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VO [00:00:06] You're listening to REINCheck with Andrea Rice, Contracts and Industry Specialist at REIN, where you get the latest member news and information delivered straight from the source. REIN MLS.

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Andrea Rice [00:00:20] Hello and welcome to REINCheck. I'm your host, Andrea Rice, and today we are checking in with REIN's Data Specialist Josh Garbin and Sales Managers Advisory Committee member Edwin Rucker to discuss year-end stats and how this year stacks up to other years. Josh, Edwyn, thank you so much for taking time today to be here to discuss these stats.

Edwin Rucker [00:00:44] Andrea, Josh, I'm glad to be here, and I'm looking forward to the discussion.

Josh Garbin [00:00:48] I'm glad to be here as well. Looking forward to that discussion.

Andrea Rice [00:00:51] Thank you. So, let's kick things off with you, Josh. Can you start by giving us a bit of a year-end wrap-up? What did the numbers tell us, and how do these numbers compare to last year?

Josh Garbin [00:01:04] Absolutely. So, the market is at its lowest month's supply of inventory for November 2021 at 1.09. This tracks, essentially, the health of the market in one way. It takes a look at, essentially, if there were no active listings put in today, how long would it take for the market to go down to inventory zero? And when we're looking at that, anything below a six, which is considered a balanced market, is considered a seller's market, anything above a six is a buyer's market. So, compared to this time in 2019, the month's supply of inventory was 3.04. And that's a 64 percent change, a negative 64 percent change. That's pretty huge. What we also saw were 35,188 closed sales as of the end of November, and it's the highest of any year dating back to 1997. So, when we're looking at, say, 2019, which was pre-COVID, if your years follow the same trend from the previous year's, sales overall have been trending upward since 2014.

Andrea Rice [00:02:11] OK, so that's interesting. So, are you saying that we're seeing the same kind of trend, but it's just extreme?

Josh Garbin [00:02:19] Correct.

Andrea Rice [00:02:20] OK, interesting.

Josh Garbin [00:02:22] And we're looking at overall year sales are up, but again, we're experiencing those normal periods that we're used to seeing when it comes to the market. Days on market was its highest in December of 2020. And then it kind of went down as the early parts of the year came along with a small rise happening in summer before leveling off in September and October. So, generally, those September, October times, I know, Edwin you'd probably speak on this, those summer times are usually the busiest times when it comes to transactions. So, it's really interesting to see that pattern emerge so quickly coming from 2020.

Andrea Rice [00:03:00] Yeah, and you noted that the month's supply is the lowest ever recorded. Correct?

Josh Garbin [00:03:10] Correct.

Andrea Rice [00:03:12] But yet the closed sales is very high. So, that's a really interesting bit of information. Edwin, how does this translate into the market? Well, how do these numbers translate into rea-life experiences in the market?

Edwin Rucker [00:03:28] Yeah. Even though the inventory is low, what it means, Andrea is that anything that goes on the market is going to sell very quickly. And most likely you're going to have multiple offers. You're going to have escalations on the price point and we're even seeing sales price guarantees. And the only thing I can say on that note is that agents are writing contracts even listing agents that are reviewing some of these contracts always do their own market analysis and make sure that they are pretty close to what they think that property might appraise for because there are some low appraisals coming in because sellers are overzealous and buyers want the properties. And so they are offering a lot more than what they normally would. But sometimes you get outside that window of what that property could actually appraise for.

Andrea Rice [00:04:12] Yeah, interesting. A lot the appraisals, you know, just because you're willing to pay way above market value doesn't mean they're going to raise it for that so then you run into those issues.

Edwin Rucker [00:04:25] Yeah. And, you know, just to highlight that, you know, I, you know, I still work with buyers and sellers personally. And, you know, and I just recently, I had an offer accepted on a property and there was an escalation and that was a guarantee sales price. And, you know, one of the things I caution my buyer with is that, hey, you know, I don't think it's going to appraise for more than this based on, you know, a thorough analysis and not caution, you know, the buyer not to, you know, go above a certain point and they, you know, listen to the council. And, thankfully, it was enough of an offer to be able to get the offer, and the appraisal came in at value. So, you know, again, you know, their houses are selling as soon as they go on the market. And, you know, we got to be careful as buyers and sellers, how we count, listing agents and selling agents, how we counsel, you know, our clients because at the end of the day, you know, you want to get the property sold.

Andrea Rice [00:05:27] Right. Yeah. Good advice there. Good information. And, you know, Josh, this is the data you're giving us right now is for resale properties. But what are the numbers look like for rental properties? Are we seeing the same things?

