RE: Real Estate Podcast

Clint C. Galliano, REALTOR® (00:00)
Interest rates just hit 6%, the magic number everybody was waiting for. But now that it's here, the quiet market is officially over. If you're waiting on a 5 % rate, you might find yourself saving $150 a month on interest while paying $50,000 more because of the bidding war you just walked into. Today, we're doing the math on the 2026 spring surge.

Ben Harang (00:39)
Hello everybody and welcome to another episode of the RE Real Estate Podcast. My name is Ben Harang and with me today, as always, is my co-host, Clint Galliano. How you doing today, Clint?

Clint C. Galliano, REALTOR® (00:53)
I'm doing wonderful, Ben. How you doing?

Ben Harang (00:56)
I'm going terrific. Weather warmed up on this February day. Wind's blowing from the south. Another little front's coming through. So it's blowing all the hair in my head all over the place. But other than that, life is good.

What we talking about today Clint?

Clint C. Galliano, REALTOR® (01:19)
Alright, today we're going to be talking about the 2026 spring market surge. While waiting for a slightly better rate often results in a higher monthly payment because the purchase price outpaces the interest on savings. Let's talk about it.

Ben Harang (01:38)
We will. Does anybody want to get back to the bidding wars we had during a COVID era at the 3 % interest rates? Those were wild. I certainly don't. Inventory's up a little bit by about 10%, but new listings are still a bottleneck. We don't have enough listings to meet demand.

Clint C. Galliano, REALTOR® (01:48)
likely not.

Ben Harang (01:58)
We are not back in the frenzy we were in in 2021, but the days on the market is shrinking. So something's The 6 % interest rate, as Clint said, was the mental barrier. We got to 5.99%. So people that were waiting for 6 % are gonna get back into the market.

Are we going to see 20 offers again? I certainly hope not. Or will we see three or four very aggressive offers that focus on the quality of the competition

and are appraisal gaps back?

But as interest rates go down, if they continue to go down, there are

More buyers in the market so you have more competition from the buyer side. Some areas of the Bayou Board were in a buyer's market, some were in a seller's market. It looks like we're trending closer to a seller's market. So from a timing standpoint, now's the time to do something. If you're in the market for a house before we hit 5.5 % if we do, because then the floodgates will really open.

Clint C. Galliano, REALTOR® (03:12)
Yeah, we're already starting to see, I'm not gonna say a rush, but I guess a surge is correct. Personally, I've seen it since November or December, where there are a lot more buyers in the market that are seriously contemplating purchasing a home. ⁓ When the rates went up, obviously, like we've discussed on past episodes, it became untenable for a buyer to

Ben Harang (03:22)
Mm-hmm.

Yes.

Clint C. Galliano, REALTOR® (03:39)
contemplate purchasing a home just because the payments that they would have to make did not fit with their current financial situation. Now as rates are trending down, it's becoming an option again for people to buy and they are extremely motivated to do that.

Ben Harang (03:47)
Mm-hmm.

And the rates we're talking about today actually double and sometimes more than double what they were in 2021, I guess. compared to those days, we're still not where we were, but historically the 6 % rate is in my mind below the market rate.

think something around 7 % is equilibrium, but it might prove me wrong that the new equilibrium might be 6%.

Clint C. Galliano, REALTOR® (04:33)
Yeah, and you know what? think that probably in a future episode, we'll go over kind of market and housing stats and stuff like that. Not just a market update, but kind of a national position of where we are compared to trends and stuff like that. And kind of projected for 2026. And I've got the slides to back it up.

Ben Harang (04:48)
Mm-hmm. Mm-hmm. Good idea.

Mm-hmm.

All right. All right.

Clint C. Galliano, REALTOR® (04:57)
Alright, next let's talk about strategy. How to win without overpaying. So, I like this first approach. Not saying that I don't like the others, but this one is nice. It's the clean offer. So, in a 6 % market, it's not just about the price. ⁓ We have other tools that we can use to make the offer attractive and

Ben Harang (05:16)
Mm-hmm.

Clint C. Galliano, REALTOR® (05:21)
convince the seller to accept our offer, especially if there's other offers pending or coming in once they receive ours. Things like shortening the inspection window, Or giving a higher good faith deposit, or offering that. ⁓ There's other options.

Ben Harang (05:37)
Mm-hmm.

