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Hey, I'm Steve Volkers. This is the Steve Volkers group, which is my name kind of goofy. Right. But it's my company. So it's my name. We are talking market data and we're gonna talk, this is, uh, the July episode, but talking June to the past and we've been rolling with this Kev. I feel like we got a pattern going.

I talk too long, even though I'm gonna be sort of shorter every time in my mind, but there's always good things to talk about. This came out of just my 16 years of experience. A lot of people ask me about the market what's happening in residential real estate market in west, Michigan and economy and those kind of things.

And I just like keeping up with it. So, uh, Kev was like, we better record the things that are in your brain, so we're throwing them out. So it's been a busy. With all kinds of drama, it feels like Kev we've I, I wrote down all the buzzwords here. We've got a lot of buzzwords in the economy that people are freaking out about.

So inflation, a new one that I heard yesterday was the Russian tax. Which is part of inflation, the shift, the affordability issues, recession, crash, jobs, corrections, you name the buzzword, they're all flying all of June. Right? And so it's been, uh, I've been sort of chomping at the bit to do another video, cuz it's like, man, everybody's an economic like advisor.

Everybody knows what's happening or not happening specialist, real estate agents. We like throwing out little memes on the social medias and, and everything. What we think or don't think, and everybody wants to get on the same bad and way. So I'm not usually on the same bandwagon. I've been talking about this ever since we started these videos, Kev, that it was getting a little iffy out there and things were changing or the buzzword of the month is shifting.

It's getting the shifty out there but I, I want to talk just, and something I've said for years to people that is actually coming true now, and then sort of just what we're communicating to our clients or people that ask me things to think about, to set themselves up for the time period that we're in right now, and probably are gonna be running for a little bit of time ahead.

One is really, I think, caveat when you asked me this a couple years, When will the residential real estate, continued huge price increase that we have all the data to show over the last couple of years. Stop. Steve would be a question I would get, and I would always say. There will be a point where affordability will stop the market from the huge 15, 20% growth.

That is where we are now. Right? So we're gonna start seeing the growth slow down, and I think it's gonna stay steady at that norm. What hopefully might turn into a normal rate of return for a residential real estate. That five to 8% is even super solid. Not this 15, 20.  because we still have the two major issues, inflation being number one.

So everything freaking costs way too much. And it continues to go up. We were in the up, I got a stack of wood for $8. You know, that stack of wood should have cost me three 50 cab just a year ago. Right. So everything costs more. I even had to like cut it down a little bit. Cause there were big logs. And so anyways, everything costs more labor costs more.

And I, I sort of. Joked about the Russian tax, but, you know, that was what, uh, our president, uh, mentioned just in the news article. I think in the last couple weeks is that inflation is not done. And he is blaming Russia for that situation because of the grain and food costs are gonna go significantly up because of Russia, not allowing Ukrainian grain out of Ukraine and the oil crisis right.

Of consistently, trying to. Uh, fill the void of Russian oil, which those two things, those factors will bump up inflation. Uh, I, I think those two are very significant. I also think we printed way too much money during COVID, which we all needed. It was very healthy. It kept Kevin and I employed during that period of time.

So I didn't mind the money. We're just having to deal with it now. But also just things, uh, they, they needed to cost a little bit more and that's okay. So inflation is the big one. The shift is what people are talking about, right? And the residential space, everybody says it's shifting, it's changing.

For sure. Right. But it's been changing, right. If we don't look at the, the change, it it's been happening. Couple things. I am specifically talking about west Michigan real estate here. Your real estate market might be different if you're in California and New York or whatever, talk to an expert in there to see what's happening.

There's, there's two factors that June and July play out. So I don't get. We have numbers in data, but I I'm really careful in June and July and August to, predict what's happening in the market and its generality because we live in west Michigan and we hibernate in the winter and we explore in the summer we leave.

Why would I want to go look at houses in the middle of July, July 4th. I'd rather be in the up looking at waterfalls, right? Like I, I am cooped up too much, all winter long. What we find is the market always shrinks in July and August and agents freak out and we say, well, there's not as many buyers and our houses are taking longer to sell.

And we only got two offers, not 25 offers. Well, sure. We're binging summer. I mean, I wanna binge summer. Why not? You know, my, my belly's a little fatter. I keep on drinking the wine and the coolers and stuff. Okay. But anyways, I'm not even talking about data. I'm just rambling at this point. I don't think we have a crash coming.

