ARE WE ENTERING A BUYER’S MARKET? DISCOVER THE TRENDS THAT ARE RESHAPING THE HOME INSPECTION LANDSCAPE AND WHAT THEY MEAN FOR US!

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PODCAST TRANSCRIPT:

Ian Robertson
Hey, Beon, welcome back to the podcast.

Beon DeNood
Hey, thank you, Ian.

Ian Robertson
You know I feel bad because you know, for those that can’t see, obviously, most of our listeners are audio only, they can’t see your beautiful Inspector Toolbelt shirt.

Beon DeNood
Yes, man, I’m official.

Ian Robertson
And I show up without one. Yeah. Like a doof.

Beon DeNood
On the plus side, at least you do have a shirt on. So that is good.

Ian Robertson
Yeah, you know, we try to keep all our clothes on during the show. Great to have you back on. It’s our Q1 market outlook podcast. So that’s something that you and I usually do together here. And, you know, I like the Q2 market outlook. It’s the, you know, just before spring hits in most markets, you know, our southern markets, it’s a transition to a different kind of market, or northern parts, you know, of the US and Canada. You know, it’s a spring market when everything really gets going. So it’s kind of a fun and wild prediction of what the next three months are going to bring. Would you agree with that?

Beon DeNood
I would indeed, yes. But before we get started with that, I haven’t been on since the convention. Have we talked about that at all on the podcast?

Ian Robertson
No, and I actually have a note here to talk about that a little bit, we did. We went to the InterNACHI convention in Orlando. That was fun.

Beon DeNood
Yeah, that was unreal. It’s the first convention I’ve been to and that actually Inspector Toolbelt has had representation, had a booth, be part of the whole experience. But you know, the craziest part, the craziest part to me, is how many people walked up and wanted to take their picture with you because of Inspector Toolbelt Talk. Everyone’s like, oh, let me hear it. Let me hear it. And you’re like, what? You’re like, welcome to Inspector Toolbelt. And they’re like, yeah, that’s it.

Ian Robertson
That was so weird. I mean, we get 1000s of downloads, just ridiculous amounts of downloads and listens and the metrics are all over, and we’re very proud of that. But when you experience it in person, it’s so weird, because my wife is like, really, people wanted a picture with you. I’m like, thanks, honey. But it was super weird, like, the the stuff that people know about me because I just talk, you know, and people are like, bringing up personal things, that I’ve never met before. They’re like, hey, wouldn’t you rather have a scotch? And I’m like, actually, yeah, kind of, how do you know that?

Beon DeNood
Yeah, no, it was, it was great. So yeah, it took a little getting used to, because, I mean, we’ve only been obviously virtual and online, you know, since we started this. And to be in person and to have a live fan base. It was a bit surreal. But once we kind of got used to it, it was just, what a cool endorsement from the inspection community. I mean, there was really only a small percentage of people who didn’t hear about the podcast or haven’t listened to it at some other point. So, so that was great.

Ian Robertson
Yeah, there were over 1000 inspectors, the vast majority of them were at our booth, to the point where I was pretty proud of it. At one point, we congested the area, I’m like, this is okay. I can deal with that. But we talked to so many hundreds of inspectors, and it was just a blast. And our user base, they came up, and they were all taking pictures, and we got to meet them in person. I took pictures of them, we put them all over the internet, and just like, look at everybody. It was just, you know, it’s fun. It was like, it was just a good time, yeah, you know, looking forward to the next one.

Beon DeNood
Absolutely, absolutely. So to everyone listening. If you stopped by, thank you. And if you weren’t there, make plans to be at the next convention. It’s a cool vibe, and we’d love to meet you all, but yeah, committed to our fan base more than ever. Let’s put it that way.

Ian Robertson
And if you wanted an autograph, and Beon tried to charge for them, you know, I did not endorse that. It was his own idea. I’m just kidding.

Beon DeNood
Yeah.

Ian Robertson
But hey, listen. So now that we talked about the convention, which was super cool, and there’s another one coming up later this year, which you should look that up, InterNACHI and TPREIA are kind of putting that one on. But, um, the next three months, things changed in a way that I did not completely see over the last quarter, like we were pretty on, but there are some elements in there that I didn’t expect, and the regionality of things is gotten really even deeper. So I was looking through CoreLogic, actually, and looking through some data. Interestingly enough, Southeast Florida, we’re just going to use Florida as an example for a moment. Southeast Florida, and Florida as a whole has become a buyers market.

Beon DeNood
What?

