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The Candy Valentino Show
Navigating the Housing Market: Insights and Strategies with WSJ's Veronica Dagher
00:32:30
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- [00:01]
Candy Valentino
This episode is brought to you by Progressive Insurance. You chose to hit play on this podcast today. Smart Choice. Progressive loves to help people make smart choices. That's why they offer a tool called Auto Quote Explorer that allows you to compare your Progressive car insurance quote with rates from other companies so you save time on the research and can enjoy savings. When you choose the best rate for you, give it a try after this episode@progressive.com Progressive Casualty Insurance Company and affiliates not available in all states or situations. Prices vary based on how you buy. Welcome to the Candy Valentino show, the podcast for founders, investors and entrepreneurs where we have honest conversations about what it takes to grow your business, build more wealth and create financial freedom.
- [01:15]
Hey guys. Welcome back to another episode of the Candy Valentino Show. Thanks for tuning in with me today. We've got a great show for you today as I am joined by the Wall Street Journal's personal finance and housing expert, Veronica Dagger. We're going to break down exactly what's going on in this housing market. What you need to know about interest rates, if you are a buyer, things that you don't wanna miss, and if you're a seller, what you can expect, as well as if you're looking to invest in a rental property. This episode is for you. So let's jump into it. Veronica, welcome to the show.
- [01:50]
Veronica Dagger
Thanks for having me.
- [01:51]
Candy Valentino
I'm so glad you're here. This is going to be a great conversation. Cause I know this is something that is really topical on everybody's mind. We've seen rates been jumping all over the place these last couple years. And I know that personal finance and the housing market is your specialty and your expertise. So I'd love to talk about a little bit of this real estate market. We've got a lot of real estate investors that listen to the show, a lot of people that may be looking to either uplevel their home or get a second home. So I want to just get your overall view of this housing market. Just give you the wide lane to kind of like share what your thoughts are for our listeners and what's most important for them to know.
- [02:29]
Veronica Dagger
You know, it's such a tricky housing market right now. We're in this moment and we've had this moment before. But right now it seems a bit more extreme of this bifurcation regionally. And so if you are a buyer in the Northeast and you're looking to buy a home in New York or New Jersey, you're probably going to still have bidding wars. You're going to be competing you're probably going to have to pay more than the listing price. However, if you're a buyer in the south looking for a house, specifically a house, you're probably going to have your choice of homes. You're going to be able to negotiate, most likely pay lower than list price. You're not going to have to run to make an offer. You can take a couple days, which is maybe even a week or so. I mean, this is a big shift from the pandemic and the height of that housing frenzy. And so depending on where you are, you can really get a good deal. That said, like anytime we want to make sure people are, if they're a buyer, sticking within their budget, not becoming over leveraged with debt. And we've got this whole other factor right now of many more people are reporting they're feeling financially insecure. It may just be a feeling. It may not be based on their actual finances per se. However, if you feel like your job's not as stable as it once was, if you're worried about the overall climate of tariffs and what that means for you and prices of groceries and your employer, some people are saying this is really having a chilling effect on buyers. And the long story short is that we are not seeing a lot of people making moves unless they actually have to right now.
- [04:21]
Candy Valentino
Yeah, and I agree with you. I do feel that there's almost a stalemate going on in the market. So I think what for my interpretation of that, it means there's a lot of opportunity for people who do have the right mindset, understand this a little bit so that they can take action, because there could be some deals to be had. To your point now you said New York, New Jersey, some Northeast. There may be still some competition, heavier competition. Are you seeing some specific states in the south or in different regions that there are opportunities? So if maybe a listener has the flexibility to move, they may get some better prices in other states for sure.
- [04:56]
Veronica Dagger
Texas and Florida are two regions specifically. I'm also hearing places in South Carolina showing some opportunity. And so if you are in a position to invest and you have the capacity to be a landlord and you're looking to maybe you can't maybe buy in New York, but you could afford something in Texas and you're willing to take the steps of what it means to be a long distance landlord, this could be opportunity for you. Just know though, as I'm sure you already do, not as many people have the option for remote work anymore or as many days a week from home. And so that has hurt some people who are invested for that reason. During the pandemic, we saw a bunch of people buy properties because people were moving out of the cities, wanted more space and were renting some of these nice units out. And then I'm just hearing, and I think we're seeing it in the numbers too, some of these rentals that people had purchased during that time are having vacancies. So the last thing you want to do is buy an investment property and then not have someone to pay their rent and that you have to cover the mortgage and all the expenses and have a place sit vacant. So that's something to consider as well. But yes, to your point, there is opportunities given the right circumstances.
