Key Factors RealEstateAF

Balancing Lattes and Loans: Navigating Consumer Spending and the Housing Market

• Mark A Jones - Founder of ReviewMyMortgage.com

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Could your daily latte be jeopardizing your shot at homeownership? Join me, Mark Jones, with guests Austin Pantuso and Nicole Aguero Kelly, as we unravel the complex web connecting the economy and real estate. In a landscape where consumer debt soars and the cost of living climbs, we take a critical look at how these pressures influence personal finance and the housing market. From scrutinizing fast food prices to debating the impact of monopolistic practices, this episode is a deep dive into the factors that shape our economic reality and the choices we face as a consequence.

As interest rates loom large over financial stability, we draw parallels with the 2008 crisis and question the Federal Reserve's optimistic forecasts. With Austin and Nicole bringing their expertise to the table, we dissect the role of consumer spending in market regulation and whether government intervention might be the necessary medicine. The Texas real estate market comes under our microscope, too, as we weigh the merits of buying a home in uncertain economic waters. For anyone navigating the complexities of financial recovery or considering a property investment, this conversation is packed with insights and advice.

We don't just explore problems; we're also sowing the seeds for financial acumen. Financial education takes center stage as we discuss how showcasing money-savvy role models can empower a new generation to build wealth. Achieving a lifestyle balance, managing credit, and making informed consumer choices are more than buzzwords—they're the pillars of financial health. If you're a professional, investor, or simply someone trying to stay ahead of the property market pulse, this episode is your guide to a more informed financial future.

Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.

Speaker 1:

Welcome to Key Factors Podcast, where knowledge meets ambition in the fast-paced world of real estate and mortgage. I'm your host, mark Jones, bringing you the latest insight, trends and expert advice to navigate this dynamic property market. In each episode, we dive deep into the heart of the industry, dissecting market movement, exploring investment strategies and unlocking the secret to real estate success. Whether you're a seasoned professional, an aspiring investor or simply looking to stay ahead of the curve, this is the ultimate guide to making informed decisions in the world of property and real estate. So grab a seat and let's uncover the key factors that make all the difference.

Speaker 1:

Welcome to Key Factors Podcast. Let the journey begin. And here we are at Key Factors Podcast, powered by ReviewMyMortgagecom. And just as a reminder, guys, this is a tool that you can utilize to self-diagnose with mortgage programs all around the country and is gaining a ton of traction in this market. So, that being the case, today I wanted to talk a little bit about the economy, how it affects us, what we're seeing out there and how it could impact us on a real estate level. So I've brought along two guests. I've got one, austin Pantuso. Austin, how you doing?

Speaker 2:

I'm doing good and a third guest.

Speaker 1:

And we also have a co host with us today the champ miniature Australian shepherd, my favorite. And then we also have Nicole Aguero. Kelly, how you doing Good, good, welcome back. Yes, welcome back. Thanks. It's been a little while since you've been in the podcast and it's good to have you back in here.

Speaker 3:

I know I went and had a baby and now I'm back.

Speaker 1:

You went and had a baby. That's awesome. So, guys, today we're going to be talking about the economy. Before we started this, austin brought up some fun facts that he had stumbled upon, and it was very alarming, in my opinion, as far as what the heck is going on with our economy and how it could potentially impact the real estate world as we know it. So, austin, if you want to kind of let us know what you discovered in that quick article that we saw there, can you pull it up real quick.

Speaker 2:

We absolutely can Go nation. Don't go Texas. I know Texas is different. Yeah, let's jump into here. This is what I discovered, but I think you should explain it. I mean, by no means are we economists right. We're not economists, Right.

Speaker 1:

And we want to preface with that we are not economists. We don't even play an economist on TV. So, as we're looking at this data that you now see on your screen, and for those that are listening, not watching, we're looking at a chart from Fred, and Fred is a very trusted resource for economic data. Pretty much play by play on what's happening with different statistics all over the different sectors in regards to housing, financial aspects and many other things, but today we're looking at consumer loan, credit card and revolving debt and this is also all commercial banks and, as you can see here, we have surpassed the one trillion mark. But one thing that's alarming is that from about 2020, when the pandemic hit consumer debt went down. Let's talk about that first. Why do you think between this period it looks like about a year long revolving debt went?

Speaker 2:

down Because people were unable to spend because they had to be locked in their home. So they weren't able to go out and party and go to dinner every night and go on vacations, right. They weren't able to put their kids in sports, right, Because you had to be on lockdown. So it caused a lot of savings. Look at the look at the drop on that. So drop straight down, so anyways, and then after that, right after the pandemic starts to end, people start to get out again. They start to spend money. That's why you see a sharp increase.

Speaker 2:

And the thing that I tell when we have these conversations, the things I tell everyone is just look around when you go out, so I mean on any given day of the week, go to the rim right, and look and just see they're full. It's full. It's crazy. And not only is it full, it's super expensive. So the question is that I ask where are people getting all this money to spend all the time, right? And I think the answer is yes, some of them have it, but a lot of them don't. They're charging it on credit, right, Racking up debt, and that's what you're seeing here is a racking up debt, and that started the upswing of this was just around the beginning of 2021.

