Housing Update: Buyers Disappear

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1:01do what they always do. And that is they pull back. They get nervous. They get scared when something like this happens. But hey, we're going to talk with Matt the mortgage guy because maybe I'm wrong. What are you seeing, buddy? What's going on? Yeah, I mean, it's a mix of things, but it's interesting. That's one thing I will say. And you know, to your point, people that have been paying attention, understand, you know, what's going on with Iran has upward pressure on mortgage rates to keep it really simple, right? Whether, you know, that's uncertainty or inflation or, you know, oil prices, a mixture of a bunch of different things. But mortgage rates have gone up over the last couple of weeks. We saw mortgage rates get under 6%. We saw, you know, the beginning of 2026 start off with a lot of tailwind. People were excited. A lot of people were refinancing. Me in my office, we did a ton of refinance. We had people that were, you know, jumping off the fence. You know, numbers we hadn't seen in three, four, five years on pre-approvals. And people just,

2:08you know, either entering the market for the first time or re-entering after they had, you know, poked around, got pre-approved six, nine, 12 months ago and re-emerged. And while some of that still exists, and I'm still doing a lot of refinance scenarios day in and day out. And for people that are paying attention, you know, rates might have gone on a 30 year fixed average that mortgage news daily kind of reports on. I think, you know, five, nine, low to six, two, high. Now we're back settled into six point oh nine. Yeah. This isn't like a one point, like a one percent swing, right? This is, but, but, but Matt, it's, it's, it's that psychological five nine nine to not five nine nine. That little psychological bearer, you know, barrier is just, we have now learned for the third time that number is meaningful. Right. And I think it is to a certain extent. I also think, you know,

3:11if we look at, you know, current state of the market, buyer sentiment, enthusiasm, whatever label you want to put at it, there is a certain degree of uncertainty. And I think that, like, you know, foreign affairs, politics is one thing. I think AI has also reached this point where, like, the excitement might be fading. And now there's some fear setting in. So when you have a, you have a company like block lay off 40% of their people, that'll get your attention. I mean, that'll wake up the Silicon Valley. Well, yeah. Talk about like 40%. Yeah, California, where affordability is an issue, you're like, oh, well, if you got a tech job, you can afford houses. Well, if you have a tech job where you, it's a coin flip, whether or not you get laid off because they can do the same amount of work as efficiently with 30% of the workforce because of AI advancements, like, there's a lot of stuff to consider. But I think what people need to remember, the latest stats I saw, annual transactions was like 4.1 million or something. We're still

4:16expected to do 8% more than we did last year. I think that the way this year started, that number could have been even higher and was on its way to be higher. And, you know, a little bit of slow down in how excited, how many people came back to market. One thing I want to mention, Mike, and then I'll get your thoughts too, is one thing I was hoping for, and I think I'm seeing it in this weekly meeting that I go to on Tuesday. So there's probably 50 or 60 agents that work in and around Sacramento. There was sometimes, as recent as Q4 of 25, you know, a few short months ago where they can put a home on tour and they can pitch the home. Hey, I've got this three bedroom, two baths going on. It's in this area. It's 599,000. We had weeks where there was nobody pitching anything. Like, not a lot of stuff coming on to market. We couldn't get through it in 10 minutes yesterday. We had so many people pitching so many properties that are coming to market. And so,

5:20you know, part of that seasonal. So I'm not going to attribute it all to a changing market. But I think that, you know, that is a healthy thing, in my opinion, to see for the housing market. Some of the demand come back. Some, you know, new inventory and listings coming on. So time will tell, man, but I'm still super optimistic about 26. Well, you're a mortgage broker. You probably should be optimistic. But no, you're absolutely right. I mean, I called for January 1st by percent increase in transactions. I increased that to eight or 9% when I saw January's business. I'm like, wow, this is, you know, this momentum is better. But it's going to be really, it's going to be really interesting. I talked to Beth Traverso yesterday, who's a number one, one top 1% agent in Seattle. And she's like the last 10 days have been a dud. Right. Obviously, there's, she's up in the Seattle area. So, again, very tech heavy like the Silicon Valley. But this, this, I ran war, this bump and interest rates.

6:24It, um, it just hit consumer psychology at a very vulnerable time. And again, what, what, what, what we have learned for the third time is demand will come flying off the shelf at 599. And it disappears at 6.01. It, and again, if you do the math on the payment, it's like 17 cents. But it is psychological number for folks. Right. What, yeah, real, real quick interject here too. The funny part is too, people are still doing 5.99%. But instead of being zero points or, you know, they, they pay 500 bucks for it. Now they're going to pay 850 or 1125. So it's really, you can get the seller to pay for. Right. Yeah. And so we're talking, it's minuscule, but you are 100% correct where it's a psychological thing. And, um, it definitely, um, affects, you know, buyer sentiment. Yeah. And again, consumers are, again, as an economist, you know, when I got my degree and then I

