Mark's Market Update: Market Statistics
Welcome to another edition of Mark's Market Update.
The market continues to perform exceptionally well for sellers. It is a strong seller's market. I’m going to post below multiple statistics that will show the strength of this market.
In addition, I've been interviewed by multiple news media over the last few days. Below you can click on the link for my interview with KMOX and Dave Glover or Mark Reardon on 97.1. There will also be summaries below.
If you have any questions about buying, selling, or investing, don't hesitate to reach out to us and stay tuned for a lot of great information.
Interview with Dave Glover of KMOX
Dave Glover 0:00
Happy Tuesday, my buddy Mark Gellman joins us from the Gellman Team. Hey, Mark. Hey, buddy, how are ya? Good pal? So probably the last five times we've had you on the show, we talked about the crazy real estate market. And it just shows no sign of slowing down yet. Right.
Mark Gellman 0:18
You know, you're exactly right. And it's, it's interesting, because a lot of people thought that inventory levels would open up. And we have been talking and saying, look, I think this is closer to the new norm than it has been. So three years ago, we were talking when the market was a little softer. We were saying, look, we believe prices will go up. We believe that you can hold off a little bit on selling. Buyers, you know, knowledge or opportunity, but totally different. We've been seeing this consistent. I mean, it's crazy to remember back, we were talking with the unknown a year ago. I remember I was on the radio and who would have thought that this is where we are today.
Dave Glover 0:57
And you know, people in the buyer situation are probably thinking: "Well, I'm gonna wait this out. Because I can probably get this house for 10 or 20% less in a year." But that may not be true. And if they buy now, they may be able to take advantage of selling it at a profit a couple or three years from now, if you're right about this.
Mark Gellman 1:16
Absolutely. So we're hearing a lot from buyers. Look, I don't want to overpay, I'm not willing to buy that home and write over asking or other. But that is the market. So I really I'm...not to bring up, you know, a competitive investment, but there's crypto two weeks ago or three weeks ago, Bitcoin was 60. That was the market today. 35,000. That's the market. So the market today is for the house, this is what they're going even if they're going over asking. And so the thing about it is we don't believe this is going to soften. There's what there's approximately five to seven buyers for almost every house right now. And if interest rates go up, which people are talking about. So that drops one or two out. It is still a supply and demand and there's significantly more demand than supply. They're not building more homes in the heart of certain areas. There's infill homes, but they're not huge subdivisions. And so what's happening is again, it's just the supply and demand and we don't see this changing. And over the years, believe me, I've thought that things would change. And they did. But this is a case where I don't see it changing.
Dave Glover 2:23
So Mark, let's take it on directly that you've heard it. I've heard it, well people will say, "Well, I'm going to sell it myself. Or I'm going to go with one of these like budget rate places because it can't... How hard can it be to sell a house when you got five to seven people trying to outbid each other?" Tell everyone why it is still important to use you guys.
Mark Gellman 2:44
So at the end of the day, most sellers really all they care about is the net. So it doesn't matter how much you pay for commission in there. It's can you net more, can you have more in your pocket after the transaction under any one scenario. And we are seeing that we are netting more for those sellers that use a full service realtor than a for sale by owner. Don't get me wrong, you absolutely can put a sign in your yard and sell your home. Selling your home is not the challenge. It's actually navigating the waters. When you have one contract. Does it appear that you have 10 contracts? And you actually can get the price higher? Can you negotiate on inspections? Can you negotiate on appraisals and other? So we're not just simply getting a contract. And because you could, anybody could sell their home for sale by owner get a contract, but it's actually what is it going to close at? What's the closing price? And are you going to net more than we've actually seen a validatable that you will net more under a full service component. And so it's getting the widest buyers within then when they are writing a contract, getting the best opportunity for yourself because at the end of the day, remember, my fiduciary duty is to our sellers. And under that scenario, my opportunity is how can I do the best for my seller? So absolutely, we're saying that they're getting a return on investment.