Ian Robertson
Yeah, I know, and it is very much regional. And so here, let me, let me grab some data here, but I didn’t expect it to be that regional. You know what I mean? First of all, according to some of the data, well, actually, all the data and CoreLogic was the one that I was kind of going off of for most of this, last year was one of the lowest home sales in three decades. A matter of fact, home sales fell to the lowest level at one point last year in three decades. So within three decades was also the great recession. So less homes at one point last year were sold in the entire US than the Great Recession itself. That’s pretty intense. And you know, a lot of guys will call and say, Ian, what I do. Business is rough, this and that, and unfortunately, a lot of it comes down to hold on. And here’s why hold on is important, because this ultimately leads to a buyers market. So there’s been a surge in Florida home sales, but mostly because Florida is starting to turn to a buyers market. So let’s see. Florida ended January of this year with 172,209 homes for sale, the highest level since Redfin, who’s giving this data, began recording the data in 2012 so whenever you have inventory, that’s when it becomes a buyers market. Sellers have to start competing for buyers again. Now that’s Florida as a whole, southeast Florida in particular, had, I forget the exact percentage, it was a little less than 10% of the homes taken off the market. Now you figure that’d be bad, but what happens is they use that as an indicator of it being a buyer’s market. So if a house is on a market for four or more months, and then it gets taken off of the market, they say, hey, that seller couldn’t get what they wanted for it, so they took it off to wait. And that’s an indicator that it’s also a buyer’s market, because otherwise, if you had five people competing for that one house, escalator clauses, the whole nine yards, then it would be a seller’s market. So Florida right now is a full blown buyer’s market overall, but it’s mostly being carried by Southeast Florida. So northern Florida, western side, not as much, but overall, if you took it as a whole, full blown, I say full blown, it’s on the upward curve of what a buyer’s market would be. So it’s got a couple more years before it peaks out. That’s beautiful.

Beon DeNood
Wow. So that’s quite something. And you made me start thinking a little bit, because just this last week, my wife and I were commenting how in our neighborhood, because if anybody doesn’t know yet, we live in in Florida, just north of Daytona Beach, so we’re in Northeast Florida, but what we commented on was that there are more houses for sale, even in our immediate neighborhood, than what there has been since we have moved here. There’s quite a number of houses with the the signs up, but they’re not moving. I mean, those signs have been up for a while and that makes me think, okay, so like you say, maybe we’re entering into a buyer’s market from the sense of there being more inventory. But it seems like the prices, I don’t know, this is just, I have no data to back this up, but at least I look at the prices they’re asking for those homes in this immediate neighborhood. It seems like the prices are still a blocker. It’s like the value has escalated over the last few years, and I don’t know, they’re not moving. Some of them have been on the market for for a few months with no movement. But I was just trying to put that in correlation with what you were just saying.

Ian Robertson
Yeah, no, and that’s exactly what happens. So then when more houses are on the market, eventually, when you have too much of something, it was Thomas Sowell, he was a famous economist, and he talked about how, basically, scarcity is the principle of all economy. The more you have of something, the less valuable it is. The less you have something, the more valuable it is. Everybody says that. Everybody understands that.

Beon DeNood
Right.

Ian Robertson
So the more houses that are out there, they can’t sustain those prices. So if somebody puts a house on the market for $400,000, it sits there for four months and gets taken off, the next person is going to say, well, they didn’t get it. Let me put it on for 380. Now if it goes in three and a half months and it sells for 360 now the next person is going to say, well, I’m going to put it on for 360 and start there. That’s the way we lower the cost of the housing stock, which is very important, because price and a combination of price and interest rates is really what’s keeping people from buying homes. But it doesn’t matter. You could have houses practically free if there aren’t houses for sale. It doesn’t matter. We as home inspectors, want to see more houses for sale. We don’t care how much they sell for ultimately, until we’re buying a house ourselves. What we want is more houses for sale. And at 172,000 houses in Florida, that’s the most number of houses that Florida in a long time has had for us to inspect, and that’s a good thing, and we have to think of it as a cascading effect, too. So if there’s eight houses in a neighborhood like yours that are for sale, some of them get taken off the market because they sit too long. Some go for a lower price. Some sit there for six months to a year because they have to sell them. Now, all of a sudden, six months later, you have 14 houses for sale, and then you have 18 houses for sale. Now you have 20, and it just the stock will build. But then the more we go into a seller’s market, not only do we get those inspections, but cumulatively, we get more home inspections per inspector in a couple of different ways. So a buyer in a buyer’s market is going to be more cautious, so a buyer is more likely to walk away from a home that they don’t like the inspection for, so if I find roof damage, and it’s a $30,000 roof, and they’re like, well, there’s 20 houses for sale, I’ll just go to the next one that doesn’t have a roofing problem. Now we get a second inspection. And ethically speaking, hopefully no home inspectors are out there failing things hoping to get a second inspection. I hate that. Just say what it is, let the buyer decide. But statistically, you know, let’s say one out of five buyers ends up walking away from the house and hiring us again. Cool. So then on top of that, sellers are more likely to get a pre-listing inspection because they’re like, listen, I don’t want to be one of my neighbors where the house sat here for eight months and didn’t sell and the two failed inspections. Let’s just get a pre-listing inspection and we’ll get it taken care of. Let’s say one out of five for that. So now, instead of five inspections, we have seven. We increased. What’s that, 20% increase? No, that’s a 40% increase.