Clint C. Galliano, REALTOR® (05:39)
If you're buying with a loan, can't waive appraisal. But I always recommend doing an inspection regardless of what condition the house is. The next option would be the hidden inventory plate. So that would be stale listings. So 60 days or more on the market that were priced in a 7 % market but haven't adjusted to the 6 % surge.

So that's always an option. People may look at it and say, well, I don't want to look at that. It's been on the market for so long. Why would I even consider it? Why are other people running away? But considering we're having this interest rate reduction, it becomes a viable option where we can maybe come in with a lower than list offer, and the sellers may be amenable to accepting it. And then the last one.

Ben Harang (06:13)
Mm-hmm.

Clint C. Galliano, REALTOR® (06:31)
The last strategy is to contrast. So buying the perfect house, but there are 10 other offers on it, may not be as good a strategy as buying a good house with zero offers that's a stepping stone to the perfect house. It can still serve the same purpose, and unless you're wanting to become an Instagram model in front of your house,

Ben Harang (06:48)
Right.

Clint C. Galliano, REALTOR® (06:57)
It's a viable option.

Ben Harang (06:59)
You've heard me preach before. In today's market with all the new construction going on, I would still be buying the least expensive house in a subdivision that's almost sold out. Take all the incentives they're willing to give me and buy the house. Make it a home. And three to five years down the road, you can upgrade, can...

trade it in, can stay there, do whatever you want, but you have an affordable new construction with a warranty. So you're not gonna get a lot of amenities, there won't be any landscaping, there won't be any curtains, but it'll be a comfortable house. So it's just, you wanna do something before there's a whole lot more competition out there.

Clint C. Galliano, REALTOR® (07:44)
It's a good financial strategy, good financial approach.

Ben Harang (07:48)
Yeah. All right. we have a problem. The inventory isn't exploding because there are people that bought those houses with a 3 % loan and have no intention of giving up that 3 % loan. I think I've said before, I've had people ask me what the interest rates are and...

tell them whatever they were and they said, well, I got mine for two and three quarters. I said, congratulations. I hope you like your life. I hope you like your family and I hope you like your house because you can't move. Your ego is not going to allow you to move. There needs to be a life event for those people, a divorce, a job change, a transfer, an illness. Something has to happen to cause them.

to give up that 3%. Note, because the difference between the 3 % and the 6 % is just on the same house is not even close.

That's one of the biggest reasons we don't have the inventory we would typically have at this time. So because the inventory isn't there, the prices are not falling like some people expected them to when the interest rates were up. Because we were still selling houses at 7%. There's no doubt about We'll be selling more houses at 6 % because there will be more buyers in the market.

anyway, just one reason why the available inventory has not increased like it typically would, because those people are just locked in to their current house and they're not considering putting on the market and moving.

Clint C. Galliano, REALTOR® (09:41)
mean, just as an example, just to illustrate the difference, on a $300,000 loan at 3%, that principal and interest payment is $1,265 a month. And you go to $500,000 loan at 6%, which is about what the price range is. assuming that they've had the house for a couple of years, this potential of it

Ben Harang (10:09)
Mm-hmm.

Clint C. Galliano, REALTOR® (10:10)
appreciating a couple hundred thousand, maybe not that much, but a $500,000 loan which may be what the seller would be wanting to move into at 6%, that more than doubles that monthly principal and interest payment.

Ben Harang (10:22)
Alright, from $1,200

to right at $3,000 a month.

Yeah, so those people in my mind, I say they ruined, they're not ruined. Them being in the real estate market is not going to happen without a life changing event.

Clint C. Galliano, REALTOR® (10:40)
And it doesn't all have to be negative. It could be positive that they add another family member.

Ben Harang (10:40)
So.

Right.

Right? Life changes, family changes. There's all kinds of reasons, but they're not gonna just wake up one day and say, you know, think I want a new house. I think I want to move. Those days are over for those people.

Clint C. Galliano, REALTOR® (10:56)
It's almost like

saying, think I'll take up smoking.

Ben Harang (10:59)
yeah.

Yeah, about that expensive. And then it kills you.

All right. Talk about the strike zone, Clint.

