2023 First-Time Homebuyer Stats: Want to Buy a House in 2024? Listen to This!
CREDITS
Hosted by: Kristina Modares and Steph Douglass
Produced and Edited by: Megan Pue
Music by: Lemonmusicstudio
Photo by: Chelsea Francis
SEASON 6, EPISODE 5 SUMMARY
Did you know that in 2023, 57% of our clients were able to make a down payment of 5% or less when purchasing their first home? Additionally, 16% of our first-time homebuyers in 2023 closed on a home with a platonic partner (buy homes with friends ❤️)! Today, our incredible Realtor team - Jenn, Sydney, Alan, and Mandy - reveals more stats like these to inform your 2024 home-buying strategy.
Though buying a house has its challenges, getting your first home is doable. The numbers we'll share show that clearly. You've got this!
Get in Touch
Comments, suggestions or feedback? Email us at podcast@openhouseaustin.co
Want to hear more from Open House? Follow us on TikTok or Instagram and check out our website!
Please stay tuned for more episodes every Tuesday, and subscribe so you don’t miss them! You can find us on Spotify, Stitcher and Apple Podcasts.
Related Resources
Connect with a Realtor - Austin-area experts with experience house hacking, buying with friends, tiny home construction, and renovations
Blog post: "Our 2023 First-Time Home Buyer Stats (Want to Buy a House in 2024? Read This!)"
Join our Creative Home-Buying & Wealth-Building For Women - it's free, and we meet up regularly; you're welcome to pitch yourself to other members via the Facebook Group or at an in-person meetup
Sign up for our next "How to Buy a House in Austin" Workshop
Take our "Are You Ready to Buy a House?" Quiz
Transcript (Auto-Generated)
0:00
Hey there and welcome to the Open House podcast where Women Talk real estate.
0:03
Did you know Christina?
0:04
And I co-founded our educational company and brokerage four years ago.
0:07
Since then, our team has been helping people buy and sell homes creatively in Austin, Texas every day.
0:12
If you're thinking about buying a house in 2024 now is the perfect time to chat with one of our realtors just visit open house austin.com to get started.
0:19
All right, let's jump into today's episode.
0:28
Welcome to the Open House podcast where women talk real estate.
0:31
I'm Steph Douglas and I'm here with our agent team who will be able to introduce themselves in a minute.
0:36
I am obviously the co-founder of Open House.
0:39
We're missing Christina today, but that's because she is not on the agent team.
0:43
And we brought in the experts to talk through our stats from last year and this is always a highly rated episode because we love data and we love to talk through like what actually happened in the year prior.
0:56
It kind of lets us know the trends and let us know what's possible in the market.
1:00
So Sid I'm gonna take it away.
1:02
I will.
1:02
Hello, I'm SID.
1:04
I am a realtor on the open house.
1:06
A team Jen and I are about to hit our four year anniversary actually.
1:10
Just exciting.
1:11
I've been a realtor in Austin for eight years and I love helping first time home buyers.
1:18
So I'm excited to chat through the stats today.
1:20
I have purchased a few times in Austin.
1:23
Currently, I'm living on the east side of town in a property that I partnered with four other people on and there is a, a little short term rental in the back.
1:36
So that's fun as far as like supplementing the mortgage.
1:40
And yeah, I'm Jen.
1:42
I'm also one of the agents on the open house team as well as a real estate investor myself.
1:48
I bought my first house in 2010 when I was 21 and right now I'm sitting at six units, four properties.
1:57
I've partnered on two of those, but the only interesting fact, the only house that I own with my husband is our primary residence.
2:04
Every other house I've either partnered or I own by myself.
2:08
Yeah.
2:09
And next year or this year I'm looking to buy out of state for the first time going to be a new adventure.
2:15
Awesome, so good.
2:16
I'm Alan.
2:16
I'm an agent at open house as well.
2:18
They know that we're like, but Steph is my fiance romantically, we're putting your relationship unnamed.
2:27
Now is that, you know, So, I mean, she probably knows better how many we've, we have, we've house, had houses before.
2:35
Like we partnered a lot.
2:38
Most recently, big partnership.
2:40
I guess this is almost a year ago.
2:41
We all partnered with other friends to buy a ranch about an hour outside of Austin, which we do on airbnb and short term rental.
2:48
But we also use it a lot for ourselves and go parties out there in camp and do things like that, which was only made possible through partnerships.
2:55
That would not be something that me and Steph could do just on our own both in like the cost and the management of it.
3:00
And yeah, I've been an agent with open house since its beginning as well.
3:03
I was started as an assistant to staff and casino when they first started and then the business quickly grew and I was off to the races with them and I'm Mandy.