Ian Robertson
Way more.

Beon DeNood
So, more inspections in a buyer’s market than sellers.

Beon DeNood
Okay. All right, yep.

Ian Robertson
By my anecdotal calculations, from my own experience, I don’t have raw data on that, because most states aren’t reporting for home inspections, that is, it’s about a 40% increase, two for every five.

Beon DeNood
No, that’s pretty logical. Yeah.

Ian Robertson
I would like to see the market more like that.

Beon DeNood
So then, interesting, because then technically we should, as inventory rises, we should see price points ease somewhat. And the crazy part is, is that most of the like, you know, big organization, Zillow and realtor.com and whoever else is out there, Redfin, yeah, they’re all for the year. I don’t know which part of the year, but for the year, they’re still predicting, they’re pretty bullish on house value still increasing from the previous year. I don’t know if that, I mean maybe, like, different local markets will obviously, like, play out at a different rate or in a different way. But I wonder, I wonder how they’re coming on that big, or if maybe the current move was unanticipated.

Ian Robertson
Yeah, so, and I actually agree with them. I personally, I do read a lot of realtor.com’s data and zillow.com’s data, I find Redfin, for some reason, seems to have some more of the more accurate data that I’ve seen, so I tend to lean on theirs a little bit more at times. But Florida, Texas and Louisiana right now, Florida is mostly into a buyer’s market. Louisiana and Texas are getting there. Texas, new construction inspections are really, really bolstering what is there for the infrastructure for the home inspection industry, and kind of always has, in a lot of ways, but those three states are heading into a buyer’s market.

Beon DeNood
Okay.

Ian Robertson
Problem is, here’s another example, the Northeast. And I’m not just talking like New York and Massachusetts, I’m talking like Pennsylvania to the tip of Maine and everything in between is very much not doing well for home inspectors, okay, or for buyers in general, still very much deep in a seller’s market, inventory is low, and the same core logic data talks about that, inventory is low. House pricing is going way up, still, multiple offer situations, the whole nine yards. It’s still not as bad as it was a few years ago with all the skipping of the inspections and things like that. There’s less of that now, but places like the entire Northeast are why they say house prices are going to continue to rise. So you think about Florida, Florida, let’s say an average house is $400,000 I don’t know. I don’t live there, but now they’re still going to hang out at that price while we enter the buyers market. So it may go down to 390, it may go up and down and fluctuate a little bit, but it’s going to hang right around $400,000 so there’s not going to be a downward sweep in pricing that’s going to be measurable nationally, whereas places like the northeast, it may go up another 3% this year.

Beon DeNood
Gotcha.

Ian Robertson
So that’s what sets off the numbers nationally.

Beon DeNood
Yeah, so it becomes comes a wash and ultimately a gain at the end of the year. You did mention interest rates. You know, that’s always a hard one to try and, like, predict or something. But I did read an interesting article this week that was referring to data that Target just released, and it’s sort of like warning sign, the economy slowing down. Spending is down. So that is the first time in a while that we’ve heard that from one of the big retailers. So I mean, potentially, that’s a good sign for interest rates easing as well in the near future here.

Ian Robertson
The other thing with interest rates is, I’ve said this all along. We can drop the interest rates to 2%, the average home buyer, it’s not going to help them much if they have $350,000 they can spend. But all the houses are $450,000.

Beon DeNood
Right.

Ian Robertson
So interest rate is a factor. When interest rates lower, basically, the upper 20% of people in the US are the ones that make money. I mean, there’s guys out there that’ll just borrow stupid amounts of money at, you know, two and 3% like they were before, you know, in the twos rather, and they’ll go and they’ll make 9% on it and pay back the loan over the course of time. And then, with inflation, they’re paying back a loan with money that’s worth less while they’re still making 9% interest on it.