- [06:15]
Candy Valentino
That's great advice. Everybody hears the clickbait on social media about rental properties. Rental properties. And so often people just jump into buying something because they think they should without doing the proper research of that market to understand if it's going to be filled. Because let's be real, the the rental property is only valuable if somebody's renting from you. Are you seeing a shift? I mean, I can tell you in the pandemic time, it was extremely difficult to find any multifamily or any rental properties at all. Are you seeing a shift in that as well? Are there more opportunities for buyers and is there anything that the investor could do to make sure that they do an analysis of the area in order to hopefully stack the odds in their favor to have a renter in that property?
- [06:59]
Veronica Dagger
Definitely seeing more opportunities out there. I think the biggest obstacle for some of the people I'm speaking with is still, presumably if you're taking a mortgage is mortgage rates, because if it's investment property, probably going to have to pay more for the mortgage rates. And so that is a big obstacle for people, but it is so important to check out the building, actually have boots on the ground. I know there's some companies that will you give them money and they will do all the due diligence for you. I'm not saying those are bad, but I'm just saying I think it's really important for you as the investor to try to physically see what you're about to buy into before you actually do so. Because the way something's described by someone may not as be as accurate as what's really happening and to talk to other people within the complex. Some of the things you're not going to hear about or not going to read about in the listing, like it that might be important to your renters, like is it A good school district, really? And what's the safety? What's the vibe in the neighborhood? Or is a big shopping center going to be built right across the street and that's going to scare away potential tenants? All these things you can find out when you're actually on the ground and speaking with people before you send money. Especially in this kind of economy, you want to take those extra steps of due diligence in addition to seeing the building's financials and all the. And just seeing how it fits with your overall financial picture.
- [08:26]
Candy Valentino
Yeah, it's sound advice. And you mentioned interest rates, so we have to circle back to that because speaking of the market being a little bit kind of sideways and stuck, if you will, we're kind of seeing the same thing with interest rates. I know that there's been a lot of talk that we will be seeing these come down. Do you feel that this is also applying pressure to, to the market? And if so, how?
- [08:46]
Veronica Dagger
For sure, it's been a big drag on the single family home market this year. It's funny because the prediction with interest rates, who knows, right? Because if you look today, I mean, I just was looking at Mortgage News Daily right before and it's, you know, 7.05% for the 30 year mortgage is what they're showing today. And that's a tricky, that's, that's a really high number because if you look back just a few months ago, even we were saying, well, in the spring, which is basically over by now, rates are going to fall. And that never happened. That didn't happen. Things went the opposite direction. And so it's been difficult for buyers and for that very reason, in addition to high home prices, people are holding off. I worry about the people who bought homes during the pandemic or maybe slightly after, who didn't get the super low interest rates on their mortgages. There is, I don't know what the percentage is. I think it's relatively small. But still, I think there's some people who bought a home during that time who had like a 5 or 6% mortgage and they bought the home, they couldn't really afford it, but their realtor told them, you know, buy the home, date the rate because soon you're going to be able to refinance to a lower rate. Anecdotally, I'm hearing some of those people are really under pressure right now financially because rates have gone the opposite direction and no one knows when they're going to drop again soon and especially drop enough to warrant a refinancing. And so you don't want to get yourself in a situation where you think you can afford the house only if you can refinance in the future. If it's going to be tight and you're going to find yourself really stressed out and worrying that you're going to be house rich and cash poor. I think it's, it's a mistake to take that plunge. Perhaps you want to rent a little bit longer just to save a bit more. I know that's tough with rents being high, but it's also, it's easier to get out of. It's a lot less traumatic getting out of a lease than it is, you know, going, you know, bust on a mortgage.
- [10:58]
Candy Valentino
Yeah. And that's great advice. I hear so many times people, oh, buy the house, state the rate. Like we hear that on social media a lot too. Right. And I guess there's some truth. I always say there's, it seems like there's truth in a lot of these things, but you need context. Right? It's like, well, is the truth that you can fully afford the payment now and it's only a bonus if you get to refi, then I'll agree with that. But if you are stretched like there is nothing worse than the pressure of being in something and you're just hoping for that rate to drop, like that's a bad financial plan. What is your belief on. Do you have a certain like structure that you tell people, here's how you know how much house you can afford. Because if you go to some of these mortgage brokers, they will get you cash strapped and house rich. So is there something that you, as far as just personal finance that you have a little rule of thumb that you share with people?