There is nothing that so shows that the, the data shows that we're continuing to get more inventory, which is great, but we're still way out of the inventory needs. The inventory that's being put on right now, I'll tell you a lot of it is really rough guys. So if you're a, a seller, that's gonna list either with me or with someone.

Please clean your house up a little bit for me. Like you're not gonna get top dollar anymore for a shitty house. Am I allowed to say that? I hope so, but, I have gone through multiple houses this week. My buyers are back active after 4th of July they're and boy, these places that you guys are listing right now that are rough.

Tell your people to put some new carpet in, please just paint a little bit. Like, you know, you can't get top dollar anymore for crap. That's gonna change. You do need to have your house ready to sell that instead of just the, anybody will sneeze on it, everyone will buy it. I think that analogy's sort of changing now.

It's gotta be a good house. There is multiple offers on houses, but you gotta, you gotta really go for it. You gotta have a nice house. We've listed some houses, even ourselves that haven't been as. They did the delay of submission and they got an offer, but then all of a sudden that offer didn't play out and now they're back on the market and we're having to do some work to that house.

Right? You gotta, you gotta do the work. So shifting recession, I was listening to an article on the way in, they were talking about, you know, are we in a recession? Right. And we'll find out, uh, everybody's predicting that we are, that the GDP will show that we are here. I think it's end or middle of July that we've shrink for two quarters in a row, but they, they don't know how to do this recession, all those economic guys, which I'm not one of, 'em just rambling here.

They don't know how to predict this one because it's not a job loss recession. At this point, there is companies are making really good. And they need employees and they're paying more than ever to get them, but they're still making money and they can't find enough employees. That's still the situation.

You can't find enough employees. So, uh, it's, it's not a jobless economy, right? You're not having a recession. And out of the, I think they said the last 12 recessions, all of them had job loss. That was part of that situation. This is the first one that will show potentially GDP, uh, going down two months.

Two quarters in a row, but jobs increasing or staying steady, which they don't know how to do. So, uh, obviously, uh, stock markets all over the place, everybody is, doesn't even know how to predict this one, cuz it's sort of own animal, but no one could predict COVID we did a bunch of things during C that has never been done before and here we are now trying to figure out what it happens after the fact.

Anyways, Kev, the boss man throws this thing together. This is really the meat and potatoes I'm rambling, but you guys need to get ahold of this, make sure that you look at this compared to the other months, Kevin throws it up on our websites or wherever he throws it. He'll shoot you the link. But, yeah, but it's amazing.

The date, I love this stuff. So we are down 16% sales this month. I didn't add that up. Kev. We should add that up though, to find the total for the end of the year. Or total so far this year, compared to years previously, but we have been down right, 6%, 14%, 8%, 11, four, and now 16%. So, you know, let's just, if we even average that out to 12% less, sales per month, this month's, compared to the last four years, we're down 16%, year to date transactions were down 10.

Dollar volume is starting to slow down a little bit. Did you check that one Kev? Uh, in June, uh, we were only up 2% in volume, which means that we're starting to settle into these values that people are listing. They're not gonna get a ton more than that, that we're really settling into almost back to like a, a, a steady, steady number.

Medium home prices. Holy crap, Kevin, those numbers five year increased by 50%. So you bought your house five years ago. It's worth 50% more. That's a pretty good return on your money and it's not even your money. It's the bank's money. Right? So. Guys, you know, I don't know. That's 10 years, it's 159%, right?

Yeah. 10 years ago, you know, houses where you could buy 'em for 40 grand. So, I mean, I get that number, but still a five year at 50%, it'll be interesting. We keep this going for another five years kind. What it will look like in five years from now. I don't think you'll see 'em at 50, but could you see 'em at 2025?

Sure. You can't build the stuff for what you can buy the materials for. Right. So, uh, all kind, you put a bunch of new stuff in here. Ke you've got square foot price, uh, disruption of sale price. We got all kind number of showings. , but it is fun when you get into those graphs, right? You start seeing that average price of last sale listing is steadily declining.

So we had those huge jumps, where people are paying 5% above 7% of 6% above last year in February, March and April, same happened this year, January or February, March, April. Uh, we were, may. Uh, April is when it started sliding off. So we had two months of 1.5, 1.7, and now we're starting to slide down. So just so you know, my clients are definitely starting to ask, do we really need to add that 10% or whatever?

