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Disclosures and Podcast Description with about $1.5 billion in market cap anywhere, real estate ticker house that's HOU S is a major player in U.S. brokerage. The company own brands you may well recognize, from century 21 to Corcoran to Sotheby's International Realty. And amongst its portfolio is Caldwell Banker Realty, with a network of 50,000 affiliated sales professionals and approximately 2,700 offices. Given that scale, a lot of information about the U.S. housing market flows directly through the business. Well, with a Fed rate cut eagerly expected by the market for December, and hopes that fairly stagnant residential housing sales will kick back up as a result, we wanted to dig into the latest in real estate trends, so we're excited to welcome Kamini Rangapan lane, president and CEO of Caldwell Banker Realty. Before taking the CEO role in March 2023, Kamini was president of National Brokerage at Sotheby's International Realty. Before that, she spent just under three years at Compass, culminating as President of the West Region. So there's a lot of knowledge here. Let's get into it. So Kar, thank you for joining and excited to see a little bit of the world through your eyes in this conversation because there's a lot going on in real estate. Caldwell Banker Realty has just enormous scale. You're operating in every kind of housing market in pretty much every market in the United States. With so much data at your fingertips. Which data points are you actually watching most closely to gauge what's going on with demand and what's going on with supply in these areas?

B (6:42)

That's a great question. And because I feel like a lot of people talk about the market being down or up or, you know, sluggish or stagnant, but the reality is the market is really thriving right now. And one of the things that I look at is as a very simple indicator is days on market. And right now we're at about 34 days on market, which is really indicative of the fact that it still remains a buyer's market. Demand is super strong, but we are inventory constrained. So when you find a home that is well priced and well marketed, it's flying off the shelves. So 34 days on market is the average for the US as a whole, and we have many metros that are far below that. So you know, it's really indicative to me that demand is strong and any sluggishness that we're seeing from the market really is scarcity because we still are at below national sort of historical averages in terms of inventory. So that really is the issue is that we need more housing in order to match the demand that we see.

A (7:41)

Can we talk a bit then about where this narrative is coming from? And let me just give you a another piece of information that has been in the headlines recently. There was a Redfin report that came out saying that roughly 15% of the homes that were delisted listed in September were at risk of selling at a loss. But 70% of homes listed in September were on the market for 60 days. And despite that, the supply of homes for sale about 15% higher now than it was a year ago, suggesting the inventory is actually loosening up. So it's painting a very, very different picture, admittedly sort of two months old now from the one that you are. So what is that? Is that different price brackets? Is that different regions? Is it just different moment in the year?

B (8:20)

Yeah, different price brackets is definitely a huge factor in there. So you know, you think about units versus volume and obviously the mass market over contributes in terms of units. And so you do have markets such as Florida for example, where the average days on market is about 70. And Florida is a oversized contributor in terms of units nationally. So that might be where that stat is coming from. But the reality is 15% up year over year on inventory is still drastically below even 2019 levels. Right. Pre pandemic levels. We've got about four and a half months of inventory on market right now and that's not enough to meet demand. And I think one of the other key indicators is prices. Prices are still going up at a really steady pace across the entire country. And in fact in really desirable metros we see prices going up 4 to 5%. So if there wasn't enough demand then prices would stagnate. And in fact when you look at the 20, when you look at the 2008 housing crash, prices went down almost 10% nationally. So the fact that prices are still increasing and in fact in many metros reaching historical highs is a very strong indicator that the market is actually still pretty healthy.

A (9:41)

Let's talk then about how buyers can try to navigate this kind of market. Because affordability or the lack thereof is something that's being talked about a lot. We're talking about first time buyers, maybe 40 years old by the time they get on the real estate ladder. Is that a dynamic that you deal with at Caldwell Banker Realty or is your core client a different demographic that's more immune from these kinds of issues.

