was a baby boomer.

I thought I was something else. But evidently, I'm a baby boomer. My kids are out of college. I don't need a big house.

I downsize. I have clients in their 70s that are in the middle of the baby boomer size ages and they are finding that they don't have enough money to get by with their retirement. Some things happen to their health between the ages of 60 and 75. Something's gone wrong. There's a stroke. There's a heart attack. There's Parkinson's. There's Alzheimer's, dementia. All these things are going wrong that they did not see coming because they've been a super active generation.

And even though we talk about it all the time and we say this happens, they don't think it's going to happen to them. And at 75 now they're starting to sell their homes because they're two story and they can't go up and down because the wife or the husband fell and they can't get up and down the stairs. So we're going to see more people transition out of bigger homes into smaller homes. So you're going to see a huge boom in retirement communities. This year I turned 55, so I could move into one of those communities and I'm thinking you've got to be kidding, but they're where the biggest housing boom is.

They cannot build small, cute homes fast enough for these seniors. So I think we're going to see more booming there. And then of course that's going to open up these houses for other people. People that have built in starter homes are going to move up the ladder to medium sized homes. And, and it's, it's a cycle.

It's a cycle every year. And I think it's going to get even bigger. The other reason baby boomers are going to sell their homes and downsize and move across the country is cost of living. They're out of money. They're going to live where it's cheaper to live. So if you're in a state that has super high taxes, we see a lot of people leaving California. Not only the workers and companies are relocating, but people that don't want to pay the taxes anymore. So if you're in a high tax state and you have the option of retiring somewhere where the taxes aren't so much, you're going to move. Do you, as a result, see that the cost of some of these larger, especially like the suburbia houses, um, the McMansions might come down in price as a result of that need to sell and relocate and the vacancies that might occur? I think it's all in the town that you're in. So, um, if you don't have a demand for four to $600,000 homes, then you're going to sit on that a little bit longer. If your city is declining or if your suburbia area is not supporting, if the workers don't have enough good jobs, if big companies are transferring out of your state, you're going to feed, it's going to take you longer to sell. The millennials seem to like the condo, the urban living, apartments, and they don't seem to mind that as much.

Do you see that as a constraint? No, they don't want to spend two hours. Sure, they don't want to spend two hours in a commute like all of us do. They want to be able to walk to their stuff.

They want to be in the same five, 10 minute drive. So I think depending on where they work, they're going to find, they're going to gravitate towards whatever's there. They're not going to spend time going to the city, uh, to live in suburbia and work somewhere else. They're going to make it different.

And that's not all bad. That's going to revitalize a lot of downtowns because they want to work there. They want to walk there. They don't want to drive. They'd rather bike. I mean, all this stuff sounds funny when we talk about it because they're so different, but they don't have any intention of spending an hour in a commute one way to get to a job just to live in suburbia. They'll stick it out at an apartment complex and some of these apartments, you know, they've gotten pretty swanky, you know, they're two, $3,000 a month in most cities. Um, they can live in a, it's like living in a home, but they don't want to buy a home either because they feel that's anchoring them and they don't want to have to be forced to stay somewhere they don't want to be.

So like when you and I were younger, you know, the whole dream was to get a house, the white picket fans, kids, dogs, and that was your life. Well, that's not their lives. That's not what they see. They want to work at home. They don't want to commute. Suburbia means nothing to them.

Not until they probably get older because there's enough of them that are, that are wanting to stay in those apartments because they can buy a nicer apartment, have better amenities than they can living in a house by themselves. Another kind of recent trend in the housing market, Debbie, is these services that will buy your house without showing. Um, and there are a lot of different ones out there, but the, the advertisement says that you can sell your house now without the showings. There are multiple services you could probably shop around and get multiple offers from that kind of stuff. How do you see that affecting the overall housing market?

Well, I think that is a really cool wrinkle that is going to be here with us to stay for a long time. It's just like when Amazon comes in and, and people think it's more convenient to just get something to come to your door. Then you have to go out and it comes tomorrow to your door. So why bother going to the mall?

Um, and you have to spend hours walking around when you can be on your phone and order it. Same thing with the houses. Um, they don't want people walking in and out of their houses. They, they don't want to have to show their houses. A lot of people, you know, I don't know if you've been in many houses, Peter, but not everybody lives in a stainless steel, a very squeaky, clean, glamorous house. Um, a lot of them need repair. Yeah, they're lived in.

Yeah. I mean, there's laundry everywhere. You know, the places that is the rec, um, and they have to keep it nice and keep it clean.

And, uh, at some point they're, they say, I just want to leave. I don't want to have to fix repairs. And these companies don't require a lot of repairs. They'll let you uh, they'll give you $10,000 less, but then behind you, after you move out, they're going to send in a paint crew. They're going to paint it. They're going to re make sure the walls are nice. They're going to maybe put some landscaping in and sell it.

