What’s Actually Going On In The Real Estate Market? | Tom Ferry Podcast Experience

Dude. So the.

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I like it.

And. And I got, you know, sunglasses and, you know, like, 16 freaking different colors. And my wife's like, please stop buying those, honey, honey, I don't drink. I don't smoke. I don't screw around.

I just buy glasses.

There could be worse vices. That is right.

So here's the thing. Entrepreneurs, leaders, salespeople, we all want to create consistent, repeatable, and scalable ways to grow our business and our income. And we want to do it better, faster, and more seamlessly. Why? So we can actually enjoy our lives, take vacations, and spend the quality time we want with the people that we love. How do we do all this without spending a fortune or running ourselves ragged? That's the big question, and this show is dedicated to the answer. Hey, welcome back to a special episode of the podcast. We're sitting here in the middle of July, and I'm thinking, what in the world is going on with the real estate market? I'm not sure if you're feeling that way, but if you are, you might want to put a comment below and let me know, you know, how are you feeling right now about the market? And I thought rather than just be in my head, or rather you be inside your head, I thought I would ask three friends to join us today to really just do a deep dive into insights and what to expect for the second half of the year? And more importantly, what in the world do we communicate to our buyers and sellers? So to help us do that, I asked Lance Lambert from Resi Club. Lance has become a friend over the last couple years. Super bright guy, great economist, the David Childers from Keeping Current Matters, who obviously we've been doing this together for a decade. And one of my personal clients and friend, Mr. Orlando, Ken Posak in the house. So this is going to be an interesting show. So, fellas, none of you need an introduction, certainly not to my base of clients and friends. I want to get right into the first question which trying to broadly help people understand what economic indicators should agents be paying attention to right now. Lance, I'm going to kick it to you first.

Yeah. So I think the big thing to be watching is still active inventory for sale. That really tells you what's happening to that supply, demand, equilibrium in the market. And big picture, if you zoom out, the story with the housing market is that historically speaking, demand is much more elastic. It can go up, it can go down much more than the actual supply the stock of homes in the housing market. And so during the pandemic, housing boom, very quickly in the pandemic, there was this huge increase in demand. This housing demand had just surged. There was all the work from home, right? So there's the work from home arbitrage where people take that higher income in New York and LA by, in Boise, Austin, Phoenix. There's the people who stayed in those markets that wanted just more space. So even though New York City and Los Angeles left lost people, their actual demand for housing increased because the people stayed, wanted more space, they decoupled from their roommates, they wanted that extra bedroom for an office. There's all the stimulus money that increases demand more. And then the ultra low mortgage mortgage rates which make so many of these properties cash flow for investors. So there's a lot of investors piling into the market. A lot of people are like, you know what? Rates are low, I'm working from home, I'm in my home more. This is a time to move. And so you had more of that occurring during the pandemic and all of that increase in demand, there wasn't enough supply to absorb it. Right. And so the Federal Reserve estimates that the actual housing starts would have needed to increase 300% to absorb that increase in housing demand. That can't happen. Right.

Big number.

You can't go from 1.4 million housing starts to 2.8 to 4 million to 6 million. It's just not possible. Only so many people know how to do the things to build a home at any given time. There's only so many supply chains that can produce the materials, right? And those take years to build. Lumber, you know, drywall, all of that. Right. And so what we had is a huge overheating for home prices. The price is what played. So not everybody got to transact, but those who were willing to pay the most did transact. So prices overheated during the pandemic housing boom. We went up 40, 50% nationally. Then once the inflationary shock was followed by a rate shock, the reality of that deterioration in affordability from the overheated prices was felt. Right. And so incomes did not keep up with all of that. For incomes to a matched the increase in the monthly payments. Given what happened to prices, what happened to rates, incomes would have needed to increase 80%. They went up 25%. And so that backdrop is the market that we're in today. It's market where prices haven't given up that much nationally. And so as these sellers have struggled to find buyers who can afford this affordability environment we've gotten to, they're slowly becoming more slack that's building up in the market. And as that occurs, occurs, it kind of shifts that supply, that supply, demand equilibrium in the market of power, that power dynamic from the sellers to the buyers. And so what we've seen more of over the past few years and really the past 12, six months more so is we've seen more of these sellers markets become balanced markets, more, more of the balance markers markets become buyers markets. And as that active inventory and months of supply builds and where it builds and the neighborhoods it builds, more of that equilibrium shift will occur. And, and so, you know, if you've reached a certain point, you are seeing some of these markets seen prices come down a bit, it's happening, you know, to certain types of products more than others on the market. There's a lot of variation and nuance to it. And I think that is really where a lot of the value of agents is in this market. Right. Is discerning what is happening in my market, what is how communicate this to, you know, the different stakeholders so that they can make a good decision in this marketplace.

