Ryan Serhant on Real Estate Outlook

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00:00So some relief, some relief for buyers. Is that enough to say this is a buyer's market? Are we

00:05on the way there? No one wants a lot of relief because they don't want what comes with lots of

00:11relief. Every time you get a lot of relief, it comes because something terrible is happening

00:15and everyone goes on their heels anyway. We should have another Fed rate cut roughly right

00:20in about a week or so. That'll slowly put pressure on mortgage prices. Although I don't know because

00:24we have a government shutdown right now. So no one knows what's happening. Unemployment,

00:27we don't know. And we just keep moving forward. But you're 30 years in the low 60s. Arms are in the

00:33high fours. You know, like that's that's a moving market. So that's what we're seeing. Well, let's

00:38talk about that continued pressure on mortgage rates, because if we do get meaningfully lower,

00:43where things actually start to feel a little bit cheaper, I mean, how many buyers are just lined up

00:48on the other side of those lower rates ready to jump in? About four million. Yeah. Yeah. Like if

00:54you look at historically where we were and probably the healthiest real estate market we've known in

00:58the last 25 years, we should have at least six million, if not more home sales nationally every

01:05year. We're hovering now at around four. And that's where we've been for the last three years in a row.

01:10And you're starting to see some of that weakness. September, I think, had the longest days on market

01:15for a home in the United States, about 50 in 10 years. Pricing continuously creeps up. So we need

01:22pricing to come down a little bit. So there's more affordability. We need affordability to track with

01:26income, which just hasn't happened in quite some time. So there's a lot of things that have to come

01:31together so that the housing market could open back up. But if you're in the market, you can get

01:34a deal right now. If we do see that market open back up, is that going to be across the nation or is

01:39it going to be confined to certain geographical regions? No, it'll be across the nation. The luxury

01:44market is always there, right? It has its peaks and valleys, but people are always excited to buy luxury

01:48because they look at it as an alternative to other types of investments, right? Like gold. Gold is

01:53up, what, 66% this year. Those buyers are also putting dollars into real estate. What we really

01:59want is for the average American to be able to balance the monthly costs from a rental to a home.

02:06And right now, it is cheaper to rent in most markets than it is to buy, where in a lot of markets,

02:11the starter price is still over a million dollars. Yeah. Just on that last point, though, about luxury

02:15buyers and particularly the idea of using real estate as an investment. Are you seeing more

02:21competition, particularly in that space? And I mean, like the idea that real estate was kind of

02:26that tried and true real asset, if you would, that diversified your portfolio. But there are so many

02:31other alternative assets out there right now. Are you seeing any meaningful competition for real

02:35estate as an investment? Oh, yeah. I had brown hair this morning. Yeah. I mean, between all of our

02:41prime markets, New York City, Palm Beach, Miami, the West Coast. I mean, you know, we have our TV

02:46show on Netflix, Sony Manhattan. The second season comes out December 5th. There's a deal on that show,

02:51which is a bidding war for a $60 million property in the west side of New York for a resale.

02:57Those buyers want what they want. We just put a $75 million property in Palm Beach into contract,

03:03and it was a bidding war between two separate purchasers. But yet across the streets,

03:06for a home that's worth maybe 10x less, it's taking time to find movement. So at the top end

03:13of the market, there's very, very little inventory, and buyers are pushing. Well, that's certainly a

03:18stratosphere that very few can relate to. So let me bring it to something a little bit more tangible.

03:23I am looking in Hoboken right now, for example. Nearly every place is turning into...

03:28Every day, Ryan. Every day.

03:29Every day. Romaine hears about it all the time. Every place, every property pretty much goes into a bidding

03:34war. Everyone's a cash buyer. And I think some of the pressure that people feel is that we're

03:39heading into a seasonally slow period. We're heading into the holidays. And you fall into this game when

03:45you're going to all these open houses, which is all I do, is that how do I know that I'm not going

03:49to see something better listed come back in January, come back in February? And I wonder, you know,

03:54when it comes to some of these really hot markets, what that equation looks like.

03:59How long does it take you to order dinner?

04:02About 10 minutes.

04:04That's a long time.

04:05Yeah.

04:06Yeah, it's a long time. Listen, you can always wait for something better, in which case you're

04:10just going to stay in the current home you're in and you're not going to be able to enjoy life.

04:14Some point you have to give and no one can ever perfectly time the market. If you see something

04:20you like, you really like it, and you make an offer that you think is a good deal,

04:24where if you get it, you won't have buyer's remorse. But if you lose it, you won't feel bad

04:29either because you'll say, so glad they got it. Then move forward. Like, life is short. A long

04:35time ago, an asteroid came out of the sky and killed all the dinosaurs, and they don't get to

04:40have houses in Hoboken either.

04:41That's true.

04:42So, onward and forward.

04:44On that point, though, and since we're sharing anecdotes about our housing search.

04:47Yeah, go on.

04:47Yeah, where do you want to buy? I'll help you.

04:48Well, that ship has sailed. But it gets to this idea of the sellers, a lot of them are

04:55sort of locked in because they bought at much lower rates. They're trying to sell at prices

05:00that are elevated. And we ran into this issue. And I had one seller, we had a long back and

05:04forth, like several weeks back and forth. We're not budged. He tried to offer some concessions

05:08here and there. But ultimately, the price was the price. And ultimately, what he told us,

05:12I mean, my wife was basically like, look, he's like, I'm basically breaking even on this at that

05:17price. And if I take what you're offering, I'm losing money. And I do wonder where that

05:21balance is right now across the board.

05:23Yeah, we have that conversation with everyone, even in the luxury market. If you bought at

05:27the top of the market, right, either somewhere between 2013 and 2016 or in a suburban market,

05:32somewhere between 2020 and 2022, there is a chance right now that you might break even

05:37or take a loss. But it's not all about the singular asset. The conversation we have with

05:42sellers all the time is think about your life as an entire movement. You take a little bit

05:46of a loss here, but it's OK. Let's look at your portfolio. How much has it risen over

05:50the past four years? You're thinking about one little loss here when you've gained wealth

05:56over here. You have to think about the entire package of your life. And what we tell sellers

06:03too is you might think you're selling at a discount to today. But if the market goes the opposite

06:09way, which I don't think it will, but if it does, the offer you have on the table today

06:13is a premium to what you could get six months from now. So you can roll the dice if you want

06:18to, or let's move on. Like I can, you know, people sit and they count pennies. You don't

06:25want to cut your nose to spite your face.

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