November 26, 2025 • 48 mins
Everyone’s sharing hot takes on the 50-year mortgage, but most people miss the real question: does it help you buy smarter, or just slower? We sit down with San Antonio experts Robert Elder and Stephanie Paxton to unpack affordability beyond the headline rate, run the equity math on 30-year vs 50-year scenarios, and reveal why taxes, insurance, and maintenance now drive the monthly payment more than anything else.
We get brutally honest about new construction. Builder buy-downs and flashy incentives can be seductive, but the true cost is often buried in the price—and appreciation can lag for years in areas with abundant land and endless new phases. We contrast that with landlocked neighborhoods where limited supply supports stronger resale dynamics. We also break down buyer expectations that hold people back: choosing staging over structure, refusing longer commutes that transplants accept, and chasing “move-in ready” at the expense of long-term value. If you’re weighing a first home, a move-up purchase, or a possible rental conversion, this conversation will sharpen your strategy.
We close with where the deals actually are. Year-end inventory homes can be negotiated hard across all price tiers, while select resale properties offer meaningful price cuts. The playbook: model your total payment with taxes and insurance, stress-test your five- to ten-year plan, and consider the 50-year loan as a tactical bridge with a refinance path—not a forever decision. Local data beats national headlines every time. If you’re ready to run your numbers and build a plan that fits your life, tap follow, share this with a friend who’s shopping, and leave a quick review to tell us what you want covered next.
Key Factors Podcast is Powered by LoanBot.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.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:04):
Monday, get better, Tuesday, get better, Tuesday,
get better for five years, tenyears, fifteen years.
How much better you are gettingbetter every single day?
That's the question why you isjust taking small steps.
And then you don't try to get itall done.
SPEAKER_04 (00:38):
And welcome back to another episode of Key Factors
Podcast Real Estate AF, wherethe AF stands for and finance.
And I'm your host, Mark Jones,and we are powered by Lone Bot,
Smarter Mortgage Matching, whereyou can find this on Apple or
Google Play.
And today we want to talk aboutsome real questions, some real
(01:00):
topics that we've discussednuances the last couple of
discussions, but I brought someexperts in the San Antonio
market to have this discussionwith.
And we're going to be talkingabout the 50-year mortgage.
We're going to be talking aboutaffordability in San Antonio and
is it really affordable?
And lastly, we're going to goover the idea of new
(01:23):
construction homeowners startingoff underwater.
But without further ado, let meintroduce my guest for today.
I've got Robert Elder.
Robert, how are you doing?
I'm doing great.
Thanks for having us.
Absolutely.
And then I've got StephaniePaxton.
Stephanie, how are you doing?
SPEAKER_06 (01:37):
Great.
Yes.
Thanks for having us.
SPEAKER_04 (01:39):
Absolutely.
Guys, you've been on the showbefore.
We've had great discussions, um,intellectual, industrial,
far-fetched.
Sometimes we bring it back.
But the idea is you guys are theexperts of our industry, in my
opinion, and many others.
So if you can, before we getstarted in our first topic, tell
us a little bit about yourselvesseparately and then kind of
(01:59):
together how you do what you do.
SPEAKER_06 (02:03):
Well, I've been in real estate for 15 years now,
but I'm a data nerd.
I love data.
I'm a big fan of Resi Club.
I love Lance Lambert and what hebrings to the table.
And so I feel like working withsome investors in my past, being
an investor, and then alsoworking with home buyers and
sellers, like we need to knowour market.
(02:24):
So that's where I come in.
SPEAKER_02 (02:28):
That's where she comes in.
No, she's definitely more thedata nerd.
Me, I'm the one that I go backinto, you know, 34 years of
being in the business and theexperience that I have in my
head.
But what I've learned from heris definitely diving into the
data and the analytics to get aclearer road ahead of, you know,
kind of what's going on andseeing trends, perhaps before
they become obvious.
(02:48):
That's that's where she's greatat.
And so I've I've I've learned toincorporate that into my
day-to-day business as well.
Absolutely.
SPEAKER_04 (02:54):
And you guys have created a juggernaut of a combo
with what you guys do on thereal estate side of things,
listings, sellings.
You guys are workinginternational.
You're now doing a little bit ofinvesting and starting your own
kind of things.
Tell us about the most recent,let's call it last 12 months of
(03:15):
business, if you don't mind.
The last two guests I asked thesame question, and I want to see
if it's similar to what theyexperienced over the last, let's
call it 12 months.
SPEAKER_02 (03:23):
I'll I'll let her, I'm gonna answer and then I'm
gonna give her answer.
Can you, if you can imagine likea little cartoon character
dragging someone across thefinish line, kicking and
screaming?
SPEAKER_05 (03:34):
Yes.
SPEAKER_02 (03:35):
That's what it that's kind of what it feels
like right now.
SPEAKER_06 (03:40):
Yeah, it's been it's been a year.
Most of our sales have beendeath, divorce, relocation.
No want-to moves, goldenhandcuffs are real.
I'm talking to some buyers rightnow and they want to see houses,
they're super excited.
I'm like, we need to talk to alender.
You need to see the reality ofthis, yeah, and if it makes
(04:01):
sense, because there's no sensein looking at these houses if,
you know, it it's one thing inyour head, but it's a lot
different when you're looking atit on paper, the reality of the
that's exactly right.
SPEAKER_02 (04:12):
Yeah, then the numbers are like, oh goodness,
you know, they had this pie inthe sky illusion, and you see
the pretty houses, which there'sof course there's beautiful
homes out there, but then it'slike, like she says, the
reality.
What is it gonna cost you?
SPEAKER_04 (04:22):
Absolutely.
And and shameless plug, buttrue.
I was just showing you before wegot started the idea that we
founded, launched Lone Bot.
Now, question for you both whydo you think that these buyers
are not getting with a lender?
It's a good question.
Because there is, you're on themoney, data research shows that
(04:45):
the buyer, the home buyer, thehome shopper, they'll look at
pretty houses all day long.
They'll formulate the idea ofwhat it looks like and and to
have it as their own, but thenmaybe an idea of a payment, not
knowing what insurance can do.
SPEAKER_02 (05:00):
She's experienced recently on one of her
investment homes, you know, whatwhat the insurance number went
up to.
And even when we were lookingpersonally for ourselves, like,
oh my gosh, insurance like threetimes the number.
I I think they go in with theinnocence of like, I want to
look at pretty homes, but notwith the reality of what is the
financial impact.
Correct.
SPEAKER_06 (05:19):
That's and it's it's more local.
Yeah, it's our local folks.
People moving into our city,they're not afraid to spend the
money.
SPEAKER_05 (05:26):
Totally agree.
SPEAKER_06 (05:27):
It's the people that are in a home right now, they
don't know how to trade up ordown.
It's crazy.
They'll sit in a home that's waytoo big.
SPEAKER_05 (05:34):
Yeah.
SPEAKER_06 (05:35):
And it's smarter move to downsize, but they won't
because of sticker shock.
SPEAKER_04 (05:38):
Yeah.
So that actually leads me toanother question regarding the
folks moving into our marketfrom others.
What markets are they movingfrom that you're seeing
predominantly?
I mean, obviously there's tons,so there's no way you can scale
to seeing all of them.
But the idea is where are thesepeople coming from that allows
(06:01):
them or enables them to go, ohwow, that payment makes perfect
sense.
SPEAKER_06 (06:07):
East Coast.
I'm not seeing much from theWest Coast.
Okay.
Everyone's California.
I'm like, no, they're notcoming.
SPEAKER_02 (06:13):
I think I've had one California this year.
SPEAKER_06 (06:15):
Believe it or not, Houston.
SPEAKER_04 (06:17):
Yeah.
I've seen it.
I've seen it.
And and what do you think thereason for that?
I mean, these folks, more thanin my opinion, they're probably
cashing out of a property,sitting pretty good, already
know the concept of owning ahome and what value it brings,
and what the disadvantages are.
