The thought of buying a new home in this current market can be scary! If you're looking to buy or build soon we know you have a ton of questions about the housing market and if now really is the right time to pull the trigger... so we've brought in the Real Estate experts to shed some light on the situation. Co-owners of Knob and Key Realty Michelle Ozymy and Alan Simonton join us today to unveil the truth about what buying and selling really looks like in today's housing market. Listen in because their answers might shock you!
S2 Ep12_Why the Real Estate Market is INSANE Right Now! (Knob & Key Realty).mp3
Intro: [00:00:03] Welcome Home, a podcast brought to you by John Houston Homes. Join hosts, Chelsi Frazier and Whitney Pryor, as they walk you through the exciting adventure of your home buying and building journey.
Whitney Pryor: [00:00:18] Thank you for joining us on this episode of the Welcome Home podcast. I've got Chelsi here with me, and I'm Whitney. We're excited to get going on this new podcast episode. How are you, Chelsi?
Chelsi Frazier: [00:00:30] I'm great. How are you?
Whitney Pryor: [00:00:32] Doing great! We've got some of my favorite people here on the show. I probably won't even have to talk because the are just the most awesome couple ever. I love hearing them on the show.
Chelsi Frazier: [00:00:45] We've already been laughing and we haven't even started recording.
Whitney Pryor: [00:00:47] I'm trying to get it together.
Chelsi Frazier: [00:00:50] Yes, there's so fun.
Whitney Pryor: [00:00:52] Chelsi, who do we have today?
Chelsi Frazier: [00:00:54] Today we have the co-owners of Knob and Key Realty, Michelle Ozymy and Alan Simonton, here as our guest experts. They have a wealth of knowledge and many years of experience. John Houston Homes has partnered with them, pretty much since the beginning. They have a very longstanding relationship with John Houston Homes and the Real Estate Industry. As we all know, it's literally insane right now. We talk to them weekly, sometimes several times a week. We just wanted to have an episode where we could talk about those questions that everybody wants to know. What's happening, where are we headed, what should I do and just kind of get some knowledge from them. Welcome to the show, Michelle and Alan!
Michelle Ozymy: [00:01:38] Thank you so much.
Chelsi Frazier: [00:01:40] Welcome back!
Michelle Ozymy: [00:01:40] Yes, this is our second time!
Alan Simonton: [00:01:41] Thank you so much for having us back.
Chelsi Frazier: [00:01:43] Thank you guys! I know that the market is crazy, crazy, so we have a lot of questions. I think let's just start with what's going on in the housing industry right now and why is it so crazy?
Michelle Ozymy: [00:01:55] Wow, that's a great question.
Chelsi Frazier: [00:01:56] Loaded question.
Michelle Ozymy: [00:01:57] Loaded question, there are a lot of answers to that. Let's start with the country as a whole. Definitely, we are experiencing an unexpected market after the pandemic. I would assume that because of the pandemic, people were stuck in their homes for so long that they were able to discover what they did or didn't like about it and that's causing a lot of movement, which is fantastic. Of course, the builders weren't ready for that, so that's why we're seeing such a shortage in new home inventory. Because of that, it's kind of trickled down into existing home inventory because people are so nervous about selling. They don't really necessarily know where they're going to go. All of those things are making it a fantastic seller's market because now prices are going way, way up.
Alan Simonton: [00:02:41] Yeah, I think the good news is it's a great time to buy a home. It really is.
Whitney Pryor: [00:02:48] Interest rates are still good, right?
Alan Simonton: [00:02:50] It is and this is the best time, but yes, you have to be prepared. I know we're going to kind of get into what day to day looks like right now with the buying and selling homes, but it's still great.
Michelle Ozymy: [00:03:05] Oh, absolutely. In spite of price appreciation, interest rates are fantastic. The interest rates are so low and so much lower than we've historically seen, that it impacts what a person is able to buy. I was talking with my dad yesterday and when we lived in Ohio and moved back to Texas, the interest rate on the home we purchased then was 14%.
Whitney Pryor: [00:03:27] Oh wow.
Michelle Ozymy: [00:03:29] Can you imagine?
Chelsi Frazier: [00:03:30] No!
Michelle Ozymy: [00:03:30] I mean, wow! I think when we bought our first home not that many years ago, we had a great interest rate from Trinity Oaks Mortgage of 6 %.
Chelsi Frazier: [00:03:39] That was good.
