Beret Kechian: I’d say like, you know, probably 90 to 95% would be New Jersey, with New York and Pennsylvania making up the difference. Within New Jersey, [and] specifically Hudson County – which is a place that’s right across from New York City – [it] is very much like a big time condo market, my bread and butter.
But of course, we have a lot of clients that move out of condos once they have kids and get married. They move to the suburbs and they take us with them. So we still have a significant suburb influence, but they usually begin in Hudson County.
We have a really good niche and area where we are condo experts. We’re in an area that’s 90% condo [business], so it’s harder for lenders that don’t know this market to lend here. So more realtors in the area have started working with us. And usually, once they work with us, we hold on to them.
Kim: Looking at the 2021 numbers from Scotsman Guide, about 60% of your business came from purchase. I’m guessing your production pivoted toward purchase mortgages, but what does the number look like for 2022?
Kechian: In 2022, it was almost 90% purchase mortgages. I only did like $30 million in refis and I think they were all done at the beginning of the year. The numbers shook out to be like $378 million. That’s what we submitted to the Scotsman Guide.
Kim: What did you do differently from the refi boom years of 2020 and 2021?
Kechian: The world opened up, which allowed us to see people physically more. So we kind of just connected with more people. We feel like we picked up more market share in 2022 and made more connections, working with so many more teams than we did in 2019, 2020 and 2021. There just wasn’t enough volume to make up the difference of losing all those refis — and then there just wasn’t a lot of volume in purchase because our area dipped due to the rates increasing and the lack of inventory.
The suburbs had a significant lack of inventory, and even the urban areas, there just wasn’t a lot of deals going on. So I think our share of the deals has gone up and we’re seeing it so far.
After the first week of January, our applications went up like 300% month over month. We went from like 13 applications for the last week of December and the first week of January to getting about 40 applications every week.
While there’s still a lack of inventory, we’re seeing more deals happening. More buyers, I think, adjusted to this market and understand this is what it is. A lot of them are perfectly willing and happy to work with seven- and 10-year adjustable rate mortgages (ARMs) to keep the rates as low as possible. So the ones that are eligible for those are absolutely taking advantage.
The 2-1 temporary rate buydowns have certainly been a factor. We’ve been advising them how to use it with the sellers.
Lately, we’ve seen bidding wars come back where really good buyers are still not able to get houses. We have a lot of them looking and way more activities than in the fourth quarter.
Kim: If there are bidding wars in your market, are you expanding beyond your major market of Hudson County — especially given the inventory issue??
Kechian: Our realtors have been expanding, too. They have been telling me [that other] realtors are going to the suburbs more than they did and taking people out there. A lot of them that worked with us in Hudson County take us with them. We introduce ourselves to the realtors out there so they know we’re a tough team. A lot of times we ended up working with those realtors, which is a good thing. It’s taken a lot more work to do a lot less volume, which is crazy to say.
It doesn’t make sense to refi, even with cash-outs. [Borrowers] would never take cash out of their property right now and sacrifice the rate on your mortgage. They would take a line of credit or an equity loan or a personal loan. They are not going to sacrifice that rate by 2%, 3% to grab another property. The only refis we’ve seen are either late financing type refis or a divorce situation, [and] literally nothing else.
I do see that changing, though. There will be some refis at some point this year because now there is a group of people that locked in rates at around 6.5%, 7% in the fourth quarter of 2022. Those guys will end up refinancing at some point in 2023, and we’re all over that, keeping an eye on those people, making sure that we’re finding that perfectly to them — and making sure we can save our clients money.
Kim: When you say buyers are entering the market – are they first-time buyers or existing homeowners?
Kechian: I think that we’re seeing a pretty good split, but I think a majority of the buyers are buyers that are renting right now. So first-time buyers, and even if they’re not first-time buyers, they’re renting currently on their primary residence, or they may own an investment property. So when they’re comparing rent to buy, they’re looking decent.
We’re seeing less move-up buyers than we did before. Because even though they might be running out of space a little bit, unless they’re absolutely bursting at the seams, it’s hard to give up a 2.8% rate and trade it in for 5% or 6% and also go to a more expensive property. So I think people are kind of hanging on a little bit longer than they would have previously.
We’re not seeing a huge amount of the suburb move-up buyers because, again, unless their house is just way too small, I think a lot of people are hanging on and just kind of staying with the status quo, which is also hurting the inventory in the market.
Kim: Who does your team consist of? Are there other teams within your branch?
Kechian: Individual loan officers mostly, [and] no other teams besides mine. My team consists of, obviously me — the lead. I have a production manager who’s licensed in a lot of states. I also have four other licensed loan specialists that work on my files, and then one assistant. So six licenses total under my umbrella (team).
I’m a producing branch manager beyond just doing my own production. We have loan officers that are licensed in other states, and the branch itself is licensed in other states. As a branch we did $1.5 billion in 2021. I did about $830 million of it that year. In 2022, our branch did just under $700 million.