In this episode of Palm Harbor Local Podcast, we have the pleasure of hosting Brandon Kelter, an esteemed authority in the local real estate market and mortgage industry. Join us as we unravel the intricacies of Palm Harbor’s current real estate trends, along with expert strategies for successful home buying and financial planning in this ever-evolving market.
Listen to the podcast episode here!
What’s up, Brandon, welcome back to another episode of Palm Harbor Local, man. Happy to have you here.
Thank you. Thanks for having me. Glad to be back.
So I looked back at our last episode. It was August 22. So a little over a year ago.
Can’t Believe It’s August of last year. ? Time flies.
A lot has changed since August of last year.
Yes. And all aspects,? Like real estate mortgages. Everything.
So for for people who didn’t listen to the previous episode, you go back and listen to it. August 2022, was when it was when it was posted. You can learn a little bit more about Brandon but just kind of give us the quick little rundown of what you do, and how you got to work with movement mortgage.
I’m Brandon Kelter. I run the Keller Mortgage lending team at Movement Movements an unbelievable company. We came from a big bank previously. And, I help people facilitate what I call the American dream. And that’s homeownership. A lot has changed since August, a lot has changed. I feel every day, the markets, life in general, the home prices, and prices of groceries a lot have changed.
But, my job is basically to help people buy their first home or buy their 10th investment property, crunch the numbers, get creative, and help them build their portfolio or start their new chapter in the life of homeownership.
So, it’s pretty cool. And now you say that I remember us talking about that. That journey, especially for the first-time homebuyer, the first time they’re gonna own a home and experience that closing day. ? That’s a pretty cool feeling for everybody involved—closing days, are just a lot of fun in general.
I mean, it’s, the stress and the pressure of the home loan process is a lot. But, my team and I take great pride in making it as smooth as possible, moving from another state, or, just tired of renting and wanting to get in that house, put money in your own pocket and some instead of somebody else’s.
It’s very stressful, I’ll be transparent, it’s a lot. But what my job is, is to make it as smooth as possible. And as easy as possible, got you through, all the way from start to pre-approval, even before you start shopping, and then they go to you, to start the home search to the day close. It’s a lot, but we make it as easy as possible for you.
I think that’s the key. You can’t change the process, but you can try to make it as simple as possible. And you have streamline as much as you can as easy am so I wanted to have you back on and I think we can do a, we’ve talked about before, kind of come on and just kind of do a quick update for the people of Pearl Harbor and, and surrounding areas to kind of hey, here’s what’s going on the market.
Here’s what we’re seeing and hearing and experiencing ourselves and we’re in it every single day, so I want to start with just some of the key stats for Palm Harbor as far as home values go and then you can kind of touch on, some of the mortgage side of the business there too. But obviously, inventory has been low for quite some time.
I mean, I got into real estate in 2016. And we were still kind of in that seller’s market, maybe trending towards a buyers market then, and then COVID happened. We took a deep dive into that seller’s market inventory extremely dropped extremely low. So now in Palm Harbor, this is single-family homes.
I left out condos, but single-family homes only there’s 1.7 months’ worth of inventory. So if no homes were listed, it would only take 1.7 months and we’d be out of homes for sale, median days, days on the market 21 days, it’s only taken three weeks to get a property under contract and go quick. Quick.
And then. And that’s up month over month. So it’s trending where it’s a little bit longer. It’s taking a little bit longer to sell, but 21 days is still pretty quick. It’s still insanely quick. Because you still because with 21 days, you have some that are, 4050 days, and then some that are two to three days. Median sold price. 495. Which is crazy, crazy to think about? Both of us grew up here in this area.
I mean, it’s a desirable area, though. it’s Palm Harbor, Dunedin Tarpon. Springs, it’s a very desirable grade school. ? The water and you’re not far from the airports. You don’t have the big you’re outside the city. But you’re close enough to it, Mm-hmm. So I think that’s what really brings, you said, I mean, we both grew up here. I wouldn’t go anywhere else. that’s what we bought here. So it’s crazy to think about, just how fortunate we grew up in this area.I used to be a part of that. Yep. So every day very thankful for it.
Pretty cool. So let’s talk a little bit about what you’re seeing in the market. Obviously, the interest rates are a hot topic now. Always a hot topic. That’s true. But kind of what are your thoughts? What do you see? And what are you hearing?
I mean it’s the million-dollar question. Every time I get a new lead from an agent partner, even before we get into the details of what goes through being pre-approved, it’s what are the rates. And where are they going?