Michelle Ozymy: [00:03:40] That was great! We were very happy with that, but now, people would freak out if you told them it was a 6% interest rate. In fact, rental investment properties, you can get at a 4% rate if not lower and that's just unheard of.
Alan Simonton: [00:03:53] From history, that's great, but we also are seeing a lot of first time buyers, young buyers right now, especially in the Dallas area, where we've been serving more and more. They don't know that history. They just see what's in front of them right now with interest rates and can it grew in value?
Michelle Ozymy: [00:04:13] What they're seeing is, with the rental market and what they've been paying for rent for that apartment or townhome, they can live in their own residence and start building equity.
Alan Simonton: [00:04:23] Yeah, we just closed one yesterday.
Michelle Ozymy: [00:04:27] First time home buyer in in East Dallas.
Alan Simonton: [00:04:28] Yeah, it was so cool. She was tired of renting and wanted her own space. It was like a very adult move for her. It was awesome to be able to share in the journey with her and be successful. Michelle kind of led that and it was awesome!
Michelle Ozymy: [00:04:47] It's definitely that price point that's difficult right now. There are lots of offers and bidding wars. You have to go the extra mile to get the property, but we did it, and her and her sweet puppy moved in.
Whitney Pryor: [00:04:57] I was going to ask, did she have a puppy that needed a yard?
Michelle Ozymy: [00:05:00] She did. It was a little Shih Tzu.
Alan Simonton: [00:05:03] Exactly, yes, and that dog is everywhere with her. We posted yesterday, on our Knob and Key Facebook and Instagram, a picture of her with the dog and you can tell the story.
Michelle Ozymy: [00:05:18] They were looking at paint samples. The dog was down on the floor with her and they were really digging it. It was cute!
Whitney Pryor: [00:05:24] Oh, adorable! It's so funny how pet owners now are their pets are their lives. Oh, I need a yard for this pet house. I will buy a house!
Chelsi Frazier: [00:05:34] I will buy a whole house for you, that's how much I love my dog.
Michelle Ozymy: [00:05:36] We will find you a house.
Alan Simonton: [00:05:37] Hey, we're dog people. We're dog people and kid people. We are all of it.
Chelsi Frazier: [00:05:43] I bet it's really rewarding to work with those first time homebuyers.
Alan Simonton: [00:05:47] Yes, it's something I really enjoy, mostly because it's not always, but predominantly younger families, that are looking to grow their their financial situation, grow their families or grow their possibilities. We're there to help unlock that. For me, it's kind of awesome to be along the journey with them, to see their kids grow. to see them get baptized and just help them sell that home to buy the next one. That's something I really treasure. Michelle and I have been pretty successful. Repeat business and referral is how we live.
Whitney Pryor: [00:06:29] You mentioned that you helped a first time homebuyer. What is that hot price point right now? I can probably guess that you're going to say anything, but what is it?
Michelle Ozymy: [00:06:40] Well, gosh, it is anything, because inventory is so, so low. In fact, the latest report showed that the supply in Texas or in the Dallas Fort Worth Metroplex, is less than a month. It's .9 and we are usually at 3 to 4 months.
Alan Simonton: [00:06:57] It's not doing any better. February is really low into March.
Michelle Ozymy: [00:07:05] What that means is every price point is fantastic. Really where we see things just get out of control, is that under 350k price point. There's just not that much inventory anywhere from Waco to McKinney, that's in that 350k price point, especially for first time buyers as they're moving out of rentals. That's kind of that more affordable area. The interesting news with that is because those price points are so valuable and inventory is so limited across the country as a whole, we're seeing a huge number of homes that are going over list price. The average home is selling for over list price now, more so than it ever has across the country.
Whitney Pryor: [00:07:50] How does that happen? Is that a multiple offer situation?
Michelle Ozymy: [00:07:55] We're seeing so many homes go into multiple offers, which makes it a great opportunity for sellers.
Alan Simonton: [00:08:00] There's high demand and low inventory, but that doesn't mean that you still can't buy a home. We are serving more buyers more often these days. With a good plan and the way Michelle and I operate, just being forward thinking and being prepared and planful, it's still possible.
Whitney Pryor: [00:08:23] What are the tips that you would suggest for someone that's looking to buy a home in that price range? What tips can you offer people?
Alan Simonton: [00:08:33] Yeah, I think the first thing we always want to say is what can you live with, paying monthly, then that's going to potentially determine your purchase price. Then you kind of go from there. That's going to then you kind of determine the areas that you want to live in and then some details of the home. The main thing is to get your financing ready because you have to know several things and Michelle can expand on this. How much cash do you have on hand? How much can you put down? How much can you bring over appraisal, those kinds of things.