Speaker 1:

And, as you can see, it is a total incline straight to the top and is there an end in sight. I don't know what ends up happening when this gets out of control, because you don't get to these kind of figures with just part of the United States doing it. This is everybody and it's quite a bit alarming, in my opinion, when you look at it and you go, okay, what are they spending on? And this could be, in my opinion, things, but also necessities and when you get to the point that you're now putting necessities on credit cards, that is the alarming piece of it. Does it turn into something that everybody just goes bankrupt? Or because the United States in my opinion, we should have been bankrupt years ago, but we continue to print money?

Speaker 2:

I agree with that. In my opinion that's above my pay grade to know what's going to happen. So like I have no clue what's going to happen with that. But you know, I think it. It's not just necessities, it's things that people are used to spending. Like I complain that I go to Chick-fil-A and I pay 14 bucks for a spicy deluxe. Like that's insane, dude.

Speaker 1:

You're the only one that complains.

Speaker 2:

Heck. No, I complain too. Mcdonald's is more expensive now. I mean, they just recently posted how the fast food industry has gone up like 33% in prices just recently, over the last two months. So I think it's the last two months. It's just it's getting insanely expensive, and remember we had this conversation the last time. Oh well, it's because it costs more to transport the goods and the cost of goods went up and this and that. So let's pull up one more time a corporate profit chart. Can we pull that up? Yes, I'd love to, because that is truly the case. Very alarming, right Corporations. If everything's costing more, they shouldn't be netting exponentially more, right? They should just be really kind of staying kind of steady or maybe at small gains. But let's look at this corporate profit chart. You can go to Fred too on that, yeah right there Boom.

Speaker 1:

So let's take a look at this. So what we're looking at here now is the corporate profits chart. We're not talking revenue. This is profits meaning after expenses, what do you take home as a company, or what do you pay people, et cetera, et cetera. But, as you can see, and what I'm going to do is I'm going to zoom into from 20, look at 2020, just look at the. I'm going to zoom into from 20. Look at 2020. Just look at the. I'm going to go right before 2020 so that they can see the difference. How many more? Yeah, we're talking 1998 here. This is your average corporate 2008,.

Speaker 2:

Right Housing bubble.

Speaker 1:

You see it right Dip down, okay, and then came back up.

Speaker 2:

Kind of steady. But then look, it's like exponential growth. It's insane.

Speaker 1:

So 2020, and, matter of fact, this is the second quarter of 2020, just as the pandemic hit, how is it that you've got everything shut down? The assembly or the chain? What is that called that transport chain, the supply chain? Essentially, everything went up. We know that. It's logically okay, it takes longer to get things, nothing is readily available, they had the shortage of the chips for vehicles, all of those things, but then, after it went under control, let's call it 2022-ish, right at the end.

Speaker 1:

Right there, we're still rising, and this is profits. Guys, like I said, I keep repeating that this is profits, what they're putting in their pocket, meaning all of this inflation that we're seeing was supposed to be due to the chain, in which, okay, it cost us more to make this product, so we have to pass that along, and this costs more to get, so we have to pass that along. I understand that, but once the supply chain got back to normal, they just kept prices up. They kept prices up and not even just keep prices up. They kept rising in prices. So, nicole, I want to get your thoughts on this. What are you seeing in your everyday life as a consumer? Because we get to look at a ton of different credit reports every day, but we also still live our lives. What are you seeing in your everyday life?

Speaker 3:

I just spent $4 on a dozen eggs at the grocery store last night.

Speaker 3:

So that's a lot of money for 12 eggs. So when they say you know it's easier to make food at home, well, when you have a grown man yourself and you're trying to feed breakfast, lunch and dinner, it's not as much of a price break to go grocery shopping, because I spent a hundred dollars to be able to make lunch for two people for three days and I'm like that is insane. So while I'm with Austin I know I was just talking about how I go to Chick-fil-A, cause it's right here and it's $14 every single day. And I think, as consumers, we are comfortable with the how quick and the convenience of getting things, because we don't want to take the time, we're too busy to make food or whatever the case may be. But I mean, I I feel it as a consumer I'm like I'm gonna make a better choice and it's like it's difficult to make a better choice, because what is the better choice? Is it saving money for me or is it, you know, not giving money to the corporations?

Speaker 3:

right and and I don't know. I don't know if this is relevant, but have you guys seen how much the SAWS CEO is making in a bonus this year?

Speaker 2:

Oh, how much is he making?

Speaker 3:

No, so his annual salary is $587,000 a year and his annual bonus due to performance is like $133,000 as a bonus, and that's 1%. So imagine the I mean, that's just a CEO. Think of the other people higher up, you know. And it's like our water bills. We've cut back so much we, our yard, our water intake, we're a lot more conscious of these things, but our water bill is still consistently increasing. And then $133,000 bonus on top of his $580,000 annual salary.

Speaker 1:

I mean that brings up another topic. I mean, you don't have a choice. That's literally what I was going to say right there.

Speaker 3:

Go shop my water system. I have no choice. If I want water which I need water I have to bow down and listen to it. Same with the energy and the power bills.

Speaker 1:

And it's not a sales type position. I mean, I can see bonuses being paid from sales type positions, but if your goal is to make sure that the people that are paying you get water, it is affordable. How is there room for a bonus there? I mean, I'm all for capitalism, Do not get me wrong. I just think that it belongs in its certain places and something like that being a monopoly. I don't have a choice either. You are exactly correct.

