Your Home's Hidden 50% Value Jump: The Five-Year Appreciation Secret - 9/2/25 Update

This Week's Update - 

The housing market is showing improvement in interest rates, with potential cuts coming from the Fed through the end of 2025, creating refinance opportunities for those with rates above 7%. Tariff Talk as well - depends on the court's ruling...

Home appreciation data reveals a dramatic increase pattern: 2% in one year, 7% in three years, and jumping to 50.5% at the five-year mark – explaining why the 5–7 year timeframe is when many homeowners choose to move.

• Interest rates and Tariff's - What may or may not happen!
• Home appreciation follows a pattern: 2% (1 year), 7% (3 years), 50.5% (5 years) 
• Refinancing typically makes sense with at least a 1-1.5% interest rate reduction

Agents
• Creating a 5-year plan with your clients
• HomeBot tool sends monthly neighborhood market updates to clients
• Fourth quarter is prime time to reconnect with past clients while competitors slow down
• Follow up with past clients from 2-3 years ago to discuss refinancing or moving options
• Be intentional about reaching out to your sphere, even if it's been years since last contact

Reach out to us to learn more about HomeBot and how we can partner together to bring value to your clients.

Contact Nikki on social media @mortgagesfromMN2AZ or call 952-484-1584 for mortgage questions.

Realtors! Contact Angie Gerber for business strategy and planning!

With Gratitude -
Angie Gerber
angiegerber@gmail.com

Chapters

• 0:00 Recording Started

Transcript

Speaker 1: 0:37

Welcome. It is September 2nd. Welcome to September. How are you today, Nikki?

Speaker 2: 0:43

I'm doing good. I cannot believe it's already September. I mean time has just flown by this year.

Speaker 2: 0:50

So we did see some improvement in interest rates towards the end of last week. We had gotten some good indicators from the Jackson Hole meeting that the Fed will be cutting interest rates through the end of the year and the market is responding appropriately to that. This morning we did see a little bit of a dip or a little bit of an increase back up in interest rates due to the appeals court decision to tell the Trump administration that they weren't using the proper laws to invoke tariffs into other countries. So that pending decision is going to go up to the Supreme Court to rule on that Worst case scenario. If it comes back that the Trump administration cannot do the tariffs in the capacity that they are doing right now, we would have to pay back that tariff money, which could hurt the economy in a big way. With that being said, that's what the market's kind of responding to today. They don't really know how to respond and therefore we've seen a slight increase in interest rates. With that being said, we're still in the mid-sixes, so earlier last week or later last week I should say I was able to lock some people in in the low-sixes. So we are seeing continued improvement year over year and it is going to be an opportunity for everyone to reach out to their clients here over the next couple weeks. Talk about the Fed dropping the interest rates, talk about them getting in touch with their lender to talk about refinance opportunities, especially for clients who are in that 7% or above interest rate bucket. It is going to be advantageous for them, probably through the end of the year, to watch those interest rates, keep constant communication with their lender to see if it's an opportunity for them to refinance. With that being said, I want to kind of tie in home appreciation, building wealth through real estate by leveraging the equity in your property, your interest rate when you purchase a home and also when is the right time to refinance and what is going to make sense for that client. So there's a lot of components that go into, obviously, homeownership and building wealth through homeownership.

Speaker 2: 2:49

Kay Schiller just came out with their numbers, their analysis of appreciation data, and they said okay, in the past year, three years and five years on the national average. So not just particular to real estate markets where things are going good, not just necessarily real estate markets where things are going not so great or real estate markets where things are going not good. They took a blend of all of those different real estate markets, from the ones that were performing the best all the way to the ones that were performing the worst, and really came up with some statistical numbers from an appreciation standpoint Average appreciation and this is really interesting. So when you have a client who is on the fence about buying a home or they're renting right now, it's important that they understand the exponential growth of appreciation of a home in comparison to other investments. So when we use the word leverage, leverage is basically in this case the amount of money you have and what you decide to do with it to create more money. So leverage could be investing in stock markets, leverage could be investing in a home purchase.

