The Negotiator's Market: Why Now Is The Time To Buy Before Rates Drop | Real Estate Market Update w/ Martin Perdomo

Ready for a real estate reality check? The extreme market swings we've witnessed for years are finally settling into something resembling balance. In the notoriously volatile Bay Area, median home prices have dipped 4% to $1.3 million, homes are sitting for 30 days instead of 18, and only one in five properties faces a bidding war—down dramatically from the two-thirds that sparked frenzies in 2021.

This cooling trend creates a strategic window for prepared investors and homebuyers. While today's 6.58% mortgage rates have lowered typical monthly payments to $2,668 (the lowest in seven months), buyer demand remains surprisingly muted. The smart money sees this hesitation as opportunity. Sellers don't want their homes lingering for 40+ days, creating leverage for negotiating concessions, closing credits, and rate buy-downs that simply weren't possible during the pandemic boom.

What makes this moment particularly significant are the demographic shifts reshaping the housing landscape. Homeownership among 25-34 year olds sits at just 39%, while nationwide rentership has climbed to 36%—its highest level since 2016. Combined with JP Morgan's prediction of four Federal Reserve rate cuts by year-end, we're looking at a potential strategic sweet spot: buy with negotiating power now in a cool market, then refinance when rates drop. Remember the fundamental truth of real estate: when rates decrease, prices typically increase as affordability improves. Most consumers buy mortgage payments, not houses—meaning this window of opportunity won't stay open indefinitely. As I tell my students: words are loud, but numbers scream. And right now, the numbers are screaming opportunity for those willing to move while others wait. Follow me on Instagram @TheEliteStrategist for more market insights and strategies to navigate this shifting landscape.

Download the free Sovereign Standards Manual.

A short guide to discipline, clarity, and Authority & Freedom.

Get it here:
https://offer.elitestrategiesconsulting.com/

Reserve your seat for the FREE Webinar here!
https://webinar.thesovereignstandards.com/

Transcript

Bay Area Market Cooling Down

Speaker 1 0:42

The Bay Area is finally normalizing after years of extremes . More Americans are renting , as ownership stalls and mortgage payments are coming down , but demand is still weak . What's up , guys ? This is Martin Perdomo , wealthy AF , the Elite Strategist , here with your weekly real estate market update , and we're going to jump right . In the Bay Area , one of the most volatile markets in the country over the last five years , is finally cooling into balance . The median Bay Area home price is $1.3 million , down about 4% year over year 4% year over year . The days on the market are averaging 30 days compared to 18 at the height of 2021 . Frenzy , only about one in five homes is facing a bidding war back from nearly two-thirds in 2021 . In the highest cost metros like San Francisco and San Jose , sellers have recalibrated .

Speaker 1 1:50

If you're hunting luxury flips on long-term holds , have negotiating room . You have negotiating room you didn't have years ago . Cash buyers in particular are getting price cuts instead of escalating clauses . First of all , I think it's way too risky to be buying in this market . Luxury flips up . There is a market for it . There is a buyer for it . But if the affordable homes are sitting , luxury flips are sitting even longer . Right , with interest rates so high . There is not a lot of buyers for that . There never really is a lot of buyers for that . There never really is a lot of buyers on the luxury side , because that's a small percentage of of americans that can really afford those types of property . But I think for me , I'm not a flipper anymore . I no longer flip . However , those that do flip , I think that's really .

Speaker 1 2:46

However , if that's your game and that's what you're doing right now , it's definitely a great time because the data is telling us . Nationwide , the home ownership rate in Q2 sat at 65.8% Unchanged

Homeownership Trends and Rental Market

Speaker 1 3:01

. But here's the real story In the 25 to 34 age group , ownership is only 39 . Now , this data here is by red fin . It's a little bit skewed because I've heard I've heard different data points in 2016 I just saw some data point , a different data point that in 2016 , the average 30old in the 30-year-old bracket it was a 40% homeownership rate and that today , 30-year-old bracket , it's only 14% . So I'm not sure where this data is coming from , but we'll go with it . This is Redfin's data .

Speaker 1 3:41

The rentership is climbing in metros like Phoenix , atlanta and Tampa , where affordability has been absolutely crushed . I can speak for Tampa . That is correct . In Tampa , roughly 36% of households nationwide are renters the highest share since 2016 . For investors , rental demand is not softening . If you own single-family rentals , you're is not softening . If you own single family rentals , you're in the sweet spot . Multifamily , even stronger Rentership growth means occupancy rates will stay tight and rents will have support even if home prices wobble . This is why Blackstone and other institutions are doubling down in single family portfolios right now .

Speaker 1 4:29

Now boots on the ground and I am small in comparison to the whole market . However , I am an active investor in the market . That is not my experience and I'm talking to you . Know , I have two different property managers in two different markets and I'm constantly talking to the managers . I'm constantly talking to the lenders Boots on the ground . I'm on the ground . I'm looking at my portfolio consistently . I got to tell you that that is not my experience . It doesn't mean that that's not the data .