Speaker 3:

It's not like your cell phone bill. It's not like your car insurance, right? You don't have a choice either. You are exactly correct. It's not like your cell phone bill. It's not like your car insurance, right? You don't have a choice, you, you pay them right it's a little odd. It's a little odd, it's it's a little questionable, and I mean we could go down a rabbit hole, but 133 000 is a lot for a bonus right on a. So to go back to how much like is it reasonable to go get food?

Speaker 3:

I mean, is it reasonable to make food? Who's to make the choice? Because it could cost you just the same amount. Now, do I need to go to TG Max? Probably not, but that's a choice that we make sometimes and I know my husband and I have made, as a consumer, a very self-aware choice of cutting back on all of those expenditures because we have bigger goals and we know that things is not what gets us satisfaction in life. It is. It is the milestones, it's the goals, it's the creating, the generational things for our family, because now we're thinking about those things.

Speaker 3:

It's the instant gratification where I think Americans get really caught up on Shein, Amazon, TikTok shop, whatever. It's just so at our fingertips and affordable that we do it. 10 bucks here, 10 bucks there, 10 bucks there. Over the course of a month, we spent $1,500 on what. Nobody can tell you what they spent it on, but they did because it was convenient and they think that it's helping their credit score, which is cool. Cool. You have a good credit score, but you make your minimum payment of $45 a month. 35 of it goes to interest and 10 bucks goes to your principal.

Speaker 1:

Well, I mean it also kind of roots to. Are we doing it to ourselves? And what I mean by that is my mom put out a post recently and said oh my God, have you seen the amount, the price for some ice cream? I don't remember what it was, but I told her, if we all stop buying that ice cream, they're going to have to bring their prices down. So what that tells me is consumers are too stubborn, too set in their ways, too unwilling to sacrifice in order to make that choice, to say no, enough is enough. Restaurants, I'm not going. Ice cream place, I'm not going. Ice cream place, I'm not going.

Speaker 1:

And if we were to stop that? It's supply and demand. The supply comes down or the demand comes down. Well, guess what? The supply goes up. Therefore, the price has to come down in order to push their product. But we, as Americans, I think we're just too used to the ease of access. We're too used to swiping the card and it going through every time. That it has become second nature. But it's starting to catch up with us.

Speaker 3:

And I also wonder because this just happened to us. We got increases on our credit cards.

Speaker 2:

Oh really, yes, yeah, without you asking, oh wow.

Speaker 3:

Without me asking, and I mean, it's not like $500. It's a significant amount and so I can imagine that, you know, with a certain mindset having an increase, you're like I just got a pay raise of $5,000. Let me go and spend it.

Speaker 1:

Yeah.

Speaker 3:

Because you just don't see the repercussions until it's time to face the music and you're trying to pay it back and you're, you're chunking 200 bucks a month at it and it's not going down. It's, it's a black hole credit card. That is is serious, and they don't. They don't teach you this stuff in school and it's a. It's a. It's a shame, because look where they are now. We have things that we can't even tell you what we have.

Speaker 1:

That's a damn good point and, that being the case, Austin, you mentioned something at the beginning of this that I don't know if it's true or not, but writing being on the wall at some point, if you're underwater with your credit card debt, that minimum payment continues to increase, which then takes away the funds that you could have used to pay your auto loan, to pay for your mortgage, to pay those necessities Once those are out of your limit, or once it's maxed out, so to speak. That being the case, could this trickle into our world of real estate and, if so, how so?

Speaker 2:

I mean absolutely. Again, I think you know back to you know when, nicole, what all the others think. I think that's part of it, but it's, it's a vicious cycle. I mean, like she said, the monopolies. You have no control over it, so they control the price. And, like you're saying, the ice cream shop yes, they may be overcharging, but a lot of times they're having to charge more because their CPI went up for that year, for the rent, right or maybe right. So it's trickling down from another area where they have to increase their prices.

Speaker 1:

So and I. I agreed with that until you showed me this stat, but that's not corporate.

Speaker 2:

I'm talking to your standard, your standard ice cream shop that maybe they own one or two. Oh, she was. She was talking about like bluebells. Okay, that's different, that's different. But yes, that's that's what I was gonna say.

Speaker 2:

Monopolies and corporations are what, in my opinion, is what is currently ruining america, yes, and causing these people to go into major debt. And it is our fault too, because we keep buying it right, just like you said. So why should they lower the prices? You're still buying it right, so they're going to keep on racking you, you know, racking the dough. But in general, you know, if I don't even know if not buying it at this point would help, because there's so much involved that it's literally this vicious cycle that has caused this to happen and I don't know how to fix it. The rates going up is not fixing it. It's not. Look at the inflation reports coming out. They're higher and higher. Correct, it's still going up. It's insane.

Speaker 2:

And you know, she said insurance. That, I think, is going to be one of the next big crises for homeowners insurance. Yeah, my policies have gone up like 40% in one year. Same here. A lot of them are pulling out Like that is insane. That is a monopoly. You have to have insurance right. So either you're going to take like a super high deductible right, have less coverage, and even then that doesn't help that much. So it's putting people in really, really bad spots. And other States there can get insurance, like Florida. There's a huge crisis in Florida, you know. So, in general, like I said, this is this is something that we could be seeing literally the tip of the iceberg here for a domino effect. I don't want to be like doom and gloom kind of person.

