Real Estate Blog

Video Transcript:

Hey, I'm Steve Volkers and we're the Steve Volkers Group. I think it's like a lair now. I feel like this is our like, like secret sauce lair but we are doing the July numbers in Grand Rapids, Michigan, which is basically Kent county. The data that we get from our association each month, big cab behind the camera puts together.

This booklet of information. It is data that is, is accessible by agents, but Kev puts all of his fancy spins on it, adds all kinds of math to it. And so then I get to spill out the information that Kev does with real life stories, working with buyers and sellers. So we have been talking about the market shift or last month, if you played along all the verbs or all the nouns or whatever, I'm not good with English cab, what is it?

Is it verb or noun is a. What is that? Uh, it would be, it could be a upper in this case. Okay. Okay. In this case it could be a verb, but ultimately we're talking about a change or change of direction to the marketplace. And boy, do these graphs show it this month. Right? We've had this, like every graph I could show you has this four month trajectory down.

So we just try to give you an overview of what we think is happening. Like current, current, right. And then maybe where things are going. So we have to remember that this is the first week of August. It is what's the date today? Kevin it's August 4th right now, when we're recording this and the market always does something different and August as it does in April.

Right? So we're gonna compare April data to August data, but it's not really fair. The spring market is when the bulk of the listings start hitting. And as they start hitting people, buyers come out of their layers. They're hibernating for the winter, and all of a sudden hibernation is done and they say, we want a yard for our puppy or.

We need more, whatever. Right. And so the bulk of our market growth happens February, March, April, may, early June. So when we're gonna talk about some of these numbers of value increase of 7% and 6% month over month, kind of a thing. And then we look at July. Numbers and they're significantly different. We have to put in perspective that it should be different because ultimately if we have a 10 or 15% growth annually there might be seasons where we're at 20% growth, but this is the season always where we start seeing that number pull back, or the consumer, the buyer ultimately saying, I've already given you your growth.

I'm not gonna give you more money on top of that. A prime example would be an ger Heights house that we listed this. Thought I'd get five offers ended up just with one ke behind the camera, even told my seller that this is gonna be a hot listing. And then it wasn't. Thanks, Kevin, for setting us up, it was a great listing.

But we listed at 3 25 and they were hoping for three 50, but three 50. Would've been giving them an improvement on the already improved price that I gave them. Right. So we do a market. For three months or for six months or whatever. Sort of saying, this is where the market is right now. Here's the four comps or the four houses that would compare to yours.

And that's why we're pricing it at X. But the last four months would be the new number for this year. And so it's kind of greedy in a way to try to act like you're gonna get the new number for the year, plus another new number on top of it. Right. So we're really having to work with our sellers, particularly in hearing that every house has five, five offers or seven offers and it's beyond measure.

And then you only bring them one offer and they're like, well, did you do your job? And I'm like, well, of course I brought you the number that I told you I'd bring. And we're successful. But that conversation is definitely changing. And as we're sitting down with our sellers, trying to balance the narrative that's been out there for the last couple years is when you put it on the market, you're gonna have a bidding war.

There's gonna be 25 people that want this house and your house is gonna suffer 50,000 or 80,000. You name the number that you've heard. That no longer is occurring. Some of it is summer. And then we talked about the affordability index or affordability conversation and just overall economy, the last couple of these recordings, which also play into, I will give you your number.

I think your home is worth X, but I am not going to overpay it. Rachel, uh, over at the big table, Illinois, we put another deal together. And we negotiated inspections. This. Sorry. I have to pause negotiated inspections. Inspections were waived until just what 30 days ago, 60 days ago, majority of homes still were waving inspection to get your offer done.

We did inspections and then we told them the house wasn't good enough. And we wanted something else off of the price that we negotiated to fix set issues where the. Fire probably knew of those issues. Right? So this is a complete shift in the way that we're negotiating. And so we're having to balance the reaction of the seller to get the deal done.

So let's get into a little, little thing. So I got the know, it said that you're getting your list. Price be happy is what I wrote here. Sorry, that's a little like brash, but that's really where we are. If we can get you your list price right now, and it's the improved price of the year already.

Congratulations. You already won. You don't need to win more. You won you, you won. And, uh, you got the 10% increase, which is the same kind of thing, right? The 10% to 15% increase already occurred. So you don't need to get more con you, you stayed for all spring market. Now we're gonna be moving into fall market.

So you already received the growth of the year. You're probably not gonna receive more growth over that. Okay. So data. There's a lot of interesting things here. One is almost every arrow that Kevin puts on here is down, right Kev, like down, down, down. So we are 18% down in residential sales for the month of July.

That's a significant, uh, lowering where 21% compared to the four year average, right? So down, we were only 9% down the month before. So it tells you the significant, like slide off that we're starting to see. Year to date transactions were only 10% off. We were 8% off running up. So we obviously are still track in that same direction.

Now this is the one that sort of points to the earlier conversation year to date dollar volume. So right now we have been tracking at 5% or 4% year to date volume, right? So we're doing less transactions, but the, the, the. Purchase price equaled the same volume, but we're only at 2%. I would not be surprised Kevin, if we zero that out  in August or have a negative because of the lack of inventory, but not just lack of inventory, the prices are decreasing or staying steady.

So you're not gonna see a huge uptick may, maybe we'll see. What was the other one? Oh, okay. This one, medium home price per square foot for four. Again, this four month trajectory just shows. We're on that scale sliding down. Right, but there was another one that I really liked. Number of showings to pendings this one, I think we should talk a little bit about you really like this sheet.

You're always really focused on this, which is your goal. I mean, you're the marketer, right? So what are we doing? So, ultimately the average we have a five month trend down, see this trend down, right? So, in, uh, basically let me draw the line down. So in February, and in March we were at 24 to 22 showings per listing to a pending.