3:14
I'm the newest agent addition to open house, but I coming up on my two year open house anniversary, I've been an agent for going on five years and I have bought two homes in a romantic partnership.
3:28
I won't get into the nitty gritty on that.
3:31
But this is the first time that I'm starting to strongly consider and take action to buy in non-romantic partnerships.
3:40
And I hope to add another door to one of the units I already own in Bastrop, Texas, which is about 40 minutes east of Austin, currently operating a successful airbnb there.
3:51
And I would like to buy a second home in the mountains and maybe even in another area in central Texas.
4:00
So, wow, so impressive.
4:02
We ideally we have podcast episodes with each of these people individually this year.
4:07
But the soonest so that we'll be dropping, we'll be with Mandy about buying her house in Bastrop.
4:13
So stay tuned.
4:15
But for now we're going to go into the data.
4:18
The keep in mind this is just our clients, open house clients and we, we like to track based on our values.
4:25
And so we are all about creative home buying.
4:29
We love helping first time buyers, but we are not, we don't put ourselves in that box.
4:33
Like we've, we've helped people that have bought their 2nd 3rd houses and have sold and you know, we, we help a large range, but we have a huge emphasis on education and transparency.
4:45
which is why these these data points are so interesting and like this is all raw and real data.
4:52
So first off in 2023 63% of our clients who bought a home with open house were doing so for the first time.
5:00
Does this surprise you all?
5:01
63% were first time home buyers a little bit because historically, it's been a little bit higher.
5:07
Right.
5:09
Right.
5:10
Why do you think, why would it be lower?
5:12
Well, last year, I mean, the market was a little trickier with higher interest rates.
5:16
So, like numbers are kind of were down all over the place.
5:20
And it kind of makes sense if you were a first time buyer or getting ready to buy.
5:23
I mean, there were a lot of advantages to buying in that market which I'm sure will get to later with numbers and stuff.
5:27
It makes, it makes sense to me.
5:29
If you're like, kind of getting ready to do it, then you have all the news you're hearing is about high interest rates.
5:33
You might slow up that and someone who's bought before and kind of has been through the process and kind of can like, imagine what the cost is and kind of look at the higher rates and wrap their head around the difference it really makes and might have equity from a prior purchase a little more cash because they have a house they could sell or reinvest or pull money out of.
5:53
And the more you put down, potentially the lower your mortgage payment is and mortgage payments were so high due to interest rates last year that that could be, that could be why all I help exclusively are first time home buyers.
6:04
But this last year, I certainly had a few second time purchasers and I heard from them that our process at open house of educating first and like really dissecting the process and explaining and not just saying, hey, I'm here was really valuable to them.
6:21
So that's something I wanted to point out about just how we do things here.
6:25
I think our, our generation is maturing, right?
6:28
And as our community grows, so do their investments.
6:31
So I think we see a lot of our clients come back after 2 to 3 years and they're like, I'm ready to do it again.
6:36
You know, I'm ready to make my home an investment.
6:38
I'm ready to buy an investment.
6:40
So I can see that reason too.
6:42
As a company we started in 2019, we hired Jen and Sid in 2020.
6:49
And so yeah, we're on your four of clients and our whole thing is you're not buying your dream house first, right?
6:54
You're stepping stone, you're buying a stepping stone to the, to the next phase of your life.
6:58
And so it does make sense to me too.
7:00
I hope our clients are clients for life.
7:02
So I help them with their fifth or sixth.
7:05
Exactly.
7:05
So I'm sure that this number might go down or maybe stay steady, however, in the 60 to 70% range just because obviously market changes every single day.
7:15
So that's part of it like what Alan said.
7:16
But yeah, we're going to keep on having people coming back.
7:18
And that to me, his point, we have such an educational approach that not a lot of people do.
7:24
So we have people that literally come to our workshop and say I have done this before, but I have no idea what I did.
7:30
I have no idea what I signed and that's honestly the service.
7:34
And we hope that if you already bought and you felt still lost, you can still like, you know, approach us and say, I wish I had known about you when I bought my first house, which we hear a lot and then also I'm ready to like learn what I'm actually doing here.
7:48
So love it.
7:49
Ok.
7:50
Next that I have for y'all, 83% of those first time buyers were between the ages of 2035 thoughts.
8:01
Good job, isn't it?
8:05
I was thinking about that stat and it's the other side of the coin of the high interest rates from last year, like with those higher interest rates and being younger, a lot of people are getting their first like adult jobs or they're advancing in their career a bit and they're like maybe earning a little more.
8:20
But the higher interest rates mean is that monthly payment is a bit higher, but the market was soft enough where you could come in with much lower down payments.