Speaker 2:

Oh no, Because I don't know what's going to happen. But I know there's a lot of people. I don't know how you can survive. I see people post like I make three times minimum wage and I can't even afford to pay my you know, even come close to paying my bills, Correct? So how do you survive? Right, the disparity between the super is just growing and growing more, Right, and I don't know how you stop this. Like, I think it's maybe out of control and I'm sorry, your stimulus check of 2,500 bucks Isn't going to save you. No, it's not what I'm saying. So, yeah, I don't. I don't know what to do.

Speaker 1:

Like, I don't know what they're going to do, like I said, it's above my pay grade, but I'm curious to see Well, I mean, you've got well. Were you in the business in 2008?

Speaker 2:

I got in 2007.

Speaker 1:

Okay, that's right. So back then, when we were going through the process of seeing all these foreclosures hitting the market, it was due to lenders creating loans for consumers that should not have received loans, let's be honest, and it was in abundance. We're talking multiple homes for an individual that should not have had them. They call them investment properties. They've got three investment properties over here and what ended up happening is they continued to pay their primary residents and let the others go by the wayside and because there were so much exposure, it created a crash. In Texas. We didn't feel the crash as much. Was it because there weren't as many bad loans? I can't say that I think that was probably across the board. There were, but for some odd reason, texans tend to pay their mortgage regardless of anything else. This.

Speaker 1:

Obviously, we don't know what's going to happen, but we're starting to see some writing on the wall. We're seeing some signs of I don't know, like this chaos that is brewing, and many people don't understand it because they don't take the time to look at the stats and then apply it to their own situation. But us, being in the industry, can see this data piling up and it's starting to go okay. At what point are they maxed out on their credit cards, are they potentially? All it takes is I lost one job out of the two in a household and you are. You have no choice. Even if you want to pay your home, you can't.

Speaker 2:

That's what I was going to say. So people are getting so strapped right now right that they're. Even when we were helping people back then, they were still living paycheck to paycheck. Don't get me wrong. Right, Absolutely. So now you're living like one paycheck behind a, one paycheck behind, right, and you're just charging it on debt. Now, when something catastrophic happens, whether it's a, you know, car wreck, or you get cancer or whatever it may be right, and you have to fork out the bill right, Then you're, you're screwed, so you know, and that's the problem. And that's where I think that's what we're running into now. And yes, I'm already seeing defaults happen. I'm seeing it already, and it's not necessarily like full foreclosures, they're just allowing them to go way, way in forbearance. You know, like way into forbearance. It's insane, like two years and stuff. No, we've seen it. Yeah, it's crazy, you know. And as for I don't know, maybe you can just like when does a mortgage company?

Speaker 1:

say okay, we're not going to let this happen anymore and we're going to foreclose on you. I mean, honestly, mortgage companies, mortgage servicers, they're not in the business of buying property, so they they want to do everything and anything to keep that consumer in the property and they'll just tack it onto the end. But then at the same time, does that not kind of go against the whole concept of qualifying for a mortgage, the concept of paying your bills on time? I mean, it's like they're indoctrinating us with this new philosophy that it's okay, you can't pay no big deal, that won't even affect your credit, we'll just move it on to the end.

Speaker 3:

You know what? I've seen this happen, austin, I know you. I've had this happen in two instances and it was during COVID, and the buyers were well-qualified, they could have made their payments like nobody's business, but they chose to take 18 months without a payment. I saw it every day, we're talking about, you know, $200,000 household income, minimal debts, except for student loans. Their mortgage payment was like seventeen hundred dollars and they went 18 months without paying their bills because they could yeah and they, they didn't understand when I, when I showed them, I said, look, this is what you signed.

Speaker 3:

He goes. Nobody explained that to me. I'm like, you're signing a legal document, you have to understand that you are attacking on. You know $85,000 to the end of your loan that you have to pay back Right, all because you wanted to save $1,700 a month and go on vacation.

Speaker 2:

Yeah.

Speaker 3:

And that's what happened. You know, unfortunately, and there's people out there who they probably could have benefited from not making payments for two years to pay off their bills who wanted to, from not making payments for two years to pay off their bills who wanted to, but they can't now, because I can only imagine how many people who were able to take advantage of that program that didn't need to took advantage of it, and now the people who need it as like a Hail Mary, now they can't.

Speaker 1:

But then those were the same people that came to us to refinance but couldn't because they were still in forbearance. And you have to have three months consecutive so that we know that you can pay your mortgage on time, and I don't think people understand what forbearance means. Even on student loans, forbearance means I cannot pay right now, so is there an option? Whereas deferment is not. I cannot pay, it's you don't have to pay right now. Does that make sense? Like you call on forbearance when, hey, I can't pay, is there any solution? Yes, forbearance, okay, I equate it to student loans Student loans immediately when you get out of college. You can choose to, or you don't have to. You can put them in deferment. Deferment doesn't mean I can't pay, it's just I don't have to pay right now. I'm delaying the process, correct, and we're seeing a lot of that still with the forbearance coming to play. And then you've got the idea of here and I'm going to pull another stat up. So, if you can pop this on here um, unemployment rate today, boom.

Speaker 2:

Let's see it's also gone up it has gone up.