Clint C. Galliano, REALTOR® (11:07)
So, for rates stay flat going forward, know, this is some some buyer strategy going forward, then this is a strike zone. You have a predictable payment and manageable competition. If rates continue to go down, that's going to precipitate a feeding frenzy, because just like we're seeing more buyers come into the market, if it goes down further,

then that puts even more buyers above the threshold to be able to afford to purchase a home. So that, you know, we don't know exactly what those numbers are because we don't have a great handle on how many buyers are actually in the market. But I know that a lot of buyers dropped out of the market as rates went up because it just did, it became a non-option for them because they couldn't afford what they were trying to get.

Ben Harang (11:51)
Mm-hmm.

Clint C. Galliano, REALTOR® (11:59)
I mean, overnight we went from people getting pre-approved for $450,000 to buy a house to only being able to afford $250,000. While that number is not a bad price point, it just went way past their expectations and they just said, never mind.

Ben Harang (12:12)
Right.

And that's

another group of people that I refer to as ruined because they wanted that $450,000 house. They didn't buy it for whatever reason. And now they're qualifying for 250. They said, well, no, I want that $450,000 house. Well, that $450,000 house doesn't fit in your budget anymore. So those people are standing on a sideline. So they may be coming back in.

at a $350,000 level now. We don't know. But they'll come in sooner. Those buyers will come into the market sooner than the sellers. The owners will list their properties for sale with the 3 % market.

Clint C. Galliano, REALTOR® (13:06)
correct. So I'm gonna make a strategy suggestion here. Buy right now while you can still negotiate repairs and concessions. Right now we're seeing sellers are amenable to covering some concessions and doing repairs, but I think once we get at five and a half percent or below, the sellers are gonna stop

fixing leaky faucets and starting expecting or start to expect highest and best offers by Sunday at 5 p.m. because they're gonna be able to see it. know, I mean, if they're getting multiple offers, they're in the catbird seat. ooh. don't want to sound cliche and say it's a really good time to buy.

Ben Harang (13:44)
weren't those fun days.

Clint C. Galliano, REALTOR® (13:54)
but it's a really good time to buy right now before we get even lower.

Ben Harang (13:58)
It is, it is. And then if the rates continue, there's always a refinancing option. And I've always said, you can refinance the interest rate, you cannot refinance the principal. If you're paying $50,000 more for the house, you will pay $50,000 more for the house without any ability to change that. The interest rate can be changed.

Clint C. Galliano, REALTOR® (14:21)
cover some of the biggest mistakes in a 6 % market?

Ben Harang (14:26)
All right, how about chasing the trough? How about trying to time it when the interest rates are at their rock bottom? You know people that bought houses at three or three and a half percent didn't buy it at the bottom. People that bought it at 2.75 bought it at the bottom. But those people at three and a half percent are still sitting pretty good right now if they did not overpay for the house.

And then how about ignoring the real price?

It's not unusual for a house to appreciate for

a couple of percent a year. So on a $500,000 house, 2 % appreciation is $10,000. So if you're waiting, that price is going up. So you're going to pay more just because you waited. Interest rate may or may not offset that. But if you buy it now, when there's more of a balance of buyers and sellers,

Clint C. Galliano, REALTOR® (15:11)
six months.

Ben Harang (15:27)
without the appreciation or before the appreciation hits, you would be better off. A year from now, you'll look back and say, I should have bought that house then versus I'm glad I didn't buy that house then. You probably would wish you had bought it a year from now. And then I love the wait and see tax. Unless you live in a mama's basement, you're paying to live somewhere.

It took me a while to figure out, know, a 30-year note is a long time. But if you don't buy, you're going to be renting for the rest of your life. However much life you have left in you, that's how long you're going to be paying. And you're paying somebody else's mortgage instead of yours. And 30 years is a long time, but you wake up one day and you're like closer to 30 years than you were to the beginning of the loan. So.

That's just some, at 6 % it's a tough rate not to go after something. It's not the bottom historically, but it's awfully low.

Clint C. Galliano, REALTOR® (16:18)
that.

And to just add to that a little bit, people look at, paying on that for 30 years, yeah, it's a lot of money. But it typically winds up being less money than if you do an addition-subtraction calculation on it. When you're renting, it's all money out the door. When you buy a home,

Ben Harang (16:52)
Mm-hmm.

Clint C. Galliano, REALTOR® (16:55)
you get some tax benefits on buying and yes you're paying the loan back with interest so the interest is costing you something but your home as long as you maintain it typically appreciates and eventually you're going to get to a point to where that house is worth probably what you paid for it or more including the interest over time because for the most part the general trend on

home prices is up. And part of that's due to inflation, but there's some other factors involved. You still wind up being better off buying the house as long as you can afford it.