And the advantages outweigh thedisadvantages.
(06:39):
So that's why they continue todo it.
And then the idea of, well, I'mgoing to get this rate, but I've
got X amount of money.
Let me go do something with thismoney and put the minimum down.
And that payment is nowtolerable as opposed to what I
was paying wherever I was, NewYork.
I mean, all different types ofplaces that, yeah, maybe their
(06:59):
property taxes aren't as high,but definitely their property
values are.
SPEAKER_02 (07:03):
Right.
Or just the cost of living.
Sure.
Perhaps coming from whether it'srestaurants, gas.
I mean, you know, gas inCalifornia is how much these
days?
$8 a gallon or something likethat.
You're right.
SPEAKER_04 (07:13):
That's ridiculous.
And that concept for the localfolks is why you see tons of
social media posts about this50-year mortgage.
Yeah.
And we'll lead into that as thenext topic of if you could,
either one of you, explain theidea of a 50-year mortgage like
(07:35):
I'm five.
Me being the lender.
But I want to hear what youguys' perception of this is as
if if I'm five.
You want to take a stab at that?
SPEAKER_06 (07:46):
Yikes.
Okay.
Well, it's just basicallystretching out affordability
over a longer period of time.
SPEAKER_05 (07:54):
Yeah.
SPEAKER_06 (07:54):
So it's like layaway.
SPEAKER_05 (07:57):
Remember.
SPEAKER_06 (07:58):
Yeah.
Eventually you'll own it.
SPEAKER_04 (08:00):
Correct.
SPEAKER_06 (08:00):
But the cool thing is you'll get to live in it.
SPEAKER_04 (08:02):
Yeah.
SPEAKER_06 (08:03):
I don't think it's a bad thing.
There's pros and cons.
And I really think it's a goodthing.
SPEAKER_02 (08:08):
There you go.
There's pros and cons.
I I don't necessarily think it'sa bad thing.
You know, do I think it's a wisething?
Probably not, but the it'sbetter than the alternative of
renting.
SPEAKER_04 (08:18):
I have to agree.
SPEAKER_02 (08:19):
You know, and if that's if that's what it took
for that first-time homeowner, Idon't necessarily think it's
going to be the savvy, you know,upper tier luxury buyer that's
going to be doing something likethat.
Maybe the wannabes.
SPEAKER_04 (08:30):
Yeah.
SPEAKER_02 (08:31):
I'll I'll throw that out there.
But if if it allows you to getinto a home that you were not
able to get into, then I don'tthink it's a bad thing.
At least they'll start theirjourney of homeownership.
And this is the funny thing thatbecause of course all of that
was trending last week.
Absolutely.
Everyone in their grandmotherwas posting that.
And everyone's like, look atwhat you're going to pay for the
life of the loan.
Who in the hell lives in theirhouse for 50 years?
(08:53):
Nobody does.
We're not our parents.
Seven is the hour.
Her parents did.
My parents did, probably yoursand yours, but we haven't.
We've had four homes, I think,in the nine and a half years
we've been together.
Yeah.
We were on it every three-yearmarriage until this past year.
But but like you and I weretalking before Stephanie got
here, what did you do with yourmoney?
You were rolling over it to thatnext house, which was what we've
(09:16):
done as well.
Absolutely.
So I personally think it's agood thing, you know, within
reason.
SPEAKER_04 (09:23):
I'm from a lender's perspective that can play
devil's advocate of this.
All we can do as professionals,number one, is provide them with
the data.
The second thing is, I don'tbelieve it's a good or a bad
thing.
It's just another thing.
Right.
And that thing, if it allowsfolks to actually purchase a
(09:45):
home, great, as long as theyunderstand how it breaks down,
how it shakes out in the end.
But then there's this devil'sadvocate of me going, okay, so
if we're saying that this is forhome affordability, but yet
you've got these first-time homebuyers that are buying 400, 450
and using a 50-year mortgage,well, shouldn't they just
(10:07):
knuckle up and buy a$300,000home instead for their first
one?
That's where that tug and pullwe're almost allowing them to
get in over their head.
But is it really because you'restill building equity?
SPEAKER_02 (10:20):
Yeah, you're still building equity, but it is it
really because the$300,000 homethat we know today is not the
same$300,000 home that it wasfive years ago.
SPEAKER_04 (10:28):
You're on the money, yeah.
SPEAKER_02 (10:29):
So you know, maybe they the family can't fit in a
$300,000 home and they have nochoice but to buy a four or four
hundred and fifty thousanddollar home because they need
five bedrooms or whatever.
SPEAKER_06 (10:39):
So there's two points that I'd like to bring
up.
One is they need to keep thisfor an end user, not an
investor, because an investorcan use this.
Oh, yeah.
I mean, what a great tool.
I'd just continue to refinanceyourself out of the butt thing
is refinancing.
(11:00):
Everyone's talking about 50years, even if you don't move,
who stays everyone's refinanced.
If you're correct.
Look at how many people like weknow over COVID that refinance.
That's why we're in thesituation we're in.
Absolutely.
So it's like you're not stuck tothat 50-year mortgage.
You can roll that into a 15, a30.
Yeah.
SPEAKER_02 (11:19):
How many people do have we heard of years ago that
did 30 and then he refinanced?
You're on the five years into15.
Yeah.
Yes.
SPEAKER_06 (11:25):
So you can get in, establish equity, establish a
home, yeah.
And five years refi out of itafter you saved, you have some
consistency.
SPEAKER_05 (11:35):
Correct.
SPEAKER_06 (11:36):
You know, I think it looks good for a lender too.
You refinance out of it, youhave a better position, and then
your your equity starts to grow.
So, and you don't have to loseyour position.
No, I mean, I know, and I don'tknow how it looks like on the in
not the insurance, the mortgageside?
SPEAKER_04 (11:54):
Taxes.
SPEAKER_06 (11:54):
No, the why can I think of it?
Interest interest side.
Yes, thank you.
Interest side.
SPEAKER_04 (11:58):
I'm getting ready to show you.
SPEAKER_06 (12:00):
Okay.
So, but I know you can refi andnot lose that position
necessarily.
SPEAKER_04 (12:05):
And and I think the idea of losing the position,
it's actually circumventing thatbecause you're not losing your
position where you purchased inthe market.
That price, let's say this pastyear we went down by 2%, 1%-ish.
Next year, it's going to kickright back to where we normally
(12:25):
are, about three, four percentyear over year growth.
Yeah.
And you missed out on thatopportunity to lock in, kind of
like buying a stock.
What was your strike price?
What is your cost basis?
My cost basis here is I boughtin 2025 back when the market was
kind of uh, but now rates arelower.
So not only can I refinance, Ican also capitalize on equity if
(12:48):
I were to have the opportunity.
SPEAKER_05 (12:50):
Right.
SPEAKER_04 (12:50):
But yeah, that's good point on that.
So I brought up, JC.
If you can throw up the screenand make sure that we're seeing
this.
So what I did here, and I'mhoping that that looks big
enough on screen.
I don't okay.
So we've got an eight-yearequity comparison for a 30-year
(13:13):
versus a 50-year mortgage.
And I want everyone to firstknow that this is not financial
advice that we're giving.
Please consult your actualadvisor.
But when it comes to loans andstuff like that, I'm I'm
licensed to do this.
So if we're looking at theamortization that was used for
this scenario, we've got a homepurchase for$350,000, which
(13:34):
we're using the the a little bithigher than what the average in
San Antonio is.
I think it's at 290 something atthe moment.
But we've got a 5% downsituation, which gives a loan
amount of 332,500, a 30-yearinterest rate at a 6.7%, and
then we've got a 50-year at an8.25.
(13:56):
And the reason for that iscurrently a mortgage that is a
50-year is not going to be aqualified mortgage.