And it's time and effort. The buyers, the sellers today don't want people coming in their houses. They don't have time for open houses. Um, they don't want strangers in their homes. This is just more convenient.

It's another non-emotional. This is the, you know, cause you offer those companies offer you two or three bids, right? You can go out to two or three of those companies and they'll give you a price. It's a no haggle price. It's just like buying cars without going back and forth for hours at a dealership like you used to do.

Now they even bring you a car to your house to test drive. How about rates? What do we see is the future for rates. And let me preface that by saying what I have heard is that mortgage rates tend to hit their lowest point on election eve. The trend has been that they've come down and they hit their lowest point on the night before a presidential election, which I found interesting.

Yes. So it depends on what the market thinks of who could win. So all of this is going to hinge on the public opinion of how the country is going. So if the rates are going to go down, that's because the market and, and the fed and everyone that is in part of that transaction thinks that this is going to be good for them because, or they feel that it's a problem.

They may also lower the rates because they don't want to freak out the market. Like when, when Trump got elected, I don't know if you remember, no one thought he would win. So everyone after he won, the markets kind of went crazy because it was a non event.

He promised all those great things. He promised rates would stay down. People would have more money in their pocket. There was a consumer confidence that kept the economy going. Rates typically stay down. The fed keeps rates down when they're unsure and they're hoping to entice more people to buy. So the stock market tends to hate uncertainty and become more volatile when there is uncertainty. Perhaps the housing market and the rates that we can get on mortgages are more advantageous for consumers during times of uncertainty. I think so because they, the fed, their goal is to keep the market moving. And so if people are getting nervous, then they may not want to buy a house. But if the rates are attractive enough that will override, money will override their common sense or their, are there a risk. So if I can get it for a good enough deal, you know, no one minds going to buy a new car if they can get it at 0% interest for the first four years because everyone has a, I think innate sense that things are going to be better down the road.

So if the presidential election shows that it may not be better going down the road, then the fed will probably keep rates low to keep the market moving, to counteract some of the other bad stuff that might be going on. Again, Debbie Bloyd, she's owner of DLB Mortgage Services, talking about the housing market, what we saw in 2019, what we expect to see in 2020. Debbie, no matter what the current trend is, there does seem to always be a side of the real estate industry there to take advantage of. Well, I would say that no matter what the trend is, so like, you know, every, every month the reports come out, this is up, this is down, this is, this is fallen greatly.

And it could be an eighth of a point. Overall, I think there always is an advantage to the housing market. You got to turn it to your advantage. So if the housing rates go up, what does that mean? That means that people are not going to be able to afford as big a house as they had before. They're not going to quit buying. They're just not going to buy biggest, they can't afford the bigger houses.

Okay. They're going to have to be in their price range and that range may shift a little bit, but that is an amazing opportunity for investors because if people cannot afford, or if the lending rates get too strict and we can't lend and a lot of people, you know, they raise the credit score and people can't get in houses like they used to, then that's a perfect time for landlords and investors to come out of the woodwork and buy more property because now those people are going to have to be renters. They're not going to be buyers. So in my understanding, there's always a benefit to the market.

You just have to be on that side of the benefit. So it's either you buy a smaller house or you stay a renter and that's advantageous to the investors because now they can pick up smaller properties and rent them out because people can't qualify to buy. So they're going to turn into renters. I look at the, you know, my business is busy no matter which one is up. And real estate has created more millionaires than most any other asset.

Yes, exactly. So I would say now is a great time to buy. And I would say that if you're an investor, buy now because there'll be some specials out there and some foreclosures. We don't see a lot of foreclosures right now because everyone's making their bill. But if the election doesn't go well, if companies start laying people off, if the economy slows down and, you know, companies lay off workers, you're going to see more foreclosures and that's not always bad. Now it's a great time for investors. You can get these prices, you know, um, these homes at prices that are really affordable and you'll turn them into rental properties. So I just think we have to look at the market is there's always a plus, you know, when the stock market goes down, softer on sale, there's always people there to buy it and write it back up. So you just have to say that it's really good either way.

It just depends on who you are. Well, Debbie, we appreciate your time, your perspective on the housing market. Of course, one of most Americans largest investments and our home really means so much to us. So thank you for providing your insights.

It does. Thank you. Thanks so much for your time today. We do appreciate Debbie's time here on Rich on Planning, Planning Matters Radio. Again, I am Peter Rochon, founder of Rochon Planning. And if you want to look at your overall portfolio, your financial and investment and retirement plan, where your house and the equity that you've built up and where real estate may play a role in your planning, welcome to give us a call.

We do offer the opportunity for a complimentary review of your total comprehensive plan. You can give us a call at 800-338-5944. That's 800-338-5944 to take advantage of the time the opportunity for a complimentary financial investment portfolio and planning review. Again, Peter Rochon here with Rich on Planning, Planning Matters Radio. For more editions of the program, you can visit richonplanning.com. That's richonplanning.com or give us a call 800-338-5944. We look forward to speaking with you.

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