8:28
Get a lot of like, there's a lot of things you can get done to have your closing costs go down or even buy your interest rates and down.
8:34
So if you're like, you know, 20 years old, you got a promotion in your job or you're younger and you're like starting to earn a good income.
8:40
Maybe you don't have a ton saved.
8:42
It's like the ideal conditions for you to buy last year and even still like, sort of right now because the market is soft enough where you don't need a huge bag, as they say, of like cash to be able to like, get into a home.
8:54
If you're making good money monthly, you could with not that much money up front, get into like your first home.
8:59
So it makes sense in that regard.
9:01
I think I like the range of 20 to 35 because it says you could be a young person who's like, really motivated to get into the market and you can also maybe have already had a, you know, gone done the traditional thing of going to college and maybe you've had a couple of careers and you're still, there's no wrong time or too long or anything like that to get into the market.
9:29
I just think it's super cool that that's such a high percentage of people that are thinking about it and knowing that adding real estate to their investment portfolio no matter what is going to help them in the long run generationally.
9:43
So, yeah, I feel like millennial and Gen Z are really proud that they maybe planners better than their parents' generation was and that, you know, they want to retire early and want to have generational wealth and they see that real estate is a way to do that.
10:00
Especially if you start young, you know, you could be retiring at 50 instead of 70.
10:05
I also think that with that generational idea and point there, most of our clients are now having the light bulb moment in workshops and on calls where they're like, oh, I don't have to save and save and save for so long that they can do it sooner than maybe they had originally thought in their head from probably conversations that they've had with their parents thinking about like, oh, I need to save 20%.
10:32
And so I think that also plays into the younger age.
10:37
And it made me think of the importance of talking to a lender.
10:40
And I think of when I was 26 or 25 when I got pre approved for my first house, I was so a little bit ignorant to the process.
10:49
But when I talked to a lender and realized like, oh, I can actually buy a house.
10:52
I never would have even known.
10:54
Had I not talked to a lender, I would have just been operating in the idea that I was never going to buy a house.
11:01
So that was really a pivotal moment for me.
11:04
And I think it is for a lot of people, especially in this age range, 100%.
11:07
I think this our generation millennials and then Gen Z are rejecting the traditional way of doing things.
11:14
And so like to all of your points really is they're buying earlier, they can houses before spouses they can buy without being married.
11:22
They're partnering potentially with friends or family members and then they're also buying multiple houses generations prior, like, didn't really do that, especially at a younger age, like maybe your parents or grandparents had a rental property or two.
11:35
But like, we're doing this in a way more creative way because people want to not work at the same company for 40 years and retire when you're 70.
11:43
So back in the day who had invest in properties, you thought like, it was a kind of excuse for like the very wealthy and like, it's kind of like a thing that the very wealthy did and it's kind of pivoted where you could find a way to, especially with partnering.
11:57
It helps where, like, it's not saying like, you need to go out there and get like 40 doors or something and become some sort of like real estate mogul.
12:03
But, you know, like having like two or three properties or even just two or just starting with your first one and starting that young kind of opens up the door and like that down the road, just like, that's like an investment.
12:15
Yeah, you go sell that in 1020 years and goes towards your retirement or whatever it might be.
12:22
It is exciting and really opening up the door to younger buyers out of high school or even, you know, 20 years old is our, our, our bottom age.
12:31
That's amazing because that person is very well in their twenties, low twenties, I think they are the younger you are potentially the more flexible you are with roommates and house hacking and sharing space.
12:44
It's, it's cool to know that our clients are really setting themselves up for a cool, cool live time and markets and market.
12:50
One of the things that time in market matters more than timing the market.
12:55
There you go.
12:57
No, but I do agree with it.
13:01
Ok, cool.
13:02
Let's move on to who people are buying with.
13:05
So our, our whole motto is houses four spouses.
13:09
And I think this is probably very unique to our brokerage.
13:13
But 37% of our buyers were single when they bought, which means they have rejected the traditional and then 47% were in a quote unquote romantic partnership and then 16% bought as a platonic partnership.
13:27
Thoughts on this.
13:28
I just wanted to bring up an example of like the coolest partnership.
13:31
I think I experienced last year.
13:34
I had some clients that it was two couples and the brother and sister.
13:41
So there was a guy and his girlfriend and then his sister and her boyfriend and they bought a triplex.
13:48
So they lived in one of the little houses, the other sister and her boyfriend lived in the other house and then they had a tenant in the third house already.
13:58
Yeah, he, I mean, it was an amazing deal, great location in East Austin.
14:03
The income for the rental was already there.
14:07
She, the sister got equity for signing a long term lease and having a tenant set up in that second house and yeah, they got their ideal location and he had amazing loan and it just worked out really well and it's such a partnership that you would never just dream up.