Speaker 1:

So unemployment rate in the United States is 3.9%, which is lower than the long-term of 5.7. And and what you're seeing on TV and in the news is that we're at the lowest ever. Yada, yada, yada, which I don't buy it at all, because they're not taking into consideration the fact that these people are not all full-time jobs. That's the key, right there.

Speaker 2:

There's a lot of part-time. There you go. A lot of part-time. Take it away Austin. Tell us about that, that's what it is.

Speaker 1:

Take it away.

Speaker 2:

Austin, tell us about that. That's what it is.

Speaker 2:

So I was talking to Clyde about it in the office and Clyde actually brought this to my attention is that a ton of the jobs that were added they're part-time jobs, so you can't count that as employment fully. In my opinion, that shouldn't even be a stat on there and that's how they're making it look good, but in reality I think it's a lot worse than what they're portraying. Worse than what they're portraying and it did go up, but you know I mean part-time. A lot of people you can't survive on part-time. I hate to say that. So that's a. It's an issue on how they report the data.

Speaker 1:

But another thing that is startling to that concept of part-time is I'm not seeing and this is not just a mortgage thing or a real estate thing, but in every aspect of careers I'm not seeing a lot of new full-time positions being opened up. Why is that? Well, you've got AI that's coming into play. That can take half of the work off of your plate if you use it properly, so why would they go backwards? In turn, it's making more profit for the corporations hiring part-time labor For your average American.

Speaker 2:

I see it looks a little.

Speaker 1:

You know it's a little gloomy, correct and you know what else you don't have to do when you've got part-time workers. You don't have to pay their benefits, you don't have to pay their health care, 401k all the traditional things that we're used to seeing are not there. So that adds to that concept of the potential crisis that could come to be because they're not being honest with us about what's really going on in our world. In regards to the employment statistics, they're skewed.

Speaker 2:

I just, you know, it's such a weird time, like it's so weird. I never have experienced anything like this. That's all I can say. I mean yet. And then you got the stock market over here. That's like almost at all men highs, you know, yet people are in full blown debt. So it just makes me wonder, is it just full greed? And like corporations and hedge funds that are running the show? And that's the only thing that I can think is yes, that it is. But you know, again I like to talk about forecasting the future and remember I don't know if you remember like I called you in 2023 at the start, and I call everyone, like we talked about this on a podcast.

Speaker 2:

I called a bunch of people who have been in the industry for a long time and, right, I said where do you think? What do you think is going to happen with rates? Because that's when they started to go up, right. So I remember everyone said like, oh, they're going to come down to about. You know, I think they're gonna come down to five and a half. They're going to stabilize out and it's the market's going to stay good.

Speaker 2:

And I remember what I said. I said I don't see that happening at all. It's been too good for too long. I see them continuing to go. Oh, I think for like four rate cuts, right for the year. That's what the Fed Right, so that's what Powell was saying four rate cuts. And I said I don't see it happening. I just the proof is in the pudding. When you're out there and you see everyone's spending is doing and that's what I told cloud I said it's going to come back higher, like that's my opinion and rates are going to go up again. Yeah, and it's they're not going to come down. I said I don't think we're going to see a rate cut until like mid 2025. Well, that that is even now. I still think it might even be later than that.

Speaker 1:

I have to agree later than that if if, if they don't use it as some campaign. That's exactly correct and it goes back to the basics of what the Consumer Pricing Index reveals and what ways can we control it or bring it down? Well, the only thing is rates. According to them, I mean, they could, in my opinion, put some restrictions on corporation profits for maybe a year or two years to allow us to get back to normal. I'm not looking for handouts, that's not what I'm saying, but in the world that we live in, that consumers believe everything they see on TikTok and Facebook, you've got to have some restrictions that kind of put us in check a little bit.

Speaker 1:

I'm not one for government getting into our stuff, but if we as consumers can't band together to do it ourselves, then somebody does. I also, back when we saw rates going up, everybody was saying, oh, it's going to last only a little while. I didn't see it. I didn't see how it could possibly last a little while with the amount of spending that was going on and being directly attached to rates and pricing index. It just didn't make sense. Matter of fact, when he came out with the four rate cuts, I went he's full of shit.

Speaker 2:

Yeah, that's what I thought. There's no way it caused the market to blast, right? When they say that it's immediately, it's a whole, uh, you know, tactic that they can use to get people to spend money Speculation, speculation, right? So I'm going to go back to cause, uh, the old saying seeing here, with these stats, it's going to get pretty bad, yeah, pretty bad, until, like you have Uncle Sam, which is like your dad. You can't do this because people just they're not getting it Right, they're not going to regulate themselves, no, until they file for bankruptcy. I think you're going to see a lot of people file for bankruptcy. Yeah, I think that's what you're going to see them do, just to erase their debt. They're just going to rack up debt, file for bankruptcy and then start over. I mean, can't blame them, it's true, that's what they're going to do, right?

Speaker 1:

So they're going to rack it up, getting your life to the next chapter. You can't buy a house right out of a bankruptcy. So this is a good shift in the conversation into what we're seeing today in our market. We can't talk about all of the United States, but in Texas and in particular San Antonio and surrounding, what are we seeing? And I want to kind of frame this conversation with we're coming up on summer.

Speaker 2:

Wait, but you can educate how long after chapter seven and 13 until you can buy a home.