So, David, I'm hearing inventory, job market, you know, average compensation, a lot, a lot of things that they should be paying attention to. But you and I, you know, around on the road, we hear the questions like home prices are coming down, you know, we're sliding into a recession, you know, is the world coming to an end? And I get it. Like, fellas, most of us still kind of remember where we were in 2007, 8, 9, 10. And if that's the closest recession that we can remember, that's the one that we go, oh my God, it's going to happen again. David, what say you? What do you want to say to the agents to help them understand this?

Well, you know, I think the. It's fun to be on here with you, Lance, and with you, Ken, and certainly you, Tom, talking about this. There are three things that I would pay attention to right now. First is inventory. Like Lance said, it's rising pretty much across the country. But, you know, I was watching a video too from our good friend Glenda Baker, and she said she defined this market as erratic. And I think that's a very good word for this market in a lot of ways. Is erratic, but inventory is rising. That's causing prices to sort of, you know, not nationally, not rise as fast, but come down in some top markets. You know, I just looked at the number of homes that had a price reduction and we're back to about 2018 levels. Like if you were to watch it just kind of slowly increased. And then we're seeing, you know, Tom, we've talked about this, expired listings. There are more expired listings right now of things that didn't sell than we've seen in quite some time. But, but, but what would I be watching for? And here's the way I would sum this up. You know, the Redfin came an article and I think everybody saw it where there's this sort of imbalance between buyers and sellers. But I would still argue there are plenty of people that want to buy a home. Affordability is the issue. Right. They've been priced out. So what the market wants to see is certainty. And if we see certainty, I think we'll get a little bit of relief in rates. And that's going to bring sellers back in the market, buyers back in the market, a little more activity. But I looked at even the watch tool that Wall street uses, the CME tool on the Fed meeting the end of this month, pretty much consensus from Wall street they will not cut the fed funds rate. More consensus down the road that they will. But I think we're in a market right now where somebody's waiting for something to happen to bring a little bit more of. We're going to, you know, survive through some of the uncertainty in, in the economic world today.

So Ken is, as my, you know, top rockstar agent here, crushing in Orlando, having one of your best years ever. I'm super curious. You and your, when you hear these two guys talk, you guys are on the streets every single day. How are you taking this information and bringing it back to your team, back to the buyers that they're working with, the sellers that they're talking to? Just give us a little insight on, you know, from sort of insight to action.

Yeah.

So we look at finding them motivated is more important than ever. We had 2,200 sides transact in my market last week. And so there's still people buying and selling all the time. And yet like in Orlando, it's really interesting because I have the short term rental market where Airbnbs went hyper, like way fast up, and now they're coming down almost just as fast. And then 30 minutes away, you've got kind of uber luxury where you have multiple Offers. It makes no sense. And yet, like things are happening every day. We have more listings than we've ever had before. So our skills are having to change a little bit more. And so it's just skating to where the puck's headed. So that's what we focus on. What's the opportunity for our clients? Finding them motivated and staying after. It's.

I love it. I love it. So I want to talk about, guys, the. I want to go back to David, your insight on what the Fed's saying. And I'm curious. I'm going to go. Lance, I'm going to go to you first, like, give us your best. I mean, I feel like every time it's like this, you know, come on, seven. Right. Like, when are we going to see more reasonable interest rates? And is that going to be the thing that suddenly has hundreds of thousands, maybe potentially millions of buyers come into the marketplace?

