Is the Real Estate Market Finally Shifting?

Is the real estate market finally shifting?

In this episode, we break down the latest signs that the housing market may be moving away from the ultra-hot seller’s market we’ve seen for years and into a more balanced, slower, and more uncertain phase. Sellers are getting more aggressive, buyers are more hesitant, and pricing strategy matters more than ever.

We discuss whether major price drops before an open house are a sign of desperation or a smart move to attract attention in a crowded market. The conversation also looks back at real estate trends from 2014 through the COVID housing boom, comparing today’s conditions to past market cycles, including the 2008 housing crash.

While some national headlines focus on luxury markets like Menlo Park, Silicon Valley, and other high-end California areas, we also talk about why those trends do not always reflect what is happening in places like Minnesota, the Midwest, or Florida.

The Minnesota spring housing market is also showing unexpected weakness this year. Normally, January through May is one of the hottest times for local real estate, but this season feels different. We explore what may be driving that shift, including inflation, gas prices, global uncertainty, job market concerns, and the growing impact of AI on consumer confidence.

Whether you are buying a home, selling a home, investing in real estate, or simply watching the market, this conversation offers insight into where things may be headed next.

Topics covered in this video:

•  Is the real estate market slowing down? 
•  Why sellers are becoming more aggressive 
•  Are big price drops a smart strategy? 
•  Minnesota housing market update 
•  Buyer hesitation and affordability concerns 
•  Comparing today’s market to 2008 
•  California real estate vs. Midwest real estate 
•  Inflation, oil prices, AI, and job-loss fears 
•  What a balanced housing market could look like 

#RealEstateMarket #HousingMarket #MinnesotaRealEstate #HomeBuying #HomeSelling #RealEstateInvesting #HousingMarketUpdate #MinnesotaHousingMarket #PriceReduction #RealEstateTips #MarketShift #RealEstateNews

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Transcript

SPEAKER_01 0:00

Hey, welcome back to another episode of uh Jaden and James Real Estate Podcast where we uh talk about real estate and whatever else comes up. How's it going, Jaden?

SPEAKER_02 0:12

Doing pretty well. How are you doing?

SPEAKER_01 0:14

Uh good. Uh we're not gonna lie. We were just doing another video, so we've already been talking. We got this, we got the small talk down, so we'll just head right into the video. This is an uh another video. Jaden and I we're really getting some really good um I guess not reviews, um comments, comments like hey, these uh doing these reaction videos um are pretty neat. So I I we're gonna keep doing them, so why not? You know, I mean I think everybody learns something a little bit new, and we can ride somebody else's wave and or they can ride ours, you know, either way. So I think it's a good thing. So today, um, do you know much about this one or not?

SPEAKER_02 0:52

No clue, no idea.

SPEAKER_01 0:54

Um, I have absolutely no clue. Do we have any teaser, Brady, or are we just gonna do it?

SPEAKER_02 0:59

Let's just watch it. Oh, it says uh what does it say shift of the real estate market is happening? Okay, let's just let's play it.

SPEAKER_01 1:04

Oh, I guess if you hit read, you can actually see that. Okay, perfect. Ready to go, Brady.

SPEAKER_00 1:08

All right, let's play it. Hey everybody, real estate ninja here. I want to talk about what I'm seeing in the real estate market right now. Now, I live on the western side of the United States, but this exact same phenomenon is happening all over the country. Some parts of the country are gonna be more accelerated, more drastic, and then some are gonna be more muted. But what I'm seeing is not only are we seeing a an increase in activity because of the spring season, but we are starting to see for the first time in many years that sellers really become fearful and start to aggressively market their properties. The other day I went to an open house, beachfront uh property uh ocean front, and they had lowered the price fifty thousand dollars the day before the open house, which I believe is absolutely ludicrous. Uh, if you're trying to grab attention for uh your open house, lower it like a thousand bucks to pop it up number one on the MLS under you know price changes to drop it fifty thousand.

SPEAKER_01 2:16

If he's talking a beach house that's on we're talking million dollars, well, it could be multi-million dollars, it might be three million dollars or something, you know. You don't drop a thousand bucks, they laugh at that. So I I 100% call in BS on that right out of the gates because you don't you actually have to go 2550 increments, you know. If you go a thousand bucks, he's right, you're gonna put it up at the top, but that's not gonna change anything.

