Mary Beth: Hi. This is Mary Beth Harrison with Dallas Native Voice and I’m sitting here with Chris Kelly. I love spending time with you.
Chris Kelly: Always a joy being invited.
Mary Beth: CEO of Ebby Halliday, of which Dave Perry-Miller is a part of. I always love what you bring to the table here.
Chris Kelly: Thanks for always inviting me. I appreciate it.
Mary Beth: So here’s what I want to do today. We did a market update at the beginning of the year. Here we are mid-year, what does it look like to you?
Chris Kelly: So if we’re looking across the city, what we’re seeing is that inventory is up between about 17 and 20%. That would be blended of all types of inventory. Right? Certain types might be higher or lower, but blended all, it’s about 17 to 20%. Then we’re seeing pended is down about 3%. So the number of sales this year versus last year is down about 3%.
Mary Beth: So we have more inventory and what’s going under contract is kind of slowing down a little bit.
Chris Kelly: Correct.
Mary Beth: Okay.
Chris Kelly: Now, but when you look into it though, what’s interesting is that we’re looking at last year average inventory on the market was about 2.3 months. Now it’s 2.7. 17, 20% sounds like this really big number, but when you really measure it out in months, it’s not a huge difference. But what it reflects to me is that we’re seeing a more balanced market, a more even balanced market between buyers and seller, which is always actually a really good thing.
Mary Beth: I agree with you. I was noticing when I was looking at the stats that came out is price point about starting about 600, 700 the month supply of housing goes up exponentially?
Chris Kelly: Correct.
Mary Beth: So we’re at six months or more of homes over 600,000 and it just jumps seven months, eight months, nine months, and then when you get a million and more, I think we’re at 12 months supply in housing. In certain price points the market is still really good. And like you say, the inventory is one to two months supply. There’s just not enough of that. But then you start getting into that higher price range and I think that’s what we’re seeing. Just be a little bit more calm. Just a little bit.
Chris Kelly: Well remember, every time you go upper price point, you’re pool of buyers gets smaller. Right?
Mary Beth: Absolutely.
Chris Kelly: So every time you jump those 100,000 increments, your pool gets smaller and smaller. The decision making on those higher price point buyers also has a lot more factors into it. When you’re looking at what the average sales price in Dallas and the median sales price, those factors are always based on, “Do I feel secure in my job? What’s the cost of gas? What’s the interest rate?” When you get into those million dollar plus things, “How’s the stock market doing?” There’s all those different things that are at play. There’s a lot more variables that depend on when I buy or sell.
Mary Beth: Without a doubt. There are a lot more globally interested in what’s happening in the market all the way around. It’s not just our little microcosm of what we’re doing here.
Chris Kelly: Yeah. Exactly right.
Mary Beth: But then take in a much bigger picture there. So I completely agree. They’re taking a little bit longer to make a decision. So it’s not like they see it an and write an offer like you do on some of your say $300,000 properties that go pretty quickly. But I see them just taking a little bit longer to make that decision and get all their ducks in a row before they go there, which is not a bad thing.
Chris Kelly: No, and certainly since the last time we talked. What we saw happen was interest rates really came down and that has spurred that under 600,000 dramatically. I was at a meeting where we were talking with our loan officers and they said between January and now, the average buyer in the Dallas community probably has $50,000 more of purchasing power based on the interest rates from January versus now. That’s a big difference and allows you to jump up a little bit.
Mary Beth: Oh my gosh, that’s crazy. If anyone had told me we’d still be at these interest rates, I would’ve lost my home, my dog, everything because everything I had that interest would no longer be this low. The opportunity is so incredible right now. If anyone is sitting out there with a ridiculous interest rate on their loan, they need to be refinancing because this is the time.
Chris Kelly: And what we define as ridiculous now is like, “If you’re in the fives, you’re crazy. Its ridiculous.”
Mary Beth: Exactly. We all know anything under, what, six or eight percent interest is a great loan. So we’re so spoiled rotten now with this continually low, under four percent type of interest rate that when it does start to tick up, I think we’re going to see a big kind of like, “Whoa. What just happened here?” Like you said, their buying power drops dramatically. So that little bit of interest is huge between what they can afford and what they could afford. People who put things on a back burner and said, “You know, we’re going to wait because wasn’t enough on the market or whatever.”
Mary Beth: Then when they did jump back in, interest rates had gone up from the threes now to the fours. It knocked them completely out of their buying power.
Chris Kelly: Well I think the point for those that are watching and watch all of your videos is that here’s the expert here saying, “If you would’ve told me interest rates would be this low.” So if you’re out there waiting thinking, “It’s going to go lower,” don’t gamble on that. If you’re thinking about doing it, this is really the time to do it. Take advantage of it while it’s there.
Mary Beth: I don’t seem them going lower. They just stayed at this incredible rate for quite some time.
Chris Kelly: I agree.
Mary Beth: But all in all, I just think it’s a great market. I know our business is up tremendously this year. So we’re seeing it. It’s just a good time to be in the market.
Chris Kelly: Balance is good. When it’s out of balance, it might favor one side verus the other, but it always is going to lead to issues and problems and bubbles. So, balance is absolutely what we’re striving for.
Mary Beth: Yeah, not having 10 people hovering over one house is actually a good day for us.
Chris Kelly: Completely agree.
Mary Beth: Someone is not going to be happy. There’s nothing good happening on a multi offer. There’s going to be some disappointing people [crosstalk 00:05:32].
Chris Kelly: One person happy, nine people very upset.
Mary Beth: Absolutely. Well thank you for bringing us up to day.
Chris Kelly: Thanks for having me. Always appreciate it.
Mary Beth: Hey, I always love having you here.
Chris Kelly: Thank you.
Mary Beth: Thanks for listening. You can find us on all social media. We go [inaudible 00:05:41]. Thanks for listening.