Yeah. So with mortgage rates and the long term rates, I think it's always good to emphasize a bit that they're not directly set, of course, by monetary policy and the Fed. Right. The Fed set the short term rate and it immediately have the exact same rate impact on the long term. And last year we saw the Fed cut by around 100 basis points. Right. And mortgage rates kind of ended up at the same place. We did start to see mortgage rates come down a bit late last summer, but a lot of that was driven by the market pricing in more recession risk because the unemployment rate last year started to move up. It moved up from the cycle low of 3.4% in April 2023 up to 4.2 last summer. And the number of people that were unemployed jumped up a million in the first six months of last year. And then right around when the Fed started to cut, and the Fed was kind of citing some of this weakness in the labor market, the labor market started to tighten back up. And actually the unemployment rate now, 12 months later is the same as it was 12 months ago. And the number of people unemployed, despite it jumping up a million in the first six, seven months last year, it's only up another hundred thousand. And so if we were to start to see considerable weakness in the job market and we started to see the unemployment rate jump up, we would start to see the number of people unemployed. I think that's where the long term rates, 30 year fixed mortgage rate in particular would start to come down more. But if the Fed's just kind of cutting a little bit here and there, kind of moving back to neutral, is they kind of, you know, take their foot off of the inflation fighting, but not necessarily trying to boost the economy. So they kind of go to neutral with policy. I don't know how much of a material impact there could be to mortgage rates. Maybe there's some, you know, maybe we start to see more of the spread, start to narrow. We did see the spread between the 30 year fixed mortgage rate and the 10 year treasury yield, which historically is kind of averaged around 1.7 percentage points, 170 basis points. That widened to over 300 basis points, 3 percentage points at the height of this rate hiking cycle. It's now down to like 2.5 percentage points, 250 basis points. We've seen that come in a bit. If that were to continue to ease up, we could see more spread compression if that even compressed by another 50 basis points. Given where the 10 year treasury yield is today, the average 30 year fixed mortgage rate would be somewhere closer to 6.2 versus the 6.8%, 6.7% that we are today. But Lennar's CEO came out the other day and he said there's been a lot of speculation for the past few years that rates will fall. And he was pretty much saying when they do fall, they fall. But right now they're not expecting a material change. And I think that's kind of also where I am. But the big wild card there to keep an eye on is the labor market. What happens to the unemployment, what happens to the number of people unemployed? If that were to really soften, we would see the Fed attack it. And then also the long term expectations in financial markets, those would shift because remember, the bond market is what moves yields in the average 30 year fixed mortgage rate is demand for the Treasuries, demand for the mortgage backed securities and the price of those bonds and the yield, the rates move in inverse. So if there is more demand for the mortgage backed securities and 10 year treasury yield, the yields and the mortgage rates fall. So when the Fed is out there buying up mortgage backed securities, there's a lot of demand for those and so the yields and the mortgage rates fall. But if it's the opposite and there's not a lot of demand for the mortgage backed securities and 10 year treasury yield, kind of like what we've seen the past few years since the Fed stopped buying up mbs, then you see additional upward pressure on the yields and mortgage rates. And so if you do have a recession and there's that flight to safety where the conservative mood sets in and people want these Treasuries want these mortgage backed securities for their yields that are guaranteed or less risk to them. You'll see more demand for them and then downward pressure on the yields and mortgage rates.

Yeah, David, there was a lot to unpack in that. You got some color commentary.

I want to say a couple of things. I love listening.

Lance. Next time, take a breath.

What Lance is saying is bad news is good news and good news is bad news.

Bad news.

That's the bottom line in the economy right now. But Lance, and I am curious to hear your perspective on this because it seems like the latest unemployment report, sort of a false positive. You know, it was boosted by, you know, government hiring. And I do think most people starting to look at the labor market say there are issues there that, you know, the private sector is, you know, not producing what they need to produce in jobs. So it feels like that could be on the horizon. I don't know, Lance, if you feel that way and that being a false positive in the latest jobs report, but I'd be interested in your perspective. I will say this or go ahead, Lance.

Yeah, I think what's very much the case is that we have these headline numbers like the unemployment rate, right. Where if you took that historically, that's in the top 25th percentile. History. Right. This is a very low unemployment rate relative to history. But if you kind of peel back the onion, you'll see that the job market has softened. And really, if you just talk to a lot of people who are out in the job market or recent grads, you know, their reality they're seeing is pretty different than the actual numbers. But I think despite, you know, some of that softening that has occurred and the cooling that's occurred in the labor market, it's still not gotten to the point where, you know, policymakers and the, you know, Federal Reserve is like, okay, this is a weakened job market. Right. Or it's one that's kind of broken and unemployment rates spiking. So it's kind of been steady, but under the surface there's maybe some of these cracks. But if any of those cracks were to really materialize, that's when we would probably get more of a pullback in mortgage rates.

