Real Estate Market Update – Hey, I’m Mike Acquisto, real estate broker and co-owner of Acquisto Real Estate in Frisco, Texas, market update for the end of 2021, first business quarter for residential real estate. And here we go. So I’ve been speaking for quite a long time about the residential market here specifically and how it’s been changing all across the country and how people have been moving from the city center, our one location.
So if they lived in the city center, they were moving like, you know, to the edge of this city. And if they’re on the edge of the city, they were moving to the suburbs from the suburbs to somewhere rural. If they lived rural, they were going and getting like really rural and going to other places, just getting a lot of space. And that person was looking for 10 acres, a hundred acres like big voluminous space because of what’s going on.
And there was a couple of factors at play. The first factor was covered in the fact that we’re doing so much remote work and everything kind of seems to be working reasonably well with that. So that trend is going to continue. And then the second thing in play that goes along with that is, in my opinion, Elon Musk and the blanketing of the whole globe with this Internet that’s coming, beaming down from the sky and having to actually work and having these things take place so you get real world connection speeds and you can actually live all these different places.
So that was one of the big things that was holding people back is like, hey, I still have to work if I move to a place like this. Right. And now that we have viable Internet in those places, it’s working and people like, OK, I can see this coming. I’m willing to make that move. So that’s kind of been the trend that I’ve been seeing.
And, you know, for every one person that’s in the city that’s moving to the outskirts, from the outskirts of the city to the rural, there’s more people that just keep getting magnified at each step of the transaction as you move out and people are moving to one classification of property with more, more space. What I see is there’s more of them at each turn. So the people moving, you know, there’s like one person and then for every one person, there’s two people moving to this one.
And for every two people moving from here to this other space, there’s five in 10. And there’s just this huge groundswell. And what’s happening is these huge tracts of land are getting split up in these outlying areas that used to be a thousand acres. And they’re becoming pieces for one hundred pieces for ten acres. And people have these numbers in their mind. They’re like, I want to have this house.
And they imagine some larger home, one storey spread out and like a couple of animals in the front and a garden and being self sustainable in a while and putting a certain amount of money and getting 10 acres and having something interesting. I have heard that same story over and over and over again, and that’s kind of what I’ve seen happening. But I do have an addition to add to that now.
So what I’ve seen is these people moving out to those locations. And I’ve also seen and heard of a rubber band pulling back just the opposite direction. So with some of these companies, if you have a super premium position with one of the ultra-high end companies that are influential in setting the tone for our economy, if you work at Facebook, Google, Apple, one of those big ones and you’ve achieved in your career, and you’re now at the point where you’re making, you know, half a million dollars to a million dollars a year, and you’re in this range of having one of those really serious jobs.
Then what’s happening is you are if you move to one of these outlying places, you become too far from the influence center. And there’s a person who’s making decisions and all of a sudden you lose some of this input that’s going on. And I’ve heard it from SCIAF, Reza Amjed, one of my really good friends, and Cornell roommate. So he told me that that was becoming a problem in some of these people are missing out on opportunities or steering committees or getting passed over for promotions because they weren’t necessarily in that city center.
It was only important when being geographically close to the decision maker was vital and important because this person has this position and they felt that influence in proximity to the influence decision maker was important. And we’re talking about jobs that are, you know, half a million to a million dollars a year in income. I also heard this same thing from Frisco luxury real estate associate broker Amy Gasparini.
She talked about that just the other day, that some of her clients were initially thinking like, hey, this is all. Until right, so I think that this is a trend that continues to happen, but what we have is is tip of the iceberg up here and there’s so much Downbelow. So if we look at this tip, there are some people that can’t be away from whatever sphere of influence that is at their work.
And there’s a small number of people that make that certain amount of money. Those people might always have to be there if they have ambitions and want to continue to rise up the corporate ladder. However, underneath that iceberg, if we look at it, there’s a lot below the surface in all of those people are the ones that are going to be able to move. Right. So they’re moving out and getting more space.
So that’s a trend that I definitely see content continuing on. But I didn’t want to make the note that we are seeing kind of that tip of the spear of that specific price point that we just mentioned that do kind of have to have a logical reason to stay remotely close. So if you have that person and you’re looking there and you have that borrower, you have that client that’s looking in that price range, and they do make that type of money, they probably do want to stay close.
And now it could be an amazing buying opportunity for you to have them scoop up one of those homes from somebody else that’s moving away, possibly the owner of the company or super high up executives are not that involved on a day to day basis anymore. Once the company becomes large enough and they’re just doing kind of like vision and leading the company mentally, then those people are able to get away and be at more of a disparate location.
And they have availability to private jets, planes, you know, to be able to have a helicopter and get back for corporate board meetings. I’m hearing a lot that people are stopping down for board meetings in a more specific way now than they were before. So if you have somebody that’s in a board meeting, you have somebody that’s on an executive committee, you have one of those type things. Then what you’re going to see is they’re going to probably be in town for a period of time and they’re going to be huddled in masses. And I’ve been seeing that time and time again with different clients that we meet.
They’re like, hey, so I’m kind of like in this black time where I have to, you know, turn everything off and we’re going to be doing this. So those are real world things. And that’s kind of the market update that I see going on at the end of the quarter for twenty, twenty one.
I kind of see it continuing to happen. I do see prices appreciate. You know, we’ll make note that lumber prices are up, that all the input going in, construction costs are up, building new homes is taking longer labor shortages all over the place. We see this trend all across the country. We see price appreciation going up. We see homes selling for above list price like considerably.
We see people moving from location A to location B, we see them moving all across the country and just scattering. I see the whole middle of the country filling in right before our eyes. And we are in the midst of a huge, huge real estate revolution. It is going to be not too similar when it’s all done to the Industrial Revolution. We’re going to look back at this and be like, wow, we just real estate and the whole globe. And that’s all happening because those two factors of meetings in the accessibility and the Internet.
And what that’s able to do with this low orbit satellite Internet as well as social media. And when we talk about that, there’s sometimes negative influences of social media and there’s this complete backlash of people that are off it that aren’t included with that are moving to something different, that don’t want this for their kids. The people that had this and they saw what happened with too much social media for kids, with too much pressure of being in one specific spot.
And they’re like, I’m going to do this different for my children. Then the people that had millennial children and they saw what happened there. So they’re trying something different because they love and care about their kids and thus we have a different outcome. So that’s the real estate market is I kind of see it at the end of the first quarter. Let’s go ahead and say we’re done with that topic.
Catch you next quarter.