So therefore, a non-QM lender orsomeone does not that's not
trading this on the open marketor secondary market after the
fact has to originate it,meaning outside of the
parameters of the currentguidelines, which leads the idea
(14:18):
of right now, we also alreadyoffer a 40-year mortgage.
SPEAKER_02 (14:22):
It's it's already there, it's there, no one talks
about it.
SPEAKER_04 (14:24):
Nobody talks about it.
And I've got another point, butI'll I'll let me run through
this before we jump to that, myADD brain.
So zero appreciation.
If there were zero appreciationin this concept, we have them
side by side, a payment, justthe principal and interest would
be the 2156.59 for the 30-yearmortgage, and then for the
(14:46):
50-year mortgage at the eightand a quarter, we're looking at
a payment of 2324.
So in this case scenario,they're not saving much.
And this is more realistic towhat we've been seeing online in
social media and things of thatnature because they've been
keeping these two rates aboutthe same.
So then all of a sudden, we'reseeing a, yeah, it's a$300
(15:09):
difference in payment.
That's assuming that they'regonna get the same rate on a
30-year as a 50.
There's no possible way thatsomebody would tie their money
up investment-wise and only getthe six and whatever percent.
Right.
So just being logical in that.
So then it shows the equityposition after eight years, if
there was no appreciation, andthat's about a$31,000 difference
(15:33):
if you choose a 30-year mortgageversus a 50-year mortgage.
Now, I'm not saying that is agood or a bad thing for anyone,
as long as they know that goinginto it, right?
And that's the house they want,and that's the payment that fits
their budget at the time.
Right.
Who am I to say no?
SPEAKER_02 (15:49):
You know, it'd be super interesting to do is run
these numbers if they wererenting.
Ooh, just absolutely justshowing what they spent during
that same time on renting, butthen also zero tax breaks, all
of those.
SPEAKER_04 (16:02):
All of those things accounted for on their taxes
against their income.
You're exactly right.
And it's still any which ofthese scenarios, in my opinion,
if you are a homeowner now, noproblem.
Yeah, just know that your lendershould be telling you to throw
as much as you can at theprincipal when you can.
Right.
Because this is what the outcomelooks like.
SPEAKER_05 (16:24):
Yeah.
SPEAKER_04 (16:24):
The second point, and you can kill that, JC, that
I had thought of while I wasdoing that, is at a certain
point in time in our history ofreal estate and finance, the max
you could do was a 15-yearmortgage.
Right.
SPEAKER_02 (16:40):
I was literally about to say that.
You know, this is probably thesame conversation that people
were having when the 30-yearmortgage was starting to be
talked about, which was what wasthat in the 50s?
Probably something like that.
SPEAKER_04 (16:51):
So and that idea, it was super like, well, are they
getting in over their head?
SPEAKER_02 (16:57):
Are they exactly okay?
SPEAKER_04 (16:58):
But they're now homeowners.
SPEAKER_02 (17:00):
Yeah.
SPEAKER_04 (17:00):
I mean, most of the homes I've purchased have been
with a 30-year mortgage, unlessthey were investment, which was
12-year note or 12 12-monthnote.
A couple of them we had on15-year notes, but that was back
in the day when rates werelower, you were getting like a
3% on a 15-year note.
I don't see.
(17:22):
I mean, what are your thoughtson that?
Truly, the idea of maybe this isa new norm.
And is it something that havingto go non-qualified mortgage
right now, but at a certainpoint, if it's introduced, hey,
it could then become somethingthat is now just another option
in the tool belt.
SPEAKER_02 (17:42):
Right.
It's funny.
In the car world, there'slong-term loans for higher end
exotic cars.
And I see people that can easilypay cash for these cars utilize
those tools to get like a10-year note on a$600,000 car.
And sometimes they're hedgingbets that that car is going to,
(18:03):
because particular cars willappreciate in value.
And so then it's one, thoseparticular notes are not showing
up on their credit.
Correct.
So they're business peoplesaying, okay, well, now I don't
have this showing up on mycredit.
I can go out and buy, you know,more real estate or more assets,
whatever.
My cash flow is lower because ofthis.
And I and I know when I exitthis vehicle, probably going to
(18:23):
make another$50 or$100,000.
So, well, hell, it makes sense.
Yeah.
You know, at the end of the day,I I feel that within reason, you
know, I don't think we want tobe doing a 50-year note to an
80-year-old couple or maybe ahundred-year-old home.
I don't know.
SPEAKER_04 (18:38):
I mean, I'm just saying, technically, we can't
discriminate in that in thatasset.
That's true, that's true.
You know what I mean?
I've done a I've done a 30-yearnote for someone that was 70
years old.
I'm like, There you go.
Here we go.
SPEAKER_02 (18:48):
Yeah, yeah, yeah.
I mean, well, they'll just sellthe asset.
If they expire, they just sellthe asset.
So I I I think it's a betteralternative for someone to get
into a home that perhaps is justgoing to be locked into renting
right now.
Right.
Right.
It's my opinion.
SPEAKER_04 (19:03):
And and as long as they know, yeah, like I said,
the outcome of that choice,because the average time that
people are staying in theirhomes has increased.
I mean, it went from five yearsto now about eight years.
SPEAKER_02 (19:14):
Yeah, right.
Yeah, that's what we weretalking about the other day.
So it's inherent.
SPEAKER_04 (19:18):
Is that wrong, right?
No, it gives you a little bitmore time to build some equity,
in my opinion, truly.
And knowing that more of yourpayment is going towards the
interest because it's based onamortization.
What's what's the issue here?
You know, if it gets them intothe home.
But I just wanted to paint thereal picture, kind of not apples
to oranges, but apples toapples, because that program is
(19:41):
definitely going to be a littlebit higher interest rate.
Count on about one and a half totwo points higher.
SPEAKER_02 (19:47):
Which is the same they do in the car world.
SPEAKER_04 (19:48):
It's exactly right.
And back to Stephanie's point ishopefully first-time buyers get
that logic because guaranteedinvestors understand the idea of
leveraging your capital.
You know?
Anything you guys want to add onthat before we jump into the
next topic?
SPEAKER_06 (20:06):
The only con I see is just time in the house.
SPEAKER_05 (20:09):
Okay.
SPEAKER_06 (20:10):
Because if you don't have enough time in the house
and there's not enoughappreciation and there's not
enough equity, you're bringingmoney to the table to get out of
it.
That leads into the new billconversation.
SPEAKER_04 (20:20):
Yeah, it's true.
It's true.
That is that is very true.
But then at the same time, andand we can keep going with this
because it's a it's a greattopic.
If they are advised properly bya good lender, by a good real
estate partner to understandthat this is your first home,
not your last.
Let's talk about your exitstrategy at the time that you're
(20:42):
even buying this.
Right.
Down the road, can you seeyourself selling this?
Can you see yourself convertingin it to an investment property?
Exactly.
Now all of a sudden your cashflow is higher because you made
that.
Correct.
True.
And let someone else pay the 50years.
That's right.
That's right.
At that point, what do you care?
Exactly.
No, good point.
Yeah.
Okay.
So the next topic here is morelocal than anything, because
(21:06):
that's where we get ourfoundation from, where we are
hitting the pavement, is theidea of home affordability and
what it actually is costingthese first-time home buyers,
second-time homebuyers in let'scall San Antonio or just in all
of Texas, because you've got amortgage that is made up of four
pieces.
(21:26):
And a lot of times people areonly talking about the principal
and the interest.
We've had, and you mentioned ita bit ago, insurance that has
risen substantially.
We've had taxes that has risensubstantially.
I'm hoping that they put thatahead of all the other things on
the docket of us relinquishingthe uh need to pay property
(21:47):
taxes.
But yeah, one can hope.
Yeah.
One can hope.
Yeah, one can hope.
So that being said, what is youall's perspective of what is
happening today with ourfirst-time home buyers in our
local market?
Is it the idea that there isn'tinventory out there for them?
The inventory that is there, thepayment is still unaffordable
(22:10):
because of the tax and aninsurance rising compiled with
the higher interest rates.