Yeah, I think that I want to say one thing. Tomorrow, trades perspective. I'm looking right here at forecast right now from where we go and I can send these to you, we can post them in the show notes or whatever. But if you were to take where we're at at 6.8% on average, 30 year fixed right now, forecast going into the fourth quarter of 2026 kind of go like this. It's almost like a straight line, maybe a little bit of a decline, getting into six to, like Lance said, six, four, six, one. But here's what that tells me. Nobody wants to go out on a limb and say mortgage rates are going to come down. I'll guarantee you that. There are no forecasters right now that want to do that. And I think it, you know, anybody that's saying, hey, here's what's exactly going to happen doesn't know in this economy. So it's like, all right, this is what we have. And Ken, you spoke to it a minute ago. People are transacting in this market regardless of that. That then brings the overage. If we see that. That's what I think most of us right now in the business, certainly, Ken, I don't know if you're. That's what you and your team are kind of thinking about, is if that happens, that's what we're playing for. And that's what, you know, sort of the. The cherry on top.

Yeah.

It's the background. Yeah. Talk to us.

Yeah. I mean, that's for us. It's planning for the future, but now collecting and building those relationships and just kind of being in the know, I think the whole, like, you know, marry the house, date the rate, like, we've never said that. And agents that said that got in a lot of trouble, I feel like, right now. And look at that.

Right.

And so for us, it's like, you know, again, finding the motivated. When it makes sense, we're going to jump on it and help folks. But. But I think a lot of people are waiting for those rates to come down. So, Lance, I know you do a lot of data. I'm kind of curious, like 6.8 versus 6.2. Does it actually even move the needle for the majority of Americans to say, oh, it's affordable now?

Yeah.

Yeah. So I think what we have seen is that as soon as mortgage rates shot up in 2022, we saw this drop in the number of new listings. And I know there's all this debate about, like, is there a mortgage rate lock in? Is there not? But regardless, there was this big drop in new listings, and it stayed suppressed. And in my opinion, I think a lot of what that is is essentially kind of like an affordability lock in where a lot of people, a lot of homeowners who would have liked to sell and buy something else, they can't afford to do it right. That monthly payment at these rates, it just doesn't make sense for them. Or they're kind of in this group where they just can't stomach it, right? Like that twelve hundred, fifteen hundred dollar monthly payment jump. They just don't want to stomach it even if they could afford it. But I think over time what's going to occur is that because it's really a switching cost. And so a switching cost, if you google this economic term, it's both the financial side and it's also the psychological side. And so over time, as they start to have more kids, the lifestyle start to occur, the psychological side starts to come into play where maybe their spouse is starting to get unhappy with them. Like, hey, we really need that extra bedroom, we have too many kids in this house. Or it's like there's job opportunities elsewhere where, you know, if they went and moved to X city, you know, yeah, their payment would go up, but they're going to make X amount more. And then the other thing that time gives you is that time also gives you the opportunity to potentially see your own income rise. And so, yeah, maybe that monthly payment had you sold your house and bought something else in 2023, 24, 25, what, whatever year, it's probably going to be kind of similar in 26, 27, right? But if your income during that five year period went up 30, 40% as a share of your discretionary income, it actually decreased. And so I think we had the peak of the so called lock in affordability lock in probably around like 2023. We're starting to see it ease up now. New listings still aren't back to 2019 levels, but they're slowly, you know, each year 24 had a little bit more than 23, 25 is going to have a little bit more than 24. And I think 2026 is going to see a little bit more new listings than 25. Now I think that some of this increase in new listings is why you're starting to see some of these headlines about mortgage applications being up, right? Because somebody who is quote unquote locked in, right? They are. Some, the only reason they'd be locked in is because they don't want to sell and then buy something else, right? So they are a seller and also a buyer. And so as that affordability lock in eases up a bit, they're, they're, and they're trying to sell and buy something else. They, they, they're one new buyer, right? And they're also one new seller. And so I Think that's put a little bit of a boost to mortgage applications. But the increase, the subtle increase in mortgage apps year over year, I don't think it's doing much to tighten the housing market in terms of like that supply, demand, equilibrium. Because while they are one more buyer, they're also one more seller. Right. And so it's not having a tightening effect. And even as we see mortgage apps rise a little bit year over year, we're still seeing that supply, demand equilibrium. And a lot of these markets move directionally more to buyers. But the big thing to get to there is if this continues and we continue to see new listings rise and we continue to see mortgage applications rise, eventually we're going to come out of this existing home sales trough. Right. We've been this, the existing home sales. Yeah, you'll see a headline, it's up, you'll see it down. It's pretty much been just going flat since late 22. Right. It's a little up, a little down here and there. But we've been in this really low period where we had like 5.3 million existing home sales in 2017, 2018, 2019, and now we're at like this 4.1 million. 4. Really. These are like the, the core transactions that always occurred, death, divorce, all of that. And so at some point here, the longer we kind of continue to see new listings start to ease up, see these mortgage apps start to pop out, we're going to come out of this trough and we're going to begin to start to see new listings move up. But it could end up being a very slow grind to getting back up.