Dave Glover 4:09
Talking to Mark Gellman here of the Gellman Team. So you guys, you also represent buyers. What is the overall strategy for buyers? I mean, because it just feels...you know, it just feels nuts to be out there looking for a home, competing with so many people and homes just disappear in the first hours they're on the market.
Mark Gellman 4:29
Right and I'm gonna be very transparent. I know that a lot of realtors wouldn't come on and say this. But at the end of the day, a home is not an investment. So if you want to buy an investment, you should buy a two family, you buy a four family, that market is incredibly strong. Home is where you're going to live, you're going to build memories, so on so forth. So if you're a buyer and we're representing and by the way, we are winning a significant amount of these multiple offers for our buyers. We're actually an unfair advantage. So we are, we're actually doing great for our buyers that are committed to do what it takes in this market to buy. So again, you have to have the appetite. If you're a buyer to buy in this market, it is by no means for everybody. But those that want to buy that are relocating, that are moving, that are upsizing, downsizing, whatever the scenario is, if they're committed to the process to do what it takes to buy a home, we will sell them that home and get the best possible terms for them. Now, are we negotiating 20% underestimate? That's unrealistic in today's market. There's just not enough inventory. There's less than two weeks inventory. Going back to 2008 days, just for reference, 13 months of inventory. That means it would take 13 months, if no new homes came on the market to sell through the entire inventory. Now, it would take less than two weeks to sell through the inventory if no new homes came on the market in the majority of the markets we serve.
Dave Glover 5:56
Mark, I know that a year or so ago, the real expensive homes were kind of soft. Is there anything out there right now? Any neighborhoods in the areas, any budget levels that are especially hot or especially soft?
Mark Gellman 6:09
Sure. And so when you're looking at--and we serve St. Louis County, St. Louis city, Northern Jefferson County, and St. Charles--when you're looking at those overall high level counties, on average, there's less than a month of inventory in all of those markets. So when you're asking about the high end, for example, I mean, we are seeing more $3 million homes sell today than they did even a year ago. So that market's strong. Is there less competition? Absolutely. But we are still seeing those home prices sell. You know, the first time homebuyer is... I mean, it's hard to say Dave, because everywhere we're seeing the first time homebuyer, we're seeing the mid tier, the biggest problem we have with the market right now is there are great sellers out there that would have incredible homes to sell. But you know what the problem is, if they sold, they have nowhere to go. So that's what's jamming up the entire market.
Dave Glover 7:06
Makes sense. Any advice? Anything? Any questions I should have asked, but I didn't? Anything you want to get out to the people out there?
Mark Gellman 7:12
No, you know what, again, I appreciate the opportunity. I appreciate all of your listeners, I mean, you...it's been fantastic the relationship we go back. Gosh, I don't even know how many years we've been working together. But I can't just thank you enough. I can't thank your listeners enough. It's been a great run. And we're very excited. Look, if any of your listeners just want a home valuation, we're going to give you a transparent home valuation. We'll talk about preparation for sale. And look, your sellers ultimately are gonna have to make a decision if they're prepared to sell. The last thing I tell you is you would be shocked at how many of your listeners are simply selling their homes, short term rentals and other because they want to monetize their homes today. So it is a great time, if you don't have to be in that home and you want to sell. Big buyer demand right now.
Dave Glover 8:02
If you guys want to talk to Mark, you can call 314-336-1991. I can vouch for the website. If you're looking for a home, forget Zillow and Realtor. TheGellmanTeam.com is really, really user friendly. Thank you, my friend. We'll talk to you soon.
Mark Gellman 8:17
Take care, buddy. We'll see. I think we're going out to lunch in a couple of days. So I'll see you later. Alright. See you on Thursday. Take care. Bye Bye
Interview with Mark Reardon of KFTK
Mark Reardon 0:00
COVID stuff since the beginning and he wrote a piece called why you should wait out the wild housing market. Now I don't know if Mark Gellman from the Gellman Team is going to agree with that. But we are going to talk about some of the crazy things that are happening in the market. Gellman, how are you? Welcome back.
Mark Gellman 0:13
I'm doing fantastic. How are you, buddy?