I mean, I always tell them, if if anybody had a crystal ball, the experts, that we pay a lot of money for, to follow them and get their expertise of what the trends and the data are showing. No one has a crystal ball at the end of the day. But, unfortunately, the rates are at a 20-year high now. So we’re, we’re back in the rates were 2001 2000 2003.
Where they’re at now. ? it took a solid stat the other day, which was it was very eye-opening, but when rates change, from, COVID years, that was pure COVID. that was a pandemic. Never say never, but, I think it’s going to be in our favor if we’ll ever see those rates again.
But back then, though, let’s just say, 2021 2022, when the rates started trickling back up, it took people a little bit of time to realize that this is where the rates are at, three to six weeks to have them wrap their head around, this is where it’s at?
Whether it’s your first time or their 10th time buying their house, or an investment property, I always tell the client to there if it’s their first time I tell the client ask their parents or grandparents, what the interest rate is, when they bought either their first home or their most recent home.
So the 40-year average, now, rates-wise, we’re there. We’re in the sevens, that’s the 40-year average rate in the sentence. So it’s not. It’s not out of the picture. It’s not out of character of where we’re at now. But it’s obviously different. we’re at a 20-year low. But if you go over 40 years, or at the average average,
And the most recent memory people have of rates is COVID where they were historically low rates, you go from historic low. And if you open your mind, and you really take a big look at it, and obviously that’s where my job comes into play, is to show you data trends. 40-year average, this is where we’re at. and it’s very hard to wrap your head around that because obviously, you go from COVID.
And that people who were able to and fortunate enough to take advantage of that. it’s it is hard. It’s hard news. It’s a hard pill to swallow. But the faster that you can swallow that, and to really know that that’s where we’re at now. The less pressure that you have been on?
Because I think what makes it difficult is the rate the values increased so much, and then the rates followed after that. So that’s, I think that’s the difficult piece a lot of people struggle with. And I would 100% agree, the sooner that you can kind of just, get over it, and it is what it is this is this is the scenario,? And if your goal is to purchase a house, then this is the landscape that you have to purchase a house in. if you want to be in this area.
I mean, and that’s what that’s what it comes down to is, what you touched about earlier is the demand,? So if we take an example of, me saying now is still the best time to buy. The reason for that, and as a financial benefit to you, of buying now is you can’t change the purchase price of the house, you can’t change that. However, rates change every day, every hour.
So we tell people I tell my clients all the time, are you can, you can change the rate, you can change that now, as long as you’re comfortable with the payment, now, then just know moving forward, whether it’s 1218 24 months, of what, the Fed and the experts are saying, obviously next year is a big year with it being a voting year.
So we definitely have to take that into factor. But let’s just say worst case scenario, rates don’t drop until 18 to 24 months from now,? I actually did a video myself, I put it on my Facebook page. Last Wednesday, last Monday, sorry, not this previous Monday, but the Monday before that, I did an example where if someone to buy a $500,000 house now, seven and a half percent interest rate, this is based on a 5% down, and then I would say b plus credit.
So top tips are considered 760. I had a credit score of 720. Putting 5% down so that’s $25,000 for a down payment on a $500,000 house, and your principal and interest payment, not taking taxes or insurance or PMI into place. But just your P and I, you were in the mid-300s. So with everybody waiting for the market to crash or rates to come down. The more you wait, we demand comes in, So when the rates do drop, and you haven’t pulled the trigger and closed on a house now that $500,000 house and rates drop, there’s even more demand.
So that means that’s going to force the purchase price in the market to go up. You don’t get rates come down, and then housing prices come down or you don’t get the best of both worlds. The trend shows that the data shows it Yes, it does. It doesn’t happen. . so house now 500k 5%, Down, seven half percentage of straight, you wit rates drop, let’s say they drop a full percent.
Now rates are at six and a half percent 5% Down 720 credit score. So by about a B plus bleep b minus credit score, that house now could be anywhere from 550 to 575 to even $600,000. because the demand the demand rates come down. It means there’s going to be more people shopping and wanting to purchase because of the interest rates step.
It’s going to drive the market in the home prices up. So let’s just say again, the example I use was 505% down 7% are straight. Now 18 months from now that house is 575 and the rates are at six and a half percent, the same credit score is 720 you are $131 more on a monthly mortgage payment for principal and interest, even though rates dropped even though rates dropped.
But the half percent two a full percent there. And you’re still you’re paying more. So the longer basically just shows you that the longer you wait, even if the rates come down the home prices because of the demand, it’s only going to go up.