Michelle Ozymy: [00:09:17] That's the big deal in the market today, is your offer needs to come in fast, needs to come in simple and strong. If you're in one of those difficult, challenging price points, you're just going to know that you're going to pay over the appraisal price. You need to work with an agent who knows how to make your offer stand out.
Alan Simonton: [00:09:33] And yeah, it's a special negotiation. It's a special preparedness that Michelle and I worked to be when it comes to comp, you know, comparable sales in the area for that particular home. Even when we're working with sellers, it's very important that we know what that's going to appraise it. So then we have to consider, you know, cash over, appraise and make sure how to make the offer look the best.
Michelle Ozymy: [00:09:56] Yeah. And make sure that the buyer is prepared to pay additional cash over appraisal because that's going to make the offer stronger.
Alan Simonton: [00:10:02] We make sure that's well defined because we don't like surprises when it comes to money.
Michelle Ozymy: [00:10:06] Absolutely. One of the concerns that a lot of people have when it comes to paying cash over appraisal is, well, am I overpaying for my home? Well, something that we talked about yesterday, Chelsi, Texas is a unique market considering that situation, I don't know that I would be so willing to pay so over appraisal price in other parts of the country, but Texas is a little bit different and here's why. Across the country, we've all seen an increase in the real estate market because of the pandemic and then, of course, because of interest rates. Eventually the pandemic situation, as people get vaccinated, is going to go away, hopefully sooner than later. Interest rates will go up eventually. What's different in Texas is the enormous amount of relocation with huge companies that we're seeing come into our marketplace and that's not going to change. For example, we're seeing that companies like Charles Schwab, Tesla, AT&T, CBRE and McKesson have all moved in in the last year during the pandemic. They've brought huge groups of employees with them.
Alan Simonton: [00:11:11] Yes, it's a big deal that Texas opened up first, with the masking and things like that.
Whitney Pryor: [00:11:19] We've seen a lot of remote workers moving in and they're like, "why am I paying this ridiculous amount in California to live here when my company is now gone 100% remote?"
Michelle Ozymy: [00:11:29] Yes, with no state income tax, Texas is going to continue to be attractive for years to come. Of course, our political views are a little different from some of the other states that are bringing those industries in here. Because Austin and Dallas already had a bit of a tech field support in the area, it's bringing even more of those tech companies in. Tech workers make enough money to be home buyers, so it's just a great opportunity that we're not going to see change. Where we may see home appreciation start to taper off in other states, we're not going to see that here. I think it will slow down. It won't be the 12% that we saw last year, but I think it'll slow down to 10% or 8%, when typically it's been 3% to 4%t per year. All that to say, yes, if you bid over appraisal price and you put the cash into the house, you're still buying a valuable property that's going to grow in equity and be a great financial investor.
Alan Simonton: [00:12:24] Yeah, we rarely have clients that are not profiting from the sale of their home. That's usually because they're potentially selling it, shortly after purchasing six months to a year to two years.
Michelle Ozymy: [00:12:38] We've sold several homes this year, that because people were relocating or for whatever reason, had only been in them for a year, someone even 6 months, and all of those people profited.
Alan Simonton: [00:12:48] I had two homes, one in Frisco and one in Midlothian. I listed them both on a Thursday, kind of my plan so it can filter out and be marketed through the weekend. Both went into multiple offers and both well over list price. Because it can be a seller's market and you get multiple offers pretty much on any home, were able to negotiate an extended temporary lease in the home because both of these clients were building John Houston Homes.
Chelsi Frazier: [00:13:23] Oh, yeah! They needed to stay there until their house was ready.
Alan Simonton: [00:13:28] With building, it can be a moving target and also closing on the sale of your can be as well. Are we seeing lenders feel like they've caught up?
Michelle Ozymy: [00:13:40] Oh, yeah! I think with lenders ,the bigger issue was the shortage of appraisers, inspectors and things like that, that would slow the lending process down a little bit. All of the appraisers are back to work and all of the inspectors are working. We work with some great lenders at Trinity Oaks Mortgage.
Alan Simonton: [00:13:56] Once again, that's another reason why our state is just seeing this influx. People are back to work. We're seeing every type of home be listed and sold within our agent and our brokerage. It's interesting just to see, on every level, that it's very competitive.
Michelle Ozymy: [00:14:19] Yea, the average days on market right now is 23 days, which is a decent hold on.