This coming year will be my 17th success summit. To me, it's the absolute best education I can get in the world of real estate.

After attending Summit, we had our best year ever.

More top line and more bottom line revenue for our business.

It was like a rock concert for real estate really just to get in there, the energy to be around so.

Many people, connections, fun referrals. The Summit always gets me back on my feet. Each time I go, I take away so many new contacts and the referral.

Business has just been incredible. If I can promise you anything, it's that these three days in Dallas will change everything. I almost think, fellas, before you guys give your comments, I can, I can't help but think even like coming up at the summit, I'm just gonna remind everybody, hey, the number of sales or the number of sales, you have to go find the market. And I think we're almost better to Just set a three to five year forecast for this is the market exactly as it stands. And if that's the case now, what am I going to do to build that moat around my business and increase my market share? Ken, thoughts?

Yeah, like it's the five Ds, right? Death, divorce, diapers, like those kind of things, right. And so it's interesting that the number I didn't know is like 4 million is kind of like the normal transactions. And then that delta above it is if the market picks up. That's actually fascinating to me. And so, yeah, I think that you have to just figure out where the market is and go after it. And so hearing a lot of our fellow agents locally either getting out of the business, stop spending money on marketing because they're just freaking out. And I'm like, no, it's just this over here doesn't work anymore. We have to go over here and, and find the market. And so that's, that's what we're doing.

I find it, Ken, and I'm curious, you know, just your, your take on this, that the people that were basically, and I'm not knocking the entire industry, just pay attention here. Just the people that basically passively worked their database to do transactions are struggling and the people that are doing content, doing direct mail, doing open houses, like whatever that, whatever the thing is, but it's never one. You and I both know it's always multiple things. The marketers are winning in this market. What's the old line like? Good markets create bad agents and bad markets create really good agents. We're in that environment for sure.

And I think a lot of the agents that are even on my team have only been licensed for five to six years. And so they don't know that this is a normal market. And I'm like, listen, 70 days on market, that's pretty normal. I can actually play with that. That's totally fine. When it was 10 days on market, I actually kind of hated that market because there wasn't enough time to get marketing in and actually get as exposures we wanted. And so, yeah, we're, we're having a good time, believe it or not.

Yeah, you guys are killing. David, what are your thoughts on that? I mean, just, you know, sort of, just as we, as we swirl around all these different issues. What's going through that, that brilliant mind of yours?

Well, I think the, there's an economic term that economists use called recency bias. And I think we in our business probably think about that a lot more as when are we going to get back to the good old days, you know, where you, you know, we've joked about it, Tom, even as we traveled the country, where to be a good agent, you had to have a phone and answer it sometime, you know.

Right.

And, and so I, I think right now, I think Ken's exactly right. This is the market that is a very normalized market. You know, I used to, I always think of all these things when we're talking about this. Steve Harney, founder of kcm, used to always say, you know, when we'd look at like days on market, he's like, I lived my life with, with 75, 85 days on market, 90. You very, very normal in our business. But we, we kind of look at it go, oh my gosh, this is crazy. When are we going to get back to, to the good old days?