B (10:04)

So, you know, at Coldwell Banker Realty, we sell to over 200,000 homes every single year. And what we see is that across the entire US Home ownership is still an aspiration. We just did a study called the American Dream Study where We surveyed over 3,000 adults across the U.S. 85% feel that homeownership is still a cornerstone of the American Dream. So the desire to own homes is very much still there. And you know, I think because we serve every major metro in the US we see metros that are overindexed in luxury, that are more immune to interest rates, for example, and of course, the mass market as well. What we see is that aspiration really is still there. People want to be able to buy a home. Now, the coupling of a historical pace in terms of increase of interest rates plus price increases means that many people were priced out of the market in the last few years. So affordability is a very real issue. And it's sort of the trifecta, right? You've got increasing demand, you still don't have enough supply, and then you have the pace of increase of interest rates. So those three things together mean that many people have been priced out of the market. So that is absolutely a real concern. Now on the flip side of that, we have seen rates steadily decreasing, right? And we're going to see that continue into 2026. And in fact, I was just talking to an economist the other day who said if we see another couple of rate cuts, we will see adjustable rate mortgages drop below 5%. And in some ways that really loosens up that lock in mindset, right? That really is a little bit more of a mental thing where people remember those halcyon phase of 2021 where you could get a, you know, a mortgage for 2 or 3%, and they're waiting for that to come. So as soon as we get a little bit of an indicator that rates are coming down drastically, right? And again, I'm not talking about 30 year fixed, that's not going to go below 5% for a long time. But you know, thinking about an adjustable rate mortgage and that indicator that you've got a four handle instead of a five handle, I think that's going to be a powerful sort of push for people to get off the sidelines.

A (12:19)

We'll take a quick break. More of my conversation with Kamini Rangapan Lane in a moment. And now a word from our sponsor, Vanguard Financial Advisors. Listen up. Capturing value in fixed income is not easy. Bond markets are massive murky. And let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard.

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So if you're looking to give your clients consistent results year in and year out, go see the record for yourself@vanguard.com audio that's vanguard.com audio all investing is subject to risk. Vanguard Marketing Corporation Distributor this episode is brought to you by State Farm. Listening to this podcast Smart move Being financially savvy Smart move. Another smart move. Having State Farm help you create a competitive price when you choose to bundle home and auto bundling. Just another way to save with a personal price plan like a good neighbor, State Farm is there. Prices are based on rating plans that vary by state. Coverage options are selected by the customer. Availability, amount of discounts and savings and eligibility vary by state. And now back to my conversation with Kamini Rangapan Lane. You talk about sellers who have got ultra low mortgage rates from that 2020 to 2021 period, which were unsustainably low rates by sort of any measure. When you look at history, talk to us about the longer tail of folks in the homes at the moment who took out mortgages perhaps in 2012 or 11 or 10, actually post the 08 crisis when rates also were cut as a way to stimulate the economy. They're still sitting, many of those people on mortgages or have memory of those mortgages. What kind of demand do you see being stimulated from that kind of homeowner?

B (14:15)

I think that that's where a lot of the demand is going to come from. And also very importantly, that's where a lot of the supply is going to come from. Because again, our issue in the housing market today is not one of demand, right? As indicated by short days on market, as indicated by steady price increases. But when you think about that kind of tranche of homeowner, it really is about getting them off the sidelines to list their homes. Homes, right, to create that supply. Now, you know, some are about 10% historically of home movement. So people who either buy or sell is related to life changes. And so that's sort of the cycle that happens year over year regardless of rates. And to every year you see people who are in that older tranche who've been in their homes for longer who have to move for one reason or another. I think what you're going to start to see is people who want to move, likely people who have wanted to move for a long time, but have really been stuck because of a perception of either home value or, or, or, you know, the value of having a low single digit interest rate. But the other side of that is the steady increase in home prices and the dawning realization that if you just keep waiting to buy a house, you're leaving money on the table because that house that you can afford today, you're going to get priced out of it if you just keep waiting for a better interest rate.

A (15:37)

Yeah, housing, housing. FOMO for sure. Just as it keeps on escalating. Can we talk a little bit, Karmi, Just given your vantage point, you are in a unique position because you do see so much. And we're talking about some individual buyers and sellers in the residential market right now. But talk to us about what you're seeing from a different pocket of the market, which is the investor institutions, individuals who've been active in the single family market, many of whom did pile in, by the way, when that 2020, 2021 set of rate cuts did take hold. What are you seeing from folks who are buying investment properties and then thinking about putting them on the rental market? What are you seeing there in terms of their demand for or appetite for exiting?

