New home listings have fallen by 25 percent year-over-year in the U.S., according to Redfin. Smith & Associates Realtor Melanie Atkinson, Trueblood Real Estate Realtor Dan O'Brien, and Coldwell Banker Residential Brokerage Realtor/Broker Associate Kathy Casey join Yahoo Finance Live to discuss the state of their regional housing markets.
For more of our special coverage on Real Estate: The New Reality, click here.
So here to give us a better sense of what is playing out across the country, we're taking a look at Tampa, Florida, with Smith and Associates Real Estate realtor Melanie Atkinson, look at Indianapolis with Trueblood Real Estate realtor Dan O'Brien and Denver, Colorado, with Kathy Casey, Coldwell Banker Residential Brokerage realtor. Great to have all three of you, all in different parts of the country.
I want to go around the horn real quick just to give us a better sense of exactly what you're seeing. So let's start East. We'll work our way West. Melanie, I want to start with you. What are you seeing right now in Tampa?
I actually think it's better for buyers than it was last year even though the interest rates are higher because number one, you're not paying over asking, you were getting seller concessions, and interest rates are high, but there's workarounds on that as well.
- Dan, what are you seeing in the Midwest?
DAN O'BRIEN: Very similar. It's still a seller's market, it's still a competitive market. But it is certainly a different ballgame than it was 12 to 18 months ago. It's been quite the ride as we were seeing those skyrocketing rates last year and a lot of uncertainty of what was going to happen-- are we going to see 10% interest rates. But now interest rates have somewhat semi normalized where now buyers are looking in that 6 and 1/2, upper 6 range where they've kind of accepted unfortunately this is the new norm, but the expectation is that rates are going to hopefully come back down it the next 12 months and they can ultimately refinance.
So there was a lot of uncertainty. The second half of last year definitely slowed down. We didn't see any kind of big dip or anything like that, but we certainly saw a plateau and a reduction of buyer activity. But so far, the spring and summer market has picked back up. We're starting to see some more historical trends as things have happened pre-COVID crazy market.
- Dan, what about that buyer activity? Are buyers being more pickier in this environment?
DAN O'BRIEN: Absolutely. They actually have a chance to think about buying a house before they have to jump in against 40 other offers. So like she was saying, it's ultimately a healthier market.
Of course, now sellers are saying, well, wait a second, where are all these offers and where is the waived inspections and waived appraisals. But at the end of the day, it is a much healthier market. Things are slower average days on market here are actually close to 80 days, which is a very high number compared to last several years.
But I've been in the business almost a decade and certainly, that's not an uncommon number. So buyers are a little bit choosier, a little bit pickier. They have some time really thinking about, OK, this is a big investment, interest rates are higher compared to what they were, is this really what I want. So at the end of the day, I think it's in a good spot.
- And I want to quickly get to you, Melanie and Kathy. In your regions, is it a buyer's or a seller's market or none of the above?
MELANIE ATKINSON: I would say in Tampa, it's none of the above. So in Tampa, what we're seeing is we still only have about two months of inventory and one of our biggest problems is quality of inventory. So if you have a house that goes on the market in Tampa that's really well prepared, then that house typically will have a lot of offers, maybe not as much as we did last year.
You might have went from 10 offers to two offers, but we're still seeing multiple offer situations here in the Tampa Bay Area. Florida is still really a desirable place for people to relocate to. We are just seeing houses stay on the market longer. But those houses that are staying on the market tend to be the ones that are in worse condition and need a lot of help and construction. And buyers just don't want to deal with that on top of having to pay historically high prices and higher interest rates.
- Kathy.
KATHY CASEY: So yeah, I mean, despite what you see on TV shows, it's not all designer clothes, glamor shots, and fancy cars that's happening in the market right now. So basically, yeah, so our average days the market is about 34 days. So it still is a seller's market in our region. At that 34 days, it wouldn't hit to a buyer's market until we're over 90 days. So we are still in a seller's market.
But it actually is working well for both buyers and Sellers because as you previously mentioned, buyers do have a chance to actually look and they don't have to make a decision in 10 minutes for the house that they want to buy. Another thing that I have noted-- and this was put out by NAR-- that 65% of those that purchased during the pandemic have some sort of buyer's remorse. And I think that that is because they had to make their decisions so quickly. And they really wish they would have gotten the third bathroom or the fourth bedroom or in the better neighborhood.
And so for those buyers, some of them feel like they are stuck because of the interest rates they got. But there are definitely ways that we can work around that. I'm starting to see a trend in lenders offering permanent interest by down. So instead of just the 2-1 buy down, we're starting to see a trend and permanent buy downs. Just last couple of weeks ago, I had a buyer that had a builder that actually bought her rate down two interest points.
So it was 6.5, and then it was back down to 4 and 1/2%. And so because these are permanent buy downs, this really allows them to qualify for more house. So like I said, there's ways around trying to get around the interest rates and what's happening in the market. But I definitely feel it's kind of even kill for both buyer and seller, but still leaning more towards the seller's favor.
- Dan, for those who are looking to buy in the Indianapolis area, what do they need to know? What's the 1, 2, 3 tips that you would share with them?
DAN O'BRIEN: Again, it's always about being prepared. If you're a buyer and you're coming in there not having spoken to a mortgage lender about getting pre-approved, if you don't know what you really want, at the end of the day, you're going to waste your time. So it's always one of those as a buyer, have your stuff in order, talk to a mortgage lender, talk with a professional realtor, figure out what you're looking for because I said that days on the market are up.
However, there are still zones that are very competitive. Hamilton County is on the North of the Indianapolis area and it's kind of the affluent suburb. And we are absolutely still looking at multiple offer scenarios. And an interesting statistic here is that in Hamilton County, there have been more sales over $1,000,000 than under $200,000. So in this market, for Denver, that might seem crazy that we can even think of under $200,000. But here, the average price point, the median sales price in greater Indianapolis is $280,000.
So we have some areas that are still selling very quickly. Even the high-end homes, at least what we would consider high end for this market, are selling in a short period of time. So again, to the comments of the nicer homes, still very quick at selling.
But if you're a buyer, make sure that kind of what you're doing if you get in there. You may or may not have time to get a pre-approval letter depending on what the house is doing if there are multiple offers. So that's the biggest thing that I can recommend is talk to a professional, both a mortgage lender and a realtor, to kind of understand what you're looking at.
- $200,000? Dan, that will get you a shoebox here in New York. Melanie-- Melanie, I want to quickly get back to Florida because I was recently down there, not in your region, but in Miami. I noticed the heat down there. What are you seeing in terms of the cash spent? So we saw some data from Redfin showing about a third of homebuyers are paying cash. Are you seeing that play out in what the data is showing you down there in Florida?
MELANIE ATKINSON: Not as much as it was before. So keep in mind that over the past couple of years, a lot of the cash buyers were actually corporate companies that were coming in and purchasing houses with cash with the purpose of then using them as rentals. We also had people from all over the country buying second homes here.
They were selling houses up North and coming down with a lot of cash because the prices were up all over the country. So people had all of this cash to spend. So either they were coming down here for primary homes or secondary ones. But for the most part, in general, because the market activity has slowed, obviously, the cash activity has slowed. And more significantly, we don't see those corporate buyers out there quite as much, which is great for the lower end price points and first time homebuyers if they're not competing against corporate buyers.
- All right, we will have to put a pin in our conversation. Love hearing about the state of real estate across the country. We're represented here by the Northeast at our table, [LAUGHS] anecdotally speaking. Our thanks to all of you, Kathy Casey, Melanie Atkinson, and Dan O'Brien.