Beon DeNood
Right.

Ian Robertson
It’s like, the average person, we don’t do that. That’s not what the average person does. That’s what business savvy and wealthy people do and all that stuff. So it’s not going to help our industry if interest rates just go down. Ideally for me, I would like to see house prices go down first throughout this year. And this is going to be an unpopular opinion, because everybody talks about interest rates, but you know what? It’s an easy, easy thing to say, like, oh, there’s a crack in the foundation. The foundation must be bad. It’s like, well, it’s a crack, you know? Let’s talk about all the different other factors. Interest rates is just one small aspect. I’d like to ideally see houses sit on the market for a while and prices go down first, then as prices get closer to affordable, not completely affordable, let’s say $420,000 house is now 390,000, then over the course of the year, and then interest rates drop. That’s ideally what I would like to see, because now we’ll have inventory and lower interest rates. Because if you just lower interest rates right now, you’re going to have another buying frenzy of the upper 20% of people, buy all these houses. Some will skip inspections, and then we’ll just lie flat on our faces again. I’d like to see them paired together, but I’d like to see interest rates come down lower later on. Do you think interest rates are going to come down, though? They’re right around 7% or so.

Beon DeNood
Well, I mean, you make a good point, because, you know, interest rates have obviously been heading up. They came down little, then up again. So I think there’s a psychological factor to like knowing which direction the market is moving in, and we’re like, oh, wow, looks like we’re gonna get some relief. But what does that relief look like? And what does it translate to the average buyers, actual money that they’re gonna be spending each each month, you know? So, okay, we’re sitting above 7% if we come down below, you know, even to six some percent, what does that actually mean to someone who’s got a loan for, you know, 300 and some thousand dollars, you know, I mean, I haven’t done the math on it, but to your point, you need the actual ticket price to drop to for it to actually move the needle, dropping down like a few points in the percentage point is not going to to probably push them. So a combination of those two factors, I think I like the way you mapped it out, is the most likely path to accelerating the number of transactions we’re going to see in the market.

Ian Robertson
Yeah. And then there’s other factors, like at the beginning of the year, we talked about how new construction was, for the first time, starting to almost keep up with demand. So we were counting on new construction to carry out the year, to help build up the back end of inventory while it transitioned in some markets, at least to a buyer’s market. I mean, but now with tariffs and other things going on, there’s some uncertainty as to whether or not builders can still build houses relatively affordably, and whether or not some of these big builders might have troubles later on for houses that they specced out at a certain price without any kind of, you know, escalator in their contracts with their buyers as to what materials are going to cost, they could have some issues. So there’s still some question marks as to that. But right now, home building has slowed slightly because of that, and you can’t blame it. You can’t blame big builders. If you’re a big builder working in three states and you’re building hundreds of homes, and you’re like, man, an extra dollar for two by four that could, that could cause us to make layoffs, because we’re doing 300 houses.

Beon DeNood
Yeah.

Ian Robertson
You know, there’s a big deal there, so we’ll see where that one lands. But right now, that’s slowed down a little bit, and that’s going to hurt more places like Texas and stuff, because there’s a lot of states in the northeast and northwest, they don’t, it’s more of a tradition that’s in most contracts. But most of them don’t get phase inspections. They just kind of move in and count on the town inspector to do a good job, which they never do. You know. So we’ll see where some of those things land. I think building is still going to continue to happen, just at a slower rate because of the perception of things.

Beon DeNood
Yeah. It will be interesting to see what, what actual, you know, how prices are affected, for example, on lumber imports and stuff, because some of the larger contractors obviously have massive warehouses filled with, you know, product and materials that they’ve purchased and negotiated rates or whatever. But if you know that the next batch is going to cost X amount higher, you’re not going to be selling even your current inventory at the premium rate that you were able to buy it for. You’re going to try and hedge for that. So that’s why prices usually have almost an immediate effect on the end consumer, whether you’re a home buyer getting those materials through your builder, or if you’re going to Home Depot or Lowe’s or any other lumber yard to get lumber. So it will be interesting. I haven’t really paid much attention to those prices in recent weeks to see how they are responding, but I’m thinking in the next few months, we’ll have a better idea as to, you know, whether there is going to be any effect, how long these tariffs are going to be in place, whether there’s alternative supply, you know, that can be tapped in other parts of the world for similar pricing. We just, we just don’t know. We’ll have to wait and see how it all trickles down.