- [11:49]
Veronica Dagger
I think kind of looking at your debt to income, obviously if you're strapped in credit card debt, this probably is not the time for you looking at your student loan picture, are you up to date on those loans? Essentially that kind of debt to income ratio we have seen lenders get a little bit. But you know, definitely mortgage lenders getting better about who they loan to and the standards have gotten stricter. However. Yeah, to your point, there, there is some of that societal pressure and actual financial pressure to buy more than what you can afford. So I mean in the, in the rental space, some people say no more than like 30% or 40% of your income, depending on where you're going, where you live in the country goes towards housing expenses. But I think it really depends on, on your overall budget and your other Factors such as your sense of stability and other future obligations where you are in life. You know, if you're expecting major health care expenses in the future, maybe this isn't the time for you either. I mean, I think it's really important for folks to realize while many people still want to be homeowners in this country, there is a growing population of people who are looking to be lifetime renters. And they are living in some of these beautiful buildings. Many of them are with the pool and the amenities and they are putting money that they may have put towards their mortgage. They're putting it into the stock market or they're investing it into a business. Traditionally, owning a home was the way people made money or left that generational wealth. But I think there's some shifting in there because owning a home isn't in a way, it's not the same as it used to be just because the, the cost to own that home have gone up so much. Whether that's the home insurance, whether that's property taxes, if you're in a, so in a community, HOA fees, all these things, even basic repairs have gone up a lot. And so while your home is certainly going to appreciate and it's going to be, you know, you're, you're, when you're renting, you don't benefit from any appreciation or you're just, however, when you, you look at the home, it's, it's a lot more, it's much more expensive proposition than it was in the past. And financially, some people are saying, you know what, it makes more. I can make more money in the stock market, I can make more money investing in my company. And so that's something to think about. I also think it's really important to just go back to interest rates for a second. There are some people who still will write to me and ask, you know, are we going to see the interest rates hit? Like, you know, my friend has a 2.75% 30 year mortgage or a 3% 30 year mortgage. Like, when is that going to happen for me? Like, and I think I don't have a crystal ball, but the answer is probably not anytime soon. I don't know if it's going to happen in our lifetime and maybe it will, but it probably would be a bad thing if it did because that would be like a major financial crisis in the country, which we don't want.
- [15:02]
Candy Valentino
We don't want that.
- [15:03]
Veronica Dagger
Yeah. So I would say don't. It's hard not to be jealous of something like that. But Try not to anchor on such a historically low number right now. Yes, interest rates feel very high for mortgages, but in the scheme of things, they're not nearly as high as I think back in like the 80s or something. Like, there was a time my parents always talk about like an 18%.
- [15:31]
Candy Valentino
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- [16:32]
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- [17:02]
Candy Valentino
You brought up a good point I want to touch on because I think this is a really important conversation that more people. Again, it's the context behind it, right? If you're not going to own your home because a lot of people say, well, okay, I'm just going to rent because now I know that there's this other way and there are a lot of expenses. You know, we always teach that, like your. Your own home, if you're living in it and you're not renting it out, like that isn't really an asset because it's an expense as well. Now granted, yes, you get the appreciation, but depending on where you live, I mean there are some parts of the country you'd be lucky to get 3 to 5% appreciation every year where you put money in a stock market, the S and P. On average, if you just do nothing, it's around 17% every year. So you know, there's, there's the two schools of thought there. For the person that's sitting on the sidelines that is renting, that maybe wants to dabble and is waiting for the mortgage rates or waiting to buy, is there something that you tell them to look for or maybe prepare them for when the opportunity comes? Not necessarily with the rates even, but just like for the right home. How do we determine what's the right opportunity?
- [18:08]
Veronica Dagger
I would first get your finances in order if they're not already, get a sense of what your overall budget is. You could even get pre qualified for a mortgage which will help take you through some of the activities of understanding your finances a little bit better. You can do things now like get a sense of what neighborhoods you want to live in. If you want to stay within your state and you want to start tour going on open houses and doing some tours, you could start doing that. Just be careful with what you sign when you do those tours. That's a whole nother conversation. But things have changed in terms of taking house tours now because of some. Because the real estate basically the national association of Realtors had a settlement and essentially the bottom line for consumer is now if you're going to take something as simple as a house tour or tour a property one on one with an agent, many of them will, if are represented by national association of Realtors will have you sign something and that could essentially commit to working with them for a certain amount of time. And in the chance that you buy a house within that period of time with a different agent, you could owe them that first agent money. So long story short, be careful with what you sign, but understand what fits for your budget. And then if you have that flexibility to move to a different state, know that you could be looking at a very different real estate market and that could give you a whole world of opportunity that you hadn't considered before. I know that can be tricky for people, but that could be an option. And I have heard of some people doing that renting in the city that they are living in and then buying in different city or just entirely moving if they do still have that flexibility to be remote.
