Upstate NY Real Estate & Mortgage Insights with Drew Aiello

Lisa Licata: 00:03

Welcome to Real Talk with Sterling Real Estate Group, your go to podcast for all things real estate related. Each episode, we break down the latest market trends, share insider tips, and bring in local industry experts to offer valuable insights that empower your journey. Whether you're buying, selling, building, or investing, we're here to help you navigate the ever changing landscape with clarity and confidence. Let's get real about real estate.

Lisa Licata: 00:36

Welcome to Real Talk at Sterling Real Estate Group. Today, I'd like to welcome Drew Aiello, branch manager with Fairway Mortgage Corporation. Welcome, Drew.

Drew Aiello: 00:45

Thank you for having me to your inaugural podcast.

Lisa Licata: 00:49

Right. So I'm gonna jump in here, and I'm sure you're gonna appreciate this. We go back, what, twenty five years?

Drew Aiello: 00:55

Yes. I've been in this industry now thirty years.

Lisa Licata: 00:58

Yep. And I'm 26. And do you remember when we were doing Showcase of Homes and you invited me on your radio station, and I got in there and I chickened out I and I walked out.

Drew Aiello: 01:09

I remember that day like it was yesterday. I don't know what I did yesterday, but I remember that day. Lisa started walking into the radio studio and got hives.

Lisa Licata: 01:19

I did.

Drew Aiello: 01:20

Started out on your neck, everything started getting red. And I kept walking. I turned around. She was gone. I look where where did Lisa go? She left the building.

Lisa Licata: 01:29

Yep. And guess what? Look it look it. We here we are today. Completely comfortable, relaxed.

Lisa Licata: 01:34

So yeah,

Drew Aiello: 01:35

Well that was when you were 26 years old. Now you're 30.

Lisa Licata: 01:36

Yeah. 29. 29. Well, great.

Lisa Licata: 01:42

So, Drew, today, right, we're talking about understanding mortgage rates, affordability, and some market trends. So Yeah.

Drew Aiello: 01:50

It's gonna be, I think, a very interesting year. There's obviously a lot going on on the political side.

Lisa Licata: 01:55

Right.

Drew Aiello: 01:55

A lot going on with the Federal Reserve. Now we're, you know, five years past COVID.

Lisa Licata: 02:01

Right.

Drew Aiello: 02:02

So still unwinding all that money that was pumped into the system.

Lisa Licata: 02:05

Yep.

Drew Aiello: 02:06

Then we had to deal with inflation over the last few years. So there's a lot

Lisa Licata: 02:09

There's a lot. We thought last year was gonna be a tricky year.

Drew Aiello: 02:13

It's been like this now probably a few years.

Lisa Licata: 02:15

Right?

Drew Aiello: 02:16

Yeah. I would say.

Lisa Licata: 02:17

Yep. 2024, we were just warming up. Yeah. 2025, hold my beer. Right.

Drew Aiello: 02:22

Right. Just survive till 2025. So here we are.

Lisa Licata: 02:26

Yeah. Great. So a couple of questions for you. What factors should buyers keep an eye on that could influence their buying decision?

Drew Aiello: 02:36

In terms of I think the biggest thing that I get is the rate, the rate, the rate. And what, you know, what can I afford? Obviously, if you if the max you can afford is 350 you know, better than anyone. Gotta look at 275, 300.

Lisa Licata: 02:52

Right.

Drew Aiello: 02:52

If you because you're gonna end up at 350.

Lisa Licata: 02:54

Right. Yeah.

Drew Aiello: 02:55

So the I think buyers get get afraid of affordability. There's multiple offers.

Lisa Licata: 03:02

Yeah. It is.

Drew Aiello: 03:03

Right. That's not going away anytime soon. So I've been telling buyers, especially first time buyers, is to get what we call a cash guarantee. We have a

Lisa Licata: 03:11

That's a phenomenal program. Yeah.

Drew Aiello: 03:14

Just because you have to if you're looking at eight offers, everybody has a preapproval. You have to kind of raise your game. Yeah. Unless you can pay cash, obviously.

Lisa Licata: 03:24

Right.

Drew Aiello: 03:24

You have to raise your game and kind of stand out from the competition. So might as well get a cash guarantee, which is a full underwrite by us, our underwriting team, not Drew Aiello.

Lisa Licata: 03:32

Right. Right. Yeah.

Drew Aiello: 03:34

They apply for a mortgage on a house they don't have yet. And we issue a full blown commitment letter.

Lisa Licata: 03:40

Yep. I've used it with you.

Drew Aiello: 03:41

It's tremendous.

Lisa Licata: 03:42

Yep.

Drew Aiello: 03:42

It tells it tells the seller, hey, These people have zero outstanding items. We need an appraisal. We need title. We can close.

Lisa Licata: 03:50

And the clear to close and off they go. Thirty days. Right? Or less than thirty days.

Drew Aiello: 03:54

You could close in fifteen days.

Lisa Licata: 03:56

Yeah. Yeah.

Drew Aiello: 03:57

So I tell buyers because it's super competitive. It's not gonna change anytime soon. We're gonna talk about the demographics

Lisa Licata: 04:05

Right.