Or are the buyers just notrealistic enough to go, you know
what, it's my first house, notmy last.
Let me go to the 200, 250 pricepoint and deal with this first
home because when I bought myfirst home, it was$130
(22:31):
something, thousand dollars.
That same house today, mind you,is$220.
You know, expectations.
Am I wrong for thinking thatthey should bring their
expectations down?
SPEAKER_06 (22:43):
I think it's the unknown.
SPEAKER_04 (22:45):
Okay.
SPEAKER_06 (22:45):
I don't home ownership is expensive.
SPEAKER_05 (22:48):
It is.
SPEAKER_06 (22:49):
I am not for everyone.
I have a rental right now that'sa pretty darn nice rental.
And I just spent$12,000 inrepairs for to make this buyer
happy to get out of it.
And it's a lot.
SPEAKER_05 (23:03):
Yeah.
SPEAKER_06 (23:04):
It's like you're right, taxes, insurance all have
gone up, but so have the costs.
Air conditioners are twice asexpensive as if they were,
refrigerators are twice asexpensive as they as they were.
So it's every kind of costinvolved in a home is more
expensive.
SPEAKER_05 (23:19):
Sure.
SPEAKER_06 (23:19):
And you know, you have your big ticket items like
your roof, your AC, your hotwater heaters, but then you've
got those other nuances like agarbage disposal.
So a fuse.
SPEAKER_04 (23:31):
Yeah, a fuse that pops, you got to take the whole
damn thing out and redo it.
SPEAKER_06 (23:35):
Exactly.
Or God forbid, a leak orsomething real happens where you
know it's it's it's costly.
SPEAKER_05 (23:40):
Yeah.
SPEAKER_06 (23:40):
And your even your deductibles are higher now.
So I think that's what haseveryone sticker shocked because
it's everywhere they look, yeah,it's twice as much.
And so I look at the rates and Ithink they're totally normal.
Like, these aren't even high.
Right.
It's not the rate, it's all theother stuff.
SPEAKER_05 (23:58):
Yeah.
SPEAKER_06 (23:58):
And so it's a quandary because an older home,
like you said, lower yourexpectation, get into an older
home.
Well, then you might have amaintenance nightmare.
SPEAKER_04 (24:08):
You're on the money.
SPEAKER_06 (24:09):
And so that's real hard money.
Yeah.
Like it's like I can rolleverything into a brand new
home, and at least I know it'spretty good for 10 years, and I
don't have to worry aboutanything crazy coming up.
SPEAKER_05 (24:23):
Yeah.
SPEAKER_06 (24:23):
And I think that's what a lot of buyers have to
weigh out right now.
SPEAKER_04 (24:26):
That's a good point.
That is a great point.
SPEAKER_02 (24:29):
I think the challenge, because I agree
wholeheartedly with her comment.
And I think the challenge thatsome people have is builders
right now, they're giving awaythe farm.
Yes.
You know, they're buying downrates, they're doing all of this
stuff.
But if their agent is not askingthe right questions, like, what
is your five-year plan family?
What is your 10-year fan, youknow, uh plan family?
(24:50):
You know, if you if they'regoing to be moving very quickly,
especially in San Antonio,because we're a big military
city, they could get, you know,their orders to transfer.
And let's just say they are thefirst ones into a brand new
development, they're screwed.
Absolutely.
They're screwed.
unknown (25:03):
Yeah.
SPEAKER_02 (25:04):
They are going, they're already upside down.
They're not, they're not goingto be able to sell successfully.
And that's the part where I'mjust going to say it so you feel
it.
You know, I see all these agentsthat are selling brand new
entry-level homes and they'regiving away all of these gifts,
like barbecue pits and TV setsand all this other stuff.
And it's like, if you were, youknow, if I'm your agent, this is
what you get.
Well, yeah, because you probablygot a six percent commission on
(25:26):
that.
Eight, ten, yeah, three hundredand fifty thousand dollar house.
And that poor, that poor couple,they're going to be buried in
that home.
Yeah.
So is that doing the rightthing?
I don't know.
You have to have theconversation.
Perhaps they did have.
I hope to God they had theconversation.
Yes.
Because we've seen it more oftenthan not, where someone calls us
to list their home and it'slike, oh wow, you're off a
(25:48):
Petranko.
Good luck.
Good luck.
I love you, but good luck.
SPEAKER_04 (25:52):
Yeah.
We got to be real with you.
Yeah.
And a lot of times they did notset them up for failure.
SPEAKER_02 (25:59):
They set them up for failure.
SPEAKER_04 (26:01):
Correct.
Yeah.
Yeah.
And that's what I'm seeing quitea bit.
Go ahead.
SPEAKER_06 (26:04):
Well, back to your point about lowering your
expectations.
This is where I get frustratedwith this generation of new home
buyers or first-time homebuyers, is that they want the
new home look.
Yes.
They want the updates.
Yes.
I saw a house the other day andI'm like, this house's roof is
brand new.
They did the AC, they did allthe things that matter, and
(26:25):
you're not interested because itneeds granite and flooring.
Yep.
Like, deal with it.
That's right.
You know, you could do thislater.
SPEAKER_05 (26:33):
That's exactly right.
SPEAKER_06 (26:33):
But then you want to go buy the house the flipper did
that's pretty, but it's a trainwreck.
SPEAKER_04 (26:39):
And you have no idea what's behind the walls.
SPEAKER_06 (26:41):
Exactly.
And so it's like, I I'm withyou.
If I were a first-timehomebuyer, I'd be looking for
grandma's house that somebody'staken care of.
That's right.
I wouldn't go out and buy a newhouse.
I'd stay far away from them.
But if that's people don't thinkthat way.
They want it all.
SPEAKER_04 (26:58):
What about the idea?
And I think this is alsosomething that is plaguing our
first-time homebuyers locally,is the level at which they are
willing to compromise onlocation.
If your work is here, you grewup over here, and now you're
finding out that, oh shit, thosehouses are 500,000.
(27:19):
That's not a first-timehomebuyer type home.
And you're just like, I'll justkeep renting, versus being able
to go over to the Petrenko areaof town and get you something
for 300 that could basically bethe same home, to be honest.
Right.
But the idea of, oh, I want toassociate with this area or this
(27:41):
side of town, I have heard thatquite often, especially in the
last year.
What are you guys' thoughts onthat?
I know you deal with a littlebit different clientele and they
get to pick where they'rethey're wanting to be, but what
is your experience with thatfirst-time, second-time home
buyer and lack of compromise?
SPEAKER_06 (28:01):
Well, it's funny.
I just moved a family here fromHouston.
So imagine Houston drive time,commute.
They bought their house 45minutes away from where they
work.
SPEAKER_05 (28:14):
Okay.
SPEAKER_06 (28:15):
Because of where they wanted to live, which is
normal.
Because she was like, we justwant to be within an hour.
I'm like, what?
We want like five minutes.
SPEAKER_04 (28:22):
That's kind of the point that I'm getting to is and
and you almost made that betterof a point because someone as
close as Houston is totally usedto that kind of commute.
That's nothing.
Whereas San Antonio, if it's notwithin 20 minutes, it's too far.
SPEAKER_05 (28:38):
Right.
SPEAKER_02 (28:38):
Is that very different mindset?
Yeah.
The San Antonians, I think, Ithink all of that would change
over time because we are gettingsuch an influx of people coming
into this market that areexpecting, you know, better
food, better shoppingexperience, better housing,
yada, yada.
But the drive time, like when Iused to live in Houston, yeah,
it would take me an hour to getout of the galleria.
That's right.
(28:59):
And that was normal.
SPEAKER_03 (29:00):
It took me 30 minutes to get to the office
today, and I was pissed.
Isn't that weird?
Do you see what I'm saying?
That was JC.
Jay sizzle on the ones and twos.
There you go.