Speaker 1:

It depends on the program. I mean FHA. Yeah, fha typically is going to be your three years out of it and you've got your VA, which, after two years out of it, you can do it, unless you have additional entitlements that you can use, your bonus entitlements. Conventional is four years. So there's nothing you can do about that, and it matters, seven or 13.

Speaker 1:

It matters how you, it does matter, and there's different ones for different chapter 13 or seven, and it has a lot to do with the concept of has it been completed or not or did you just file it? Typically, for example, foreclosure, People will say, hey, it's already been two years out of a foreclosure. Well, when you go to do the research, it's actually two years from the time that the foreclosed sells that property and nobody realized that. I've had customers come in and they're like yeah, I'm four years out of a foreclosure and guess what? The bank still owns your house. They still haven't sold it. So none of that has even started yet.

Speaker 2:

I didn't even know that. That's great stuff to know, so that's huge.

Speaker 1:

Absolutely. And the first thing when somebody says a foreclosure or we see a foreclosure on the credit report, I go to the county appraisal to see the deed history. If the deed is still in the bank's name, hasn't even started, you're out of luck.

Speaker 2:

Yep, that's not good, not good at all, yeah, so and same thing with buying other other than cars. Right, that's correct. Your credit's going to be going to be roomed.

Speaker 1:

So we're approaching the summer months and, as we know, that is our busy season every year, no matter what, uh, it comes around like clockwork kids get out of school, people start buying homes, they start shifting, but by this time within the year, we've already seen kind of an uptick in people moving around, people getting pre-qualified, and in my opinion, I'm not seeing that. What are you seeing? You work with a lot more new construction, so there's probably more going that way month, depending on what homes we get, right?

Speaker 2:

So I am still going to hold to the argument of it is still better to buy a home in Texas anyways, maybe not elsewhere, but it's still better to buy a home. And I'm going to go to the old saying where it's like playing basketball without ever shooting a shot. You just never have the chance to score, right? So with rent, even if it's at $2,000 a month, you're giving away $24,000 a year. No matter what way you put it, that's right. You can't do what you want with your house, right? You're going to get approval from the landlord to paint the wall. You know you may not be able to have the dog you want or whatever. It may be right. But you also don't have repairs and expenses for maintenance and things like that. So there's advantages to it too.

Speaker 2:

But as we know the real estate market and overall, when we looked at the market stats, they've kind of leveled off. When you look at year over year, there's really been not too much increase in pre-owned home value. Correct, it really is not. And actually it's dropped in new home value. Right, really it's gone down. Yeah, there's been decreases in prices year over year. It's like six 7%, so it's not huge.

Speaker 1:

But it's still. It's still an indication. It's less right.

Speaker 2:

Because they were charging more right. Charging more right as much as they could get more right, that's right. So that's why. But you can't do that anymore with pre-owned right. So you got to be realistic with your pricing now. And if you get a decent offer, like I tell my clients, you take it and run Like there's no telling what's going to happen. That's another plus. You're paying down principal where you wouldn't before.

Speaker 2:

On renting, I mean, you're not paying 100% interest and even if it goes up 1%, you gain 1% and you pay down principal instead of just giving all your money away to a landlord. And I wanted to talk right Cause I brought them home. So you're right. I mean, I love when people pay my mortgage for me in general, but yes, that is, that is the case, right? So I still think it's better to buy. Unless you're pushing DTI right or you're in a bad situation and you don't think you'll be able to pay your, your mortgage, don't buy a home. Or, if you're going to be PC, rent it. And even then, if you're going to plan to rent right now, it's going to be tough getting the payment that you need to cover even come close to your payment for rental values. So again, there's certain circumstances, everyone's different, but I still think it's better to buy.

Speaker 1:

I mean, and you great point all the way around. And you've got folks that are knee deep, elbow deep now chin deep in credit card debt, that are unwilling to sacrifice to purchase a home, whether it be higher payment or I want to keep the same payment that I'm used to, but I don't like the house for that payment. It's like a inevitable thing that they will push themselves out of being able to buy period or they'll have to move to Oklahoma, you know.

Speaker 3:

There's one thing I want to bring up. You know we're talking about how people are in credit card debt, consumer debt, all of this stuff when you are renting and you are in a position to be able to buy. You know, during my conversation, when I'm approving people, you know I say hey, right out the gate, what do you want your monthly position to be able to buy? During my conversation when I'm approving people, I say hey, right out the gate, what do you want your monthly payment to be? All in taxes, insurance, your mortgage itself it's different than homeowners. We go through the whole works. They give me that number $1,800.

Speaker 3:

So when I tell them, hey, you're approved for $400,000, but your comfort payment is down here. So we need to have a serious conversation. If you want to be at eighteen hundred, I need you to shop at this payment. Right, the moment that you step into a home and it's a different price point, aside from new construction, I mean, we're going to. It's far off, correct. But all of this to say is you know they say, well, if I can get approved for four hundred thousand dollars, I want to buy four hundred,000. And right there, as a consumer, you know we justify, I want it. It's nice, I get to show it off.

Speaker 2:

It sounds cool, but your payment's 3,400 bucks what I'm seeing is correct me if I'm wrong but like where current rates are at and of course it depends on the loan type, but I'm seeing about 1%. Is your payment of whatever the sales price is about 1's, about 1%, pretty much. I've seen you want it to be $1,800? You better go find $180,000. Good luck on finding $180,000. That isn't trash, it's pretty accurate.