Mark Reardon 0:16
I'm doing great. But it seems like every week passes this, this tight supply is not going to change anytime soon. So I know that Fred sent you that piece is your realtor. So you're probably not going to give us advice. But I think Thompson's point, you know, citing some other experts is this is so crazy right now, maybe it's best to sit it out for a while.
Mark Gellman 0:35
Yeah, and as I said, and so I was interviewed yesterday about this same idea. And here's the thing. First off, people have to understand that I'm very transparent. Your home, a person's home is not an investment. If you're looking for an investment, you should buy multifamily, which is way overpriced right now. But it's income producing. Here's the thing, the values are the values today. And a home has never truly been an investment. For example, you bought it over the last three years, and you've seen the appreciation, but you'd have to monetize it at this point. Here's the thing. I'm not sure what to wait for. And the reason is, it is a supply and demand issue. And right now there is five to nine buyers for almost every home. And so what's happening is we're seeing multiple offers, we're seeing over asking, etc. But that is creating what the new market is. The thing about is I'm not sure what he's suggesting. And I didn't really understand what he's suggesting people wait for. Interest rates go up to five, which is still incredibly low, it may knock a couple people out. But I don't see that knocking out the entire market. There was only a month there was less than two weeks of inventory. 2008 there was over 13 months of inventory, which is a severe buyers market. What that means is, is that if every home sold it would take 13 months to liquidate all inventory. Today, many markets less than a week of inventory that haveif no new homes came on, there would be no new homes in that market.
Mark Reardon 2:06
Right. Yeah, well, so he pointed out, you look at what's going on right now. Home prices - record high, inventory - record low, percentage of home selling above asking price for record high, average time on the market - record low. And I think overall--and I've seen other experts weigh in, Mark and I have talked about this, too--that this is not going to change for a while, right? There are no signs that this inventory is going to all of a sudden dramatically reappear. And there are several reasons for that. Right?
Mark Gellman 2:32
Absolutely. So in just to validate, first of all, he was talking a lot about the coasts, but clearly the exact same dynamics he was discussing is happening in St. Louis. Let me just give you a quick stat for St. Louis County. The medium price in the last 30 days. So if we look at essentially May closings this year versus May closings last year, right in St. Louis County, the median price between that period one year over year went up 23%. [This year] the average days on market was 6 days. Last year, by the way was still fast, 17 days, but obviously exponentially quicker. But within 30 days, if the home sells within the first 30 days, which is that time period, the average price was 104%. 100 last year. So you're talking about people paying over asking in a market where prices are significantly increasing. So his pricing model was right on. So I do want to validate that the question I'd ask him is what is going to change? What is going to increase? They're not building more homes in many municipalities. Certainly in certain areas they're building. And by the way, there's not even enough building. The building rate is about 50% what it previously was because we went through the downturn. So that slowed everything down. They can't ramp up fast, plus with lumber prices, plus with supply. They can't build them. For example, in Florida, one of our nice mutual friends is building a home in Florida. That subdivision has actually put homes on a whole new construction because they can't keep up. They also don't know what the pricing is. So that's the price of the inventory. So I'm not sure what's going to increase the inventory that would impact that.
Mark Reardon 4:22
Mark, what's your gut tell you? And again, there's a variety of reasons. But why this is so tight right now, because obviously some people don't know the status of their jobs, and they don't feel comfortable doing this right now.
Mark Gellman 4:38
Sure. So interestingly enough, what we're seeing is, we're seeing huge dynamics going back to the interest rates that are still historically low. There certainly are people wanting to jump in on this bandwagon. We are also seeing moving in and out of St. Louis. What happened over the last year people [is] want to be closer to their family, not you know...and we're seeing people want to get out of apartment types. People who are scared about inflation, there's no doubt about it. We don't have to get into an economic discussion. But clearly, people are looking at real estate as a hedge for future inflation. And that's really what's happening. Equally though, I am seeing a significant amount of my clients wanting to monetize their homes. They're renting. They, you know, have second homes or other and they're living there. But we are seeing...so it's a very confusing market right now. The one thing that's jamming this market up most though, is we have great, great sellers that would have an unbelievable house to sell. But you know what their problem is the same thing you had about four years years ago. They didn't know where they were going to go. So they can sell. They can get multiple offers. But then what do we do? And so that's what's jamming up the market very much right now.