Josh Garbin [00:05:43] It's been very interesting. We've been following the trend with rentals and there's been a trend of lower inventory and median rented prices going up. So, talking about supply and demand, lower supply, higher demand is showing, you know, higher rented prices. When we're taking a look at it, I pulled some numbers and in 2017 we had about 11,000 or so rented properties and the median rented price was thirteen hundred. When you go up to 2018, there was about a change of maybe like 400 or so that went down but the rented price went up by fifty dollars. So that was about a three percent change. Then in 2019, we were down to 10,888 but the price went up again. We were at 1,375 and that was a change of twenty five dollars. We saw about 1.8 percent change. And then in 2020 we saw 9,295 but the median rented price went up by $25 again. One point eighty two percent. So you think with these, you know, beats of, you know, the normality, even despite 2020 being abnormal, what I found interesting was that up till November, basically, I pulled the data on December the 10th and there were 6,149 rented price, you know, rented properties. But the median rented price was 1,525. A $125 change overall, which is super interesting to me. Edwin, you were talking about the speed of the sales and everything. There's lower inventory. I think a lot of people are potentially trying to go and rent properties as well because they're missing out on sales, and I think that could be potentially driving up prices.

Edwin Rucker [00:07:41] Yeah. Josh, Andrea, you know, I'm not sure if people are renting because they can't buy. It just seems to be a very high demand and a very low inventory. Whether you're looking at purchase or you're looking at rental. You know, fortunately, our firm, you know, we do property management as well as sales, listings and sales. So, I get to see both sides of it. And, you know, that's just less inventory out there. And even considering the fact that, you know, they're building and building and building as fast as they can apartment complexes. And they're charging extraordinary amounts for rent. Trying to rent a townhouse or a single-family typically is still a lot more advantageous for the average renter than renting an apartment where they might be confined. They got people above them. They've got people beside them. Those types of things that most people don't want. They want some level of privacy and quiet. But, nevertheless, there are less properties on the market for rent. And unlike sales where, you know, there are multiple offers going back and forth and there's tons of negotiations in the property management arena. Typically, what you're going to find is that you know, one property goes on the market, you know, an agent property manager probably going to get anywhere from five to 20 applications in a matter of a few days. And typically, what they're going to do is look at the best applications and accept one of those. So, there's not a whole lot of negotiation that goes back and forth with respect to price. And what I mean by that is that I have, just gave an example, I have a property I list for over 1,700 a month rent. You know, if this was a year ago, I probably wouldn't have list that property for more than 1,400. So, if I get a qualified buyer at 1,700 plus and they meet, you know, everything else, you know, we're going to accept that particular applicant as a tenant.

Andrea Rice [00:09:44] Yeah, interesting, Edwin, because that really just matches up with the numbers that Josh was going over. And what I found interesting, you know, Josh, you were talking about it was a pretty steady increase, you know, pretty predictable for rentals from 2017, 18, 19, even 2020, which we thought was a crazy year. But then it's just this huge jump in 2021. And Edwin that goes along with what you're saying, you know, that, you know, a year or so ago, you wouldn't have probably been able to get, you know, 1,400 for that property and now you're getting 1,700. So, that's just, you know, everyone says it's a crazy market, but it really is, especially when you look at the numbers and how that translates into the real world market.

Josh Garbin [00:10:31] And one other thing to note, I did a comparison based on 2021 to 2019, and that median rented price is up 10.91 percent overall. And then the number of rented units was down 45 percent, which was kind of very interesting to me. Just overall.

Andrea Rice [00:10:50] Yeah, inventory everywhere is down then.

Edwin Rucker [00:10:54] Yeah, and that's the nature of the beast. And that's a lot of driving factors for it. You know, new construction industry can't keep up. You know, the cost to build new homes, cost to get land to build on is up significantly. So, builders are behind and what they're able to do. Seem like the only people that's been able to find places to build is apartment complexes. And they can't even build enough of those and they're charging exorbitant rates for those. And again, you know, you got people that don't want to live in apartments. They want to live in, you know, single-family homes, townhomes, or something along those lines. They're just not there. There is more demand than there is supply. And that's the nature of the beast, supply and demand. You got less supply. You got greater demand. The prices are going to go up, and that's what we're experiencing. And if somebody would ask, you know, what's going to happen in the next 12 months and I don't have a crystal ball, and there are a lot of experts out there predicting different things, but I think we're going to see a lot of what we've seen in the last year all over again next year with the exception, it may not be quite as bad as it was. That we'll see a little bit of improvement, but not enough to reduce prices.

Andrea Rice [00:12:08] Yeah. Well, Josh, did you have any other stats you wanted to share with us?

Josh Garbin [00:12:14] No, I think we've covered quite a bit here. It's been a very interesting conversation.

Andrea Rice [00:12:20] Yeah. And, you know, talking about next year, I would hope that both of you could come back at the end of next year and just see where we end up at the end of 2022 because I don't think anyone saw 2020 or 2021 shaping up the way they did. So, it'll be really interesting to see what this next year holds. I want to thank you, Josh. And thank you, Edwin, for joining us today and giving us all that great information. I really appreciate it. I want to thank all of you for listening. If you have not done so already, go to REINMLS.com/podcast. You can sign up to get REINCheck delivered directly to you when new episodes are released. So, please go ahead and do that. Listen to past episodes. And again, thank you, everyone. Have a great rest of your day.

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VO [00:13:13] You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source, REIN MLS.

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