SPEAKER_02 2:40

If the you it depends on what the sellers want, do they want to tell the the market that they're serious about selling this and they're really serious about looking at whatever offers come in? And don't be shy about sending me a little bit of a low-ball offer. If some people want that to be the message, you know, and that's the message they're gonna send by having a huge price trap before an open house. You're gonna tell people like, hey, we're pretty motivated here, send us an offer.

SPEAKER_01 3:03

I think it's a brilliant idea.

SPEAKER_02 3:05

I I it depends. If if if your seller is motivated and wants out and is okay with dropping the price, then that's what you should do. If the seller really is rigid and wants the highest possible price, then then don't do that.

SPEAKER_01 3:17

But again, we don't know the what what if um we don't really know the value. Maybe they went in uh way too high and they went, oh hey, let's lower it down, and that could have been a hundred percent a strategy where hey, they went 50k too high, now they're coming out at the market at exactly where everything else is. People now think they're getting a hell of a deal.

SPEAKER_02 3:38

Yeah, yeah, there's there's a lot of different things. It could be a five if it's a five million dollar house that dropped to 50 grand, that's only one percent of the price. I mean, it's like nothing. So it just all depends on the situation. So, anyway, let's let's roll this and keep watching.

SPEAKER_01 3:50

Give them more of a chance, I guess.

SPEAKER_00 3:52

Number four, you're supposedly about to pull an open house that's gonna attract a bunch of potential buyers to look at your home. You want that wiggle worm right there. It only spells desperation. Um, I've seen agents recently say, I think I priced this wrong. It's too low because I have a bunch of people showing up, yet only two people made offers and the price was dropped 50 cents on the dollar. When you average, you look at the average uh uh per square foot price uh that are selling in the area. I'm seeing a lot of people, a lot of agents now. As a matter of fact, I don't know one single agent that is saying this is a good market. Everyone's like, this is a tough market. This is a tough market.

SPEAKER_01 4:33

It's like sellers have finally capitulated. It's not that it's a tough market, it's not the last three years where everything was flying off the shelf.

SPEAKER_02 4:42

Well, I will have to go back further than that. So this hot market we've been in goes back to 2014. Sure, if you can believe that, it just got hotter every year since 2014. So it's been progressively harder and harder to buy a house since about 2014. Because it I picked that because 2013 is when I stopped like buying every house I could get my hands on, because in 2013 the market was ridiculously good and nobody was buying houses. And in 2014, I had to stop buying houses, and then ever since then, it was like every year it would get harder and harder and harder to buy a house. And so now this is the first time, and then it got and then it peaked through COVID, it got ridiculously hard. And uh, so that's what that's what put us 12 years, we're 12 years into this run, and now this is the first time in 12 years where you're seeing what happened in 2013 and 2012, and all the years before 2013. This is how the market was. So we're just gonna it's gonna start going back to something probably not as extreme as that, but more balanced. Where as he's talking, I think what I'm thinking of is like the past few years, everybody's like, well, there's so many buyers and there's not enough houses, so if my house doesn't sell for the price I want, I'll just take it off the market and sit on it for another year, and then I'll just try again next year and I don't need to sell it, and I don't want to sell it that bad, and it's a rare, it's a scarce asset, so I really don't need to sell it. And um, but now if you've got a situation where there's a thousand houses for sale on the market in your area or whatever, and there's only five hundred buyers for the for the houses of the thousand houses, but there's a thousand people that want to sell their house, well, only five hundred of them are gonna actually get their house sold. So, what are the other five hundred gonna do? So probably you're gonna say, well, the other 500 are gonna have to sit and wait and sit and whatever, but what if you have a thousand people that really want to sell their houses? Then what? Now you're gonna have to fight to be one of the 500 that gets picked. And this is the first time this has happened in a long time. So he's like with this $50,000 price drop, like, well, that person maybe wants to be one of the 500 that gets picked and sells their house. And the people that didn't drop their prices maybe won't sell their house. You know, they might and may it may be that what I've seen in Florida here is people have been the last four years just pulling it off the market, I'll sit on it, pull it off the market. Every year they do that, they throw it back on the market the next year, and all the prices went down seven percent. Yeah, well, what's good to now you're you're starting at a seven percent lower basis now, and then you're and I I've seen people do this for four years. Every year ride the wave down seven percent. Well, what if you just dropped it seven percent the first year and sold it? You'd be done, you know. These these cycles last years.