Ian Robertson
Yeah, and we’re going to know by the end of the year, because you talk about those warehouses of stock that they’ve built up. So the federal government, they tax your inventory. And that was actually based on lumber. It’s one of the reasons why we have that tax, so they can’t store that lumber and then carry it over to the next year. So by the end of this year, or whenever their fiscal year ends, these construction companies are going to need to do something with it, so they could be waiting and then we see a big boom later on in the year, because they’re like, we gotta use up this lumber, we’re paying tax on it. Or they may say, listen, the taxes may be less of a hit than the increase in price, and they may bite the bullet and carry it over into next year. That we’re going to have to wait to see. But right now, building has slowed slightly, not incredibly, but slightly. I would encourage home inspectors outside of states like Texas, where there is building going on, to try to educate your market on phase inspections, that is a great market. And you know, 11th month inspections, those have been doing well, but there’s nothing like a three phase inspection. You have the phase one, phase two and the final. That will keep you busy and keep you scheduled out, find these developments, and finding the people is hard. The builders don’t want you there, but a lot of builders still have that in their contracts. Sometimes it’s mandated, sometimes it’s not, to be able to get phase inspections. But buyers of new homes in my area, I almost never, do you hear of a phase inspection. Everybody says the same thing, it’s a new home. How bad can it be? Then you go to places like I mentioned Texas again, it’s like, everybody gets a phase inspection. It’s like, wait, you didn’t get a phase inspection? Try to push those a little bit. I think that’s going to be an important part of staying afloat, and not just staying afloat, but owning some market share by creating that market, getting out there and saying, okay, how do I get people to get a phase inspection and then get them to hire me to do it.

Beon DeNood
Yeah, so I guess question then, as far as, like marketing and getting yourself out in front of people for something like phase inspections,what are your best channels to use to try to access that target audience?

Ian Robertson
That’s the trouble is, how do you target them? You’re going to get them a lot through mortgage lenders and in states where it’s an attorney state, which is means a state where they use attorneys for closings, talking to them because they make out the best by protecting their clients interests, mortgage companies are trying to protect their own interest. So if you can get in front of those two parties, and you pitch them two different ways, mortgage people are like, hey, do you want to protect your interest? Did your clients get a phase inspection because you don’t want to have a mortgage on a home that three years from now, they go to sell and they sell it, you know, short sale, you know, for 80 grand, under what they paid for it, you know, now you guys are stuck. That doesn’t look good. And like, oh, yeah, okay, let’s, let’s talk about that. For attorneys, it’s like, hey, you want to protect your clients from litigation and all this other stuff. Consider phase inspections. It’s a hard sell in certain areas, but getting to the people is the hardest part.

Ian Robertson
But new construction will still have mortgages on it. Most homes have a mortgage on it.

Beon DeNood
Yeah, because I’m even thinking of the timing that you engage with an attorney and, you know, somebody doing your mortgage, it’s typically for most it would be at the point where, like, phase inspections are almost like, already you’re looking to close, you know, and get financing and all that kind of thing. So even then, it’s not a done deal.

Beon DeNood
That’s true.

Ian Robertson
So unless somebody’s building a house for 800 grand cash, which people do, for the most part, they’re gonna have a mortgage on it, and some lenders require a phase inspection. But I’ve also seen a lot of lenders that don’t enforce it, they’ll just say, like, did you get inspected? And like, yeah, sure. And then they move on. Um, there is some open education that you can try. And I’ve talked about this on a previous podcast, like home shows. You go to those home shows and there’s builders everywhere. So listen, you can’t be a builder’s friend. You just have to be used to getting spat on, metaphorically speaking, by these builders. You go to a home show, and you set up a booth, get a phase inspection, protect yourself from the builders. You’re gonna get some dirty looks, but you’re also gonna get some attention, you know, hang up some pictures of things that you found on new construction, you know, discreetly without mentioning any of the builders in the room, their names. Yeah, you know, don’t make enemies. But be like, hey, this is from a new construction inspection. You know, if you have other inspectors that you know in other areas that have some pictures that they would like to provide, and you can do a backdrop, and, you know, go to canva.com and you can get some marketing material there made, and just say, is this something that you want? Do you want to have a flooded basement because they crushed the, you know, the drain line going out into the yard when they were back filling, you know? No? Well here, think about getting a phase inspection, work that into your contract. You know.

Beon DeNood
Yeah. I mean, you definitely would stand out, even from an attendee point of view.

Ian Robertson
It would be so uncomfortable.