Why was that occurring? There was a lot of buyers that were getting nervous about interest rate increases. But still could buy at 3%, 4% still was really great interest rates. And you had, most agents were holding offers until Monday or Tuesday, right. List on Thursday, hold until Tuesday. So we would have that lock box, just crank and open, cranking open.

And it'd just be a string of people going through it. Well, this month we're at half of that 11, right? On average 11.6. So we're more than halfway down for showings. Why is this occurring? Two of the listings that we listed this week, one in Wayland and one in Elra Heights. Elra Heights one, we waited til offers due on Monday at two o'clock.

We still only got one. Right. Then the second one that we did in Wayland actually was the. We took the offer that came in within a 24 hour period or 48 hour period was a solid offer from an agent. We know good, good overall sort of presentation of offer. They really wanted it. We had, I think, six people through at that point, not a lot of more tours after that point had an open house, had four people through.

We felt like we had captured a general audience that would make an offer. We got one. And it was a solid offer. So we told our seller, you know, you might just wanna take it. Why hold offers till Tuesday or Wednesday when you have bird the hand kind of a conversation. Right? So that one would be a prime example of this changing that we only had six or seven people through Elra height's the same way alre height's house.

I would've, if, if you asked me on that Thursday, when we listed how many people I would've said, we probably have 15, 20 people through and probably eight at the open house. Perfect Al right slash Garfield park house. We had six showings, seven showings, right. Still got a good offer, but that's, that's what we're seeing.

So in the office here, we're talking about the buyers are just skittish or there's just not as many of them. The other part of the price change that we see that Kevin's pretty into is the percent over list. Right. So, back again in April, we were at one oh 7%. So 7% above list. Was the average things we're selling for obviously some less, but obviously some way more to get to an average of 1 0 7.

We're down to 1 0 3, I think next month we might be at 1 0 1, right? Maybe even just straight at like, you get your list price and don't cry about it kind of conversation. Right. But that's back to that same thing. You already got the 7% growth, the 6% growth, the 6% growth, the 5% growth you you're already 20%.

Like, so you can't, we're just not gonna keep giving you 20% ahead. Now that chart though, Kev see the same peak and valley. So we're on that same peak and valley. We just got to a bigger peak this year. Right. But we're starting ahead on that same valley. This is a big drop though. The reason I think the big drop was there's one more that I want to hit on this.

This, I think is the other reason for the big drop gov. New listings dropped, uh, were down 1.4% in July over last July. But in June we had almost 16,000 or sorry, 1600 listings. If you could. I know you guys can't see it. That's why you gotta download this stuff from Kevin, cuz it's so good. But if you see that.

That's not a normal listing amount. It peaked in June, which is all your July closing. So all our data is based on June listings, July closings. So what happened? You had a 5.7% to 6% interest rate, and you had a glut of homes hitting the market at the exact same time yet an affordability. And more homes than what the buyers are used to and they already were sort of nervous.

And so that's why you're seeing all that price drops. So there's all kinds of stuff we can keep going, but we're at that like 15 minute mark probably already, if not 20, right Kev, 15 boy 13. I'm doing pretty good, actually. So anyways, the point of the. If you're a buyer still solid to do the deal, right?

You actually are getting inspections. You actually can buy a home that has value still in it. I still believe that this sort of normal pattern of spring fall, winter increase in value will occur over the next couple years. Even if we have an economy that is sort of shrinking, as you can see, if we're in a recession, the government doesn't want to call it a recession right now because we're having election.

But it technically, according to everybody that's out there, this would be considered an election. You just don't hear or a recession. You don't hear it in the news. For the first time ever when GDP lost two quarters in a row is always beca recession. So if, if we weren't in an election cycle right now, we would be all over the news that were in a recession and you'd be more nervous than what you are now.

Well, we're an election cycle, so, you know, you're not gonna hear about it. Right, so anyways, That's my political rant. Not, not for any party or against, we're just trying to elect people. And in electing people, you don't wanna tell 'em there's bad news. Right, so ultimately I think the values are gonna continue to increase.

If you're a buyer, just find the right thing that fits you. You can be a little bit more picky, all of a sudden, right? You, you know, you might. Full price. Uh, you might pay a couple grand, more, 10 grand more or whatever, but you aren't seeing those massive swings and you actually have a chance. We're actually putting deals together for our buyers now and not having the, I tried a dozen houses and finally got my 13.

You might have to try a couple, but it's amazing that we're still being able to get them done. The thing with the sellers is just know that we're in a different market. And listen to me, your agent or whomever your agent is if they're suggesting not doing the holding offers, that might be something for you.

Each client, each house, each situation is different. We do not take a broad view of saying. This is how we do it. This is the machine we're gonna be in the machine. There's some things that Kevin is a machine with the marketing, and there's a process to that. But in reference to pricing your home in reference to the time it takes to get it on the market and how long you should leave it, there even price reductions we've had to do.

That's, that's crazy. When I have to call a seller and say, you know, we, we might have missed the mark time to break, bring it down a little bit. I haven't made those calls in five years, Kevin, and those are finding calls. Not really, they aren't phone calls to make, but usually the seller overpriced it.

And I said, yes. And I should have said no, but anyways, that's just me being conservative and not, uh, not knowing sometimes where pricing is. So whew, Kevin, anything else that we missed? That's everything. Okay. Rage. Do we miss anything? No. Okay. Rachel says we're good. I'm Steve. Voker at the Steve Voker. In our layer office, uh, downtown grand rapids.

And that was July's data on August the fourth. Thanks guys. Good to hang out. See ya.