Q&A with Mike Frazier

Q: A lot of people are buying homes today because of low interest rates. Given the upward pressure that puts on prices, is the value proposition of ownership still as strong for them?

A: I think the value proposition is stronger today than ever. Given our current Covid-19 environment, clients are looking for “better space”, a home office or outdoor living. Our homes are our safe havens; the place where we raise our families and it is still a good means to create wealth.

Q: Speaking of low interest rates, do you see very many homeowners buying more than what they need, that is, too much home?

A: I don’t see this as a problem. Since the economic downturn of 2008, lenders have done a great job of analyzing a person’s credit. We don’t see clients buying homes they can’t afford.

Q: To keep up with buyer demand, many new homes are being built quickly. With the speed that homes are being built, does quality become a concern?

A: Most of the new construction has gravitated to the $500,000 plus market. Given the expense of streets, sewers and permitting, the basic development costs are too high. On top of that, with rising costs of labor and lumber, most builders can’t afford to build lower priced homes. This exacerbates the inventory problems we currently see, especially in homes priced below $300,000. Because of the price point, I don’t see quality issues from the builders we market.

Q: Where do you see home values in headed over the next 3-5 years?

A: The inventory issue will not go away anytime in the near future. Also, the demand for housing continues to rise, which will push prices up. As interest rates rise over time, we may see a normalization of price, but nowhere near what we saw in the 2008 to 2011 market. 

Q: Are there any significant changes in the makeup of buyer demographics, including Millennial-age?

A: Millennials are buying homes. In fact, they are the number one home buyer demographic. Many of these buyers have been living with their parents and have had time to save for a good down payment. With more people working from home, we have seen an uptick in the demand from the Millennial buyer. They’ve decided they want out of their apartment or their parent’s home.

Q: In this seller’s market, where are sellers moving on to after their sale? Downsizing? Retiring out of state?

A: We see sellers going in many directions. Some are taking advantage of the low interest rates and buying a more expensive home. Others are downsizing to condos or villas. We realize the challenge of dealing with sellers is that they need somewhere to go, and we are working hard to meet every client’s needs.