Speaker 1:

It's not ironclad, but it's pretty accurate it's pretty damn close.

Speaker 3:

But all of this to say is that if you are in a position to be able to buy and you can comfortably afford it, you need to come to terms that it might be the best choice for you, that $180,000 home. If you can get the deal to close on it and you can afford it, it's a good idea to get in, because what's going to happen in five years from now, when you are maxed out on your credit cards and we don't want to buy a home just to get ourselves out of a credit card debt, but three, four, five years down the road, when you own a home, you have options. You're not backed into a corner. You could sell your home, get yourself out of debt and not have to just say where am I going to pull off all of this from my 401k? Can't do it, heloc, I don't qualify. You have options when you own a home that you don't have when you rent.

Speaker 1:

Right.

Speaker 3:

And I mean it's just the truth.

Speaker 1:

I mean, one of the things that I love to do with consumers customers is to go through all of their finances, not just their mortgage, and be pigeonholed into. This is the conversation. This is what our goal is is to get that payment down. Let's broaden the picture to get them to understand there's a reason why you're telling me that that payment is comfortable for you. If you don't want to be honest with me, I will come to the table to let you know why. It's because your auto loan is this much, your credit cards are this much. You've got this and you've got that. Have you considered shifting some of that debt? Have you considered getting rid of it Any of those things that make the home purchase more tolerable to what your appetite is, so to speak?

Speaker 3:

I've had people who have a $1,400 vehicle payment and they tell me that they want their payment to be at $800 for their house. And I've said, hey, do you mind me asking why you're okay with having a $1,400 payment, but you only want $800? They're like, well, my truck is my baby. I'm like okay. Well then, we need to have, you know, we need to have a serious talk.

Speaker 1:

Yeah, a depreciating, and I don't even want to call it an asset until it's paid off a depreciating vehicle. I don't know what the answer to any of this stuff is. Education, yes, and most people aren't educated. Now here comes a question Education, since you said that how, and as we know what was the old saying back in the day, sex sells right. How the hell do we make educating finances and real estate sexy?

Speaker 2:

The way you make it sexy is you put successful people in front of them, like they already do, because they want to be like that, right? So people who know how to manage their finances have done well maybe are young, younger, right. So because it's in my opinion and don't get me wrong like it can still resonate with people, but the older you are, the more time you have right To do well. So when you see someone young that is doing well, that kind of it really resonates with people like that could could have been me or could be me, right, right, and that's what they want to see. And then you use your tools and your techniques and you tell them how to do it.

Speaker 2:

And that's what we're generally doing every day with our clients, right. So we're doing that every single day, by no means in my financial advisor, but do I sometimes like dip into that and maybe give them some some knowledge of what I've done? Yes, and by no means do I know it all, but at least if I know some I could tell them Right, I can help them. You know, and I think that's what they're not going to take advice from someone who doesn't know what they're talking about or doesn't do well, so it's putting people in front of them that know their stuff.

Speaker 1:

And it's tough, because if you don't do it in the sense that there's some kind of humor or some kind of shiny object to even get their attention, do they ever hear the message? And these days I'm seeing, let's say, we're educating consumers via social media. If it does not, I agree with you in regards to putting somebody young that's actually done it, etc. But then when you actually do that, they don't believe that they actually worked for this and budgeted for it and sacrificed. It's like you hit the lotto somehow, or you, you got successful with some video, your parents helped you, and that's not the case, you know, other than creating a reality show where it's just super transparent. But even still, you've got to go over a long period of time because I will tell you, me, you.

Speaker 1:

It didn't happen overnight, it didn't. We're still going through it, you know. So it's, it's, I don't know something. That Is it. Of course it's worth addressing, of course it's worth continuing to beat that drum, but at what point in time do those successful people that are trying to share their story say to hell with it, go screw yourself up if you're not going to listen Again.

Speaker 2:

I mean, there's no substitute for hard work, right, you gotta, you gotta put in the work, and that's what I was telling my dad the other day.

Speaker 2:

I was like man, like I, I think for about seven years straight I put in like a hundred hours a week. I literally sacrificed my entire life. All I would do is work. It got so bad that I would feel bad for not working. Yeah, right, I would. It was literally like an addiction to work, right, so it's. It's crazy, where you don't like when I wasn't there, I wasn't like constantly thinking or doing work that I would feel bad, like I should be working right now.

Speaker 2:

Like it's not okay to go enjoy time with my family. Right, I need to be working Right, Right, Right. So that's how I know like I overdid it for that amount of time. So it's also a balance. But that's another reason why I'm at least a little bit ahead is because I put in the time. So there's no substitute. You've got to put in the time. I say you've got to put in the time to make the dime.

Speaker 1:

Hey, I like that. That's what I'm saying. Put that on a T, okay. Well, I think that's pretty good. Is there anything else you guys want to bring up before we close this sucker out?

Speaker 2:

Just educate yourself. Get with people who can teach you. So you know, go to classes, Go. I mean I'm not saying like go pick up a book and read Grant Cardone, I'm saying like, really like, get with someone who really like that you maybe can know locally that can really teach you. And there's so many finance classes. It could be at your church, it could be, you know, with um. You know, one of your friends is successful with mortgage companies. Right, I don't companies.

Speaker 1:

I mean, what happened to that concept?