SPEAKER_01 7:25

Last year's but we hit a hard one though, Jaden. I believe is everybody because it's COVID and everybody was paying attention to the news, and everybody, you know, was doing real estate, so that's why I think it's more prominent right now.

SPEAKER_02 7:38

Sure, it's well, because it would it got COVID was just like 2005, it was like the same thing. The market was ridiculous, people were bidding things, a house get listed for 500 and so for 600 the next day. Like that was 2005. The same thing happened in 2020, 21. And and then after what happened after 2005? You had a couple of years of like stagnation, like 06 and 07, and half of 08 was just like this stagnant market that was kind of sideways and maybe down a little bit, and foreclosures were coming up a little bit. And then in 08 is when it just completely flipped, and the inventory surged and the buyers evaporated. Because once the inventory starts going up and everybody starts to realize that housing isn't scarce and it's not hard to buy, and it doesn't just go up every year, everybody just goes, Whoa, this is a completely different situation than the last 12 years. Now I don't even know what to think. What are these houses even worth? Nobody knows anymore. So then it'll have to reset back down to something that's more based on like well, how much does it rent for? That's what happened in 08, is the prices went back down to well, if nobody knows what the houses are worth, who can who can buy them? What investor can buy them and rent them out? And what prices he will want to pay for the house? And that's what the prices went down to. They went from 08 down to 2013 down to those investor prices, basically. I'm not I don't know if that'll happen now or not, but at some point, um, if there's a surge of inventory, there has to be something that balances the demand side of it out. Right.

SPEAKER_01 9:13

All right, let's hear the rest of this video. It's not much left, I don't think.

SPEAKER_00 9:18

Capitulated along with the agents. Uh, because the agents have really capitulated and say, hey, you know what, this isn't the uh market we used to be. We need to come in strong, hard, with a good price and fast to try and scoop up uh someone, uh a potential buyer because of FOMO. And so this is happening all around the country. Now, spring is usually that time when people sell uh more than winter and fall, obviously. However, with the inventory that came in through the winter that hasn't sold and then the spring stuff stacking on top of it, what's going to be really interesting is over the next 30 and 60 days, watching homes stay on the market for that long and then how much they capitulate. I am seeing in my local area homes, once they drop 10% in one whack, they go contingent. Another thing that I'm seeing is a lot of homes in a very desired area. This is, I mean, where Larry Ellison lives and all that stuff. I mean, like all the the wealthy billionaires have homes uh in this one area that I'm looking at. And they uh homes uh that were in contract uh a month or two months ago have all fallen out of contract. I just saw approximately 10% of the market fall out of contract in this one area.

SPEAKER_02 10:36

Let's stop that. So he lives in California. He's talking about like Menlo Park or something by San Jose, Silicon Valley, where those super wealthy people live. I'm like, I mean, I don't I don't want to be mean, but like this is not going to inform anybody else in the rest of the country as to what the house America's doing. Thank you mean about it, but like this isn't gonna tell you anything about what's happening in Minnesota or Ohio or Florida or anywhere else in the country.

SPEAKER_01 11:00

Hey, our bet best advice that we were given from somebody else or who it's like look around, know your market in your area, just know that. Yeah, you're going to get ahead.

SPEAKER_02 11:11

So, like, why is Menlo Park or um Palo Alto doing? I don't know. I kind of don't care, honestly. Those people are all super wealthy, and if they decide they want to pay 10% less for a house, do I I really don't care? I don't care. I'm sorry, it doesn't matter to me at all. Uh it's not my world. Uh it doesn't, I don't know anybody in that world. Um, their world is affected by stocks and tech stocks and tech company income. And um, unless you're living in that area and you're in that industry and stuff, this is kind of an irrelevant irrelevant um, unfortunately.

SPEAKER_01 11:46

I don't think this is that relevant for you, but you can take this uh screen off and just put Jaden and I on here. Yeah, there you go.