Alan Simonton: [00:14:25] Hold on, average days on market, what does that mean?
Michelle Ozymy: [00:14:27] The number of days from the time the sign goes in the front yard until it sells. That's down 44% from last year, so it's fast.
Alan Simonton: [00:14:38] We thought last year was fast.
Michelle Ozymy: [00:14:39] We thought last year was fast.
Alan Simonton: [00:14:40] We had a very successful year navigating thorough 2020.
Chelsi Frazier: [00:14:47] Before 2020, what was the average days on market?
Michelle Ozymy: [00:14:50] I'd say around 38 days, somewhere like that.
Alan Simonton: [00:14:53] It fluctuated a little bit, but before a few years back, it was almost 60 days.
Michelle Ozymy: [00:15:00] Yeah.
Chelsi Frazier: [00:15:01] Oh wow, that is crazy!
Michelle Ozymy: [00:15:04] Texas is the place to live.
Whitney Pryor: [00:15:05] You just need to be prepared whenever you're ready to sell for sure, right?
Michelle Ozymy: [00:15:09] For sure. We can help you with all that from packers' to movers to storage, all the things. Don't hesitate to put your house on the market for that reason because we've got a plan.
Chelsi Frazier: [00:15:18] I think that's the thing, people just don't realize what they have until they have it with their real estate agent. It is just all the care, thought and consideration, just all the little things that you guys do for your clients. If they didn't have you, they would either be doing it on their own or it wouldn't happen.
Alan Simonton: [00:15:37] Thank you! I think that's something we focus on. Is the care and communication honest and open? We do lead our company very similar to John Houston and Trinity Oaks. We lead by our faith, so for us, it's an honor to serve. We feel like that God send us our clients and it's it's up to us to steward that well. Through our mission, core values, from faith to knowledge and integrity, joy and service, we look to make a great plan. We want to make sure that you're communicated to about that plan. I tend to build the plan in my head and not necessarily communicate it well, so that's why I have help around me. We have our team, so it's all hands on for us all the time with our clients, with our family, with our strategic partners and our community.
Whitney Pryor: [00:16:36] Have you guys seen any interesting real estate forecasts for the future? I know you mentioned that Texas is looking great, but is anything there?
Alan Simonton: [00:16:44] Yeah, we recently invested in this crystal ball. They said that it works. No, I'm just kidding!
Whitney Pryor: [00:16:53] At this point, it's just in magic eight ball, right?
Chelsi Frazier: [00:16:58] Yeah, ask again later.
Alan Simonton: [00:16:59] Yes, yes.
Michelle Ozymy: [00:17:01] The only real thing that I've seen that I can speak to is in the preowned market. Because of the cost of lumber going up the way it has, the last statistic I read, which I looked up yesterday, per house the lumber pricing seems to be going up 35k for the average family home, which is just insane to me. That is causing a true need or not a need necessarily, but a re-sparked interest in the pre owned market. What that's going to do is drive up prices in the preowned market, which once the builders catch up with our specs, is only going to increase the interest in the new construction market. All that to say, I don't think anything is going to slow down. The key though, to getting this market really moving again or moving in a more solid way, is for people to put their homes on the market. We've got to break that fear barrier. People have to recognize, "oh, my gosh, this is such a great opportunity to sell because I can make so much money on my home that it's worth it to take the risk or move into the apartment or do the temporary thing, so that I can get into that awesome new home."
Chelsi Frazier: [00:18:15] We talked about you guys being very relational, invested in the community and active. I know you guys are very active with something called Venture. Alan, will you tell us a little bit about that?
Alan Simonton: [00:18:26] For sure and Michelle can share as well. She's s been a part of this journey with them as well. venture.org is a faith based nonprofit. This is actually the group that I went to Mount Everest base camp with. I actually got to go and see the spaces, in Katmandu, that we are now serving through this campaign. What we're doing is we're, what are we calling it, run to give?
Michelle Ozymy:[00:18:55] Yes, it is the Run to Give Campaign.
Alan Simonton:[00:18:57] Yes! If you want to have access to that, you can go to our Communities Page or tab on our website, knobandkeyrealty.com. What we're doing is we have a specific dollar amount of $36,000.00 and our cutoff is the end of September. This is to serve vulnerable girls, boys and kids in the India Nepal Region. There is a severe human trafficking problem in that space. It is not policed really. It's very severe and it's very disturbing. What happens is these girls or boys will be brought to the border. They'll be sent across alone to thinking that maybe they're going to, you know, get a job or whatever, and they're actually being sold into that trade. What we're doing is we're raising money for a Border Patrol station, border station or whatever you want to call it, that has people standing there that are equipped, usually someone that's actually been through this, to intercept these kids. They know what to look for because the pimps send them alone because they don't want to get caught and go to jail. They're there, they see them, bring them over and they've got some pertinent questions. If they sense that they are being sold, they'll take them to a safe space. That's what I got to see, was this school.