Speaker 2:

They're still there. They're still out there, but they just want money, yeah, for what they do right, and time is money, like, don't get me wrong, but there's also like free classes that you can go to and there's also good books, like there are also stuff for people to where you can learn. But I recommend, like, what someone's trying to teach you is not for everyone. So figure out what your goals are, figure out what you want to achieve, help you achieve it and educate yourself. Don't just keep on spending cash over and over and over yeah, right, so and putting yourself in debt. Try and go, educate yourself and learn so you can get, get a one up.

Speaker 2:

And I just but I tell everyone, it's all just math Like, if you can do the math, like even with real estate, it's just math. If you can do the math, you can really get ahead. And I'm sure most people don't know math. Right, it's sad, yeah, it's really sad, but if you learn how to do the math and it applies to a lot in finances like you can really get ahead. Do the math, so you know and figure it out. That's my advice.

Speaker 1:

Well, that being the case, Austin, you want to go on a date later, you and that puppy, let's go. Champ, let's go. Absolutely Awesome. Yeah, Thanks for coming. Chick magnet, of course, absolutely.

Speaker 2:

Those blue eyes. Yeah, like I said I, I I'm sorry about having to bring him today, but oh, don't be sorry at all. So he had to. He had to come along cause he just whines and whines, so he'll grow out of that that's going to be the moneymaker on this episode. Puppy free.

Speaker 3:

Yeah, nicole, is there anything you want to add to this? Just kind of what Austin said education is free. A lot of people think that it costs money to figure out what, what works for them and what should be their long-term goal, or it's just complacency. But the only thing it will cost you is your time. Your time, your questions. There's no such thing as a bad question, especially in in today's market. There's so much stuff on TikTok and Instagram and you know it's, it's.

Speaker 3:

I will always go back to putting on your your rose colored glasses. You know, even though there is a little bit of uneasiness about the future of the economy, it pays to have a positive outlook, because that will get you positive or realistic pessimism will not get you very far. Um, with the positive outlook on everything, you know you, if there's a will, there's a way, and if you're positive about it, you know you surround yourself with people who will support that idea and support your dreams. You know, if you hang out around people who, uh, want to go to the bars on friday night and spend 200 bucks every weekend, saturday night, same thing, and they're not encouraging you to, you know, hit the books, let's go for a walk, let's surround ourselves with people who we want to be like that.

Speaker 3:

That's a very powerful thing. So it doesn't have to be with homeownership, it could be with anything. Surround yourself with people that you look up to, because there's no harm in that and I guarantee you the successful people want other people to be successful with them, which is something I didn't understand for a long time. But you surround yourself with successful people and they will lift you up and they will guide you. Yeah absolutely.

Speaker 3:

Because success feels good. Success is boring when you don't have anyone to share it with.

Speaker 2:

I like that. I really like what she said. The saying if you're the smartest person in the room, you're in the wrong room. Absolutely Get your ass out of that room, get out of that room, yep, so, but that's really. I really like what she said.

Speaker 1:

And, as a matter of fact, I'm going to close out with this and it comes it. There's mentors, there's books, there's YouTube, there's anything you want to find, and those are there to help you avoid the real education that actually cost you money, because when you lose your ass, hopefully you learn from it, because there are many times in my life that I've lost my ass and did not give up, but it was very costly. Um, and now, thinking smarter, or working smarter, not harder I'm seeking any which way that somebody that has already been there done that, um, to fill me up with any kind of experiences and things that they've discovered, because what you'll find is those that have actually been there are more than willing to share their adventures. It's almost as if they don't get the opportunity enough to share it, so they're an open book when it comes to things like that. So, that being the case, guys, get all the free education you can from a local mentor, from a distance mentor, from maybe even somebody.

Speaker 1:

Podcasts that you listen to, books that you read, but it's out there and those things are intended to save you money or, like I like to call it, to help you avoid stepping on the landmines that they have already blown themselves off. That being the case, I think this is a great discussion and a rude awakening for many out there that hopefully it'll resonate with the concept of looking at your finances, realizing what is most important to you and what changes you have to make in order to get there.

Speaker 2:

And ask questions. People are so afraid to ask questions. Yeah, and that's how I learned. That's right. Look what I just asked you to explain and I didn't know about the foreclosure it's when the bank sells it. So ask questions, because I don't know it all and I want to know as much as I can. And if you don't ask questions, you're not going to know. So just ask. You're not going to sound stupid. Ask, that's right.

Speaker 1:

Champ, you got anything to say, so see you later. See you later. All right, guys, we will catch you on the next one. Thank you so much for continuing to support. Make sure to like, subscribe, share with a friend. We are also on Spotify and Apple Podcast YouTube's kick and tail so we will catch you on the next one. Welcome to Key Factors Podcast, where knowledge meets ambition in the fast-paced world of real estate and mortgage. I'm your host, mark Jones, bringing you the latest insight, trends and expert advice to navigate this dynamic property market. In each episode, we dive deep into the heart of the industry, dissecting market movement, exploring investment strategies and unlocking the secret to real estate success. Whether you're a seasoned professional, an aspiring investor or simply looking to stay ahead of the curve, this is the ultimate guide to making informed decisions in the world of property and real estate. So grab a seat and let's uncover the key factors that make all the difference. Welcome to Key Factors Podcast. Let the journey begin.

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