Speaker 2: 3:55

But what this Case-Shiller data has showed us is that over the past year, the average appreciation of a home is at 2%, which is great. 2% appreciation. You've earned 2% on your home value, which is wonderful. If we span that out over three years, that number goes from 2% to 7%. Now that's pretty good. I mean, if you think about over the last three years, you've shown 7% appreciation in your home's value. But if we go out to the five-year mark, the appreciation on that home goes from 7% to 50.5%. So if you really think about purchasing a home in 2025, by 2030, you can expect that home appreciation to have gone up 50%. That's a huge jump in increase from year one all the way through year five.

Speaker 2: 4:44

So this is why we see oftentimes in the real estate world, people start moving between five years and seven years. The reason for that is number one. Obviously, life changes happen during that time. You know, people are getting married, having babies, kids are going off to college, needs are changing, jobs are changing things of that nature that tend to happen on a rolling five to seven year mark. But also because at that five year point that appreciation in that home in general has been significant enough to warrant a needed move, to warrant taking that equity out and putting it into something larger or, you know, doing whatever they need to with their equity. So it's important that when you're talking to your homebuyers and you can come up with a five-year plan this is why I use a five-year plan in mortgage planning as well the five-year plan what are we going to be doing in five years? What are some things that could come up? How can we plan for the appreciation in this home and how can we plan to use it effectively, to leverage it for future investments? And so it's really important to know that it's hey, if you want to purchase a home, let's come up with a five-year home for you, so that's going to make the most sense. In between that five years, does it make sense to refinance your mortgage? The answer is always maybe it might.

Speaker 2: 5:57

Usually, what I like to see when I talk to clients, when we talk about the cost of the refinance versus the potential savings in interest, versus the again five-year plan, what we like to see is at least a 1% to 1.5% interest rate drop in order for it to make sense to them. I do an analysis on the numbers. I say, okay, it's going to cost you $3,000 to refinance. You know, this is how long it's going to take you to make up for that $3,000. And are you going to be in the home? This long is really the very first set of questions that we need to have.

Speaker 2: 6:31

So any clients that you have that have bought homes in the past year, two years, three years, five years those are going to be great opportunities for you to get back in touch with those clients and say, hey, where's your interest rate?

Speaker 2: 6:41

Have you talked to a lender? Have you ran the numbers? Do you need to move those types of things? So it gives you opportunity to re-engage in your clients, gives them bring value in that way and know that those clients that are the five-year plus, they probably have pretty significant equity in their homes where it could make sense for them to say, hey, I can go from a home that's $500,000 to a home that's $700,000, meet the needs of my family and not have to increase my payment. So a lot of that stuff can be talked about and a lot of that stuff can be analyzed and figured out, as long as you're keeping in touch with your clients with that strategy and that's why it is so important Like right now, I'll be talking to all of my clients that I have helped purchase homes in the past two to three years and saying, okay, where are we at with your interest rate?

Speaker 2: 7:27

What's the Fed doing to cut those interest rates? What's the target interest rate that we want to have before we will refinance your house? Things of that nature to kind of bring that value. Inevitably out of those discussions comes hey, you know, I don't really want to refinance, but I'm actually thinking about moving. What does that look like for me? And so great opportunity for you to reach out to your clients, understand the numbers, understand that at that five-year mark it's so important for you to be in touch with them and continue to be in touch with them, because that is the prime time when a lot of homeowners are going to see the appreciation in their home and have the desire to maybe move or to make a different decision for their family.

Speaker 1: 8:04

That's so timely. I actually just was on a call yesterday morning and this morning and a woman over on the East Coast. She gets 17 to 30 deals, the fourth quarter by just following up with her past clients, so she has 200. And each month she has something. She does differently, and so it was amazing. And with you saying that, what came to mind were two things, and I'm sure I've touched on this before and repetition is key, so you will hear me saying the same thing over and over, because you'll always hear it differently or it might just hit differently.