Beon DeNood
Here’s something different, you can, you know, hire your own security and have like two bouncer looking guys at your booth, make sure you stay safe. But, yeah, that’s an interesting approach. I mean, I guess it’s just trying to get yourself in front of the would be buyers to say, hey, like you say, education campaign. Obviously online is another thing you can try, but that’s really hard, you know, unless you know what you’re doing, you’re just gonna be throwing money down the drain, pretty much.

Ian Robertson
So a couple of things. You can also try with new construction agents, in areas where they don’t do phase inspections, they get a little bit wonky about it. They don’t like you to try to educate because it slows down the whole process. But online, people aren’t searching for it. That’s why I say an education campaign. If somebody needs to take statins for their, what’s that for?

Beon DeNood
Cholesterol.

Ian Robertson
Cholesterol, good. So obviously, you have high cholesterol. Now we all know.

Beon DeNood
Obviously.

Ian Robertson
So if you take, if you need to take statins for your high cholesterol, but you don’t know you have high cholesterol, you’re not looking up statins.

Beon DeNood
Right.

Ian Robertson
So you need to know that you could have a potential issue before you look for the cure. So you need to have an education campaign, but the new construction agents, you can try that, or you can do a social media campaign and run some ads. So, you know, like AJ, and them, they do a lot of, and Preston. Well, Preston does mostly older homes. You know, AJ is doing newer homes, and he’s like, hey, here’s something I found on a new construction. That’s gonna draw more people to go, oh, I need a phase inspection. You can run some ads, and video is always best for the ads if your finding stuff on a new construction inspection, yeah, and say, okay, don’t get caught. If you’re buying a home, you know, make sure XYZ.

Beon DeNood
Yup. Yeah, social media marketing, I mean, and lately, most platforms are trying to boost like local content, you know, they’re trying to be aware of of local business and trying to do that. So, yeah, that’s a great, that’s a great idea. Well, this has turned from like a market outlook to a marketing episode, but it makes it, makes it practical, doesn’t it? It’s like, okay, so this is what’s happening. So how can you, how can you fix it? How can you get in front of it?

Ian Robertson
Well, and that’s why I want to give actionable items. And I actually have a market prediction here in just a moment. But as a side point, Beon, to get away from the whole how to market to new construction, InterNACHI released data, and the data pointed to the fact that one in six inspectors are part of a multi-inspector firm now.

Beon DeNood
Wow, one in six.

Ian Robertson
I take that as five out of six are independently owned. So that means the majority of our industry is still solopreneurs, you know, working on our own, which I like.

Beon DeNood
Yeah, well I mean, even at the convention, and maybe the nature of a convention attendee, if you’re part of a multi-inspector firm, you’re less inclined to maybe want to network and, you know, be out there. Maybe a select few inspectors from the multi-inspector go. But most of the people we spoke to were, interestingly, were husband and wife teams. There were so many of them, I wouldn’t say most, but many of them, they were family businesses. You know, where, where the family was involved. Sometimes even the kids were, you know, I think even of Preston, how his family’s, like, engaged with the business and learning and things like that. So, yeah, I do want to look more at the five out of six than the one out of six there, because the solo operators are definitely still the majority and the life and blood of the industry.

Ian Robertson
Yeah, but the multi-inspector firms are moving in.

Beon DeNood
They are.

Ian Robertson
You know, actually a lot of our guests, most of our guests, are multi-inspector firms. Our most popular podcast episode, though, was about how to be a successful solo inspector. So there’s a good mix in our industry, but I just thought it was interesting, because that’s the highest number that I think we’ve probably ever been in.

Beon DeNood
Interesting.

Ian Robertson
I think it’s also good because I think that’s where the market is shifting to over the next decade, and we’re going to see that number grow of those part of multi-inspector firms consolidating markets. That’s what markets do. They consolidate over time. But I do think that it’s an opportunity for us to market ourselves if we’re a solopreneur and say, hey, we’re still independently owned, and multi-inspector firms, they just have a lot of other advantages, like they can spread themselves out farther, a larger territory, cover short notice things for for buyers and sellers and agents and all that. But I just thought that was a interesting side point.

Beon DeNood
It is interesting. And there is a difference between being a multi-inspector and being like a part of a larger national franchise. That’s a whole other you know, story. So, I mean, you do get a guy who was a solo entrepreneur, solo inspector, and he’s growing and wanting to grow locally. So, you know, he hires on a couple of inspectors, and he grows organically in that way. So now he’s multi-inspector, which is, I mean, great scale path for any business, right? That’s ultimately what everybody’s a goal is.

Ian Robertson
Yeah, not necessarily everybody.

Beon DeNood
That’s true.