- [20:04]
Candy Valentino
I love that. And we talked a lot about the buyer side of things. So if it's okay, I want to shift just to the seller thing side of things because I'm noticing this myself and I'm like, gosh, how do we fix this? Because I feel like there's a lot of sellers right now that still have the anticipation that this is a bidding war in every area and that they're not making concessions and they're not really concerned about days on market and still think that they can get list price. So for anyone selling their house right now, is there anything that maybe you can offer them or share of maybe what they can expect in this market, depending on, of course, where they live.
- [20:39]
Veronica Dagger
Right. So again, it depends where you live. But in general it is overall, it's more of definitely tilted to a buyer's market in overall nationwide. And so that is a shock for some sellers who saw the bidding wars that their neighbors got. And they may be very in what some Realtors have told me, there's some people who are kind of living in a fantasy world thinking that's still going to happen, especially, especially in a place like Florida or a place like Texas or the Carolinas, like that's not going to happen. Maybe it'll happen in New Jersey or New York City, but probably not many other places in the country. So yes, you can't be in a situation anymore where largely that in the past you could say to the buyer like, no, I'm not going to offer any concessions or no, we're not going to negotiate the price, or no, you know, I have got several other authors that don't want an inspection of the property and will just take it essentially sight unseen. That's not really going to happen. Buyers aren't in the position to, many of them aren't in the position to pay for things like repairs or major renovations. And so they are not going to just largely take that listing price from many sellers in several parts of the country. And so, you know, have to be willing to negotiate. And then some sellers are just thrilled to get one offer. Like there is homes just sitting on the market, like you said, for months and no one is coming to look at that because they're worried about the economy, they're worried about interest rates. And if you are one of those sellers, you have to be willing to either drop your price, make sure you're priced correctly for that market, or some people are delisting. We're seeing some of that, more of that happening. But in terms of getting realistic of expectations, that's such an important thing.
- [22:49]
Candy Valentino
Yeah, because it's as much psychology as it is the financial element of the market as well. So I think sometimes there's this lag where the market is kind of shifted, but buyers and sellers psychologies haven't quite caught up to what the market is speaking to. And you mentioned something about concessions and repairs and inspections Which I agree with you. I think those days are gone where people are not doing inspections anymore. But let's just chat for a quick second on that. Are there anything that just statistically you would share that like these are some of the things you should never accept or for the most part walk away from, like, let's just talk about housing red flags. Is there anything specific that jumps into mind? If I would say, what are the top five housing red flags that buyers should run from?
- [23:31]
Veronica Dagger
Well, one of them, and it's sort of top of mind right now because I, I'm writing a lot about condos and I'm writing about homeowner associations, which many homes are also part of, especially new homes. I would say if you, you really need to do your due diligence, diligence on the association because in certain places people are finding the association is in financially not in a great place or is facing major bills in the future. And as a result, because it, you are, once you buy into that association, you are essentially a co owner. And if there's a big bill like the roof needs to be repaired or there's some major, major structural issues even to like the common clubhouse, which maybe you do or do not use, you will be partially on the hook for that. And so it's very important when you're buying into a community to get very clear on what's in the pipeline in terms of big repairs and in terms of big expenses. Also, one of the things before you even buy at this point, whether it's in an association or not, is checking out if you can get home insurance. Like there's parts of the country that have become very difficult to insure. And so you might see something that sounds like a great price, but if you check out ahead of time, make sure you check it out ahead of time that you can in fact get home insurance that's going to be adequate because or at all. Because if you can't get that home insurance, you could be in a really difficult situation. Of course you want to check for structural issues within, within the home before you purchase that. And you'd have somebody do that for you and then get a really good sense of the community too. And, and making sure that there's not. I, I personally would make sure there's not a lot of vacancies on the street because maybe that's a red flag as well. And then getting a sense of also natural disaster risk because I mean that kind of ties with home insurance. But we've been seeing areas flooding that historically may not show up on a flood map, but if you knock on the next flood to the next door neighbor and say, like, how do you guys do in that last storm? Or get a sense of some of that to see if in fact you are in a flood risk that may or may not be so apparent.
- [26:00]
Candy Valentino
Yeah, you mentioned that. It's, that's great advice because you, who would think that you would even have to check and see if you could get the house insured at one point? I mean, I've been in real estate 25 years doing investing and that's, that's come something new. Right. Like, and I think it also coincides. You were mentioning that there is a lot of, you know, some deals to be had in Florida. And I think those two things are a little connected because Florida also seems to be the place that having a difficult time getting insurance on some places. And the HOA fees in some of those condos have been really pricing people right out of their condo ownership, which is crazy. Are you, are you hearing and seeing more of that or was that an isolated incident that we're kind of past?