Drew Aiello: 04:05

With the millennials and the gen z's. Yep. And it's basic. I went to college. I was economics major.

Drew Aiello: 04:11

Economics 101 right now. Supply demand. There's way more demand than there is supply.

Lisa Licata: 04:16

And and, you know, we're obviously talking about more of the resale market. And I think that's why, you know, we do a lot of new construction here. That's why buyers now are gravitating to the new construction because they're not competing.

Drew Aiello: 04:29

Take your time. You can look at 50 floorplans and

Lisa Licata: 04:36

pick your granite, pick everything. But you know, the beauty of that thing, it's personalized, you know, the brand new home. So that's great. So can you break down mortgage rates for us? Typically, I don't know, the ten year treasury yield.

Lisa Licata: 04:51

And what does the current for you know, the current forecast suggest?

Drew Aiello: 04:55

Right. So for the average person listening to this, you're not going to look at mortgage backed securities. That's something that I look at every day. But the average person can't find that on CNBC or the Internet.

Lisa Licata: 05:08

What is that? Talk about

Drew Aiello: 05:10

the securities is really what drives mortgage rates.

Lisa Licata: 05:14

Okay.

Drew Aiello: 05:15

That is that is it. But 98% of the time, you could look at the ten year treasury. That's easy. Anybody could watch that on their phone, Internet. So I say to the general public, look at the ten year treasury and then add 2.25 or 2.5% and a half percent over that ten year.

Lisa Licata: 05:32

Good information.

Drew Aiello: 05:33

And that's basically what a mortgage a thirty year mortgage rate would look like.

Lisa Licata: 05:37

Okay.

Drew Aiello: 05:37

So for the average person that wants to look quick and find that out, I have CFVC on my phone all the time. Just look at that. So during during the last few years, it got a little out of whack. Like, we saw rates at eight and a quarter Yeah. Two October's ago. We saw seven and a quarter, seven and a half just three months ago.

Lisa Licata: 05:56

Right. Right. Now what? We're six six or so? Yeah.

Drew Aiello: 05:59

Now we're like mid sixes. Low sixes. I would say six and three eights, the six and five eights, you know, various and, you know, depending on the day. But that ten year treasury versus that mortgage rate was really expanded. It was about three or three and a quarter over the ten year treasury.

Lisa Licata: 06:18

Okay.

Drew Aiello: 06:19

That's when we saw those higher rates.

Lisa Licata: 06:20

Right. Right.

Drew Aiello: 06:21

And now the markets, like we're talking about before this podcast, everything's kinda coming back to normal. That's why I'm hoping this year there's a very defining year with mortgage rates. I still think real estate's gonna be out of balance, meaning still way more buyers than sellers.

Lisa Licata: 06:36

Exactly.

Drew Aiello: 06:37

But I'm hoping that mortgage rates kinda come back in line.

Lisa Licata: 06:40

Let's hope.

Drew Aiello: 06:41

That's normal. Like, two and a quarter, two and a half over the ten year is somewhat typical over the last thirty years. That's usually what it's been.

Lisa Licata: 06:48

Okay.

Drew Aiello: 06:48

I see some of that, but

Lisa Licata: 06:51

So that's good information because I mean, I think the average buyer wouldn't know

Drew Aiello: 06:56

Right.

Lisa Licata: 06:56

To look at.

Drew Aiello: 06:57

Yeah. Everybody's like, what's your rate? What's your rate? What's your, I don't wanna, can I lock in rate? Can't lock in rate till you find a house.

Drew Aiello: 07:02

Right?

Lisa Licata: 07:02

Right. Yeah.

Drew Aiello: 07:04

But today's rate is x.

Lisa Licata: 07:06

Yeah. Yeah. We're not sure what tomorrow will be. Right. That's great.

Lisa Licata: 07:09

Let's see what else we have here for you. If the Fed lowers rates four times this year, how quickly might that impact the mortgage rates for homebuyers?

Drew Aiello: 07:19

I think that'll have a very good impact. Right now, this is very interesting. This is kinda behind the curtain information in the sense that the Fed right now is saying two times.

Lisa Licata: 07:30

Okay.

Drew Aiello: 07:31

End of last year, they were saying four. Then they reduced it to two. Bond markets didn't like that.

Lisa Licata: 07:36

Right.

Drew Aiello: 07:36

So we saw a spike in interest rates. And now, thank goodness, over the last seven weeks, rates have steadily come down.

Lisa Licata: 07:43

Come down. Yeah.

Drew Aiello: 07:44

So if the Fed, so right now, out of the out of all the Fed members, 14 of them see two cuts. So the key driver in all this and how interest rates go lower into 2025 is the unemployment market. 14 of these Fed members also think the unemployment rate is gonna stay at about 4.2. Right now, it's about 4.2 right now.

Lisa Licata: 08:07

Right.

Drew Aiello: 08:08

So if the unemployment rate all of a sudden goes to 4.4, 4.5 , then you have 14 Fed members saying, oops, I might have messed up on our predictions. And so then that two cuts goes to four cuts.