Ian Robertson
Some people like to stay solo. I gotta say, the happiest I was inspecting was solo. You know, just driving around, felt like Han Solo, just in my little spaceship, doing cool things.

Beon DeNood
Touring the galaxy, doing your thing.

Ian Robertson
Touring the galaxy. But there are disadvantages, you know, like if you get sick, you know, your truck, you know, blows a tire on the highway, or, you know, what do you do? You’re kind of stuck. So there’s advantages and disadvantages, but that’s just a market trend. But, um, here’s my prediction, Beon, and I don’t know about yours, I think the second quarter, Q2 March, April and May. I think it’s going to be a good spring. I think we’re going to hit right in the middle nationally, US and Canada. I think we’re going to hit right in the middle. I don’t think it’s going to be a nine out of 10 year. I think it’s going to be a five out of 10, maybe a six out of 10. I think new construction over this next quarter is going to be very important. For markets that don’t have a lot of new construction inspections, I do think that we should start pushing into that market a little bit harder there and create some education and try to get get ourselves in there. It’s not going to be easy to get our foot in the door, but I do think it’s worth it. I don’t think interest rates are going to go anywhere, and I don’t think three months is long enough to see any drastic price drop. But for our guys in Florida, Louisiana and Texas, congratulations, you are the first ones to start pulling out of this nosedive that we’ve seen for the past couple of years in our industry. Home inspections are going to be a little bit better. The only problem that you guys will see, besides Louisiana, Florida and Texas, are two out of the three top most saturated markets for home inspectors, so you’re gonna still see that. But fortunately for you, if you’re still around, those that have left have left some market share for you. So I think they’re gonna ride it out for a long time. But us up in the Northern territory and out west, we’re still working our way out of the mud a little bit. But these are good signs. I mean, yeah, over this year and into next and 2026 and 2027 we’re only going to see upward trends for the most part, unless something big and crazy happens.

Beon DeNood
Yeah, yeah. Now that’s that sounds like a pretty good prediction to me. And what you said towards the end there, I think is, key. Like regionally, there will be a difference in how this plays out. So if you maybe followed this episode of the podcast to see how, especially, Ian does his analysis to make these determinations, use some of those inputs in your local market. Look at, you know, how many houses are there for sale? What the price trend is going, are we going up? Are we going down? What is your new construction stats looking like? And that’ll help you regionally to see how you can adjust either up or down expectations for your local area.

Ian Robertson
Yeah, and that’s, and that’s a great, great thing to do that Beon just mentioned there, is learn to do these things in your own local market. Number one, look at price drops. Is a house, BOMK, which is back on market, and if it is, did it come with a price drop? How many houses were taken off the market? And you can set filters for this on things like Zillow and other areas. And it’ll just let you know, hey, this is off the market or this is back on the market. Here’s a price drop on this house. I do it for my own local area. Every time a house drops in price, I get alerts all over the place. You know, I’m just a freak that way. I like to watch that, but keep an eye on those things. Once that starts happening more, anecdotally you can say, okay, cool. That’s a good trend for us as a home inspection industry. Look at the number of houses on the market. If there’s 300 houses in a 20 mile radius of you right now and then later this year, there’s 412 cool. Wow. Okay, that means that, hypothetically, soon, the prices of those houses are going to start dropping. And that also means that in six months, you probably have, six months after that, you probably have four or 500 houses in the market, and now it’s going to become a buyer’s market, and you’re going to start to see that 40% increase that I that I told you about at the beginning of the podcast.

Beon DeNood
Yeah. So do you see a place here in the future where we gradually, we’re going to see most markets trend towards a buyer’s market over the next few years? I mean, I guess it’s too far out to map, but I mean, that’s ideally what, where we’d like to see the trend continue, right?

Ian Robertson
Cyclically speaking, yes, that is typically what happens. You almost never will see a trend where it goes seller’s market and then almost buyer’s market and then back to seller’s market. Unless something crazy happens. It’s always sellers, buyers, sellers, buyers, up and down. So this has just been a very long run of a very high seller’s market. Usually you peak out in the year, and then you start to drop and I don’t know the exact cycle numbers, so maybe I shouldn’t say that. It peaks out faster than this felt like. But the pandemic, that just totally changed the whole cycle of things. We tend to stay in a buyer’s market, from my experience, longer than we do in a seller’s market.

Beon DeNood
And then we forget, we forget the pain and the suffering.

Ian Robertson
Yep. So I think we’ll be, US and Canada all together, I’m hoping mid to 2026, all of us, for the most part, at the very latest, I would imagine 2027 middle of the year. And I always say middle of the year, because you have to get through the spring boom. And then you kind of realize what’s going on.