And no, the answer's no, not anymore. There was one other graph. New listings are up 18% in due compared to.  18%. So I would say that is, we didn't really have a spring market. It was weird. Uh, we had an early spring interest rates hit and, you know, people just got quiet and we didn't have as many listings.

And then June hit and boom, a bunch of listings have hit. That's why inventory's up. But like I said, a lot of that June inventory is not pretty stuff, guys. Like you, you really do need to clean up your houses. If you're gonna put 'em on the market. I'm trying to think if there was the only other one was obviously that interest rate, which is the affordability conversation.

You see that big U right. We went up to 4.87 in 2008, uh, November and December slid all the way down and then just boom. But the boom is not done. I mean, the fed is definitely saying, they're gonna add. More to it, which means everything's gonna cost more, which inflation goes up, affordability goes down and the market gets tighter.

So, um, couple things to think about that. I'm telling my clients right now, when they're calling me saying I wanna buy or sell or whatever they're asking. One is, if you're gonna sell, do the work on your house, folks spend, you know, if you're gonna sell it next year, if you're gonna sell it even in a month from.

That paint brush and caught gun. Those are your friends. Go use them, right? Or I got Mr. Sam he's he's best farmer. Sam painter. Dude. I love that, man. He will come over and just paint a couple rooms and clean up the place. It's worth every dollar. Right. Put a little, put a little carpet down, you know, carpet is, yeah, it's expensive, but you don't have to put fancy carpet down if you're leaving it anyways, just put something down.

That's nice. Just add the extra pat.  when you put the extra thick padding in everybody's like, Ooh, this is fancy cuz they, you know, they, yeah, you just it's good stuff. The other thing would be that I'm telling my clients right now with the interest rate situation going on, is there are certain lenders right now that are doing what's called lock and shop you pay $500.

They lock the rate for that day and, and you can shop, I think it's for 90 days on that rate lock. Right. So when we saw rates go up to six, People are like freaking out. Now they're back down to like five and a half. I, I don't believe that we're at the bottom of the rates right now, or that this is gonna be the new normal at this five and a half

I think we are gonna be in that mid sixties. Maybe even up to seven, by the end of the year, if we keep on having these inflationary issues and cost keep on going up, they gotta make money harder to get. Right. So, I would suggest paying the $500 doing that rate and. I think the institution that I, uh, often will refer to they're doing it right now.

I, I wanna say it was 500 and then they let you float down to a lower interest rate. One time, if the rate is lower, when you get your. Offer accepted, I think is the way that deal works. Just let us know. We can refer you to some good lenders that might be doing that, but that's something I'm definitely the $500 just worth it.

Lock yourself in at the rate, you'd hate to be shopping. And then all of a sudden go to put your offer in and, and your preapproval isn't as good, or it's gonna cost you $150 more a month for that same house, cuz you weren't prepared for it. The other thing. A number of people. My golf buddy, Mr. Dewey, John Dewey, uh, he's a banker.

He said his phone is ringing off the hook doing equity lines right now that people that have significant equity, which we saw it right. 159% more if they bought it 10 years ago. Or 50% more just from the last five years, they're pulling their equity lines or sitting on their equity. So they're going ahead applying for their equity, making sure it's available so that they could do the improvements to their house.

They could buy something else at a cheaper rate if they wanted to, they're getting their money set up so that if the economy does continue to shift or do anything differently, if jobs become an issue like they're pulling their money and having their money ready so that they can use it. That is in the house.

So you have equity in your house. They're just making sure that they have financial ability to do whatever they need to. They don't want to get three months down the road or six months down the road. And if money gets harder to get, or those equity lines get more expensive to not have that availability.

So we actually had a financial advisor in here what that was probably two months ago. Okay. Melissa, she said the same thing. She. I'm telling all my clients to get their equity lines right now, just to have the money free for them to do stuff with if they want to. So, whew. I'm at like 20 minutes, right?

Kev 17, ah, 17 minutes. I was gonna keep it under done. Anyways, we'll wrap it up. I hope that you enjoy this time. I enjoy just talking about this stuff. If you're looking for help obviously, and buying and selling, that's what we do here. And we just really enjoy helping educate people about the process of buying and selling, but also how to use the house as a vehicle for financial growth.

I'm Steve ERs, Kevin's behind the camera and we enjoy hanging out with you. This was June's episode or July's episode talking about July June's data. I'm Steve. Thanks. See ya.


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