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Transcript:
Josh Shein 21:04
We’re in the Maryland to greater Maryland region are based in Towson, Maryland, which is right outside of Baltimore. We deal with like us two or three hour radius bend in this neck of the woods that cover sort of Southeastern Pennsylvania, Delaware, the entire state of Maryland, DC, Northern Virginia, we go a little further into Southern Virginia. We don’t head up to New Jersey into the tri state area. And right now, we really don’t go below the state of Virginia. But we’ve got a lot of ground to cover. And a lot of active real estate investors, it’s a great area of
Chris Bounds 21:32
How’s the market there? I was talking with an agent in New Jersey, don’t remember the talent. And he was just saying because he moved from Houston and New Jersey. And he’s doing real estate up there. And he was just saying like, there’s still no inventory, because unlike Houston, which is very transitory, there’s people moving in people moving out constantly. Up there, it’s like people live in a house for 40, 50 years. And like, no one moves or they just trade up. So there’s like no inventory. And when there is inventory, its gone. You know, how’s the market? That you know that you’re seeing just on a macro level? And then dig down a little bit deeper? How’s it going on the investment level?
Josh Shein 22:12
Sure. So overall inventory is definitely down, right? And that’s, in fact, affecting overall transaction volume, right? So it’s the same story here. It really is, it is everywhere. Everyone’s looking for the houses, everyone’s looking for the properties top to find them. Having said that, and this is what I always say, if you dig hard enough, and you’re open minded to dig deeply enough, I guess I would say you’re open minded, you’ll still find those deals, they’re still there. I still find people who are finding deals and opportunities. So they are still there. Price wise, we’re sort of flat right now. I still see when there is a property out there.
There could be a minor bidding war, but I say it’s minor. But there’s a lot of traffic heading there. I talked to a few agents in the last 10 days as the weather starting to clear to sunny day here today. But we haven’t gotten too much of that yet. But it’ll get better and better as the days go on, obviously heading into April next week. And there’s activity out there. And there’s definitely interest because of that lack of inventory. So there are people scrambling to find that place, grab that place, etc.
It’s not actually driving those prices up those record numbers, but it’s definitely driving the activity and keeping things that frothy, but they’re just sort of where they should be. But there are people who have to drop the prices because they still think that the market from a year and a half ago still exists. And it doesn’t. And some people haven’t accepted that reality. Some sellers haven’t accept that reality. Some buyers haven’t accepted that reality. And so sometimes I see that those two sides haven’t been able to come together. And it’s like, “Hey, until you guys can come together. You’re both being stubborn, but it’s not getting done and one of the or you’re gonna have to blink.” I mean, that’s just the reality of the situation.
Chris Bounds 23:42
Yeah, that’s what we’re seeing on the commercial side with especially with multifamily. It’s there’s a huge gap. I know nationally, I think NAR The National Association Realtors I think nationally year over year prices was still up by like a percent. But there’s a lot of markets right year over years down. I caveat that as year over year, you’re basically taking astronomical increase with, you know, the environment we’re currently in. So keep that in perspective. If you’ve owned your Helen’s home for five or seven years, like you’re still sitting pretty good, right?
Josh Shein 24:15
We’re sure. No question about or that investment property, but-
Chris Bounds 24:18
The deal and transactions are significantly down like double oranges, 20, 30%, maybe more depending on the market you’re at. Now. It’s funny that this is very interesting to 2022. No, no, no, January, January. So, January. There are three states right now that have tripled digit price year over year price growth. Florida, Maine, (that’s kind of an odd boulder, man. I had interest) and South Carolina. It’s kind of odd. So real estate. It’s very local. It’s still moving. It’s moving all kinds of directions. It’s kind of weird right now. That’s why I asked him in your area and I’ll let you know.
Josh Shein 25:00
Oh, no, probably. It’s interesting. You said and I agree with everything there. Obviously, the data backs it up. But it’s funny, like, just in our own experience, we see that, right? The number of people from our neck of the woods who have moved to Florida, mind blowing, and still hearing that. Today, I heard about two people like, “Yeah, I’m looking for properties, I’m probably going to move.” Just picking up and moving from the greater Mid Atlantic region.