Beon DeNood
Okay, well, that makes me kind of excited, because I know a lot of guys have, look, there’s a lot of guys that have been doing really well, but nobody’s gonna, you know, under any illusion over how the last few years were, there were tough years. So to hear there’s finally some evidence, some actual hard evidence, of things moving in the other direction, even for me, not as a home inspector, it makes me excited to see where the market’s gonna go and how it’s gonna benefit everybody. I’m looking forward to that.

Ian Robertson
Yeah, and, you know, there’s also the sentimentality of people about things. People are starting to, I was just reading an article, I want to say NerdWallet, but I don’t think it was NerdWallet, about how people are starting to get used to the new price of a home, get used to new interest rates. That takes time. Once people get used to that, then they’ll start to buy a little bit more, save more, as we mentioned on our Q1 podcast, buy as a family, borrow from family and things like that, and people make it work, and then prices will hypothetically level out over time.

Beon DeNood
Yeah, I think, I think you’re right, because for the group who was looking for a house, and then they went through the whole experience of seeing the higher interest rates and the higher price points and to them, it’s like, it stings. It really hurts, right? Because I could have gotten a house for it, but if you’re just newly looking for a house, you’re just kind of entering at the point where prices are now, but that takes a few years to probably turn the corner on that, like you’re saying, you know.

Ian Robertson
Yeah, so we will see if I am correct and you are correct, and see what these next three months bring us until our next quarterly podcast and the Q3 market outlook. But otherwise, thank you for being on, Beon, and everybody, thank you for listening into our Q2 market outlook, and look forward to having everybody listen to our next episode of Inspector Toolbelt.

Beon DeNood
Awesome. Thanks, Ian, pleasure as always.

Ian Robertson
Later.

Outro: On behalf of myself, Ian, and the entire ITB team, thank you for listening to this episode of Inspector Toolbelt Talk. We also love hearing your feedback, so please drop us a line at [email protected].

If you’re enjoying the conversation, don’t forget to hit the subscribe button. Our podcast is available on all major podcast platforms. For more information on our services and our brand-new inspection app, please visit our website at Inspectortoolbelt.com.

*The views and opinions expressed in this podcast, and the guests on it, do not necessarily reflect the views and opinions of Inspector Toolbelt and its associates.

PODCAST SUMMARY/BLOG

The housing market is in a constant state of flux, and as professionals in the home inspection industry, it’s crucial to stay informed about the latest trends. In this episode, we delve into the Q1 Market Outlook, shedding light on the dynamics that are reshaping regions such as Southeast Florida. Current data indicates that Florida has transitioned into a buyer’s market, signaling a major shift from previous years where competition among buyers was fierce. We dissect how this change impacts both buyers and inspectors alike, with inventory levels rising and homes staying on the market longer than before.

As we explore the implications of these shifting market trends, it’s important to consider the unique attributes that signify a buyer’s market. For instance, many homes are currently listed for extended periods without selling, leading to sellers adjusting their asking prices in order to attract prospective buyers. This creates a new landscape where inspections play an even greater role in the buying process. Buyers, now cautious due to increased inventory, are more likely to walk away from properties that don’t pass inspection, ultimately leading to an increase in demand for thorough assessments. In our discussion, we unpack the nuances of buyers being more selective and the greater importance of pre-listing inspections as sellers seek to avoid the pitfalls of prolonged listings.

Additionally, we reflect on the recent International Convention, where we engaged directly with inspectors from all over and learned about their insights. It’s clear that the excitement surrounding the convention highlights the importance of community and the need for inspectors to remain connected with their peers. As the podcast has grown in popularity, the feedback we received from attendees reassured us of our relevance in the industry.

Looking forward, we analyze predictions for Q2 and beyond. While the overall market may be improving for states like Florida, Texas, and Louisiana, other regions like the Northeast still find themselves entrenched in a seller’s market. It is vital for home inspectors to adjust their marketing strategies and capitalize on the increased volume of inspections that a buyer’s market may provide. Our strategies include tapping into new construction inspections and leveraging relationships with mortgage lenders and attorneys to promote phase inspections to help buyers safeguard their investments.

Ultimately, this episode emphasizes the need for adaptability within the home inspection sector. By understanding and responding to market trends, professionals can enhance their services and provide value to their clients. As we approach spring, we are hopeful for continued growth and recovery from the challenges posed by the pandemic over the past few years. Let’s remain focused and proactive, ensuring we’re prepared for the opportunities ahead as we embrace the new normal in real estate.