Michelle Ozymy: [00:20:34] It's a really neat organization. The thing I love about it, on the state side, is it really incorporates fitness, activity and community within your area so that you can raise money to send over. What we're doing is coming together as a community for different events like running, hiking, biking, and it's going to culminate with the Dallas Marathon, 1/2 marathon or relay or whatever you want to do. We've done several hikes at the Cedar Ridge Preserve, done some runs around White Rock, different things like that. I love the organization, what it stands for and the way they raise money.
Alan Simonton: [00:21:12] The other part of our mission is to create positive communities. This is something that we truly believe in. The Lord sent us this opportunity to serve people that don't have an opportunity like we do, but we can do something. This helps create community like you were saying. When we give a miles challenge and that's what you can do, you can go to the site and you can either make a donation, a dollar amount, which would be fantastic. In fact, we are given some T-shirts and gift cards out for a certain dollar amount raised per person.
Michelle Ozymy: [00:21:50] Check it out.
Alan Simonton: [00:21:50] Yeah, or you can create a campaign where you set a miles limit. You start campaigning to your friends and say, "hey, I'm a part of this community, look at this cool thing." We love those guys at venture.org.
Chelsi Frazier: [00:22:11] That's amazing.
Whitney Pryor: [00:22:12] Where can the listeners be a part of that and join that?
Michelle Ozymy: [00:22:15] We post them on our Facebook page. We try to do one every month. We'll be posting the next one for May and June here pretty soon. Just follow us on Facebook or Instagram or check it out on our website, knobandkeyrealty.com.
Alan Simonton: [00:22:29] Right and there's usually coffee and donuts.
Michelle Ozymy: [00:22:33] Because you definitely need donuts before you run, for sure.
Chelsi Frazier: [00:22:38] What an amazing cause that the community needed all the time, but now more than ever, safe outdoor spaces together.
Alan Simonton: [00:22:48] You want to tell them what we've pledged, as far as Knob and Key to give?
Michelle Ozymy: [00:22:52] Well, our goal is to raise $36,000.00 for the Border Patrol station. So far, we've raised a little over $6,000.00. We're super excited!
Alan Simonton: [00:23:01] What we're doing more specifically is, every portion of a close sale, we are giving. That month, we're taking that in and giving.
Michelle Ozymy: [00:23:14] Yeah, purchase or sell a home with us and we'll donate a portion of that to Venture.
Chelsi Frazier: [00:23:19] That's so great!
Whitney Pryor: [00:23:20] At the time of this recording, it's actually Cinco de Mayo. Do you have a Cinco de Mayo joke for us or something?
Chelsi Frazier: [00:23:28] I know you do.
Whitney Pryor: [00:23:30] We need like a Dad joke or something.
Alan Simonton: [00:23:31] Okay, so there was this kid's birthday party, right? They had this Mariachi Band and they had this Spanish magician. He came out and it was so dramatic. There was smoke and fog and he came out and he yelled, "Uno, dos," and he disappeared without a trece.
Whitney Pryor: [00:23:53] That's good!
Michelle Ozymy: [00:23:54] Wow, I was so nervous about where that was going to go.
Chelsi Frazier: [00:23:58] That was so on the edge! Y'all are always so much fun. I know we went through a lot really fast, but you always have a lot of insight and good information. Thank you again so much for coming.
Michelle Ozymy: [00:24:10] Always a pleasure. We love hanging out with you guys, so thank you for having us.
Alan Simonton: [00:24:13] Thank you so much. We're so grateful. Anytime, we'd love to come back. This has been awesome.
Whitney Pryor: [00:24:21] Well, thanks again for joining us. Thank you listeners for listening in to this episode of the Welcome Home podcast. If you'd like more information, feel free to visit our show notes where we will leave more information about Knob and Key Realty. We also have a Facebook page and Instagram account, so visit us there. You can call us at 866.298.1416 Or reach out to us through email at email@example.com. Thank you and we'll see you on the next episode!
Chelsi Frazier and Whitney Pryor: [00:24:55] Welcome Home.