Right, right. So, so kind of last question before we just kind of open it up for just free for all thoughts. We're seeing a lot of interesting migration patterns. And you know, we used to all maybe follow the, follow the money.com or whatever that site was and.

Where money walks.

Yeah, where money walks. Thank you. Or how money walks. But you know, Lance, I look today at whether it's Zillow or redfin or realtor.com, which I think all do a pretty good job. And then you look at like the trucking data. But what would you say are the most important insights you're seeing on sort of buyer demographics, where they're going, where they're leaving. And then what does that agent do that's in that marketplace where maybe the vast majority of people, in their minds, you know, I talk to clients all, oh man, my geographic farm, they're all selling with me, so I'm getting the listing. But they're leaving the state, they're leaving the area and I'm losing like past line opportunity. So, so maybe Lance, just unpack. Like what are the migration trends you're seeing now? And then we can get into what agents should do if they're in one of those, you know, coming to or leaving markets.

Yeah. So what we saw in the economy during the pandemic period is that the places that normally were, were getting net domestic migration, the Florida's, the Texas, the Arizonas of the world, they saw a huge surge up in net domestic migration. So those places have always attracted Americans moving in or at least in my life. Right. And they saw a big jump up during the pandemic period. And since then we've seen a really big Deceleration in that Florida and Texas are still seeing people move to them, still seeing net domestic migration. But it's not like it was during the pandemic period. And so Florida was between summer 21, summer 22, Florida sold around 300,000Americans on a net basis move. In the most recent six months, that was 60,000. So that takes Florida below its recent trend. And so what's pretty much occurred, in my view, is that Florida is going to continue to see people moving there. Texas, Arizona. Right, those places. But I think there was a bit of a pull ahead. And so some of the people that would have moved to Florida in 23, 24, 25, they moved there in 21, 20, 22. Right. Florida's kind of, they saw a bigger boom up in migration, net domestic than they would've, and now they're kind of rolling off of that. And it matters for net domestic migration because the people who usually make that move, they have higher incomes. Right. Or which is often the case, especially during the pandemic period. And then the second thing that we're seeing is that some of the people that would move would sell their house and let's say Connecticut or New Jersey and go move to the Sun Belt. They're not doing it because of the lock in effect right now. And so the lock in effect this whole cycle, the past few years, it's taken some demand off the table and some supply. But where the supply and the demand have come off the table have been in some cases, two different places. Whereas if you're in my market, Cincinnati, and you're, you know, you're not selling your house, your starter home to go do your move up home, right. In the same market, the supply and the demand pullback is the same in the market. Right. You lost one of both. Right. But if somebody's not selling their house in Connecticut to go buy in Florida, the loss of the demand is in Florida and the loss of the supply is in Connecticut. So I think over time some of that will be eased up. And some of these places that have been a little tighter than they otherwise would have in the, in the Northeast and some of these markets up north are going, are going to see some of that softening as that lock in eases. And then the second thing that's important for housing, and this is more so for the rental market, is that we saw a really big boom up in international migration. 23 and 24 were essentially the biggest years ever for international migration. A lot of that through the southern border. This is decelerating very sharply. And so it's going to end up being less demand for the rental market in some of these places. And it's really going to affect not the top tier of like multifamily product, but it's going to take some of that off. But for agents in the resale market, I don't think that's going to have as much impact. But those are kind of like the really big migration stories right now.

Interesting. David, you got some insight on this?

Well, I think I was just looking at where, you know, kind of to support what Lance is saying. Here's an interesting thing. Inventory in the Northeast is down 51% from pre pandemic levels where south and west it's over. Right. So we're seeing markets that are very, very different for, for a lot of reasons. I also tend to think, I mean, you know, we were talking about it just a minute ago in the job market that affordability is going to drive a lot of migration patterns where people go, where can we go and buy a home? Because the market that we live in, we can't. You know, it's, it's interesting. Ken, I'd be interested in your perspective. I was down in Miami with a group of wealth planners and they're like, how do we, you know, help a first time home buyer in Miami? And I'm like, I don't have an answer to that.

Send them to Orlando.

Call Ken. Right?

No, send them to Orlando.

That's going to be the solution. So I think a lot of that is going to be driven by high cost to low cost markets in the coming years.