SPEAKER_02 (29:11):
So I mean, you know, I think each family just needs
to figure out what they'rewilling to compromise on.
At the end of the day, you'reyou're gonna compromise on
something.
You're you're never gonna get ahouse that checks off every
single box.
What is it that you can put upwith and be okay with?
Good point.
You know, very good point.
SPEAKER_04 (29:28):
And and that point in itself, how difficult is it
to get a buyer to understandwhat you just said?
SPEAKER_02 (29:38):
I I think that comes with conversations more than you
know, examples, conversations,experience, experience,
definitely.
Our own experience.
SPEAKER_04 (29:46):
Now, let me ask you in your experience, and this is
something that I can speak tofrom a lending side, the way
that you speak to that buyer, Iwould go as far as to say a
little bit more firm, a littlebit more.
More as a matter of fact versusthe touchy feely, what do you
want?
No, no, no, no.
Your goal was to buy a home, andthis is this, this, this is what
(30:08):
you wanted in that home.
So this is what we found typeconcept of shit or get off the
pot because this is what you'reasking for.
Exactly.
SPEAKER_02 (30:16):
And this is what you can afford.
SPEAKER_04 (30:18):
And then on the lending side, I'm going, This is
what you can afford.
Right.
So it's kind of a one and two.
But in the experience of that,do you feel like you would have
to have a different type ofconversation with that type of
buyer?
SPEAKER_06 (30:33):
It's hard, Mark, because I have overstepped my
bounds.
Sure.
And then I feel like I amsteering.
And so I have to hear them,guide them, but they're only
going to hear what they want tohear.
SPEAKER_02 (30:50):
Yeah.
They have what are they called?
Happy ears is a good idea.
Happy ears.
SPEAKER_04 (30:53):
Yeah, they got those, what is it called?
Rose colored uh earphones.
So the idea of them believing,because it's definitely not
steering.
In my opinion, it's advisingbecause they told you something.
Now you're giving the advice.
In this market, in this day andage, would someone see that as
(31:17):
steering versus giving somestraight up old school advice?
Is is that the fear?
SPEAKER_06 (31:23):
No.
Because of the type of buyers?
I always tell people this istalking to like a sister,
brother, mother, daughter, youknow, if if you were my family
member, I I can't sleep at nightunless I'm a thousand percent
honest.
Sure.
And and and and have them see itfrom all views.
SPEAKER_05 (31:42):
Yeah.
SPEAKER_06 (31:43):
But being in this situation recently ourself,
emotion drives logic, it doesflags.
And it's crazy.
Emotion wins over logic everytime.
SPEAKER_04 (31:55):
It's very true.
That's very true.
And we could transition nowbecause the idea of what Robert
and I were talking aboutbeforehand is me and Kristen
would love to sell our property.
I mean, we we planned on beingthere three years, and here we
are, year five, six, going,okay, well, I guess we're just
gonna stay here for a little bitlonger, knowing that we have
(32:17):
tons of equity, knowing that theopportunity we could use that
for and leveraging, et cetera.
But the idea of, okay, we got tosell this, find another one.
What is that other one gonnalook like?
Are we gonna have to throw halfthis money at that to get to
back to where we want to becomfortable?
All of those things.
(32:38):
And the only solution would benew construction, but then
you're building custom, you payfor custom.
SPEAKER_02 (32:46):
Yeah, pay to play.
SPEAKER_04 (32:47):
Absolutely.
What are your thoughts ontoday's homeowner on the second
market?
I I know you mentioned earlierthe type of buyers you're
dealing with or debt, divorce.
I mean, we we know that.
The must sells, the must moves.
We know that's coming from thesame logic that I'm going over
(33:07):
right now, basically, inaddition to the fact that we got
a 3% interest rate.
SPEAKER_05 (33:11):
Yeah.
SPEAKER_04 (33:12):
What why?
SPEAKER_05 (33:13):
Right.
SPEAKER_04 (33:13):
You know how has the homeowner or the I'm sorry, the
home shopper these days beenswayed and almost steered to new
construction, to be honest.
SPEAKER_06 (33:28):
1,000.
Thank you for saying that.
I have felt that so deeply, andI'm like, how is that fair?
You know, they get away withthat.
Gosh, where do I start?
I think we have to break this upinto three sectors.
You've got the first time homebuyer, the move up buyer, and
then you've got the semi-customor yeah, semi-custom and the
(33:49):
custom.
Okay.
So four four segments.
SPEAKER_05 (33:51):
Okay.
SPEAKER_06 (33:52):
So the first time home buyer is almost always
going to be geared toward rate.
SPEAKER_02 (33:56):
Yes.
Rate and payment.
Rate and payment.
SPEAKER_06 (33:58):
That's right.
And and honestly, naive.
Naivette.
SPEAKER_04 (34:02):
Absolutely.
Well, it that time in their lifecycle, they're looking at I'm
choosing between continuingrenting, staying on my mom's
couch, or finally owning my ownhome.
So the only thing they havefinancially to compare it to is
what is rent and what is thepayment over here.
SPEAKER_06 (34:17):
Right.
And what they don't understand,I love it when these new home
sales counselors say, yeah, thebuilder is buying your rate
down.
No, you're paying for that ratedown.
It's just rolled in the price.
Right.
Because you're obscenelyoverpaying for this house.
When I walk in some of thesehomes that are$400,000, I'm
like, this thing is a$200,000house wrapped in a$400,000 bow
(34:40):
because it is not a$400,000house.
And when you go to sell thisagainst homes that are older,
that are actually nicer, you arescrewed.
Yeah.
unknown (34:48):
Yeah.
SPEAKER_06 (34:49):
Because you're now paying and playing in the same
sandbox as a pre-owned seller.
And guess what?
Your house doesn't look so sexyanymore.
SPEAKER_04 (34:55):
That's right.
SPEAKER_06 (34:56):
So I my heart goes out to these first-time home
buyers because a lot of them aregoing in there without agents,
thinking they're saving money.
They're paying this ridiculousamount of money up front for
their loan buy down.
SPEAKER_05 (35:11):
Yep.
SPEAKER_06 (35:12):
And they're stuck.
They're going to be in thosehouses for, I think I did the
numbers.
I think it's almost seven yearsbefore they see any kind of
equity.
unknown (35:20):
Wow.
SPEAKER_06 (35:20):
And that's sad.
SPEAKER_04 (35:21):
Yeah, because the idea is these, these we could
run appreciation, let's say, atan eight-year mark, but it's not
the same level of appreciationbecause they're not in the same
comparable pool.
Right.
SPEAKER_06 (35:36):
1000%.
Does that make sense?
Absolutely.
Absolutely.
SPEAKER_04 (35:39):
Can either of you explain that a little bit
better?
SPEAKER_02 (35:42):
We'll we'll go super simple.
Everyone, at least people aroundhere, know they know Alamo
Heights.
Alamo Heights is landlocked.
Alamo Heights, you can get amillion dollar teardown, but
it's location.
You're paying for location.
And we talked about Petrenko,using that as an example.
There's an abundance of land onPetrenko.
So how could anyone, this isjust using simple logic, say
(36:03):
it's going to be the sameappreciation?
No, a developer can go buy somemore land off of Petrenko, and
now they're making more newhouses that are going to compete
against yours for the next 20years.
That's right.
That doesn't exist in AlamoHeights.
That's why their appreciationfrom a percentage basis has
always been so much more higherthan other areas like that.
So and they each serve theirpurpose.
(36:25):
Absolutely.
I'm not dissing you knowPetranko by any stretch of the
imagination.
If that's what you can afford,if that's the area you can be
in, then giddy up.
It's it's better than renting.
It's always better than renting.
SPEAKER_04 (36:35):
Yeah.
SPEAKER_02 (36:36):
But the reality is, like she's saying, it I I I
think it's longer.
I think it's probably in thismarket and the way things have
played out, I think it'sprobably going to be closer to
10 years before they ever startseeing any type of relative
appreciation.