Ben Harang (17:35)
Well, if you buy a $300,000 house and you're paying a comparable lease payment on a house for 30 years, at the end of 30 years, if nothing else changes, whoever bought the house has a $300,000 asset that's paid for. Whoever rented has no asset, nothing to sell, and he continues to pay his lease payment every month. So it's a...

Clint C. Galliano, REALTOR® (18:01)
And I'd

like to add a caveat to that. At the end of 30 years, most likely that $300,000 house is a million dollar house.

Ben Harang (18:10)
Right, but I'm saying if nothing else, without any appreciation, it's still, and it doesn't matter that you paid more, you have nothing. So if you have, if it's devalued at the end of 30 years, you still have something.

Clint C. Galliano, REALTOR® (18:14)
Right.

Still got nothing.

Ben Harang (18:27)
the rental stuff just hurts my heart. Because you're paying somebody else's note and they loving you for it. Okay, enough of that. Take it away Clint.

Clint C. Galliano, REALTOR® (18:35)
All right.

All right, I've got some closing takeaways for you. So first one is market timing is a myth. Sitting there and trying to catch the perfect time to buy or sell ⁓ is, you're never going to hit that point. I've talked about before, you know, trying to pinpoint when the rates are going to stop going up or going down and, you know, trying to get the best deal possible.

ultimately puts you in a worse position just in general due to market appreciation and things like that. The other thing that I want you to take as a takeaway and I hate the term marry the house date the rate so we kind of changed it up and say marry the house but make sure the payment is one you can live with today.

and you're not hoping it'll get better later. 2-1 buy downs are a help, but you still have to qualify at that rate that you're going to be paying in three years. But it gives you a break in year one and year two on your note, or at least on the interest rate for your note, so that it makes it little easier to swallow. And it's kind of intended that your

Ben Harang (19:49)
Mm-hmm.

Clint C. Galliano, REALTOR® (19:59)
your income and everything else will allow you to pay those higher rates. even though ultimately they qualify you at the highest rate, ⁓ that it'll, that mortgage will wind up being. make sure ultimately make sure that you can live with what you're purchasing.

Ben Harang (20:10)
Mm-hmm.

Right, Adjust the house you'll buy to make sure you're not house poor.

And if you want to talk about what house you may ought to buy, Clint and I are both available. Welcome to call, text, email. We're happy to talk, sit down, discuss your situation, see where you are. And it may be time for you to buy a house. It may not be. But let's talk about it, and we'll see where it goes.

Clint C. Galliano, REALTOR® (20:45)
And on that note, make sure to like, share, subscribe.

go to rerealstatepodcast.com and you'll find links to our agent pages and links to your favorite podcast apps to subscribe. You'll also find our YouTube channel. And hey, you can even listen to episodes right there directly on the website through your browser. So.

Ben Harang (21:13)
And our website

is rerealestatepodcast.com.

Clint C. Galliano, REALTOR® (21:17)
re real estate podcast.com

Ben Harang (21:21)
All right. All right. There it is. We got three of them in.

Clint C. Galliano, REALTOR® (21:25)
That's right. that about wraps up the only homework that I have for y'all this week is to, if you're thinking about buying a house, go ahead, get your pre-approval and find an agent to work with. Find one that you're comfortable with and that works for you. If you're feeling any kind of clash with them.

Ben Harang (21:40)
Mm-hmm.

Yeah.

Clint C. Galliano, REALTOR® (21:46)
let them know saying, hey, this isn't working out and find one that you don't have any clashes with. And as Ben said a minute ago, we're also available. You can find our contact info in the show notes. You can find our websites at rerealestatepodcast.com and reach out to one of us if you have questions.

Ben Harang (21:51)
Mm-hmm.

And I think the first thing to do is engage a real estate agent and follow their advice on how to go through the pre-approval process and.

to start the process of buying the house. I would start with the agent rather than the pre-approval process. So you have some, you have a comfort level on the ground. I know, I know, but you said, you said the pre-approval first and I just wanted to clarify. They do go hand in hand, but there's some work to do before you get the pre-approval. So, all right, Clint, enjoyed it, man. That is, that is, until next time, everybody have a great day.

Clint C. Galliano, REALTOR® (22:22)
Yeah, I met both of them simultaneously.

the one in the can.