Yeah, I agree. I think Lance would know it by a county, by county level. But I know that a lot of the move data that we see in Florida, the biggest migration we're seeing in central Florida is from other parts of Florida. And so we've got people moving in from the coasts that are getting away from insurance issues and hurricanes and people from Miami because of affordability. And that's a great majority of who we're working with now is like they, hey, we have a home to stay sell, home to sell contingency that we're working through, but we want to buy here in Orlando. And so we're doing that. A lot of people that way.

I love it. So, so I want to wrap with just maybe one last question and I'll, I'll, Ken, I'll start with you. And I, I want everybody's perspective. So I'm an agent, I'm listening to this podcast and I, I Don't know man. I got a lot of thoughts going through my head. What do I do with all this information to better serve my client, Educate customers, create better content, you know, be better when I'm sitting at the kitchen table. So how do I take this, these insights from this show and actually turn into something actionable? Ken, I'm going to go to you first.

For me I think it's figuring out who my ideal client is and for me that's who's actually transacting. So looking at your market and creating content for those people for during the 2020 and 2021 and 22 we were doing a lot of moving to Orlando content because we had so many people doing inbound and we crushed it with that. And so our strategy has had the shift to, to people that actually live here and being that knowledge broker from the localized level and that's attracting a lot of sellers to us now and it's been, it's been fantastic. So I think it's figuring out who's transacting who's your ideal client and then going after them with the right messaging in today's market.

So it's funny, I was talking to Andy C. Who would say the same thing, right. He's kind of the version of you, you know, out in the Silicon Valley. How does an agent figure out you have a lot of leads, you have a lot of inbound, you don't buy any leads by the way, which is I'm thrilled with your business model, highly profitable and yet you'll sell 750 homes this year. How does the agent figure out where people are coming to, going from that isn't just anecdotal like one offs. What do you recommend?

I think this, this one guy, Lance and David, they put out really good content. I would probably start there figuring out where people are moving to and from. I would also get out in your market, you know, talking to builder reps and asking them like they're, they're getting a lot of at bats, how many people are coming in, where are they coming from, are they moving up, are they moving down? Becoming that market person of, of the, of your localized market. Is, is it starting with the data and then working backwards.

I was thinking too like you know, going into all the social networks, finding you know, finding the things that are all things housing and just reading the comments. Right, reading the comments, understanding the comments. But David, same same question like you know what, how does I take this? I mean KCM does such a beautiful job making these things actionable what else could I do to make sure that I'm communicating effectively as a real estate professional, as a team leader to my agents and my consumers?

Yeah, I think right now it is. It kind of goes back to what you and I, over the last several years, Tom, have talked about. It's being the source of knowledge, the knowledge broker. And I sometimes when I say that, I think people are like, well, we've heard that before. Right. But that's it. And there's a couple of things right now that I would say. Understanding the national market and then being the mouthpiece of your local market. Right. Here's what's happening in real estate. Here's what's happening. You know, Cincinnati, where Lance's at, in Orlando, where I'm at, in Richmond, Virginia? I will tell you, this is interesting. I'm going to share this with you, Tom. I've tried to buy a house in the last month. Four contracts with escalation clauses. Can't get one right. Very different market.

Right.

Very different market. And so we, we live in this world where the, I believe the agent that's able to broadcast themselves and deliver. Here's almost like an updated state of the market. Because I'll tell you, this is though, if you read comments and you listen to people and just have conversations and can you can back this up, I think, or tell me I'm wrong? Most people in most markets wonder right now, should I buy a house? Is this market inflated? Is it a wise decision? And so I think we can answer all of those questions. And not from a sort of, hey, you should, because I'm in real estate. But from the facts and what's happening in this market. And there's arguably probably not been a better time in the last five, six, seven years, decade maybe, to be that mouthpiece. So literally, if people would and listen, think the world of Lance. I'll text Lance from time to time and go, man, it's really good what you're putting out there. Resi Club does a phenomenal job of it. We try to get it out there is keeping current matters and be a student of our industry and get the message out. You know, I don't know how to say it any more, you know, directly than that.