Lisa Licata: 08:22

Okay.

Drew Aiello: 08:23

And that, I think, will really move rates slower. Yeah. When I say, you know, you're not gonna go down a point, but if we can get close to 6% in 2025

Lisa Licata: 08:33

That would be great.

Drew Aiello: 08:34

Five and three quarters, I would say, on the lowest end, six, six, and an eighth. Hopefully, on the high end, I think that's probably what we could we could expect in 2025. We hit five and three quarters end of last year or , October of last year.

Lisa Licata: 08:49

Right. Yeah.

Drew Aiello: 08:49

For like 2 weeks. And I don't know if you know this, I mean, the buyers came out of woodwork. We started seeing five on interest rates.

Lisa Licata: 08:55

Yep. And then they went, shot back up.

Drew Aiello: 08:57

And then they shot back up to, like, seven and a quarter. Inflation.

Lisa Licata: 09:00

It's interesting that you say, you know, they're, you know, predicting two rate cuts. So every year in January, I go to New York City to the big Inman Conference.

Drew Aiello: 09:09

Right.

Lisa Licata: 09:10

And, you know, it's a who's who in real estate, you know, CEOs, presidents. And and when I was there in 2023, they were dead on predicting the market for 2024. So this past January, when I was there, they are predicting two rate cuts. So it'll be interesting. Obviously, nobody has a crystal ball, but it will be interesting to see if, again, you know, that they're accurate.

Lisa Licata: 09:36

Right. You know?

Drew Aiello: 09:36

And then there's the the Fed looks at unemployment. The Fed looks at inflation. And I think out of the key catalyst to lower rates is that unemployment rate.

Lisa Licata: 09:47

That unemployment rate.

Drew Aiello: 09:48

So if you had to focus on one metric, look at the unemployment rate. I think that's gonna be the driver if we can get lower rates. I think inflation's coming down. Right now, we're at 2.8. The Fed wants us to be at two. You hear that number all the time. Actually, we have a big inflation report coming out Friday.

Lisa Licata: 10:05

Interesting. Yeah. It'll be the Fed's favorite gauge of inflation. And one thing with the Fed, they look at the rental market as a six month, like, history of the rental market. They don't look at the rental market in real time, and rents are about 43% of that inflation report. So if they looked at rents in real time, our inflation rate is probably much lower than 2.8, which is good. So my point. Once it catches up

Lisa Licata: 10:33

Yeah. Yeah.

Drew Aiello: 10:35

You know? So I see inflation coming down. Unemployment market, we'll have to see. Yeah.

Lisa Licata: 10:40

So Yeah.

Drew Aiello: 10:41

We'll have the same conversation a year from now.

Lisa Licata: 10:43

Yeah. Yeah. We'll see. We'll see if your predictions and Iman's predictions, you know, are correct. Let's see here.

Lisa Licata: 10:50

Are there opportunities right now for buyers to buy the dip, as you like to say, correct, on interest rates, or should they wait for further movement? We hear that a lot. I'm gonna wait until rates come down, and I know you have some interesting information on that.

Drew Aiello: 11:08

I think that's the worst thing you could do. I personally do. And not just because I'm in the mortgage business. I just look at statistics and I look at demographics.

Lisa Licata: 11:16

Right.

Drew Aiello: 11:17

If you're a plumber, you're an electrician, you're a contractor, you sell widgets, You have to look at demographics. Your demographics is your destiny. That's where you're going.

Drew Aiello: 11:27

So we look at the demographics right now. We have 70 some odd million millennials. We have, I think, like, 68,000,000 Gen Zers.

Lisa Licata: 11:37

Yep.

Drew Aiello: 11:39

They're not going away. They're gonna be buying houses. And so we're going to have this inbalance with demand versus supply

Lisa Licata: 11:46

Mhmm.

Drew Aiello: 11:46

For many years to come. So what happens? You have a house on the market. You have eight offers. It's gonna get bid up over asking price, and you're gonna pay more for that house than it's listed for.

Lisa Licata: 11:59

Right.

Drew Aiello: 11:59

That's not gonna stop. So let me ask you a question. When rates are six and a half, that's how it is.

Lisa Licata: 12:05

Right.

Drew Aiello: 12:05

When rates go to five and a half, it's going to exacerbate the problem. So buy now is my fear because I'd rather buy a $400,000 house for 400 versus next year or two years from now when it's gonna be 440. Like if you get four or 5% this year, four or 5% next year, alright, there's 10% over the next two years.

Lisa Licata: 12:26

Right. Yep.

Drew Aiello: 12:26

Now that house is worth $40,000 more. So, buy it now. Forget about interest rates. You can always refinance.

Lisa Licata: 12:33

Refinance. And do you offer a package, right?

Drew Aiello: 12:36

Yes.

Lisa Licata: 12:36

To refinance with the higher rates.

Drew Aiello: 12:40

Right. We give people a closing cost credit about $1,500.

Lisa Licata: 12:45

Which is great.

Drew Aiello: 12:46

Yeah if they refinance. So if they bought last year, the year before, this year, and they're gonna refinance when rates dip, yes, we try to help them out as best we can.