Speaker 1: 8:42

We want to be advisors in a sense, because I don't know how many agents are going to a listing appointment or a buyer consult or talking to someone at a coffee shop or on a ball field, or you know how's the market, or do you know anyone, or who do you know, that's thinking of buying or selling five-year plans Like know the numbers and know what that looks like. If it's this interest rate, what about this? Or did you think about that? Or you know, because so many people get in their lane and they're just getting through every day, getting through daily life, and this isn't their lane. They're staying in their lane, this is your lane and it should be something that you know at a very deep level. And I love how you said Nikki know your lane and it should be something that you know at a very deep level.

Speaker 1: 9:29

And I love how you said making know your numbers. And it's a perfect opportunity, this fourth quarter, while you're doing the business planning and while you're putting your foot on the gas, because so many agents will be taking their foot off the gas because they've met their goals or they're getting ready for the holidays, all the things. It's a good time to double, triple down and in doing that, one of the things is be intentional. And be intentional with reaching out to the people that have purchased in the last two to three years and I love how you asked the question about interest rate and maybe they're not going to refinance, but maybe they're not going to refinance, but maybe they're looking to move. And get them in contact with Nikki and understand what the numbers look like in both scenarios Because, again, you could be the advisor, you could be the hero, you could be the person that shows them the path to get to their real estate goal.

Speaker 2: 10:25

Very true. And the other thing is is I'm always willing to partner with you. I'll always ask any client that I have, I'll ask their realtor to run a CMA for them for any potential refinances, so that that client knows, hey, I remember my realtor, I know what my house is worth, I can make a decision on does a refinance make sense, does nothing make sense, or does moving make sense? And that at least we can work together to bring that value to the client. I cannot tell you the number of times that I do a mortgage analysis, a mortgage review, just taking a look at something for somebody and, yes, this makes sense, and sometimes it's no, this doesn't make sense. But bringing that value, even if it doesn't make sense for them, they have their knowledge, they have their numbers.

Speaker 2: 11:08

I do send out emails monthly to the clients with estimated market values that are designed to show them what activities are happening in their neighborhood. That's a HomeBot. I don't know if you're familiar with HomeBot, but that's the tool that I use. I probably would say that I conservatively get 20 to 30 deals a year from HomeBot Just from sending out that email, people reaching out me, following up and saying, hey, I noticed you were looking at exploring your market. Are you just spying on your neighbors or what's happening here? You know those types of things and that stimulates those conversations and says, oh yeah, no, I was just looking around, my neighbor sold their house. I was just wondering what it sold for.

Speaker 2: 11:45

You know those types of things and just continuously reconnecting with them in unique ways. It doesn't always have to be about real estate, but it's very convenient that that email can go out monthly. Those homebound emails are something that we can partner on so that any time that we have a deal that we work together on or you have potential clients, you can put them up on those monthly emails so that they understand what's happening in their market. So it's a little bit more unique than setting them up on a search. It gives them real-time data and real data about their neighborhood that they're currently living in and what's happening or any neighborhood that they're potentially looking at. Can you know, use those types of tools, use our chat GPT to compose texts for us that can reach out to clients and engage in unique ways. I guarantee you from now, like you said, through the end of the year, you could see some potential deals or could see some deals come in the door just because you're doing what you need to do to follow up and keep in touch.

Speaker 1: 12:43

Yes, yes, it's so amazing how much business can come from just following up and being a human and reaching out and having conversations or checking in, and how many agents don't do it at a high level or don't have something like HomeBot in place. Or I talked a lot this morning on the call about CRM. You know how are you managing your sphere of influence, your past clients, your potential clients? I said I don't care if it's a $40,000 a month CRM or a $4 spreadsheet or a free tool. Just make it the tool that you're going to use and show up and work with and work through. And we overcomplicate it so often. I mean that's amazing. Just by doing what you're doing and you found something that works. So you double down on that. And again, people out there listening to this you can partner with Nikki and have this tool in your toolbox and it sounds like, yeah, it's coming from contribution. Do something different. Be different. Be the advisor, be the one looking out for them. Call them and ask them about these things, about interest rate, about their goals. How many other people are doing that? They're just sending the postcard or they're sending this email or doing the text robot. Be different. They'll write a handwritten card for their home anniversary, for their birthday, for a holiday, whatever it is.