B (16:20)

Yeah, so investors are an increasingly large percentage of the homeowner market. And it is something that the average consumer really needs to attention to because investors now comprise about 25% of all owners of properties in the U.S. 1 in 4. Yes, 1 in 4 properties is owned by an investor. And so if, you know, if you're just an average Joe out there, not an investor waiting on the sidelines to purchase, you need to realize that those who do this for a living are not waiting. So that should be a pretty good indicator that you should not wait either. There are a lot of headlines about hesitation in the market. My main message is if you are financially stable, go talk to your real estate agent and figure out a property to get into, because investors are not waiting. And what we see from the investor population obviously is flipping. Right. These are folks who are either going to fix up a home and then sell it for a profit. So that means that that property that you could have perhaps afforded today is going to be meaningfully higher priced once that investor flips it or they're looking to rent it. And again, just math. They bought it for an amount and they're going to make some improvements and then they're going to rent it for higher than, you know, the mortgage price. So you cannot wait around. And investors certainly are not waiting around.

A (17:39)

Let's talk a bit about applying technology to real estate and using tech and search or using tech to help facilitate some of these purchases. And Carmen, you've got a long background in looking at how technology can be applied to disrupt or to enhance the real estate sale and purchase this process. There's one name that we've talked about here on this show and I actually had a conversation with one of the major, let's call it Agitators for Change at Open Door. And that's one company. There are others that have been involved in raising capital and using that capital to do exactly what you've said, which is help sellers sell their home more quickly. They themselves have been doing some of the refurbishment and some of the flipping. What do you think of companies like Opendoor as a, as a concept?

B (18:20)

Well, you know, I think the reality is that despite the fact that there is a technology foundation that enables purchasing at scale, the refurbishment is very much a human task. Right? You need contractors, you need handyman, you need plumbers, you need electricians, you need painters, you need humans to go in and do that work in order to resell that property. And that doesn't scale. And I think that we've seen that in the shuttering of a lot of these ibuyer models over the last four or five years. And you know, we've seen that in, in Zillow shutting down their I buying operation. In fact, anywhere real estate had an ibuying operation, Opendoor, despite the kind of run up of their stock, has been, you know, in, they've been, they've been struggling. So the fundamental model of buying homes en masse and then refurbishing and flipping doesn't scale, in my opinion, because that central part of refurbishing a home requires humans. And you know, so I don't, I certainly do not think that that is the future of home buying in the U.S. like I said, I think that individual homeownership really is at the core of the American dream. And you know, I'm really proud to represent a company that has over 50,000 real estate professionals that help homeowners realize their dreams. And you know, besides the sort of Open Door type technology or, you know, institutional technology, we have seen a lot of consumer facing technology that's been deployed recently. And a lot of that is amazing, right? Just, just making it Easier for people to find homes, even if it's just something as simple as going into ChatGPT and putting in an address to get the history of a home. But what we see is nothing replaces that human to human connection when a potential buyer or seller connects with their real estate agent and really gets to the core of what they need and what they want. Because, you know, every home sale and purchase, some part emotional and some part financial and I think having a conversation with an expert in the field is really the way to figure out the best decision by parsing apart the emotional, the financial, and really thinking about the fact that it's the biggest emotional and financial decision of most people's lives.

A (20:40)

And one a decision that's made with somewhat imperfect information and sort of having that person to guide you through it. You know, I just moved homes recently and I remember thinking, gosh. And I actually didn't work with a broker by the way, so apologies to you over there at, at Caldwell. But it's, it's an emotional, emotionally charged process when you think about. But one of the things I did use in that, you know, I'm in New York is I'm constantly on street easy. I was constantly pouring through these listings to try and get market information. There is some contention at the moment between Zillow and from one of your alma mater employers which is compassionate with respect to this concept of private listings Compass saying we should be able to do it. It adds value to sellers. It means you don't get tainted with the sense your property has been on the market for a long period of time with price drops. Zillow saying, it's not something that we can allow because it means not everyone gets equal access to information. Does Caldwell Banker Realty offer a private listing service right now?