And I think that’s, that’s what makes our little area our little pocket of, of, Florida real estate, so difficult for a lot of people and just challenging, for that reason,? Because demand is there. COVID for whatever, whatever reason put forward on the map to a lot of different people in the Northeast,, and even out west now. And so that demand is, and now the work-from-home stuff,?
Even more so, a lot of my clients are working remotely. So I think that’s one good thing I think COVID brought out of all this is the work from remote. So a little bit more freedom. But you said, though, it just created so much more demands for the Tampa Bay area, and then Florida in general, so I always tell my clients, as focus on the payment, if you’re comfortable with the payment, that’s what matters.
Location, obviously the house, all that comes into a correct. But once you find that dream house, that house that you fall in love with, don’t focus on what the rate is focus on the house itself, and then are you comfortable with the payment, because if you’re comfortable with that, again, 18 months down the road, let’s say again, going back to that example, you pull the trigger. Now 700% 500k you already own that house?
You took the stet, you pulled the trigger, you purchased the house, you closed on the house, that whole entire time, that 18 months, you’ve been making mortgage payments, you’re gaining equity because every mortgage payment is dropping down that loan amount, you’re not getting principal. And then at the same time, your house is appreciating because again, the demand is there in our area.
Always appreciate. It’s all-time highs this year, every month, we get an update, it’s all-time high all-time high all-time high for home appreciation. So if you pull the trigger, buy the house now. And then you wait for the rates to drop. You’re no longer in everybody else’s pocket to wait for the shop and then purchase what you’ve already purchased. But your financial benefit.
What I said earlier, is you’re making that money work for you. Time Being You can’t change the purchase price of the house. You can’t once you’re under contract, you agree on that. You can’t change it. You can always change the rate. Always. Again, going back to asking your parents, your grandparents, and Uncle best friend, back in the day, ask them how many times they refinanced.
As for how many times I refinance, a refinance on there, they’ve been in the home. So it was 96. So over 30 years now, math, and they refinanced a few times. even my parents built their house in 94. They’ve refinanced a handful of times. you can’t change the purchase price, but you can always change the rate men refinance. So going back to that example, if you bought the house now 500k 5% Down 7% interest rate, if you just waited until the rates dropped at the six and a half percent, and let’s say that house is now 575.
Let’s say your house only appreciated a 550 let’s just say that the purchase price if you waited is 575 because the demand is there, but let’s just say your home appreciates the equity there is at 550 and you refinance, so you take advantage of that six and a half percent interest rate. It is over $300 in savings on the mortgage payment at that point at that point months later.
It is so eye-opening. So, I think that the key is to try to draw on. I mean the industry, same before it is what it is you can’t, you can’t change, and there’s nothing we can do about what the rates are. So it’s almost as if you could, just put that out of your mind, don’t even focus on the rate?
Just focus on that mortgage payment, you said,? what’s that payment? Can I afford that? And then, and then go find that home in that market? And does it exist in this area? If it’s not this area where where I gotta go to find that? Am I willing to do that man? I think that’s, that’s the key. And that’s kind of what I talked about, too, is trying to let’s don’t even worry about the industry, see what you can afford? And then go for and then see if we can find that home.
I mean, it just comes back. when you go buy a car, I guarantee you, nobody knows what the interest rate is on their car payment. They just know what their car payment is and does it get us up further, even credit cards? Interested in our credit cards are they through the roof?
Well, I mean, especially with the Fed rate, the Fed keeps raising the rates. That’s, that’s what it’s raising on its credit card debt. So you got to focus. It’s a long-term investment. everybody, a house is the biggest purchase you’ll make in your entire life. it is.
And that’s why my team and I take it so seriously, to get you to the closing table as with as possible. But we also work basically, as a financial advisor, are you covered with the payment now, because just know, when the rates start to come down?
When they do again, nobody has a crystal ball, but they’re saying anywhere from 12,18 to 24 months? We’ll really see what happens next year, with it being a voting year, that’s always a big Sway on things, but if you take advantage of purchasing a house now is going to work in your benefit for the long run, because again, you can refinance the house, your payments will drop with refinance, you take advantage of that lower interest rate, instead of being in the pool of buyers who have been waiting for the rates to come down.
So not only are you You already had the house? If you didn’t do that, now you’re in the same exact pool as everybody else waiting for the rates to drop. So that house now that has maybe a handful of offers, when rates drop, now you’re looking at an Excel spreadsheet of buyers, we’re going back to 2021, where it was 1520 25 offers on the table, and you’re going from 30-40-50,000 over asking, waiving appraisals, waiving inspections, just to get in the home.