14:24
But the situation presented itself where they all wanted to live in the same location and they're all such good friends.
14:30
And so they have shared outdoor space where they have community dinners and it's just like the ideal communal living.
14:37
Everybody is thinking how much they want that right now.
14:42
Everyone.
14:45
I, yeah, I mean, the amount of single buyers went down last year, which was a bummer.
14:53
I think that was for me, the hardest part about navigating the market last year was just due to the nature of how the rates were shaking out.
15:03
And it made it a bit tougher for single folks to do it on one income, especially with like tech layoffs and just like some uncertainty there.
15:14
It was, I think that was challenging and I, and I, I like to see and I think it's really cool that some of these people have been shifted to, ok, let me partner because it is maybe a higher monthly liability.
15:28
But I still want to enter the market.
15:30
But, yeah, I think that's, we're already starting to see that change this year.
15:35
, because rates have come down a bit so it's becoming a little bit more, I think, attainable.
15:42
But just on the houses before spouses topic, I mean, it really is funny that it applies so much to the couples too.
15:51
A lot of the couples that we work with are like, yeah, like this is a priority before paying for a wedding.
15:58
Weddings are so expensive.
15:59
Not that we can go, we need to go on that tangent.
16:03
But really that's, I think that's a trend that we've seen like in our company and with the clients that we work with.
16:10
It's like a lot of people are valuing, ok, getting into the market and building wealth, you know, speaking personally, me and Steph were engaged and we were like, we should start planning our wedding soon.
16:21
And then we saw this house in late 2022 and it came down to like, yeah, but we could buy this house though, like we really like this house and like we literally chose this house before our spousal.
16:38
We pushed back like whenever their wedding day would be, we still don't know exactly because you know, we bought this house and said, but it's not like we were like, oh damn, that was a mistake.
16:45
We love our house.
16:47
We're so excited for it.
16:48
We really walking the walk truly and also the difference between like single buyers moving, going down a little bit.
16:53
But partnerships increasing me makes total sense, right?
16:56
Like you were saying, like mortgage rates were a little higher.
16:59
So as a single person, but maybe it's like, oh, I still want to get in it.
17:02
So I this partner, which partner can look like, you know, you to buy your roommates, you know, maybe you're already roommates, but now you control your destiny with your own own rather than a landlord doing it.
17:14
So it makes sense that that would shift a little up there.
17:17
Of course, for many partners buying together, it's like married or not like that makes sense to stay steady.
17:22
It is encouraging like people doing that before they're married or because they see like the value in having some equity in a home, you know, get your agreements in order before you do that come to our educational event.
17:39
I will say I did have a client who is married who bought an investment property on her own.
17:43
Her husband did not see it didn't come down for closing.
17:47
So that can also, I mean, single buyer in a couple.
17:52
I do think that that just made me realize that we should be tracking married or unmarried just to see like curiosity and houses before spouses.
18:01
Because if you're in a couple, you're still, yeah, you're still embodying that if you're, if you don't have that piece of paper because you're prioritizing your financial wellness above a party, which I think is, it's each to their own.
18:17
Right.
18:17
But it does make sense.
18:18
And you and Devin bought your house before you got married.
18:21
We did, we were planning simultaneously.
18:24
We got married 10 minutes away from our house.
18:26
I do that a lot too.
18:28
I've seen them close and then a month later they went a, I, yeah, I had a client just goes to see her like their wedding is in like three or four months.
18:36
It was like, it was actually great because we had this house and we have all these like people risking a ton of like Home Depot gift cards gift because like we getting married and they have to be decked out in a new house.
18:48
Can I bring up a situation to where I've had some married couples who kind of took the quote traditional route of getting married and then buying a house and also aiming to buy more of their dream house on the first time around and then living there for a few years and realizing, wow, we'd love to get an investment property and it's a little more challenging for them because they want to live in their current house, which automatically puts them in a higher down payment bracket for buying a second house if you kind of work backwards to all their points is I think a very savvy option.
19:25
That's a great, that's a great thing to bring up because to be clear, if you buy a house that you're going to live in, you can put as little as 3% down on your first house.
19:33
But then after that, you can put 5% down on any house you're planning to live in.
19:39
Obviously, you can't do this more than one time per year or, and if they think they think that you're kind of trying to scam the system, they're going to call you out.
19:45
But if you buy a starter home is what they call it and plan to be there for 2 to 3 years live there and then transition that into a rental and buy another house, you only need 5% down again.
19:57
So the amount of money that you need to have saved is a lot less.