It’s incredible, with kids, with families with jobs, whatever, again, that flexibility for zoom for remote for what have you. But it’s incredible. And everyone is doing it, everyone’s making the move in. And even as those prices continue to remain high and higher in Florida, people are still buying. It’s like, when does this ever end? With our neck of the woods, you know, he’s talking about some of those big cities that have seen some of those price declines.
I think, you know, Seattle, Portland, San Francisco, etc. Some of those areas, you know, we never have in our immediate neck of the woods, sort of the Greater Baltimore region. We never have the high highs and some of the big cities have, okay? Austin, Miami Beach, San Francisco, Portland, Seattle, etc. Those big cities, those top cities, they go through the roof when the markets on fire, doubling, sometimes even tripling whatever or you know, 50, 60, 70% increases. And then when things get tough, they’re obviously the first ones to be impacted.
Chris Bounds 25:16
Yeah, it’s gravity.
Josh Shein 25:50
Sort of fall off the cliff, right?
Chris Bounds 26:13
Exactly. Without gravity.
Josh Shein 26:15
100%, what we see is sort of a narrower band overall, where we don’t go as high up, and we don’t go as far down even in 2008, we didn’t go through the roof. And when things went bad, we didn’t fall off the edge of the cliff.
Chris Bounds 26:27
That’s Houston. So Houston, I think only had three months that were negative. And it was single digits.
Josh Shein 26:33
Yep. Incredible,.
Chris Bounds 26:34
Very, very, very low single digits, like one, maybe 2%. We were just flat.
Josh Shein 26:40 And that makes it a really strong mark and a strong region. And in this neck of the woods to affordability is huge. So we’re sort of becoming we already are a suburb of DC are continuing to become a suburb, Washington DC. Washington DC as it is very, very expensive. Ton of government growth, the government, wherever your opinion, may or may not be the government continues to grow, that’s a fact. And so those jobs, and the commuters trickle into our neck of the woods where it’s much more affordable.
You can buy a home here, average home price in the United States is I don’t know, 380, 390, whatever it might be. In here, it’s a lot lower than that for you to get into a starter home, I talk to people on the West Coast are blown away 250, 290,000, or if you can buy a home here. And it’s not a shack like it is in San Francisco, which you can buy a place for under 600,000 or more. And so it becomes an affordability factor here. And for real estate investors, that affordability factor translates into that rental cash flow working a little better.
So it’s really popular area for that. So to answer your question on the investors, investors who, for lack of a better word are hustling out there are finding deals and opportunities. Is it easy? No, it is a hard grind right now. You’ve got to be out there finding those opportunities, you got to use every resource, every source, and just straight up hours of hard work to find the deals out there. They’re not just popping up on MLS, or your buddies giving you a pocket deal, who’s a broker, that’s not necessarily going to happen as much. But there are opportunities and deals out there having said that, we as a lender are extremely busy right now. Because those people are finding those deals.
So I would say for every call I get from that person saying, “What are people doing? And how are they finding the deals?” I say, “They are.” There’s no secret like, potion, right? Like, if you just drink this Kool Aid, you’re gonna be fine, right? There’s nothing like that. There’s somebody out there, you gotta be throwing it all against the wall, a little bit of a scattershot approach. And that’s always what I’ve been an advocate of every agent, every wholesaler, every online resource, you have the Facebook groups, the chat, the networking, the meetups, etc, you got to just be out there and put yourself out there and have a good reputation. That’s an important aspect, too.
We talked about the shoppers, the ones who constantly jumping around, I talked to an insurance agent the other day, so when we work closely with and he was talking about this one client who I know of to this person’s always shopping and always beating him up and always beaten them down. And that person has that reputation as just difficult to work with, never satisfied, never happy. Those people aren’t necessarily going to find those deals and opportunities, because no one wants to give it to that person. Because they’re going to be difficult, and they’re always difficult.
So if your reputation and ours locally is an incredible reputation of honesty, integrity, stand up, do what we say and say what we do, things come your way, because you’re known as someone who can perform a closing will buy it when you say you’re going to buy it does good quality work pays your vendors on time, et cetera, et cetera, that also helps you get access to it. And it’s important not to downplay those relationships and how important they are to give you access to properties to the real estate investors here are doing okay. I might say they’re doing well. I don’t want to say they’re on fire, but doing well.