That is not financially sound, because now you’re purchasing the home. Let’s say you agree and you’re the lucky one. And it’s 10,000. Over Over asked. And you get it. But now you have the appraisal to deal with, it doesn’t appraise? Well, now, not only is the interest rate lower, which is what your main focus was on, now, you overpaid for the house, because the appraiser comes back in where, let’s say the asking price was let’s just say that, or let’s say it’s a little less, let’s say $5,000 Less, not only are you paying more principal and interest wise, because the house price went up, then you went over ask on top of that. Now you’re in negative equity.
From day one to day one. So it’s, it’s just getting people to see the big picture, the overall picture especially when it comes to first-time homebuyers.
What’s your big picture, what’s your goal for this home? how long do you want to be in this? Think about that.
And that’s the questions I asked my clients,, what’s your timeframe on getting pre-approved, on closing on this house? And then how long do you plan on staying in it? Because these stats show that the first time homebuyer the average homebuyer says in their house three to five years as a first time homebuyer three to five years. Because again, life happens.
You start a family, you’re starting your career, there’s a career change, you’re making a little more money. Yep, you have to move you want do you want to upgrade? Do you outgrow the home? The average homeowner is five years. that’s the average homeowner’s first time first times three to five. The average is five.
People are always moving because life happens. So you have to take that picture in hand, you’re not buying your forever home. You’re not I mean, you’re a very small, small percentage of people that their first home I say so you have to take that into the picture, get The House now it’s a starter home if you’re a first-time homebuyer, it’s a starter home, for those people that are looking to come down to the Palmer area as a vacation home, you want to make sure that the payment is comfortable.
Again, not the rate, because you can always refinance when rates come down, you’ve already got the house, and already have the property, when rates come down, then you take advantage, and let that equity and appreciation work for you. On top of getting the lower interest rate, the longer time that you are in real estate that you own the property, the better off you’re going to be. It’s that simple.
I mean, I think I said on our first podcasts back in August of last year is it’s a crazy stat. But it’s the 70-something percent of people who retire, they use the equity in their home to help with retirement. 70% of Americans who retire, use the equity in their home to help with retirement, they cash out their equity or cash out, or they do a home equity line of credit. something along those lines? It’s, it’s in the 70s? I don’t know the exact percentage, but it’s an astronomical number. it’s, instead of renting, what, where’s that money going?
What do you have to show for? And so it’s, it’s a short term and long term, way to think. But that’s where you and I come in, and we’re able to help you see, either the short-term picture or the bigger picture, and then work the numbers and the area, obviously, you with cops, and be in the area expertise of what Paul Armour has to offer.
Is there anything else that you’re seeing? Besides, I mean, obviously, interest rates, the hot topic, everyone’s talking about it concerned about it, following it, maybe not everyone’s following it day to day, but is there anything else that you’re seeing anything else you see on the horizon? I know, you guys just launched something, a movement? I think it was increasing the loan limits or something that you’re offering.
So we just launched a new program, which we call the early release loan limits. This time of year, they may officially announce it here pretty soon, oh, maybe in November. But we launched a new program where the conventional conforming loan limits basically what the max that conventional loans will loan out, we just came out with a new program that UPS it to 750,000.
Now, it’s 723, and changed to 723 350, something along those lines, but we launched this new program that allows up to 750,000. So because when you go from conforming, which is now 7723, and change, we have our program that goes up to 750. So if we were to go for our new program, any dollar amount, literally $1 over 750,000, it’s considered nonconforming. So now you are in what’s called the non-QM or jumbo loan programs, which could require, higher credit scores, and more down payment to put down so we just launched that last week. So that’s super exciting.
But, another big thing is, coming up with the down payment or coming up with the closing costs, that’s always a big ticket item as well, not only are clients looking at the interest rates, and then the home prices, you said, with the median home price was what 494 You said 495 495, . So it’s a hard pill to swallow. So down payment closing costs movement. We launched this, I believe it was, it was definitely earlier this year, may have been last year, but definitely this year, we launched what we call movement boost, which helps with downpayment and closing costs.
Now, it’s not a conventional loan, it’s an FHA loan. However, if we cover the full three and a half percent down, which is required for FHA, there’s that option and then the other option for moving boost is also to give a 5%. So it covers your three-and-a-half percent down payment, and then an extra one-and-a-half percent towards closing costs.
So I mean, there’s many programs out there They’re in downpayment assistance through the Florida Housing Finance Agency. We have all of those. Earlier this year, the big thing was the Hometown Heroes program. that was that was massive.