20:01
If you're just, if you're gonna move as opposed to buying an investment property and not moving into it at all, you have to put 20 to 25% down, which is challenging as we've said, and we've talked about this a lot like on consultations, this comes up with couples.
20:18
It's not sexy or romantic, but there are financial reasons that it may make more sense to buy properties before you're legally married.
20:26
Just credit and income wise, you could do things separately that you can't do when you're married.
20:31
Absolutely.
20:32
Marriage brings another layer to the purchase process.
20:36
So, so yeah, we love marriage right now.
20:44
I have a couple, a married couple who's on a contract, but the guy is on the contract for this one.
20:48
His wife just had a baby and they're doing it within mine.
20:51
It's like we're buying this and he's the only one on the loan, even though in a couple of years, 234 years, if they buy another house, like she can be on the loan for that one, it's the same, There's still ways to do that for sure.
21:03
And I think that's a point we like people to have a over their decisions, but it's important that they know their options.
21:10
Exactly.
21:10
But yeah, know your options and then make the best choice.
21:13
Love it.
21:13
Ok.
21:14
Moving on to type of house this year, the amount of people that bought condos went up a little bit to 12% and then 88% of our buyers bought houses.
21:23
It is not surprising as we love creative home buying and it's a little bit harder to do that with condos.
21:28
It's harder hack.
21:29
It's harder to property hack in general with a condo.
21:33
So it's not surprising to us.
21:34
Right.
21:35
That condos are a little bit less but any other takeaways from the 12% condos, 88% houses, I mean, I think slight increase has to do with mortgage rates being higher condos typically cheaper.
21:45
, although just to keep it in your mind, if you're thinking about that condos also, almost always come with a ho a fee which can make up some of that different.
21:53
So it's not always cheaper necessarily, like the price tag might be cheaper, but your monthly could be just the same as increasing your budget there.
22:02
But like with the, with the interest rate where, where they were at, it makes sense that there was a slight increase on that, especially if you are like a single buyer and you're not really wanting to do a lot of home maintenance.
22:12
Some but some people are like built for condos and they like want a condo, they don't want the I like take care of this roof.
22:18
I gotta think about the foundation.
22:20
I got to think about this.
22:20
I got like condos kind of eliminate a lot of those worries.
22:24
Which is why that ho a cost is there.
22:27
Yeah, it makes sense to me.
22:28
Slight increase.
22:29
I will say that I would, I would think that for us, the majority of our sales will probably continue to be 80 to 90% single family homes for the creative aspect that allows for so it just, you know, for house hacking through Stinky duplex or with an ad U or tiny home, all of that is going to be so much easier if not only possible with single family homes.
22:52
And because that's such a big part of our mission and our business makes sense, there might be something to be said after coming off the pandemic where during those times, people were prioritizing space over location.
23:04
So maybe some people moved into or prioritize buying single family homes over condos.
23:09
And then as the pandemic kind of dissolved, people realized that they missed the location.
23:14
So maybe that influenced a little bit them wanting to like move because condos, one of the big perks of condos, besides the lower maintenance is a lot of them are typically closer to the city center and that might be really important, maybe back to office as well.
23:29
We had a lot of clients buy a little further out in 2020 21 that now in 2324 are like, maybe it's time to come back in the town.
23:37
Totally.
23:38
I just, I sold one condo last year, which, yeah, years prior there would have been I think way more.
23:45
Yeah, it's interesting.
23:46
Yeah, it's a, it's a condo is like you said, the location in like for what you can get in the location.
23:53
For example, Allen has a listing right now.
23:56
That's listed at 269.
23:57
It's a one bedroom condo.
23:59
But so it all, yeah, it allows short term and it allows short term rentals, but it's in an amazing low right in any house that you wanted to get in the vicinity of it would be minimum 700 K.
24:12
So that kind of gives you an idea of like the price disparity.
24:16
And so it would be tempting to be like, oh, I want to be in that location.
24:19
And so yeah, so that's, I think when people choose condos, that's what they have in mind.
24:23
But again, yeah, not as creative.
24:25
So interesting data point.
24:27
And obviously we, we can help or help you buy either type of home.
24:32
OK, let's go to house prices.
24:34
This is interesting.
24:36
I'm gonna start at the top about 10% of our clients spent 600 K or a month and so 600 K plus 10%.
24:47
And then from there we went down and I think that the reason we have it at that price point for last year was because of the interest rates, right?
24:56
We had a lot of people who were not able to qualify for a higher because the interest rates made the monthly way high.
25:04
So like in years prior, we had, we probably would have had that at like a million plus home prices have also come down and homes have come down.
25:11
It comes down to that mortgage really like less than that higher.
25:13
I mean, I had plenty of clients who are approved that high, but like the monthly payment just doesn't make sense that high.