Lisa Licata: 12:54

At what percentage do you suggest if someone, you know, last year bought a house? What percentage rate do you think they should call you to refinance their home?

Drew Aiello: 13:03

We monitor this pretty closely. Okay. So we let people know. But we are in New York state. We have New York state mortgage tax.

Drew Aiello: 13:11

Yeah. Everything in New York state is more expensive.

Lisa Licata: 13:14

No.

Drew Aiello: 13:16

So because we have mortgage tax versus a lot of other states, you have to get at least a point lower

Lisa Licata: 13:23

Okay.

Drew Aiello: 13:23

In your rate to make it make sense. Because when you refinance, you're just looking at, alright. If my closing costs are $5,000 and I could save $200, do the math, my breakeven is x.

Lisa Licata: 13:34

Right. Right.

Drew Aiello: 13:34

So you have to make sure that the lower payment outweighs the closing costs you're going to incur.

Lisa Licata: 13:39

Exactly.

Drew Aiello: 13:40

So figure at least a point.

Lisa Licata: 13:41

Okay. So clients that, you know, you currently have mortgages with, do you, you said you monitor that? Do you email them, reach out to them and say, hey, you may want to consider right now doing your refinance?

Drew Aiello: 13:53

We monitor that, and I do reach out to my clients. And I tell them right now is not the right time.

Lisa Licata: 14:00

Right.

Drew Aiello: 14:01

But we're watching this. We're getting close. And then we try to communicate with, alright. If rates get to x, then that may be our opportunity to refinance and save $200, 300 dollars.

Lisa Licata: 14:13

And that's when you're gonna get real busy.

Drew Aiello: 14:15

And and we gotta make sure that the juice is worth the squeeze, meaning what what their payment's gonna be versus closing cost, and do they foresee themselves staying in that house?

Lisa Licata: 14:25

Right. That that's, I think, is the key. Right.

Drew Aiello: 14:27

If they Say, oh, no. We're moving next year, then

Lisa Licata: 14:30

There's no point.

Drew Aiello: 14:30

Not worth it.

Lisa Licata: 14:31

Yeah. Yeah. Definitely. Okay. So home prices are expected to rise. I don't even wanna say it. 4.1%. Right? Are we in agreement with that?

Drew Aiello: 14:40

That's right. I would say between four and five. Yeah. Yeah. Definitely.

Lisa Licata: 14:44

What does that mean for buyers and affordability and the cost of waiting?

Drew Aiello: 14:50

Cost of waiting as we touched on briefly, is you definitely gotta pay a price. The only benefit that I could say is rates go down. You know, right now, say they're in the mid sixes, so they go down to the mid fives. So you buy a house for $500,000.

Drew Aiello: 15:08

You get your 4.1%, and that goes to $510,000. But at $510,000, even if rates go down to, say, five and a half or 5%, that house is actually cheaper on a monthly basis in terms of the payment.

Lisa Licata: 15:22

Interesting.

Drew Aiello: 15:23

So I did some math.

Lisa Licata: 15:24

Yeah. Yeah.

Drew Aiello: 15:25

So on a $500,000 house, let's say 6 and a half, the principal on interest is $2,844. That fast forward a year from now, now that $500,000 is $510,000. Principal interest goes to $2,600. So you save $250 a month.

Drew Aiello: 15:43

Even at 5%, it goes to $2,464. So anywhere mid fives, low fives, even though that house appreciated in value, the payment gets cheaper. So the affordability issue with lower interest rates

Lisa Licata: 15:56

Right.

Drew Aiello: 15:56

Will definitely help that. And I know a lot of people are out there, and it's a tough. It's a tough market because prices keep coming up and they're paying higher than ask, but lower interest rates could definitely help with that affordability.

Lisa Licata: 16:10

That was, like, you know, the cost of waiting. We talked a lot about that. You know, we have the number one new construction team, you know, in the Capital District and you know, if you said, well, we're just shopping around, you know, or maybe two or three months, right? So, what is the cost of waiting, right? Everything was going up.

Lisa Licata: 16:29

We saw that, you know, during COVID escalation clauses and everything going into the new construction. Yeah. I mean, your price was locked in for ten days.

Drew Aiello: 16:38

That was it.

Lisa Licata: 16:39

And that was it. And it was

Drew Aiello: 16:40

Ten days.

Lisa Licata: 16:42

Yeah. Yeah. Which was scary. I mean, it was

Drew Aiello: 16:45

You make big decisions like that in that short of time.

Lisa Licata: 16:47

It is. Some of the builders, you know, did put a cap on it. And some others were canceling, you know, contracts that I heard around the Capital Region because they were just losing money. You know, unfortunately, it didn't, it hurt the buyer.

Drew Aiello: 17:00

Right. Right.

Lisa Licata: 17:01

So that was, I never wanna see that again.

Drew Aiello: 17:04

Yeah. To be cognizant of that because whether tariffs kick in or they don't kick in. Say they do kick in.

Lisa Licata: 17:11

Mhmm.

Drew Aiello: 17:12

And builders have a real cost.