SPEAKER_04 (36:51):
Only because, like you mentioned, let if we're
talking about an area likePenko, if we were to have said
that, let's say 10 years agowhen they started that first
couple of establishments goingout, even Calibra going out that
way, they're still buildingthat.
They're still building.
So I drove down there the otherday and I'm just like, oh my
(37:11):
gosh.
Yeah.
At a certain point, you finallyget an opportunity to go, okay,
the neighborhood's finally builtout.
We get to see what our valuesare.
So you list their home andanother subdivision open.
Another subdivision opens up.
It's like, dang it.
SPEAKER_02 (37:23):
Now you're competing against them.
Yeah.
SPEAKER_04 (37:25):
Yeah.
And that being the case, becausehonestly, what is it that we
could do other than lobby that'snot going to work, where they've
got way better lobbyists.
SPEAKER_06 (37:36):
Way better.
SPEAKER_04 (37:37):
And they own plenty of land, is realistically to
continue to play the game.
Yeah.
You know, and it's affectinglenders, it's affecting the the
realtor that doesn't focus onthat type of thing.
It's affecting the realtor thatis super honest with their
customer, scaring them away ornot doing what they want.
(37:59):
And realistically, I don't thinkthat that's the case because
what realtor is going to want togo, no, let's not do new
construction.
That six percent looks good.
But in many cases, you're alsonot seeing realtors go, okay,
I'm getting six percent on thisdeal.
Let me throw three percent atthe sales price to help these
customers understand what'sgoing on.
Because I'm not realistically inthe norm of getting more than
(38:23):
three percent.
You know what I'm saying?
I mean, I don't want to be thatguy that gives away stuff, but
at the end of the day, couldthat help?
Would it help?
It could.
Why is the builder doing it thatway instead of doing it the
other way?
SPEAKER_06 (38:37):
Well, we know that sells.
It sells, and so many agentsaren't selling, they need that
money.
So if there's if DR Horton'soffering eight percent, heck,
that's that's gonna feed myfamily for several months.
SPEAKER_02 (38:49):
That's right.
SPEAKER_06 (38:50):
Thank goodness we're not in that situation, but a lot
of agents are a lot of agentsare.
SPEAKER_02 (38:53):
So many of these social media agents I just see
they're posting, and I noticedit the other day new
construction sales, newconstruction sales, and like
always new construction.
And I thought to myself, Iwonder if they even attempt to
sell a resale home.
Right.
I mean, they're they're trying,they're chasing that paycheck.
You could've I can't I can'tlive with myself with that.
(39:14):
That's just not how I operate.
SPEAKER_04 (39:15):
But then you go, okay, well, who is monitoring
all this stuff?
We we have we have people thatwe have to abide by.
We've got our CFPB, but on youguys' side, you realistically
only have the consumer.
The consumer's the one that'sgonna make their choice based on
that social media content of thenew construction home versus a
(39:36):
video of Stephanie telling thetruth like it is.
Yeah, you see what I'm saying?
It's like damned if you do,damned if you don't.
Yeah.
SPEAKER_06 (39:43):
Well, and they're so good, those builders are so good
at creating an emotionalattachment with the model homes.
I laugh.
I walked in a house the otherday, and this house was such a
piece of crap.
But the furniture and stuff theyused to stage it was what you
would see in a luxury home.
Yeah.
And you're not looking at thehouse, you're looking at the
furniture, and I'm like, thesepoor kids are buying these.
(40:04):
Wait till they walk in to seetheir home.
SPEAKER_02 (40:06):
And they're like, Wow.
SPEAKER_06 (40:09):
Exactly correct.
Yeah.
SPEAKER_03 (40:10):
And it's I remember I had milk crates in the first
place.
Carbor with the table.
Like, let's go get some stain.
We'll make it look better.
SPEAKER_06 (40:19):
And I'm not trying to diss the the new home sellers
or the new home sales, because Iknow there are some good ones
out there.
But it's just seems like thesereally massive companies that
are are building so many, yeah,just just to put more sticks in
the ground and people in themthat are and then you've got
your devil's advocate that ifyou don't go along to get along,
(40:41):
yeah.
SPEAKER_04 (40:41):
I mean, where do you sit now?
As that new home sales counselorthat is being pushed to push
this.
True.
Yeah, you're gonna say, Well,I'm not standing for that.
Well, I don't have my realestate license.
No, I'm gonna shut up and dowhat I need to do to make this
money.
SPEAKER_06 (40:55):
Right, right, right, yeah, yeah.
Right, right.
SPEAKER_04 (40:59):
I mean, I'm not a diss on sales counselors or
anything of that nature, but Idon't know of any of them that
research market data and thatare talking about economics of
uh things.
SPEAKER_02 (41:10):
They're just trying to sell their product, correct.
Yeah, correct.
SPEAKER_06 (41:13):
But to your point about the west side and the
growth out there versus a nicheneighborhood, I I was at
actually yesterday with somesome young clients, and I was
looking at this going, yeah,this is a good deal.
There's nowhere else to build.
SPEAKER_05 (41:26):
Right.
SPEAKER_06 (41:26):
They have sure.
Yeah, where you were showingyesterday, 100%.
That's what I'm saying.
This is the first time home bar,they were giving a four and a
half percent rate.
I was like, this is a win.
SPEAKER_04 (41:34):
Y'all are good.
Yep.
And if the math makes sense,correct, they know what goes
into it.
Right.
Who who are we to say no?
Yeah.
That you're meeting theirdesires, their goals, all of the
you check in the boxes.
Right.
You know, but I think it is itis a shame on those that are not
going through the checks andbalances to be able to check
(41:55):
those boxes.
They're pretty much just puttingthem where their boxes are
checked.
Right.
SPEAKER_02 (42:01):
That makes sense.
Yeah, totally makes total sense.
SPEAKER_06 (42:03):
But I think where the absolute deals right now at
the end of the year are thosehomes that are on the ground
right now that builders want toget rid of.
SPEAKER_02 (42:11):
Oh, absolutely.
There's no doubt it's at allprice points.
SPEAKER_06 (42:13):
All price points.
SPEAKER_04 (42:14):
So let's wrap up with that, if you don't mind.
Tell us about that concept ofhow that works for the folks out
there that may not know.
You've got realtors out there,you've got home buyers out there
that listen into the show.
What is the difference betweengoing and buying a pre-owned
home, a brand new home that Ibuild from the ground up, or one
(42:36):
that is currently just sittingon the market?
SPEAKER_06 (42:39):
Ooh, this is my favorite.
I convinced him, I was like,Robert, this is the time to buy.
We need to go now.
No, this, if there is a speck onthe ground, these builders do
not want to carry it into 2026.
They will make you a deal, adeal of a lifetime.
SPEAKER_05 (42:55):
Yeah.
SPEAKER_06 (42:56):
I mean, this honestly, if if there's a deal
to be had in the next decade,that's it.
SPEAKER_02 (43:02):
Yeah, it's it's there, there's definitely a
window of opportunity right nowif you're a buyer, right?
And and you can make a goodfinancial smart decision on you
know, location, what you're whatyou're gonna be up against, you
know, years down the road, etcetera, et cetera.
It it it is the time to buy.
It really is the time to buy.
There are deals to be had in allprice points, good points,
(43:23):
multi-million dollar and below.
Yeah, you know, entry level allthe way to the top.
Yeah, builders are willing tomake deals right now.
So if you are uh a a buyer,now's time to buy.
SPEAKER_06 (43:35):
Yeah, absolutely.
And then even new or pre-owned.
Yeah, I mean, I the price dropsthat we have seen in this last
quarter are significant.
They're not ten thousanddollars, they're 20, they're 50.
Yeah, there are some incredibledeals right now.
And I know there's a lot ofpeople out there that are afraid
because of all the uncertainty,but when is life certain?
(43:56):
That's what I get so confused.
I'm like, when has it ever been?