Mark Reardon 5:50
Because I even have, not to name names, with some people that I've worked with who have become empty empty nesters, for example. And they're ready to downsize. They look at the market. They're like, man, well this is the time to sell right now. And I know that husbands and wives are having that discussion. But to your point, then what do you do?
Mark Gellman 6:07
Absolutely. And you know, no, if you're downsizing, it could be a great opportunity. Sell your home at the peak. You're going to buy. You're going to overpay. You know, not overpay. You're going to pay over asking potentially, on the downside, but you're still ahead of the game for our clients that are upsizing. They're feeling the pain on the upside, although they're benefiting on the sale. So again, it's a really tricky market right now. But the most important thing is this is a totally different market. And we were talking about this even last year, Mark. This is a totally different market than 2008, where there was a 13 months inventory. People did not have equity. There was these, you know, income stated loans, people's loans, reduce short term balloons, and other. Totally different market. There were foreclosures. Short sales were a thing. Even distressed sellers right now that have lost their jobs and other--which is a, you know, horrible situation--are able to get out of their homes. Unlike 2008, because they actually still have equity. So there have been some very positives about this. And so, you know, again, we feel good about it. And it's a tricky market is all I can say. But today's market is the marketplace. And that's really what happened.
Mark Reardon 7:21
I've seen some coverage recently. I saw a story today about whisper listings, which would be in my house. You guys came to me because someone was poking around. My home was coming soon, because there was flooding issues. We weren't sure if we were going to sell and then all of a sudden we sold and we had to shift into gear. But when they say whisper listings is that some of the stuff that's happening before homes are actually officially on the MLS?
Mark Gellman 7:42
There is and now it just to be very clear, I will tell you that, you know, there's been a lot of challenges in the real estate community where people are signing up listings. It's in coming soon mode where no showings are allowed. And then what's happening is, and it's created a huge amount of disappointment, where somebody has written an incredible offer, the sellers--who really aren't as invested in following all the you know, protocol as the agent--is going to take that offer. So yeah, actually the MLS, St. Louis, just the entire MLS is no longer allowing showings and starting in about two weeks no longer allowing showings in coming soon mode. So it's going to change things a little bit to even the playing field, because there's been some huge disadvantages that are occurring. But you know, there's a whole sub market happening, people are door knocking people, I mean, reaching out, so there's a lot of unique things.
Mark Reardon 8:35
So how did you come to a determination for the market to not have showings during coming soon? Who makes that determination?
Mark Gellman 8:42
So National Association Realtors last year did a clear cooperation because they were very concerned about this whole pocket listing world and, you know, the whisper and all that. And they really felt like, and it's an interesting thing that, they felt like it's actually was doing a disservice to sellers. Which, you know, it's possibly, I mean, look, we used to sell homes two years ago, many cases in a coming soon mode. But now we're actually putting them on the market, because we want the market to really compete for homes. So we're actuall...we took a little different approach there. We wouldn't allow these early showings. In the last year with a lot of agents were allowing...it's just a different philosophy. Because we really saw some crazy benefits. I mean, Mark, we're selling homes. We just sold a home 137,000 over asking. 699 it sold, and our client would have been thrilled at 689. Sold 137,000 over asking. There were 10 offers and the one that wrote 125 over asking called and said how could we possibly lose on it and you would not believe. But we're seeing some, you know, we're seeing some crazy prices. But what it tells you is these are the prices. We're hearing from clients they don't want to overpay. It's not overpaying because that's what the market is demanding, right? Absolutely. I'm looking at the stock exchange right now. I'm looking at the tickers and those are the true prices today. Now they could go up those stocks, they could go down. But today, that's
Mark Reardon 10:13
what is the price, Mark. I gotta run to another segment. This is great information and it is a wild and wacky real estate market. Mark Gellman with his brother at the Gellman Team. Appreciate it. Thank you, Mark.
Take care, buddy. Bye bye.