Lisa Licata: 17:14

Right.

Drew Aiello: 17:14

I saw something the other day. Builders, the cost of building an average house in United States will probably go up $10,000 if some of these tariffs come in.

Lisa Licata: 17:23

Right. Yeah.

Drew Aiello: 17:25

A lot of that, some of that might be outweighed by the fact that less regulation. So it might help builders a little bit with less regulation

Lisa Licata: 17:33

Right.

Drew Aiello: 17:33

Which means less money for them With red tape. So we'll see. As of right now, it's projected at about $10,000. But the cost of waiting on already built homes, you know, if you buy that house for $500,000

Drew Aiello: 17:47

And you put 10% down. So you you gave them $50,000, you put $50,000 down. House goes up 4.1%. Guess what?

Drew Aiello: 17:56

You just made you have $20,500 in equity.

Lisa Licata: 17:59

Right.

Drew Aiello: 17:59

And you already put out 50. You just made 41% on your money.

Lisa Licata: 18:03

Right. And a lot of people don't, you know, understand that. And that's where you come in.

Drew Aiello: 18:07

Get that. Yeah. All right. And crypto.

Lisa Licata: 18:10

Yeah, maybe.

Drew Aiello: 18:13

I like real estate better. Yeah.

Lisa Licata: 18:15

Yeah, I think that's yeah, definitely real estate investing in real estate. But buyers, especially first time homebuyers, and I know we're going to have you back and we're going to just do, you know, a podcast just what first time homebuyers need to do, need to know and how you guide them. But for the average buyer, they can call you, you know, if they have questions on this and the math because, you know, some of it's difficult to understand for some. And you'll walk them through that and what it looks like.

Drew Aiello: 18:43

I was never a school teacher, but I feel like I am now in this business. Because there's a lot of first time homebuyers. Right. And I actually enjoy it because there's a lot of myths and misconceptions.

Lisa Licata: 18:53

Mhmm.

Drew Aiello: 18:53

Especially if you believe everything that's on the Internet.

Lisa Licata: 18:56

Right. Yeah.

Drew Aiello: 18:57

You can't believe everything that's on the Internet because and the parents of some of the buyers get misinformation because they bought a house fifty years ago.

Lisa Licata: 19:05

Exactly.

Drew Aiello: 19:06

What's changed? Oh, I need 20% down.

Lisa Licata: 19:09

Yeah.

Drew Aiello: 19:09

No. You don't. You can buy a house with 3% down. You can buy a house with zero down.

Lisa Licata: 19:14

Yeah. And a lot of people don't know that. They think, you know, they just, you know, my daughter, you know, is 25 and, you know, she's saving. You know? And I keep telling her, you know, just put all your money in the bank.

Drew Aiello: 19:25

Yeah.

Lisa Licata: 19:26

You know? She's not ready to move out yet. She's almost done with nursing school, but, you know, your kids. Right? What do you tell them?

Lisa Licata: 19:31

You know, just save, you know, keep your credit good and You know, it just sets them up for a good opportunity in the future.

Drew Aiello: 19:37

Yeah. I think the younger generation now is much smarter than the boomer generation Where things got crazy. Like, the two early two thousands, 2004, 2005

Lisa Licata: 19:49

Yeah.

Drew Aiello: 19:49

Things were crazy. People buying the biggest house they could. You had crazy mortgage programs like interest only. You have four payment options every month on your house. They're buying these mega houses that they could barely afford plus the jet skis, the snowmobiles, the fast cars.

Drew Aiello: 20:04

Then the market crashed in 2008, 2009.

Lisa Licata: 20:07

Yep. Which we both lived through. Right?

Drew Aiello: 20:10

And I think everybody got their head screwed on straight after that. And now you have a good generation of savers. They're not extravagant. They focus on a balanced life.

Drew Aiello: 20:21

And so they're you know, they play hard. They work hard. They may not work a hundred hours a week, which I respect in a way because, you know, that's the way I'm built, and I'm not gonna change at this age. So I think the younger generation has less toys. They have less debt.

Drew Aiello: 20:40

Student loan is probably the only headwind that I see Because I don't see a lot of credit card debt, and I don't see a lot of personal loans. Just student loan thing because because college got so expensive. But I think that's actually part of the reason why builders, you know, they stopped building in 2008, 2009

Lisa Licata: 20:59

Yep.

Drew Aiello: 20:59

I think a lot of the housing shortage today was caused by 2008, 2009. They stopped building.

Lisa Licata: 21:04

They stopped building.

Drew Aiello: 21:06

They're behind the eight ball. They didn't wanna build. And then, oh, they finally are starting to catch up, and then COVID hits. And that put them back again.

Lisa Licata: 21:14

That was.

Drew Aiello: 21:15

So Yeah. I mean, I read something the other day. There was I think we need to build 1.9 million houses a year

Lisa Licata: 21:22

to keep.

Drew Aiello: 21:23

To keep up. And right now we're only 1.3 million. So once again, even on new construction

Drew Aiello: 21:28

Yeah.

Drew Aiello: 21:28

There's a shortage of what they can do.