And originally beginning of this year, it was for any type of first responders, and later, a few months back, they opened it up to anybody, anybody could employ by the state of Florida, was it or Yep,
So the business had to have been licensed in the state of Florida. So if your company is out of state, however, they have a license or approval from the state of Florida to do business here. You were approved, but it jumped up from 25,000. Earlier in the year for the first responders when we opened it up and went up to 35,000. I was huge. It was great. But when that happens, it goes that?
The funds ran out unlimited. And in no time. So. But there’s always the state’s always doing, I think, a great job of adding different programs that. So maybe it’s gone for now, it might come back, or something else might come back?
Absolutely. Me and the regular, Florida bond, downpayment assistance programs, or the Florida Housing Finance Agency has, those are now those really, in my career, they’ve never run out, those are here to stay, So it’s a 7500 option, there’s a $10,000 option, there’s a grant option where it doesn’t have to be paid back. Because of a lot of those downpayment assistance programs we have to keep in mind, too, is nothing is really free in this life, so you get the help up front.
But it does have to be paid back at some point,? So nothing’s truly really free. So you have to have that mindset going in as well, and, it’s obviously, again, my job, trying to find which loan program would be best for your financial scenario now. And then it’s also my job to have a financial scenario setup in place in the years future, whether it is taking advantage of the refinance or let’s say, you don’t refinance.
But if you do want to pull equity out, it’s my job to run the numbers for you if you want to do a home equity line of credit. And use that for either updating, consolidating, consolidating debt, landscaping, redoing a bathroom, there’s, there’s, there’s a lot of programs out there that can help a buddy in their financial scenario.
It’s just whether or not you want to pull the trigger now, or you want to wait, but I think that’s, that’s why it’s so important to, whether it’s myself or Brandon, lean on your real estate agent, lean on your mortgage lender, lender, learn from them, look big picture, you said, what am I goals for this home?
What’s my goal for 5-10 years from now? And then, find a product or something that’s going to benefit you at that time.
I mean, now, where rates are at itself, the short-term thinking now, all because there’s a strategic refinance, planning in place once those rates do drop. But that’s why it’s, it’s so good to take advantage now. Because you’re going to be in the pool if you already own it. And then you take advantage of refinancing when the rates drop, instead of waiting for the rates to drop.
And then now that demand, which is already this big, now, it’s this big year in the pool full of other buyers who have been waiting the same time you have. Well, it goes back to sellers as well. on your end. This time of year, I’ve always noticed, we get to the holiday years. As sellers, you want to wait till the beginning of the new year.
I tell my buyer clients, that now is the perfect time to buy no matter what the rates are. The last quarter of the year is always the best time because you have holidays. traveling, parties hosting wherever it may be. There’s less competition? More or less. So from a seller standpoint, if you tell your agent that you want to wait to list your house until the beginning of the new year, that’s what every other seller is doing.
So that three two pool home that you own now that you’re going to wait to put on the market until the beginning of the new A year, what’s going to happen is when you list that you’re going to be listed with all the other three to pull honks so that you may be overlooked.
That’s the interesting part about real estate is kind of trying to determine, and timing the trends that we have in our area. But that this time, I’ve always told sellers or buyers, there’s or there’s, you’re there’s less demand, because of the nature of, our lifestyle here in America, the holidays and all that kind of stuff are happening.
People are traveling to schools back, so families are settled down. If you’re a seller, there’s there’s less competition. But the buyers that are out there that are looking they’re serious and motivated and want to buy something before the end of the year to yes, there’s that as well.
And it goes back to that motivation factor, us in our industry, you and I both, our job is to look at trends and data and everything that, But if you, no one has a crystal ball, I go back to that, where no one can time the market. Nobody can read, data trends, it’s all from the past, it’s all from the past.
So that’s, that’s a big thing that there is no perfect time, there really isn’t. I know I said earlier, that now’s the perfect time to buy. Everybody’s scenario is so different. So I think if you have the ability to pull the trigger, now, it’s financially beneficial for you to do so. If you have to wait till the beginning of the year, you have to I mean, it’s everybody’s scenario.
I said, is different. It’s life, but if you have the opportunity to take advantage now, it just gives you that much more opportunity to take advantage, more financially beneficial than if you were to wait, and again, it goes back to sellers if you can’t listen till the beginning of the year, you can’t.
But if you’re waiting, you have the opportunity during this last quarter because of less competition. I mean, it goes both ways, buyers and sellers.
Just understanding that and then you just know, buyers and sellers making the best decision for them. And that scenario. Everybody’s different.
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