Speaker 1: 14:12

I know this one woman that I met or was talking to yesterday. I know her pretty well. She does Valentine's cards. She's like I know this one woman that I met or was talking to yesterday. I know her pretty well. She does Valentine's cards. She's like I know the Dollar Tree and I get the silliest. Like I get the guys Teenage Mutant Ninja Turtles and I get the sucker. How many grown up men do you think go to their mailbox and open a Teenage Mutant Ninja Turtle Valentine with a sucker? You think they're not going to remember her? Oh my gosh Like do something different.

Speaker 1: 14:41

Think about that in your business plan.

Speaker 2: 14:43

Yeah, absolutely, incorporating just different ideas in your business plan is key, and that follow-up is key. I heard someone say this actually this weekend. Someone said I would be willing to bet that anyone who has been in business for any length of time can really think about 40 people that they haven't gotten in touch with, or 40 people in their sphere that it doesn't occur to them that they are in their sphere. That at any given moment you can say, okay, I haven't talked to so-and-so, or I got to know so-and-so through somebody else and they aren't in my CRM. We never talked about mortgage, but maybe I can find them on Facebook, maybe I can come and get back in touch with them, maybe I can do unique ways. I bet at any given moment there's 40 people that we can think of that we're like huh, I haven't talked to them, I haven't engaged with them, I haven't let them know what I do for a living, whatever that is, and that could help increase your number of contacts exponentially if you really think about it.

Speaker 1: 15:38

Yeah, that's a great, great intention to put around as well. Sit down and make that list. And a lot of people, especially agents, they're like oh, I haven't talked to them in two years, one year, five years, seven years, 10 years. I'm like they're not tracking it. They're not sitting by the phone or the email wondering when is Angie going to email or call me? They're again in their lane doing their own life and don't apologize. Just reach out, just be like oh, I'm so sorry. I know I haven't been in touch. It's been five years, seven months, two days and 12 hours, but here I am. No, just reach out and be like you know what you crossed my mind. It's been a while. How's so-and-so?

Speaker 2: 16:19

Facebook's not come. Facebook's not come. Come up with something. Oh yeah, I was just scrolling through my Facebook and I realized I came across your feed or whatever, and you went to the park and stuff like that and I realized, man, I haven't talked to so-and-so in five years. How are you? What's going on? What's new? It's as simple as that. You know one of the processes that I go through when I talk, you know, to new potential clients or anyone that has ever filled out a loan application or I've even had a conversation with. One of the very first things I do is I find them on Facebook, Instagram, LinkedIn and or TikTok and I try to engage them in that manner because that gives me such an easy way to reach back out to somebody. That isn't mortgage related, but gives me an opportunity to talk to them about what's going on in their lives. Perfect, love it, yep wonderful.

Speaker 1: 17:04

Know your own five years. I love it. Yes, intention, yeah, some intention around it. What a great call today. Way to start start off September. You know it's October, november, december. We're coming up to the fourth quarter. So start planning now. Put some intentionality around it, get some things written down and don't overcomplicate it. It does not have to be complicated. We make it way more complicated than it needs to be. Reach out to Nikki because she can talk to you about HomeBot, how you can partner with that and be their advisor, be their trusted friend, come from contribution and just go out there and serve.

Speaker 2: 17:48

Yeah, absolutely.

Speaker 1: 17:50

All right. Well, thanks, nikki. So grateful for our time today together and for anyone listening, follow, subscribe, like comment. Whichever platform you're on, we're here and happy to help in any way we can.

Speaker 2: 18:04

All right, Bye everyone.

Speaker 1: 18:05

Bye.