B (21:40)

Yes, we do. So our, you know, our core philosophy is that every single listing and every single seller deserves a custom marketing plan for their proper. There are going to be some percentage of people who really need to test the market for some reason or who really deserve privacy or need privacy for some reason. You know, we use the example of a football coach in a local community who has been the cornerstone of that community for a long time, has taken a job somewhere else, but doesn't want anyone to know, needs to sell his house and doesn't want, doesn't want the community to know that person really needs privacy. And so a private listing network might be the best option for that individual. So we have that option at Coldwell Banker Realty. It's called exclusive look, it's a private network that's available to all of our agents. And also we recognize that most homes and most sellers are going to want to list on the MLS to get maximum eyeballs and to sell their home in a short amount of time. So our philosophy is very much have a conversation with your agent about your real needs as a seller about your property. Is your property truly unique in some way? So you do want to test the market. Do you have real privacy concerns? So you do want to be in a private network or are you looking for something that is, you know, more commonplace and better suited to listing on the mls?

A (22:59)

So, last question for you, Karmony, which is a bit of a curveball, but I know that you've got a bit of a background as well in investing. You've advised startups, you've got a broader background as well in marketing, so you understand how the consumer thinks. There is a rise at the moment of young companies, startups that are looking to build up fractional investing into homes. So they're sort of subsection subsectors of that investor community that we've talked about. What's your perspective on folks looking for exposure in real estate who maybe can't afford to buy a whole property, but is thinking about one of these fractional real estate investing platforms?

B (23:33)

I think it's a really interesting developing concept. You know, you have, you have more mature versions of this that offer fractional investing for vacation homes or second homes, for example. I think that can be a great option for some people. People. And then you have emerging platforms where you can buy a brick in a home or 10 bricks in a home and eventually pay off that fractional ownership and translate it into real equity. You know, like I said before, affordability is definitely a concern in the U.S. housing market today because of the constrained supply, because of the strong demand and because of the pace of increase of interest rates. And so knowing that the aspiration to own a home really is still at the center of the American dream, I think it's an interesting way for people to start to get into the real estate market. And if, if for nothing else than at least to get familiar and educated on the real estate market in a way that has less downside exposure and doesn't require as much cash up front.

A (24:32)

Well, Karmi, we think the market is thinking that there is going to be a rate cut in December. The probability of that happening now sitting at about 75%. Come back after that because we want to hear the latest in what you're seeing in terms of mortgage rate move and housing market movements as a result early next year. So hopefully we'll come back to share updated perspective.

B (24:50)

I'll be here.

A (24:51)

Perfect. I'd love to.

B (24:52)

Thanks Anne.

A (24:53)

Well, huge thanks to Karmi Rangapan Lane for joining me. It's 4pm on the east Coast. The market's closing, there's the bell and we don't have a ticker tape, so let's throw it over to our human ticker. Our producer John that's right, The S&P.

C (25:05)

500 was down half a percent, the Dow finished down 9.10of a percent and the Nasdaq finished down 4/10 of a percent. A few market headlines this Cyber Monday Shares in Shopify ticker shop were down over 4% as the company suffered a partial outage that impacted its e commerce network across multiple countries. Some merchants had trouble logging in, while others experienced issues with point of sale systems. Shopify's network issues come on the heels of a strong Black Friday with a reported $6.2 billion in gross merchandise volume, which was up 25% year over year. And shares in vaccine makers fell broadly today, with Moderna stock down over 6.5%. This after the Food and Drug Administration's top vaccine regulator said in an internal memo that the agency would introduce stricter vaccine approval rules. And finally, if you saw Zootopia 2 this past weekend, you're not alone. The Disney film made $156 million at the domestic box office over the long Thanksgiving weekend and became the highest grossing animated foreign film ever in China, bringing in approximately $275 million in its first six days of release in that country. Shares in Disney were up nearly 2% today on the blockbuster numbers.

A (26:16)

Well, that's it for today's Brew Markets daily.

C (26:18)

Brew Markets Daily is hosted by Anne Barry and produced by John Crateau, Tark Abdelatif and Emily Millard. Technical direction by Denise Rivera and Eugenia Waugu. Guest booking by A.B. silver. The President of Morning Brew Inc. Is Devin Emery.

A (26:30)

Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. See you back here tomorrow. Same time, same place.