Lisa Licata: 21:30

Yeah.

Drew Aiello: 21:31

Not just resale.

Lisa Licata: 21:32

Yeah. And and even I don't wanna go down, you know, whole another road, but the red tape. Right? You can't make land. There's only so much land.

Lisa Licata: 21:39

And then the new, you know, wetland delineation, you know, that regulation that came in in January, which is, you know, prohibiting builders, you know, they they could have a community to offer, you know, 70 home sites.

Drew Aiello: 21:52

Right.

Lisa Licata: 21:52

And now they can only do 30.

Drew Aiello: 21:54

Right.

Lisa Licata: 21:54

Because of that. So, you know, that's a huge impact as well.

Drew Aiello: 21:59

I know the current administration is trying to get rid of a lot of red tape in California specific with wildfires. You wonder if they can Release that red tape so they can start building if that will flow, you know, to the rest of the country.

Lisa Licata: 22:13

To the rest. Yeah.

Drew Aiello: 22:14

I have a lot next door to me. It's been vacant since I moved in twenty years ago.

Lisa Licata: 22:17

Really?

Drew Aiello: 22:17

And there's wetlands sporadically. Don't know how you build a house there.

Lisa Licata: 22:21

You may not be able to. That could be why it's you know? Because you're in a great neighborhood. I mean

Drew Aiello: 22:26

I could see that.

Lisa Licata: 22:27

If that land probably could be built on, somebody would have built

Drew Aiello: 22:31

Acre and a half in Clifton Park With only eight houses on the street. It's a very desirable location.

Lisa Licata: 22:36

Yeah. They'll be interested. I'll have to tell my bosses to take a look at it. No.

Drew Aiello: 22:39

I bet you. Bet you.

Lisa Licata: 22:41

They'll know the wetlands. Yeah. Right? They'll look at it and be like, nope. You can't do anything there. You know, or it'd be a tiny house.

Drew Aiello: 22:46

Right. Well, there's restrictions on that too in the neighborhood. Yeah. But, you know, I we look at the millennials and I want obviously, I prepared for your little podcast.

Lisa Licata: 22:54

Yeah. Well, that's wonderful. Right? Notes are good. Notes are good.

Drew Aiello: 22:57

I wanna talk about this housing market because this, what's going on right now isn't gonna change. Like, this is, I think, the new normal.

Lisa Licata: 23:06

It is.

Drew Aiello: 23:06

And in a good way, when you buy or invest in real estate, you're going to be rewarded pretty nicely. Yeah. So if you can buy now or buy anytime even when rates go down, you'll be in good shape. So right now, boomers out of the boomer generation, 74% of them own homes. So that's kind of let's use that as an occupancy rate.

Lisa Licata: 23:30

Okay.

Drew Aiello: 23:30

Right? Just because they're the Generation ahead of us. Millennials, 45% of them own homes. And the average age of a millennial is 35.

Drew Aiello: 23:42

So there's 73,000,000 millennials, only 45% of them own a home. So if you use those same statistics as boomers

Lisa Licata: 23:50

Right.

Drew Aiello: 23:50

74%, over the next ten years, you're gonna need another 8,000,000 homes just for the millennials. So now we have the Gen Zers. Gen Zers, believe it or not, are not that far off the millennials. There's about 69,000,000 Gen Zers. Only 8% of them own homes.

Drew Aiello: 24:10

But the average age of a Gen Zer, it's 20.

Lisa Licata: 24:13

Right.

Drew Aiello: 24:13

So in the next ten years, they're gonna need 17,000,000 homes. So you got 17,000,000 Gen Zers. You have 8,000,000 of the millennials. I'm not gonna say 25,000,000 because people are gonna move in together. They're gonna marry.

Drew Aiello: 24:27

Unfortunately, some people are gonna pass. You know, if you use those factors and you shrink it down, you're still gonna need 18 to 19 million homes over the next ten years.

Lisa Licata: 24:38

Yeah. Just just to keep.

Drew Aiello: 24:40

Yeah. So, so someone says I wanna wait.

Drew Aiello: 24:44

If you can buy now, I wouldn't wait. These are this is statistics. This isn't made up predictions.

Lisa Licata: 24:49

This is yeah. And you you you're very good at that. I mean, even now, guys, if anybody, you know, has any questions and looking to buy a home, call Drew. Right? He'll get you on the right path. Right? Right now, like, this is what you need to do in the next six months or eight months.

Drew Aiello: 25:04

Correct.

Lisa Licata: 25:05

You know?

Drew Aiello: 25:05

And and even if it's not right now for you Right. Maybe financially, maybe socially, maybe in your family situation, whatever. At least you have a conversation.

Lisa Licata: 25:14

Right.

Drew Aiello: 25:14

Kinda make a plan.

Lisa Licata: 25:15

Right. Exactly. Having a plan so when they are ready, you know, now they don't have to wait another eight months. They've talked, you know, spoke to you.

Drew Aiello: 25:22

Right.

Lisa Licata: 25:22

And this is what you need to do to prepare. So that is I encourage everyone, you know, to call you.

