The Rogers Healy Companies Owner and CEO Rogers Healy joins Yahoo Finance Live to talk about new home sales heading into the summer season, drops in mortgage applications, trends in home buying, and where buyers are currently flocking to where there was no previous interest.
SEANA SMITH: A headwind for housing, mortgage demand falling to the lowest level in 22 years. Rising rates and a supply crunch playing a part in that. For more on this, we want to bring in Rogers Healy, owner and CEO of the Rogers Healy Companies. Rogers, it’s great to have you. So I think everyone out there is trying to figure out how significant of a cooling period we could potentially see in the housing market. So how do you see the housing market shaking out this summer?
ROGERS HEALY: Yeah, I honestly don’t think anybody is completely surprised. I think that we had an incredibly busy run of it being really, really busy. But a lot of those people, like y’all have read for the past 2 and 1/2 years, they lost out, which means they still need a place to live. But yeah, I think that interest rates, when they increase, that, obviously, always adjust things, no matter your price point if you’re borrowing money. But we’re still in a good position. Whether you’re here in Dallas and New York City or in middle America, it’s still really, really busy. It’s the busiest it’s ever been.
RACHELLE AKUFFO: Now, for a lot of first-time homebuyers, they might be looking at this picture and wondering, should I get into this? And Barbara Corcoran was actually on Yahoo Finance recently. And she gave this advice for some of these prospective homebuyers in this sort of climate. Take a listen.
BARBARA CORCORAN: And I think you have to get in the game. You have to get in with whatever house you can possibly buy so you have a chip to play in the game and trade up and trade up and trade up. And that becomes a retirement fund.
RACHELLE AKUFFO: So is now as good a time as any to get into the housing market? Or is it better to rent for now so that you don’t end up with buyer’s remorse?
ROGERS HEALY: Well, first of all, we all match. We got the memo to wear red today, and Barbara did, too. So that’s always a feel-good to get confirmation on the outfit. But yeah, I think get in when you can. And something I’ve kind of said like a broken record is, a great deal in real estate is a deal that you get. And I think if you can buy into a property and start building equity and get that feeling of actually owning a home, there’s no– there’s nothing similar to it. And I think that given historic appreciation, even at 3% to 4% a year, you’re literally building equity.
And I think the American dream is to have not just any home, but to have a bigger home. So yeah, I agree with Barbara. And I think, again, right now, even if interest rates are double what they were three or four months ago, you still can find a way to purchase something. It just might not be in the neighborhood you want to end up in forever. But forever has changed as well. There’s no such thing as forever when it comes to owning a home.
DAVE BRIGGS: Rogers, I looked all over, couldn’t find my red sport coat. But I’ll have to borrow yours next time.
ROGERS HEALY: Aw, man.
DAVE BRIGGS: Now, on the flip side of that, one in five– Redfin showed one in five sellers dropped the price of their home. We haven’t seen that since 2019. Is this a time to maybe sit it out for a couple of months? Will prices begin to fall?
ROGERS HEALY: Well, I think the statistic most people don’t know is that five in five sellers think they know more than their realtors. And so I think our job is going to become more valued. But, you know, I think you’ve got to go and price your house with what the market dictates. And we have seen people literally overpaying for properties, so much so that there’s an agenda in states like Texas that literally waives the appraisal. I think when that happens enough, you have neighborhoods that shift pretty quickly.
But yeah, I think being ambitious is really, really advantageous. But the saying goes, you don’t want to be a hog. You want to be a pig because hogs get slaughtered. So I think right now, as a seller, be a pig. And then, again, realize you’re going to be probably buying something as well. So put yourself in a position that you can actually be a realistic client for people like me to where we can keep doing a good job for you.
SEANA SMITH: Rogers, what are you seeing? So you’re based down in Texas. First-time homebuyers, are they still getting priced out of the market, now that we’re seeing maybe some housing pull– some sellers pull back their prices a little bit? Is that creating a new entry point?
ROGERS HEALY: Yes, and no, honestly. And I think that what’s happening in places like Dallas, where I’m located, is that we kind of were forgotten for forever. And people all of a sudden started moving here. Maybe it was COVID. Maybe it was a few years before. And we became this city that was affordable. It was centrally located. And we don’t have the mountains. We don’t have the water. But it’s still a great place to call home. That’s our sales pitch here.
But people are moving to areas that they historically didn’t have the desire to move to, and that is because of what Barbara said. Get in there, buy in when you can, and then kind of flip up and buy something eventually to get to that middle of that bullseye. But we’ve seen these neighborhoods that have become mini boom towns in places like Dallas and Nashville, even outskirts of New York City, where the trends are shifting.
And I think people really want something that’s affordable that is equally as a great location, but the location is getting trumped by what they can actually afford because millennials, for the past 10 years, spent all their money on rent, which means they didn’t have a really significant down payment, which has changed things for people like me.
RACHELLE AKUFFO: And you raise a good point about some of these changing trends. We saw some home buyers are now buying two homes, sort of one to work in, sort of one to get away when you have this hybrid work model. What sort of trends are you seeing as a result of COVID? And which ones do you think are actually going to be here to stay and perhaps change the market?
ROGERS HEALY: Oh, that’s a great question. I love that question. The first thing is this. Back before COVID, the trend for people that were baby boomers was they were downsizing, right? And you think about people that come home from places like New York City, Chicago, Miami, Vegas, et cetera, and they want to come spend time with their family, their family needs more space. So baby boomers are going to start upsizing.
Next is millennials have been dictating and dominating the market for a long time the last few years. But people that are my age– I’m 42 years old and I’m technically Gen X– no one ever talks about people that are Gen X. And we’re the ones that are making money for the first time in our lives where we can afford that luxury property, which is going to squeeze out baby boomers that wanted to go retire in something as well. So we have, really, three big groups of people right now dominating the marketplace.
But the thing that’s going to become a thing of the past is downsizing. I think people want more space, and COVID gave us the ability to realize that if we’re going to be home with our loved ones, even though we love them, we want our own dedicated area. And I think because of that, people are going to want more and more space, no matter the amount of stuff they have because they want to be able to breathe and have a little bit of alone time.
DAVE BRIGGS: Yeah, guesthouse when it comes to the in-laws. Got to go guesthouse. Are we seeing some loosening on the historic low inventory across the country?
ROGERS HEALY: Sure, yeah, guesthouse for sure, by the way. But yeah, I think we’re seeing a little bit. But also, this time of year, y’all, this is normally a slower time of the year. It’s early summer. It’s hotter than crap in places like Dallas. People are getting out of town. They’re kind of getting their families back in order at the start of the summer. But watch out. Watch what happens in July. July through August is always super busy. September slows down, and then it’s really busy October through January.
So we’re kind of playing back into the trends we had before COVID. But I think we are going to see a little bit more stuff on the market because people are getting to that point where they’re like, OK, it’s maybe gotten to the highest it’s going to get. Let’s test the market. And let’s try to find something that makes sense for us long-term.
DAVE BRIGGS: Never a dull day. The stache, the red coat– love it all. Rogers, good to see you, my friend.