- [26:38]
Veronica Dagger
We're seeing more of that for sure. Yeah. As you mentioned, especially after the Surfside collapse was a condo building that collapsed back in 2021, 98 people died. And ever since that, there's been some regulations and laws passed in Florida that mandates complexes get up to code and do certain repairs to keep things safe. And as a result, insurance rates and also special assessments have gone up significantly in many parts of Florida. But also we're seeing condos in other areas of the country as well or seeing those prices rise because of some. There's, I think a growing recognition is we have to make sure these, these, these structures are sound. And so you want to, if you are seeing a lot of homes or condos listed in one area, those, these are really important questions to ask because there could be something wrong with the building or wrong with or just significant in to do with the finances of all the people who live there.
- [27:45]
Candy Valentino
Yeah, it's like do your research is so important. One of the questions as we wrap, I want to ask anytime I talk to somebody else, it's like a financial expert because everyone has their take on this and we don't ever tell you what the question is going to be. This is a signature question that we ask on the show. So I want you to imagine that you wake up tomorrow and everything that you have built is no longer. You don't have anything in your bank account. Nobody knows your name. They're not going to pick up your call. The only thing you get to retain is the information that you have right now about everything, finance, everything, housing market. And you got to start making decisions tomorrow to build it all back. What are the very first things that you would start be thinking about tomorrow, starting from zero with the knowledge that you have?
- [28:28]
Veronica Dagger
Well, I have a 4 year old, so my first thought would be like, okay, how do I get him fed? And so that means, you know, going to whatever, wherever I need to go to make sure he can eat and make sure he has a place to sleep and that he's safe and educated. And so I think once you're a parent, so much changes in terms of your thought process. I think when it was just me and my husband and we're like, oh, we'll figure we could sleep anywhere, we'll figure it out, you know. But now that I've, we have a kid, it's all about like, okay, he number one priority and then in terms of rebuilding the rest, I think what you said, you have your knowledge and presumably part of that is the people you know, the organizations you know who might be able to help you and then kind of calling on those people to, for advice and assistance if needed and rebuilding from there. You know, I think so many entrepreneurs have seen those booms and busts and I am always fascinated by that and encouraged by that, that people at any age, given the will, you know, you have these stories of people rebuilding from nothing and having enormous success. It's just that resilience and that mental toughness to keep going. And of course some of the opportunities and people that they know can help them along the way. But that belief that you can, you can do it, it just, you need to, and you've said this yourself in some of your tiktoks, you just need to believe in yourself and, and get it out of your own way essentially.
- [30:03]
Candy Valentino
I love that, I love that. And I think anyone that has kids also resonates with that. Okay, gotta make sure that they're taken care of and now we gotta start to build it back so it's what you do next. Veronica Dagger, thank you so much for joining us today. This was such a fun conversation. I thoroughly enjoyed it because I love being able to talk to especially another female about the market and finance. So thank you for what you're doing. Let everyone know how they can learn more about you. Read your great articles from Wall Street Journal. What's the best way?
- [30:28]
Veronica Dagger
Sure you can find me on LinkedIn and you can sign up for my newsletter there or my source list mailing list there on my profile. And then of course, WSJ.com, you can sign up for alerts on my stories.
- [30:41]
Candy Valentino
Awesome. And we'll link all of that in the show notes.
- [30:44]
Veronica Dagger
Amazing. Thank you so much for having me.
- [30:46]
Candy Valentino
Oh, thanks for being here. All right, guys, that's all for today's episode. Thanks so much for tuning and if you found value, please share it with someone who needs to hear it or leave us a five star review over on Apple Podcasts or Spotify. And of course, make sure that you tune in on YouTube Andy Valentino, where we drop new episodes every single week. Thanks again for tuning in and spending this time together. We'll see you next time. Hey guys, thanks for tuning in to this episode and if there was something that you loved or you had a specific takeaway, share it and tag me at Candy Valentino. And if you haven't already, grab a copy of my latest book, the 9% Edge Lifechanging Secrets to create more revenue for your business and more freedom for yourself. You can pick it up anywhere books are sold, Amazon, Barnes and Noble, or your local independent store. And once you do, head over to 9% edge.com and claim claim $1,500 in preorder bonuses, including a chance to join me on this very show. Thanks so much for tuning in and spending this time with me today, guys. We'll see you next time.