Drew Aiello: 25:27

Don't be stressed out about buying a house. I mean, it's stressful enough.

Lisa Licata: 25:30

It is.

Drew Aiello: 25:31

It's your biggest purchase, your biggest asset for a lot of people. And I just like people to go into it and with confidence. I want them to feel good about it. I want them to make an offer and you should never lose sleep over your mortgage payment.

Lisa Licata: 25:45

Right. Right? Right.

Drew Aiello: 25:46

You should you should know what your parameters are at least. And if you have credit issues, we can fix them.

Lisa Licata: 25:51

Get all that out of the way.

Drew Aiello: 25:53

Get it out of the way. There's no pressure. No one's holding a gun to your head. You buy when it's your time.

Drew Aiello: 25:57

But, you know, if you have money saved and you have low debt and you're gonna stay here, throw down some roots, I think buying right now in this environment is a home run. I think that neon sign It's flashing.

Lisa Licata: 26:11

It's flashing. Buy now. Buy now.

Drew Aiello: 26:14

Right? Because, you know, rates go to five, five and a half. It's just gonna get worse.

Lisa Licata: 26:18

Yeah. Yeah.

Drew Aiello: 26:19

Only thing I could hope for, and this is you know, a lot of experts predict this and hopefully it comes true. There's a lot of people sitting on 3% interest rates, right, from COVID. Three, four, two and a half.

Lisa Licata: 26:30

Yeah.

Drew Aiello: 26:31

And no one wants to give up that rate for seven.

Drew Aiello: 26:34

Now if rates go to five or five and a half, all right, I have a tremendous amount of equity in my house. I can give up the three for five or five and a half. And maybe you'll start to see some people putting their houses up for sale because they can take a big down payment, put it on their next house, and really not see much of a difference on a monthly basis.

Lisa Licata: 26:54

And yeah. And you have people that are selling, you know, they've had, you know, their family has expanded. So, they need, there's

Lisa Licata: 27:01

your move up buyer.

Drew Aiello: 27:02

Right.

Lisa Licata: 27:02

But then, you have people that retire, they're empty nesters and they need to right size.

Drew Aiello: 27:07

Right.

Lisa Licata: 27:07

Right? So, I think you'll see a lot of that. I know I tell my agents all the time. You know, call your clients and do an equity assessment. You know, check up for them. A lot of people don't know the equity, you know, that they're sitting on.

Drew Aiello: 27:21

Right.

Lisa Licata: 27:21

So, when that time comes, they're ready to go. Yep. Yeah.

Drew Aiello: 27:25

I've seen a lot with, you get some buyers or some sellers don't wanna list the professional real estate agent. They wanna sell on their own.

Lisa Licata: 27:36

On their own. Yeah.

Drew Aiello: 27:37

And I've been doing this thirty years. I can swear to you, I'm not just saying this because you're here. Those are the worst transactions I'm ever involved in. It's either that they have this emotional thing And they price it way too high and the house doesn't appraise. Or what's worse is they price it way too low and they leave tens of thousands of dollars on the table.

Lisa Licata: 27:58

the table. Yeah.

Drew Aiello: 27:59

Because they don't know.

Lisa Licata: 28:00

Yeah.

Drew Aiello: 28:01

They really can't appreciate what's going on in today's market.

Lisa Licata: 28:04

Right. Right.

Drew Aiello: 28:06

And I think that's good for anybody that buys today. Have a real estate agent to help you price it out, look at comps, look at factual data, and you negotiate. Yeah. Obviously, you've got just, you know, making pie in the sky.

Lisa Licata: 28:18

You know what? It it's interesting, and we had an agent list a property last week. We were talking about her earlier. We love her, Angie. And the house went on the market.

Lisa Licata: 28:29

The buyer want or the seller wanted more money because a friend had told them. And we're like, you know, we don't wanna do that. You wanna price the house for what it's worth because the buyer's agent's gonna run comps. And we said, you know, probably 99.9% people are gonna overbid to where you wanna be because there is no inventory.

Lisa Licata: 28:49

Can I tell you the sellers had to pack up and leave for four days? The showings, it was nonstop. It's like they were out of their house the first day from 9AM to 09:30PM. Where do you go for that long? Right?

Lisa Licata: 29:08

Friends, families, you know, you can have breakfast, lunch, dinner. You know, at some point, you're like, I just wanna go home again. And they said, that's it. We're out of here. We're taking off for a couple days.

Lisa Licata: 29:18

So, you know, it was great. And it, did it go multiple offers? Absolutely. Right. You know? And then they were thrilled.

Drew Aiello: 29:23

Ends up going higher than the list price anyway. Kinda gets a seller what they were hoping for. And it was a competitive market.

Lisa Licata: 29:30

Yeah. You know, and they had the equity. Right. You know, which was great. And they knew what that was prior, you know, to listing as, you know, we came in and and educated them

Drew Aiello: 29:39

Right.

Lisa Licata: 29:40

On that. So that's a fun little story.

Drew Aiello: 29:42

Then you got You got a lot of people out there right now that are sitting on homes with no mortgage. So the affordability factor doesn't even play. Like, you're buying a house for cash.

