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Century 21 CEO Mike Miedler joins Yahoo Finance Live to assess the state of the housing market and discuss why more American’s are migrating out of major cities.
MYLES UDLAND: For more on all of this, we're joined now by Mike Miedler. He's the CEO at Century 21. Mike, great to talk with you this morning.
Let's just start with dynamics you've seen. You guys are based in North Jersey right along the train line heading out of Manhattan here. What's the year been like for you? When did things really pick up, and has it slowed down at all as we've gotten to the end of the year?
MIKE MIEDLER: Yeah, Myles, it's been a rapid pace, and obviously it's all because of demand right now, right? We've got so many home buyers and sellers looking for something different out of their house, whether people are looking for a Zoom room or whether you're like me. You're home schooling your children. You're working out of your home office. My house has become my gym and the place where I entertain my family.
So, you know, folks are looking at what their real estate looks like, what their house looks like, and wanting different things out of it. I mean, you see right now 1 in 3 people are working from home, which was, you know, 1 in 20 about a year ago. And you've literally had 9 million folks just across the US relocate during this pandemic because, like I said, they're looking for more out of their house.
And it's driven a lot of obviously winners and losers markets. New Jersey, as you just mentioned here, in my home state, we've seen one of the biggest net increases. About 2,000-plus folks have moved into New Jersey from, you know, parts of New York City and Manhattan, more core cities. And it's just-- it's like that all over the country and, quite candidly, around the globe.
JULIE HYMAN: Yeah, Mike, I am someone who has been participating in this migration, as we were just talking about during the break. So it has created this sort of changing balance in prices, of course, where we have seen prices start to come down in urban areas and start to go up in suburban areas. And, granted, of course, price is a function of supply and demand, but do you think we're at the right balance now? In other words, do you think that suburban home prices had been unreasonably depressed in recent years and now they're coming up to a more rational level, or do you think that things are now just getting more out of whack?
MIKE MIEDLER: Yeah, I mean, look, according to NAR, we've seen a hundred straight months of year-over-year price increase, right? It's at the highest levels it's been since NAR started recording it, over $300,000 across the country. And I think it's just merely, as you said, it's all supply and demand. Folks who were looking at New York City, Boston, San Francisco are now moving out to these suburban and even rural marketplaces.
A quick story. My sister lives in San Francisco. She wound up moving and taking a home up in South Lake Tahoe. And you see, you know, markets like that up 200%. All of your suburban and rural areas, especially mountain towns across the US, are climbing at rapid rates, and I think it's mostly just because of the demand for those markets.
So, you know, do we worry a little bit about price and it going a little bit out of control? Yes. But at the same time, you know, you've got mortgage rates were at historical, generational lows that are really putting more purchase power in people's pockets in order to afford more house in a higher, you know, priced environment. So, you know, it's all going to be about supply and demand, and as long as that demand's there, prices will continue to climb.
BRIAN SOZZI: Mike, what a lot of folks on Wall Street got excited about with Airbnb's IPO about a week ago was that they noted they're seeing a lot of demand amongst local consumers just going out about and, I don't know, I guess, changing up, changing up, looking for a change in scenery. Is Airbnb helping to drive up prices in certain markets? What's their influence been on what you guys do?
MIKE MIEDLER: You know, I don't know that there's a tremendous kind of correlation to Airbnb and what we do. I do think it allows folks to check out a marketplace and almost enter.
As a segue, I'll just give you a quick example. A lot of folks that I know from up here in the New Jersey area are going down to Florida and warmer climates in January and February this year, and you can bet in the back of their mind they're going to be looking around at real estate. You know, it's one of the key economic drivers here in the country. It's about 20% of GDP. And I think people generally love real estate as a pastime. It's why they're always searching online at what properties look like and what values are.
And, you know, even though I am in real estate, any time I'm on vacation, I'm looking around at real property and how much it costs in the local market. So I do think it allows people to dream, but I don't know that there's any direct correlation between Airbnb and real estate. I think it can only be good for us.
MYLES UDLAND: You know, and Mike, that makes me think of Zillow and the way that that's maybe changed the market. Buyers certainly come in a lot more educated probably than they used to be. They know what they want. They know what they like. What are some things that people are coming in during the pandemic-- you know, the buyers who are making a move because they need to move. What do they want in a home that they're finding most in demand? Is it an extra bedroom for an office? Is it a nice kitchen? Is it a basement? What are they looking at?
MIKE MIEDLER: It's all those things, and in general it's just more space, right? And so people are looking for-- you know, a lot of the big searches, you'll see people want areas with pools in it, a lot of home entertainment. You know, they joke around. The new tagline is the Zoom room, right?
I mean, you know, I have to tell you, like, there are some points where I'm doing my work across the kitchen table from my high-schooler, and we just need a little bit more space. And that's-- those are the things that folks are looking for because they're doing everything from home right now.
And I think to that point, you know, you made an interesting statement there about, you know, folks really kind of dreaming about what they want. You're also seeing obviously a lot of activity in folks redoing their homes. There's, you know, a couple dumpsters literally on my block. My next-door neighbor is building an office over his garage right now.
So, you know, again, I think home is something different, but I think the most important thing that you want to do right now is obviously speak to a real-estate professional. You mentioned folks start their search online, but the value of a real-estate agent has really escalated because everything is so local and things have changed so dramatically over these last 12 months. Make sure you speak with a professional who knows the market.
MYLES UDLAND: And I'll tell you from experience, those houses, they always look a little bit different than they did online when you actually get your feet in the ground. Something to be prepared for.
All right, Mike Miedler is the CEO at Century 21. Mike, great to talk with you this morning. We'll talk soon.
MIKE MIEDLER: Appreciate the time, guys.