I was just thinking about Ken. I don't know if we've talked about this yet, but this whole new world of like Google search and how many people are trying to use the same exact strategies on Google that they're using in ChatGPT and Grok and everything else, and it's entirely different. The one thing I know for my listeners, if you haven't paid attention to AI search and how that's influencing buyers and sellers in their shopping for real estate agents and everything else. And what I know that they love is structured content. Like top 10 lists, five reasons why you shouldn't buy a home in Orlando. Number one, if you're looking in this area. Da da. Number two, if your income isn't, number three, if it's a short term move, you should rent instead. Like that's where my mind goes, Ken, like just, just different insights. But Lance, you haven't said much on this show. Lance. So I'm going to, I'm going to, I'm going to try and ask you to unpack something a little more significant here, my friend. So how would you advise a real estate agent, a team leader, what other insights would you say that, that we haven't already shared to, to just knowledge broker and inform as many people as we can on what's going on so they can make good decisions.

Yeah, yeah. So I agree with a lot of what Ken and David had to say in terms of like figuring out what is going on in your, your market, really working on your ability to make content. The content that you start creating at day one or early on, if you keep at it, it's going to get stronger. And if you figure out how to go from here is the information to how do I make it digestible? Right. How can people just eat up this data? And you try to, you know, figure out what the mediums are to do it and how to reach people and you just keep doing it and you're persistent, you're going to find success if you put the energy into it. The other thing I was going to comment on is just a general like, okay, based on the information we talked about here, based on where the market is, what should people out in the market be doing in this industry? It's about taking market share in this type of environment. Go on and listen to any of the big real estate players like Lennar, their earnings report, they know that this market isn't going to stay here forever. And so their whole goal is taking market share. So when this market is bigger, they have a bigger piece of the pie. And so existing home sales being at 4 million, if you zoom out and you adjust that to population, we're in the bottom 25, 25th percentile. So 25% of the time in history we've been this low 50% of the time. You're kind of in that what would be around like a 5.3 million existing home sales. And if you adjust it for population, that's how you compare it over time. And then the 75th percentile is kind of like that 6.1 million existing home sales. Right when we got up in 21. But every time you've moved up into the top 75th percentile like we did during COVID every single time in history, you have never went down to a normal market in the 50th percentile. You've always went down to the 25th percentile. And that's exactly where we are today. And so these Ds of housing transactions that are occurring right now, I know we had kind of talked about earlier than being normal. It's not really normal. Those are like the baseline, that's the bottom. And so we're going to get back up into that normal 50th percentile. You know, probably around like 5 million, 5.3 million existing home sales. There is going to bigger be a bigger piece of the pie at some point. And so I think, you know, the hard work that's kind of put in in these years when we're in this environment kind of creates, you know, the bigger reapings for when we're in the, you know, bigger pie environment.

I don't know. Yeah.

I want to add one thing that please thought of is is and I think we have done this I'm going to say as keeping current matters maybe as an industry from a content perspective or the last several years when it's been market related content, maybe in some cases taking this one size fits all of here's what's happening in the market and how's the market. I think right now the question I would ask myself is what is the luxury buyer need to hear? And I would build content for that. What is the first time homebuyer need to hear right now? That kind of goes with what Ken's talking about. Who am I, who am I working with right now? Where are they coming from? What are their needs? What is the move up buyer need? What is the downsize buyer need? And really starting to look at content in paths that speak to where people are at meeting them, exactly what they're at. Because I think it's different right now.

Now Ken, you got thoughts on that?

Yeah, I agree. I think it's, it's the broad strokes of like market it's good, the market's bad is never a good way to approach it.

Right.

I think you have to get into who's your ideal client and create content for them. And if it's two or three different avatars, great. Create content for them. And I think more now more than ever, even with AI and all the other things, people want you to distill down information that is really hard for the layperson to understand. And if you can come across not salesy and in a a really clear manner, then you're going to win.

Yeah, I agree. I agree. Fellas, this has been fantastic. We should definitely do this again. Thank you guys for spending the time with us and for my friend listening or watching, obviously you should, you know, make some comments. If you've got questions, you can ping them inside here. I can ping any one of these guys and get it to them if they don't see it on YouTube. But thank you, thank you, thank you for being a part of the show and letting us do what we do. We appreciate you always. All right, Fell as I will see you all very soon. Thank you for being on the show. Talk soon, guys. If you want more information about this episode, including my show, notes, mentions, links and everything else, make sure you visit tomferry.com podcast. That's tomferry.com podcast. Thanks again and talk to you soon.