Speaker 1 4:59

My experience as boots on the ground is that rents are softening in Tampa and up north and in the northeast and the northeast region of Pennsylvania . So for me to hear this and my students right , I have a bunch . I have a community of students that are actively buying and selling and renting real estate and I have real time data with a small , small portion , I must say it's a small portion . We don't . We don't have the whole market cornered , but just from our , from my perspective rents are softening . We're seeing lots of concessions . So I totally disagree with this part from Redfin where Redfin is saying that the rents are stable , and I don't agree there . They are not . They are definitely softening .

Speaker 1 5:45

When you see rent concessions in the market , if your rent's a thousand dollars a and I'm going to give you a month free if you sign the lease this month what does that mean ? That means that instead of me making $12,000 a year in rent from that apartment , I'm only going to make 11 . So if I take that and divide it by 12 , I average my rents are soft , my rents are lower than what they should be . So I don't see that . I'm not seeing that myself in the market , even in Tampa . Even in Tampa , where places that are unaffordable my portfolio in Tampa we are doing concessions and there is a lot of developers and investors in the market that are doing concessions . And if you're in the Tampa market , you know this . I'm going to take a guess , a wild guess , and I don't know this for sure , but I'm going to make an educated assumption that it's probably like that in the Atlanta market and in those other markets as well .

Mortgage Rates and Buyer Demand

Speaker 1 6:41

Now let's talk about affordability . The average 30-year fixed rate is 6.58% , down from 7.08% in May . That drop translates into a typical monthly payment of $2,668 , based on the medium home price , currently the lowest in seven months . For context , the monthly payment at this time last year was $2,829 , the average monthly payment based on where rates were last year . That's nearly $160 a month less in buyer outflow , but buyer demand has not roared back yet . Pending sales are still down 1.2% nationwide year over year and Redfin's report only a modest 2% uptick in tours . It's definitely a step towards the right direction . 2% uptick in tours We'll take that right .

Speaker 1 7:45

I'm a real estate guy . If you're listening to this , I'm assuming you're a real estate person , or you want to be a real estate person , or you're looking to buy real estate . So this right here is leverage . Retail buyers are still hesitant , which means you , the investor . If you're an investor or a buyer , a regular homeowner , home buyer can negotiate concessions , closing credits or even rate buy downs . So it's a great time to buy if you're prepared because you can negotiate .

Speaker 1 8:23

I don't believe that the market will stay this way for much longer . As interest rates come down and we're expecting there's a 94% chance based on JP Morgan that the rates will come down here in September that there'll be a rate cut and another three rate cuts . So we're expecting four rate cuts based on JP Morgan's prediction , four rate cuts by the feds . If we get four rate cuts this year , that's an amazing thing . When that happens , we are going to see a warming up and heating of the market . I think that next year this time so next spring , summer we're going to have a hot market . We're going to have definitely a hotter market than where we are today . So prepare if you can buy now , right . If you can negotiate now , when the market is cool , you should do that now and then refi later .

Speaker 1 9:17

Most people if you're an investor remember most people if you're a flipper most people buy mortgage payments , not houses . So they look at the house first , or they'll look at what they're approved for and what their mortgage payment is going to be and then they'll go look at houses in first , or they'll look at what they're approved for and what their mortgage payment is going to be and then they'll go look at houses in that category . People buy mortgage payments , not houses . Sellers don't want their homes to sit for 40 days or longer , so they are dealing today . This is why it's a great opportunity for

Investor's Market: Strategy Moving Forward

Speaker 1 9:44

you to buy . So that's a wrap . Here's the playbook from the numbers . This week , bay Area median price is $1.3 million . Price is softening . Seller's realistic Time to negotiate in high-cost metros . Caution if you're flipping , because if you're flipping in luxury homes , just be careful , you're going to sit longer . 36% of households are renting . According to Redfin . This means that this generation is stuck at 39% rental demand , at 39% . Homeownership and rental demand is your long-term friend .

Speaker 1 10:26

I am still very bullish on buying and holding . When rates go down , my assets will go up . It's just a fundamental , guys . It is a fundamental you need to understand . Rates go up , prices come down . This is what we're seeing right now . We're seeing softening of the of prices . Rates come down , prices go up . This is what you're gonna see . It is fundamentals . It's like supply and demand . Rates come down , prices go up , prices go up . Sellers demand goes down , right . Rates come down , right . Prices go up . Rates come down .

Speaker 1 11:05

Remember people buy mortgage payments , not houses . So when those rates come down , then sellers can ask for more for their houses . Right , buyers come in . Demand goes up . That pushes prices to go up . So mortgage payments are 2668 , your typical payment right now lowest in seven months . But demand is muted . Use this moment to buy with leverage while others hesitate . This is an investor's market . The numbers prove it . Words are loud , but the numbers

Final Market Update and Takeaways

Speaker 1 11:42

scream . That's this week's real estate market update . If you want the numbers , the strategies and my playbook for navigating this shifting market , follow me on Instagram at the Elite Strategist . Stay sharp , stay strategic , stay wealthy . Catch you next time , peace out .