So it's like if you're a savvybuyer, I'd be talking to a
lender right now.
Yeah, I'd be buying because thisis the this is gonna be a short
window.
SPEAKER_04 (44:08):
I have to agree with that.
I truly do.
And I think the those thatstrike while this iron is hot
will not only reg not regrettheir decision, but they may
encourage others to do the sameand therefore kind of breed some
type of movement of okay, enoughis enough.
It's time to start doing thisthing again.
(44:29):
Get out of the idea of we'regonna buy a house and two years
later flip it mindset becauseeverything is supposed to be
about making money on your firsthome.
I think that's what 2020, 2021,2022 misshaped a lot of
first-time home buyers andrenters.
SPEAKER_02 (44:50):
It's supposed to be what it's supposed to be,
exactly.
Yeah.
This is the funny thing.
It's like when you look at, andI know if I start saying this,
she's gonna have the data forit.
The amount of valuepercentage-wise, that properties
increased during COVID, now thatwe're seeing adjustments, I
would venture to say that if youwere to go back and find a
(45:10):
property that someone did a deepdiscount on to get it sold in
today's market is still sellingit at more money than they would
have right before COVID.
So did they really lose?
No, not really.
You know, they didn't get thethe massive the top peak, the
top peak for sure, but they'restill doing okay.
SPEAKER_04 (45:29):
And you know what?
You're accurate on that.
I I I did pull the data forthat, and it you're absolutely
correct.
All prices of homes in Texastechnically are still higher
than what absolute it is.
Yeah, you didn't hit, like yousaid, the peak of it, but you
absolutely are making equitymore than you normally would.
SPEAKER_02 (45:47):
Right.
You're still you're still doinggood.
And I think that's that's thepill, including ourselves, that
it you struggle with.
Yeah, like gosh, I mean, Ireally, I'd really like to get
this number.
Yeah.
Okay.
Well, you're not.
That's right.
Or maybe you're you're gonnahave to hold on to it for
another five years or something.
I don't know, but you're stilldoing good.
You're still you're still aheadof the game.
I agree.
I agree.
SPEAKER_04 (46:06):
Well, you guys have anything else to add?
That was a damn good discussion.
We we hit a lot of I lovegetting out of paint with you,
man.
SPEAKER_02 (46:13):
We have some good talks.
SPEAKER_04 (46:14):
Um, well, it it it comes from a place of we are
students to our own game.
We continue to learn as well.
We do the research, we find out,and then we are able to apply it
to what we're doing in oureveryday life because it's that
we eat, breathe, and sleep andshit.
Real estate.
That's what we do.
SPEAKER_06 (46:32):
Unfortunately, unfortunately, yeah.
If I could just say one lastthing to your listeners, it's
like if you're if you'rethinking about buying or selling
a house, stop listening to theheadlines, stop reading.
It is such a local thing, andeverything that they put out
there is national and it are itis crazy.
(46:52):
What's happening in Austin?
It's like a different countrycompared to what's happening
here.
SPEAKER_05 (46:56):
So true.
SPEAKER_06 (46:57):
Versus the East Coast and the West Coast.
It's like, stop, stop looking atthat.
Talk to you right here.
Talk to your local people.
They know what's going on, theycan advise you.
SPEAKER_04 (47:06):
Yeah.
No, that was great.
Guys, as always, ourconversations are top-notch.
I appreciate you guys taking thetime and spending with me to
have this discussion for thoseout there that need to hear it.
And for you guys out therelistening, I'm hoping that you
are getting some of this andstuff that can stick and that
you can then apply to what youdo, whether you're a home buyer,
(47:27):
home shopper, you're ahomeowner, or a real estate
professional.
Maybe these are conversationsyou guys should continue to
have.
And if you're not having them,start.
Um, and for those out there,just kind of like Stephanie
said, but in a uh lessunorthodox way, shit or get off
the pot.
Till then, we'll catch you onthe next one.
SPEAKER_00 (47:51):
And it's just taking small steps, meaning you don't
try to get it.
SPEAKER_04 (47:54):
If you're still sending out pre-approval letters
and praying your realtors sendyou the next lead, you're
already behind.
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SPEAKER_04 (00:38):
And welcome back to another episode of Key Factors
Podcast Real Estate AF, wherethe AF stands for and finance.
And I'm your host, Mark Jones,and we are powered by Lone Bot,
Smarter Mortgage Matching, whereyou can find this on Apple or
Google Play.
And today we want to talk aboutsome real questions, some real
(01:00):
topics that we've discussednuances the last couple of
discussions, but I brought someexperts in the San Antonio
market to have this discussionwith.
And we're going to be talkingabout the 50-year mortgage.
We're going to be talking aboutaffordability in San Antonio and
is it really affordable?
And lastly, we're going to goover the idea of new
(01:23):
construction homeowners startingoff underwater.
But without further ado, let meintroduce my guest for today.
I've got Robert Elder.
Robert, how are you doing?
I'm doing great.
Thanks for having us.
Absolutely.
And then I've got StephaniePaxton.
Stephanie, how are you doing?
SPEAKER_06 (01:37):
Great.
Yes.
Thanks for having us.
SPEAKER_04 (01:39):
Absolutely.
Guys, you've been on the showbefore.
We've had great discussions, um,intellectual, industrial,
far-fetched.
Sometimes we bring it back.
But the idea is you guys are theexperts of our industry, in my
opinion, and many others.
So if you can, before we getstarted in our first topic, tell
us a little bit about yourselvesseparately and then kind of
(01:59):
together how you do what you do.
SPEAKER_06 (02:03):
Well, I've been in real estate for 15 years now,
but I'm a data nerd.
I love data.
I'm a big fan of Resi Club.
I love Lance Lambert and what hebrings to the table.
And so I feel like working withsome investors in my past, being
an investor, and then alsoworking with home buyers and
sellers, like we need to knowour market.
(02:24):
So that's where I come in.
SPEAKER_02 (02:28):
That's where she comes in.
No, she's definitely more thedata nerd.
Me, I'm the one that I go backinto, you know, 34 years of
being in the business and theexperience that I have in my
head.
But what I've learned from heris definitely diving into the
data and the analytics to get aclearer road ahead of, you know,
kind of what's going on andseeing trends, perhaps before
they become obvious.
(02:48):
That's that's where she's greatat.
And so I've I've I've learned toincorporate that into my
day-to-day business as well.
Absolutely.
SPEAKER_04 (02:54):
And you guys have created a juggernaut of a combo
with what you guys do on thereal estate side of things,
listings, sellings.
You guys are workinginternational.
You're now doing a little bit ofinvesting and starting your own
kind of things.
Tell us about the most recent,let's call it last 12 months of
(03:15):
business, if you don't mind.
The last two guests I asked thesame question, and I want to see
if it's similar to what theyexperienced over the last, let's
call it 12 months.
SPEAKER_02 (03:23):
I'll I'll let her, I'm gonna answer and then I'm
gonna give her answer.
Can you, if you can imagine likea little cartoon character
dragging someone across thefinish line, kicking and
screaming?
SPEAKER_05 (03:34):
Yes.
SPEAKER_02 (03:35):
That's what it that's kind of what it feels
like right now.
SPEAKER_06 (03:40):
Yeah, it's been it's been a year.
Most of our sales have beendeath, divorce, relocation.
No want-to moves, goldenhandcuffs are real.
I'm talking to some buyers rightnow and they want to see houses,
they're super excited.
I'm like, we need to talk to alender.
You need to see the reality ofthis, yeah, and if it makes
(04:01):
sense, because there's no sensein looking at these houses if,
you know, it it's one thing inyour head, but it's a lot
different when you're looking atit on paper, the reality of the
that's exactly right.
SPEAKER_02 (04:12):
Yeah, then the numbers are like, oh goodness,
you know, they had this pie inthe sky illusion, and you see
the pretty houses, which there'sof course there's beautiful
homes out there, but then it'slike, like she says, the
reality.