SPEAKER_02 11:52

Yeah, I just I was as I mean some of the stuff he's saying, like we are seeing like in Minnesota the spring market in Minnesota is usually like crazy hot. Like, you know, people come out of the hibernation of the wintertime. Wintertime you can't sell a house to save your life because it's cold and snowy and nobody wants to leave the house. And then in January, the spring market turns on and then it gets hotter, hotter, hotter through the end of May. And like you can do nothing wrong usually, March, April, and May in Minnesota, the housing market. Like everything sells, everything goes fast. Uh, it's just like that's how it's been for you know 12 years. And this spring, we are not seeing that. This is we were expecting we had a lot of inventory going to market in the spring here, and it's not happening. It's we're just not seeing it. We don't see the usual spring appetite for housing. So people are getting cautious. I don't know if this is Iran war, probably. But when there's wars and things and uncertainty, there's war going on. You got oil prices shooting up, gas prices shooting up, inflation, people are worried about losing their jobs because of AI now. There's not been a lot of layoffs, but people are worried about it. In Minnesota, you had the ice stuff going on, all this ice protest and stuff, and a couple people got killed, and they're I mean, Minnesota was especially crazy, but the rest of the country is experiencing a lot of this stuff too. And I think people are just kind of like there's more fear. There used to be, I think when people bought houses traditionally, there was some healthy amount of fear involved in buying houses because it's the biggest purchase of your life, and there should be a little bit of fear so you don't screw it up. And over the last 10 years that fear has been completely gone because it's like, well, just do anything and you'll make money owning a house, you know. So yeah, I was just saying that um we lost James for a second there, but in Minnesota, the the spring market, we're you know, at the end of April here, this is essentially should be the peak of the spring market in Minnesota, and we're not seeing the appetite for for buying houses like like we have with the previous, I would say, 12 years. So if you look at like well, the spring market right now, there's two things that could happen. I think the spring market could get delayed a little bit into the summer because of all the stuff that happened in Minnesota, the ice protests and then the Iran War starting and all this different stuff. Maybe we'll see some of that demand just later in the year now. I think we will see some of it.

SPEAKER_01 14:07

Well, I'm hoping for.

SPEAKER_02 14:08

I think we'll see some of it, but it's not gonna be the voracious appetite for buying houses because it's probably gonna be spread out a little bit and you know, and probably not as aggressive as it usually is. So I think we'll see it through the summer a little bit, but it makes me think like if if the spring market's this week, I mean we could be at a turning point in the housing market in Minnesota. This is probably the case in other areas as well, because Minnesota isn't that different than a lot of the, especially the middle of the country. Um, you know, so if Minnesota's gonna kind of roll over here in the housing market a little bit, you know, probably the middle of the country is doing something similar. And I would just say like we always see a 10% drop in prices through the winter. Maybe it'll be 15% this winter, you know, because the spring market's been so weak. Because now if you look at like us, if we're buying stuff in the fall and winter to go sell in the next spring, we now have to recalibrate much lower because we can't count on a strong spring market again next year. We won't. We won't uh we'll be a lot less aggressive. We're not gonna be aggressive at all. We're gonna be very conservative and um cautious with buying stuff in the fall and winter now. So that's my two cents on that. Um, yeah, I don't know. Um let's not pick videos in California in the future, I guess, because I don't know if California helps anybody else that much.

SPEAKER_01 15:28

No, that definitely uh he's he's definitely not gonna help us out. But you know what? I I still like ripping on the guy, so that was fun.

SPEAKER_02 15:36

Interesting stuff. I mean, I don't know. Uh I mean who knows how the market in California works. Like maybe what he said about the $50,000 price trap was completely accurate for California. I don't know. Um, it isn't necessarily true anywhere else.

SPEAKER_01 15:49

No, it isn't. So hey guys, uh if you like what you're listening to, if you listen to us before, you haven't clicked that like button, please click that like button below and uh you know give us a comment. Um if you want to say something, maybe you don't like Jaden's hat, but you like mine. I don't know. Just put it in the comments and we'll go from there. Hey guys, it was great to uh uh coming at you. Um just remember we made the mistakes.

SPEAKER_02 16:13

So you don't have to.

SPEAKER_01 16:15

See you later.