7:27went back and got an MBA, I was always fixated on the consumer. At the time, it was like, well, the consumer is the biggest part of the economy. I might as well study them. But what I've come to learn is the consumers move in a herd. And if you can figure out where the herds going, A, you could figure out if they're going to run off a cliff, i.e. I sold everything in 06. And then B, you can figure out if they're going to go do something stupid and you can take advantage of it. So what I'm telling everybody in, in my community is 2026 is unfortunately going to be a lot like 2025. But if you are a buyer and investor, you should be smiling ear to ear because you will have more choices and less competition. Days on market will rise and you will be able to find more motivated sellers. I could not imagine a better year for my community than what 2026 will bring. Yeah, and I think it's a reminder that me and you both know this. We are reminded of it sometimes

8:31in people that like the winds can change relatively quickly. I just thought of something might because personally, I'm selling a four unit. There's an area I don't want to be in long-term, so I'm going to 1031 exchange it. And like timing is so important. This fourplex, you know, went on a couple of weeks ago, you know, like Beth is correct and it's not just in Seattle, it's in markets all over the place, like buyers just get like a hint of uncertainty and a little bit of, you know, fear creeps in it and they just press pause and they stand still. There was a home in the neighborhood I live in and like I watch more than anywhere else, you know, the zip code that I was born and raised in and it's spent 45 years in. I've seen sellers list a house and based on everything that's going on, I go rates are at 7% during that period. There's not a lot of, you know, buyer demand. They're never going to get 560. And so they try for 60 days.

9:36They don't reduce it because they think it's worth that and they take it off and it doesn't sell. Then during a time where rates go down and there's buyer demand, it would sell like 560 like this, but it's not on, right? Because they're just a property management company. They don't have a lot of real estate experience or whatever. And then things get worse. And I saw, I literally saw this hat play out over the last couple of years, Mike, where they listed this house twice. It didn't sell either time. Both times were horrendous time to buy, but probably a seller that's not paying attention calls into the property manager goes, hey, we want to sell. And they go, okay, well, we've got somebody licensed because we got to have a real estate license of property management company. So, hey, Bill, dust off your, you know, MLS or your license to get this thing listed. And, you know, so it's real that like real estate moves slow when you think about home values and some of this stuff like you're not going to see stuff fall for close 40% one year. But the sentiment and, you know,

10:41certain markets, you know, small substance markets can move fast in how things are moving, how quick they're selling, how many buyers are active and all that other stuff. And so to your point, somebody who's active, you know, one rental at a time in the school community talking to people, they've got seven or eight people that are all focused on Columbus, Ohio. They know the market, they know the neighborhoods, like they're going to win. So they should be excited. And, and, you know, when you said it to, it got me excited because more and more, I'm working with people across the country. And I'm the guy who structures the mortgage and can figure out the math stuff. But I can't, I can't be a master of all the markets. It has to ask you, you know, what do you know? Why is this a good deal? You know, what are your goals? I can structure the mortgage and do the math part of it for you. But the market part of it, the getting a good deal part of it, that is, you know, the onus is on the savvy investor, which, you know, shout out to one rental at a time in the great school community. Those people are sharpening their swords every day. No, that's exactly that's the

11:45message I want, right? This is, in my opinion, a horrible time to be a home seller. It's a great time to be an investor. Why? Because we don't have to buy. We're supposed to do the work, create great deals, deals of a lifetime, find value. This is our time. This is the year operators win, right? 21 and 22. It was easy. Everybody made money. This year is going to be hard. And it's only my community that's going to show up every day, do the work, write hundreds of offers, find the motivated seller, do the creative financing, you know, whatever it is. And, you know, that's okay. This is the year of the operators, the year of the grinders. It just is what it is. And, you know, we'll see where we go from here. Yep. I agree, man. So, you know, one last shout out if if you're not in the one rental time school community, you should be getting some of the greatest minds. And the best part is, you know, the super season best to the best are sharing all

12:48their secrets, all their insights, all the advice with somebody who's brand new and looking for their first property in 2026. So, yeah, we have almost 700 people building wealth at all levels. And it is a very active form communities. I think we have 12 accountability calls, at least one a day every day, thousands of dollars in free education. It's, it's just a wild value add, 20 bucks, 67 pennies a day. It's crazy. Yeah. And I got to remind myself too. I don't, I don't do a good job promoting it. I share the picture on Facebook with me and my family wearing the wealth. Yeah. And people like, what is this? I want to get involved. What are you doing? I go to the gym and the guy goes, Hey, I saw your post on Instagram and like, I want to get involved. I come on. I just built an A to you. And I'm like, what am I doing when the people in my circle don't know what's going on with one rental at a time. So, come on. Join that community. If you want to connect with me and my team, mtmg.com, get connected with us, schedule a call more than likely, it's going to be me who's going to call you. I want to do the intake. Even if it's, you know,

13:53something we can't do or don't do, I want to steer you in the right direction. If, if you're investor in the states we're working in, I'd love an opportunity to help you out whether that's get you pre-approved or or structure something on a current mortgage or refinance. So mtmg.com. Thank you, buddy. Appreciate you. Have a good week. Yep. Thanks, Mike. Ryan Reynolds here for Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities, so do like I did, and have one of your assistance assistants switch you to Mint Mobile today. I'm told it's super easy to do at mtmg.com slash switch. Up front payment of $45 for three month plan, equivalent to $15 per month required. Intro rate first three months only, then full price plan options available, taxes and fees extra. See full terms at mtmg.com. Ever seen a musical so good you didn't want it to end, like you could live inside it forever. Then you're going to love Schmiggadoun.

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