25:20
So like a lot of people whose, but like when interest rates were lower, whose budgets would be like 708 100.
25:26
Ok.
25:26
That turns into like 500 real quick when the interest rates have doubled, you know, that's a big factor there, right?
25:31
And I think like we we help people at any, at any price point, all we are helping people do is to make sure this is the right investment for them.
25:39
And so you know, we have people approved to approved at a million.
25:43
And are we saying ok, is that, do you want to actually max it out?
25:46
And like we really have that conversation with people and sometimes they say, yeah, like let's go for it.
25:50
And sometimes they say actually I want my monthly to be a little bit lower.
25:53
It's all part of the conversation.
25:54
And then from there from 500 to 600 K, we had 16 percent of our clients.
25:59
So that range anything to add to add there 500 to 600 K.
26:04
No, I mean, it's kind like we were saying like that that with, well, keep talking about the mortgage rates and the interest rates where they were.
26:11
But like it's, it's all about looking at that monthly payment.
26:14
That's what I always talk to clients on the phone with like the big number is the big number.
26:18
But really what we wanna run numbers for is like, what is it impacting monthly?
26:22
Like any other bill or any other rent?
26:23
That's an impact your daily life.
26:25
So yeah, and and I mean it makes sense in that range in the medium sales price.
26:29
Frosting was probably like January of last year like 520 525.
26:34
So like, it's, it kind of makes sense.
26:37
It's right in the middle there and it's like, and more and more and more people looking in the zone who had like a good budget, like a year before that, I mean, prices did down and like things that were like 650 maybe we're now like in the high fives too, you know, and then these are, this is the part of our data that shows that it's really possible to get a good deal, quote unquote or like that.
26:57
Austin can be affordable even though it's gotten such a bad reputation for being so expensive this past year has really proven,, that you can get a decent home at a decent price.
27:07
26 or 28% of our clients bought between 404 199 or 405 100 K.
27:13
And then 42% of our clients bought between 304 100 K and 5% of our clients bought below 300 K.
27:22
So it's a condo.
27:24
Yeah, exactly.
27:25
So essentially 75% of our clients were under 500 K last year.
27:29
, a lot of that had to do with the mortgage rates where they were and to be clear, they are lower now than they were in 2023.
27:38
, we peaked above 8%.
27:40
, and now we're seeing high sixes when this comes out.
27:44
We don't know.
27:45
It literally changes every day, which is why it's important to get in touch.
27:49
Yeah, I just had two closings, one at a 6.5, 1 at a 6.6.
27:52
, but like they are changing a lot in a month.
27:56
That could be like 6.25 or it could be seven.
27:59
but they're lower average than they were last year and trending.
28:03
Now.
28:04
Anything else about prices?
28:06
I mean, just with the under 400 for 2023.
28:12
So that'd be what?
28:14
42 that's 47% of our clients like that is like wild because I mean, pre yeah, like crazy times COVID market times 2020 to 2022.
28:28
It was that price point was just tough, you know, and a lot of times it was achievable, it was a fight and even sometimes kind of risky.
28:36
Whereas now like that's really encouraging to see that, you know, being able to enter the market, whether it's first time home you want live in for a while or even just like that stepping stone that it's more attainable.
28:49
But that's up like I just looked at 2022 and it looks like that 34% last year.
28:56
So that's up significantly significantly.
28:59
And it just shows that our prices are stabilizing.
29:02
We did have a huge spike.
29:04
It was an unsustainable increase in pricing in Austin.
29:08
That is very true.
29:09
But we're seeing really good houses for really good prices relative to what we were seeing in 2021 and 20 22 and in good locations, I feel like if you look at a map, for example of where people bought homes with us in 2023 versus 2022 the distance from central Austin is a lot closer, so much, you know, a lot more clients looking in like the third ring of suburbs, like 50 miles outside of town.
29:36
It's all very encouraging.
29:38
I also, I mean, when you think about Austin compared to bigger cities, you know, we're not a huge city yet, but when you're thinking of L A San Francisco, New York, you know, those commutes can be up to an hour and we're talking like 10 minutes, 15 minutes, 20 minutes, all very, very attainable under $500,000.
29:58
So pretty cool for a for a good big city.
30:01
Ok.
30:01
Keep on going down.
30:03
Payment amount is very interesting to me.
30:06
This is, this is my favorite, my favorite data points.
30:10
50 57% of our clients put 0 to 5% down which for context, if our average price points around 400 that's 20 grand, 20 grand at the max 0 to $20,000.
30:27
I my first transaction of 2023 I remember it.
30:31
So specifically because they literally all in were K under 20 K like down payment and closing costs.