Lisa Licata: 29:53

Yeah. And there's a lot of them out there. There's there's a lot of them out there. A lot of you're like

Drew Aiello: 29:58

You don't need a mortgage, which is terrible.

Lisa Licata: 29:59

Yeah. And there's some young I don't wanna say young, but, know, late early thirties and, you know, they're cash buyers. We're like, what did I do wrong when I was in my thirties?

Drew Aiello: 30:08

Crypto.

Lisa Licata: 30:08

You know?

Drew Aiello: 30:09

I know an 18 year old that's a millionaire.

Lisa Licata: 30:11

Really?

Drew Aiello: 30:12

Because of crypto. He blew off college, he was, you know, in his room and going nuts with all that stuff that I don't understand. And yeah 18 years old, has a million dollars on the back. So I think part of that is

Lisa Licata: 30:26

Maybe we need to sit down with him.

Drew Aiello: 30:28

I know. I agree.

Lisa Licata: 30:29

I'm not ready to retire though yet.

Drew Aiello: 30:32

You know, I can't even talk about that because I really have zero interest.

Lisa Licata: 30:39

Right. In retirement. Right?

Drew Aiello: 30:40

Oh, yeah. Yeah. Zero.

Lisa Licata: 30:41

Yeah.

Drew Aiello: 30:41

Zero. I love what I do. I built this up for thirty years. I love the repeat clients. I love talking to people. I do not like sitting in an office. I'll admit that. But talking to people, getting rid of the myths and misconceptions Helping people through this housing market, which is not easy. This is not For faint of heart because I think first time homebuyers get discouraged. They look at one, two, three, four, six houses, and they get outbid.

Lisa Licata: 31:10

Outbid.

Drew Aiello: 31:10

So I try to pull all the levers that I can, make their preapproval, get them a commitment letter, give them a cash guarantee.

Lisa Licata: 31:16

Cash guarantee.

Drew Aiello: 31:17

Help them write the offer with their agent better. You know, all the things that we can do. Be creative as possible to get them that house.

Lisa Licata: 31:25

Yeah. And and like you said earlier, having the right team in place. You know, write down to your agent, to your mortgage lender, to your attorney, to your home inspector, and also the agent on the other side.

Drew Aiello: 31:37

Correct.

Lisa Licata: 31:37

You know, you know if it's gonna be, you know, a smooth, you know, transaction. And that helps, you know, especially in this market and especially a first time, you know, home buyer where everyone is kinda holding their hand and guiding, you know, guiding them through, you know, the process. So um so, Drew, with that, is there anything else that you'd like to add before we wrap up?

Drew Aiello: 31:58

Basic 101 in this environment, get preapproved. That's the basic thing. If I had one thing to hang my hat on today is get preapproved because you have to be prepared. You're gonna be competing against other people. And you want all your ducks in a row, alleviate the stress, know your parameters so you can buy that house for $250,000 if That's your limit. Or you can buy the house for $400,000 if that's your limit. And the seller's agent oftentimes in this environment will call me and make sure that my buyers are solid.

Lisa Licata: 32:33

Right. Right.

Drew Aiello: 32:34

In order to do that, hey. Gather your pay stubs, W-2's , bank statements. Let's go through the gamut, take the pressure off, and just know your parameters. Get your ducks in a row.

Lisa Licata: 32:43

Yeah. And even if you're not ready to buy, you know, for the next year, year and a half, they should call you. Right? We talked about that earlier.

Lisa Licata: 32:49

Let's see if there's anything that might have popped up on a credit report that you didn't know about. So everything can get, you know, taken care of now. You guide them down, you know, down the

Drew Aiello: 32:57

programs alleviate the myths. They get it right from me. My phone's on seven days a week. They call or text Saturday, Sundays, nights. Doesn't matter.

Lisa Licata: 33:05

Yeah.

Drew Aiello: 33:06

And it's an easy process. Takes ten, fifteen minutes. It's not

Lisa Licata: 33:10

Yeah. No. It it fair. I mean, I've worked with you for how long. It is, you know, what's our rule? If I text or call you and you don't answer, you have fifteen minutes to call me back or that's it. I'm done and you always do. You always do, which I think one time you were in the air. And I was giving you a hard time. I'm like, where are you?

Lisa Licata: 33:27

Yeah. Yeah. I'm on a plane. I can't talk to you right now. So, Drew, you know, we want to have you back. You know, obviously, we you know, we could talk about first time homebuyers, investment properties, whatever you want to talk about. So when we're done here, we'll make sure that we get that scheduled.

Lisa Licata: 33:44

Alright. So that's it for Real Talk. No fluff, just facts, and we'll catch you the next time.

Lisa Licata: 33:50

Thank you, Drew, for having you. It's been a pleasure.

Drew Aiello: 33:52

Thank you.

Lisa Licata: 33:56

Thanks for tuning in to this week's episode of Real Talk with Sterling Real Estate Group. Make sure to subscribe on your favorite podcast platform so you never miss an episode. If you have any questions about real estate or topics you'd like us to cover, we'd love to hear from you. Reach out to us at info@sterling518.com.