30:41
They're in the city of Austin like in their preferred location.
30:45
And it just kind of was like, ok, we can, we can do this again as far as, you know, low money down.
30:52
So I think that was really cool.
30:54
My 0% down client, I think brought 13 K total with closing costs.
30:59
That's amazing.
31:00
That was the biggest impact that last year had for buyers.
31:04
Like people, like we would have calls.
31:06
It was like, oh, I've heard it's a bad time to buy and it's like, well, it's all like perspective, like the best time to buy is like when you can and you're ready to do it because a year and a half ago, like so many of my clients last year, like 90% of them wouldn't been able to buy just with the money, they save it.
31:21
Everything was going over ask you needed like your down payment around plus another like 50 K or so in reserves for the just in case costs are going to ask.
31:30
And it's such a huge difference for consistently.
31:33
So many clients of mine let say like 3% 5% down negotiating for seller credit to pay off some of their closing costs and maybe buy down their interest rate to a more achievable monthly thing where it really opened up the door for a lot of first time buyers, which we're still kind of in that market right now.
31:51
And as we were talking about the interest rates changing, like if they do continue to dwindle down, down, down like that will start to shift slowly over time.
31:59
I don't think it will ever be like it was, but I don't, I can't remember a single transaction I had for the past year that didn't have like some closing cost prene that was being paid for by the seller like upfront or like money off the top.
32:12
There's a really good time for buyers, especially first time buyers.
32:16
I feel like, yes, great.
32:19
No, that's pretty good.
32:20
All in all 72% of our clients put less than 20% down.
32:25
So that's huge because the traditional wisdom says you have to put, you have to save 20% to buy a house.
32:32
And we've proven 72% of our people have proven that you do not need 20% to buy a house.
32:37
28% of our clients did put 20% or more down.
32:42
So it's still ok to do that.
32:43
We don't discourage it.
32:44
And like I said, at the top, the more you put down, potentially you're lowering the that payment, that monthly payment.
32:50
So it's all about where you value your money going.
32:54
And like if you're ok with a higher monthly and you're in a house hacker, you're gonna put an ad U so you can supplement your mortgage.
33:00
A lot of people are ok with a higher mortgage and they're just ready to get into the market and put less less down.
33:05
It also opens up the conversation about refinancing.
33:08
Right.
33:09
So a lot of our clients who bought in 2023 when do you think they'll refinance?
33:13
I mean, when the interest rates are lower for sure, probably within like two years I would say.
33:19
And kind of depending on where they locked in their rates.
33:21
And there was a lot of different programs last year and some people are still using them where you could buy down your rate temporarily and they kind of increases slowly over the next couple of years.
33:30
And that's kind of built specifically for the idea that the interest rates will be lower in two years.
33:34
So before it raises, you can refinance into that.
33:38
But it all again, it all breaks down to what that monthly is like, whether you want to spend that money on temporary losing, lowering your interest rate or just holding it, investing it elsewhere and paying a higher payment until you can refinance.
33:51
But those are the type of discussions that we have with you and with your lender, it's kind of like a whole team effort of finding out like how can we use your down payment or the money we might be getting from the seller to have like the best fit for the house, like what you're trying to do, you know, and we do help a lot of clients buy investment properties which require 10 20% down.
34:10
So that is probably a large chunk of that.
34:12
I bet.
34:12
So.
34:13
Yeah.
34:13
Yeah, I didn't even think about that being part of the 20% plus because like we said, depending on how you're going to use the property, you have minimum down payment requirements.
34:23
So if you're going to live there, you have to put down a less.
34:27
, we definitely have people who live in a house and put 20% down.
34:30
That happens.
34:31
It's, it's pretty rare because a lot of times people want to have that reserve, it doesn't make sense for them to put that much down.
34:36
I mean, a lot of clients who I talk to, who plan on it.
34:39
I was like, you should run numbers and then they was like, oh yeah, like the difference isn't that big and they still, I put like 15 or 10% down but they was like, oh, I can save like this extra, like 20 grand for this.
34:50
It just opens up the idea like, I don't need 20%.
34:53
Doesn't mean you can't put a lot down or you can still put that amount.
34:56
But just knowing the difference it might make, helps a lot.
35:01
And I'll say that in conversations with buyers around, around down payment, you know, a lot of times they'll, they'll, you know, think, yeah, 10 to 20.
35:11
But it kind of varies based on the house they find like, if it needs more work, then they might pull that back a little bit or if it's moving ready.
35:20
Ok, maybe they do go to the, you know, higher end of like 20%.
35:24
So that's all something like you don't have to have your down payment decided 100% when you start looking for a house, when you want to have a good idea.
35:32
Like what Mandy said, like having that lender conversation allows you to start planning, but you can have a range and then once you start looking there also an effect could be like the tax rate, like if it's a lower tax rate and your payment would be a little lower and its like, oh, I could put a little less in but higher tax rate, which is something you can't really control the tax rates, the tax rate and that's gonna affect your payment.
35:55
Maybe you put a little more down to get the mortgage lower.
35:58
It's all about hitting that monthly, whatever that comfortable monthly is.
36:01
We also believe in well rounded investment strategies.
36:04
And so, you know, we talk through obviously, we're, we're only experts in real estate, but we believe that real estate is a part of a larger investment strategy.
36:12
And so moving some of that money that you maybe have squirreled away for down payment and being like, oh high yield savings accounts are paying 5% and it's liquid or I want to, you know, beef up my 401k account like having those conversations with you, with your CPA with whoever you know, just talking about where is your money best used?
36:33
And then also the phased options of, ok, like we like Mandy brought up, I want to buy this house and then in two years, I want to buy another one.
36:41
So why would you put all of your cash on one house when you could spread it out?
36:44
Have more assets, put it into a high yield savings until you're ready to buy that dream home or whatever it is that it's so customizable.
36:53
It's so specific to the person.
36:55
And we've just, we've had the widest range of people come to us.
36:59
It's not like we have one person, one type of person.
37:01
It's like some people are really, really conservative and they just want to put that 20% down to feel safe.
37:06
Fine.
37:06
I love that.
37:07
I just had a call with a gal who she's been, she's a high earner, single gal who wants to buy.
37:14
And she has spent the last maybe 5 to 7 years squirreling away 20% and then came to one of our workshops and was like, I could have bought five years ago, you know, and I just thought I couldn't.
37:26
And now it's great because she has the option to put more down.
37:30
But she's realizing that the prices kept going up.
37:33
What did she lose in equity over five years?
37:37
It wasn't equal to what she was saving was rent.
37:40
And yeah, so that's a great time.
37:42
And market put it on a T shirt all about to say it.
37:46
But it encourages you just to book a call to find out.
37:50
Because if you are right now in that mode of just like saving, saving, saving and you find out like, you know, the sooner you have the knowledge, the better you can act on it.
37:58
You don't know one way.
37:59
There's no one way.
38:00
, and, and book a call or lower stakes, come to it at a workshop and the most you've wasted is, you know, an hour of your time to realize.
38:09
Oh, I don't think this is right for me right now.
38:10
Or you're like, oh, wow, this is actually pretty possible for me and I can get into the market sooner and start building that equity and, and like getting the ball rolling.
38:20
So, yeah, and interest rates, I mean, we don't have a crystal ball, however, we think they're going to go down this year.
38:28
Anyone have any, even in the pa in like the first couple of months of 2024.
38:34
Is that what you're right?
38:36
And as interest rates are a little lower than they were last year, I feel that we've already seen more buyers out there getting pre-approved.
38:43
I know some of the lenders that we work with have said that their applications are starting to come through more than they were last year.
38:50
So that just tells me that people have kind of been sitting on the sidelines and are maybe, you know, set aside resources during high interest year to prepare themselves for this year.
39:01
So, and next year and whenever it is, whenever it is anyone else, but moving forward,, 2024 buying you ready for your call, the market changes every day.
39:15
So even if you had a call with us six months ago, a year ago, two years ago, it's always good to have a refresher and just know kind of topically what's going on in the market and what makes sense for you.
39:25
And if you're thinking like, I wouldn't even know what questions to ask.
39:28
I know nothing.
39:30
That's normal and everyone pretty much says that.
39:33
So the call and the workshop, great, great way to get going.
39:38
We got you, we got you.
39:39
And the last thing I'll say is there was a whole year of sellers that decided not to list because it was not a good time to list.
39:48
Like actually, and those people are ready to go, they're ready to make that move, they're ready to move home to be from their parents or whatever it is that they were waiting to do.
39:56
They put off until now the spring of 2024.
40:00
So I'm hopeful for this in this.
40:02
We have a lot of sellers prepping to list right now.
40:06
So even if you bought, but maybe not your dream home, this could be your chance to find something really, really great, really cool in a great location.
40:14
And that's always the most exciting to me is like unique, interesting real estate that improves your quality of life and that's why we're here.
40:21
Yeah, book a call, come to our workshop, come to an event.
40:23
We appreciate your time.
40:25
Thank you.
40:25
Thanks y'all.
40:26
It was so good and thanks Holly for gathering this data.
40:30
It's amazing, incredible that we can compare all the years.
40:35
Yeah, we played three or four years of this now.
40:38
Well, I'll see you all next week.