What is it gonna cost you?
SPEAKER_04 (04:22):
Absolutely.
And and shameless plug, buttrue.
I was just showing you before wegot started the idea that we
founded, launched Lone Bot.
Now, question for you both whydo you think that these buyers
are not getting with a lender?
It's a good question.
Because there is, you're on themoney, data research shows that
(04:45):
the buyer, the home buyer, thehome shopper, they'll look at
pretty houses all day long.
They'll formulate the idea ofwhat it looks like and and to
have it as their own, but thenmaybe an idea of a payment, not
knowing what insurance can do.
SPEAKER_02 (05:00):
She's experienced recently on one of her
investment homes, you know, whatwhat the insurance number went
up to.
And even when we were lookingpersonally for ourselves, like,
oh my gosh, insurance like threetimes the number.
I I think they go in with theinnocence of like, I want to
look at pretty homes, but notwith the reality of what is the
financial impact.
Correct.
SPEAKER_06 (05:19):
That's and it's it's more local.
Yeah, it's our local folks.
People moving into our city,they're not afraid to spend the
money.
SPEAKER_05 (05:26):
Totally agree.
SPEAKER_06 (05:27):
It's the people that are in a home right now, they
don't know how to trade up ordown.
It's crazy.
They'll sit in a home that's waytoo big.
SPEAKER_05 (05:34):
Yeah.
SPEAKER_06 (05:35):
And it's smarter move to downsize, but they won't
because of sticker shock.
SPEAKER_04 (05:38):
Yeah.
So that actually leads me toanother question regarding the
folks moving into our marketfrom others.
What markets are they movingfrom that you're seeing
predominantly?
I mean, obviously there's tons,so there's no way you can scale
to seeing all of them.
But the idea is where are thesepeople coming from that allows
(06:01):
them or enables them to go, ohwow, that payment makes perfect
sense.
SPEAKER_06 (06:07):
East Coast.
I'm not seeing much from theWest Coast.
Okay.
Everyone's California.
I'm like, no, they're notcoming.
SPEAKER_02 (06:13):
I think I've had one California this year.
SPEAKER_06 (06:15):
Believe it or not, Houston.
SPEAKER_04 (06:17):
Yeah.
I've seen it.
I've seen it.
And and what do you think thereason for that?
I mean, these folks, more thanin my opinion, they're probably
cashing out of a property,sitting pretty good, already
know the concept of owning ahome and what value it brings,
and what the disadvantages are.
And the advantages outweigh thedisadvantages.
(06:39):
So that's why they continue todo it.
And then the idea of, well, I'mgoing to get this rate, but I've
got X amount of money.
Let me go do something with thismoney and put the minimum down.
And that payment is nowtolerable as opposed to what I
was paying wherever I was, NewYork.
I mean, all different types ofplaces that, yeah, maybe their
(06:59):
property taxes aren't as high,but definitely their property
values are.
SPEAKER_02 (07:03):
Right.
Or just the cost of living.
Sure.
Perhaps coming from whether it'srestaurants, gas.
I mean, you know, gas inCalifornia is how much these
days?
$8 a gallon or something likethat.
You're right.
SPEAKER_04 (07:13):
That's ridiculous.
And that concept for the localfolks is why you see tons of
social media posts about this50-year mortgage.
Yeah.
And we'll lead into that as thenext topic of if you could,
either one of you, explain theidea of a 50-year mortgage like
(07:35):
I'm five.
Me being the lender.
But I want to hear what youguys' perception of this is as
if if I'm five.
You want to take a stab at that?
SPEAKER_06 (07:46):
Yikes.
Okay.
Well, it's just basicallystretching out affordability
over a longer period of time.
SPEAKER_05 (07:54):
Yeah.
SPEAKER_06 (07:54):
So it's like layaway.
SPEAKER_05 (07:57):
Remember.
SPEAKER_06 (07:58):
Yeah.
Eventually you'll own it.
SPEAKER_04 (08:00):
Correct.
SPEAKER_06 (08:00):
But the cool thing is you'll get to live in it.
SPEAKER_04 (08:02):
Yeah.
SPEAKER_06 (08:03):
I don't think it's a bad thing.
There's pros and cons.
And I really think it's a goodthing.
SPEAKER_02 (08:08):
There you go.
There's pros and cons.
I I don't necessarily think it'sa bad thing.
You know, do I think it's a wisething?
Probably not, but the it'sbetter than the alternative of
renting.
SPEAKER_04 (08:18):
I have to agree.
SPEAKER_02 (08:19):
You know, and if that's if that's what it took
for that first-time homeowner, Idon't necessarily think it's
going to be the savvy, you know,upper tier luxury buyer that's
going to be doing something likethat.
Maybe the wannabes.
SPEAKER_04 (08:30):
Yeah.
SPEAKER_02 (08:31):
I'll I'll throw that out there.
But if if it allows you to getinto a home that you were not
able to get into, then I don'tthink it's a bad thing.
At least they'll start theirjourney of homeownership.
And this is the funny thing thatbecause of course all of that
was trending last week.
Absolutely.
Everyone in their grandmotherwas posting that.
And everyone's like, look atwhat you're going to pay for the
life of the loan.
Who in the hell lives in theirhouse for 50 years?
(08:53):
Nobody does.
We're not our parents.
Seven is the hour.
Her parents did.
My parents did, probably yoursand yours, but we haven't.
We've had four homes, I think,in the nine and a half years
we've been together.
Yeah.
We were on it every three-yearmarriage until this past year.
But but like you and I weretalking before Stephanie got
here, what did you do with yourmoney?
You were rolling over it to thatnext house, which was what we've
(09:16):
done as well.
Absolutely.
So I personally think it's agood thing, you know, within
reason.
SPEAKER_04 (09:23):
I'm from a lender's perspective that can play
devil's advocate of this.
All we can do as professionals,number one, is provide them with
the data.
The second thing is, I don'tbelieve it's a good or a bad
thing.
It's just another thing.
Right.
And that thing, if it allowsfolks to actually purchase a
(09:45):
home, great, as long as theyunderstand how it breaks down,
how it shakes out in the end.
But then there's this devil'sadvocate of me going, okay, so
if we're saying that this is forhome affordability, but yet
you've got these first-time homebuyers that are buying 400, 450
and using a 50-year mortgage,well, shouldn't they just
(10:07):
knuckle up and buy a$300,000home instead for their first
one?
That's where that tug and pullwe're almost allowing them to
get in over their head.
But is it really because you'restill building equity?
SPEAKER_02 (10:20):
Yeah, you're still building equity, but it is it
really because the$300,000 homethat we know today is not the
same$300,000 home that it wasfive years ago.
SPEAKER_04 (10:28):
You're on the money, yeah.
SPEAKER_02 (10:29):
So you know, maybe they the family can't fit in a
$300,000 home and they have nochoice but to buy a four or four
hundred and fifty thousanddollar home because they need
five bedrooms or whatever.
SPEAKER_06 (10:39):
So there's two points that I'd like to bring
up.
One is they need to keep thisfor an end user, not an
investor, because an investorcan use this.
Oh, yeah.
I mean, what a great tool.
I'd just continue to refinanceyourself out of the butt thing
is refinancing.
(11:00):
Everyone's talking about 50years, even if you don't move,
who stays everyone's refinanced.
If you're correct.
Look at how many people like weknow over COVID that refinance.
That's why we're in thesituation we're in.
Absolutely.
So it's like you're not stuck tothat 50-year mortgage.
You can roll that into a 15, a30.
Yeah.
SPEAKER_02 (11:19):
How many people do have we heard of years ago that
did 30 and then he refinanced?
You're on the five years into15.
Yeah.
Yes.
SPEAKER_06 (11:25):
So you can get in, establish equity, establish a
home, yeah.
And five years refi out of itafter you saved, you have some
consistency.
SPEAKER_05 (11:35):
Correct.
SPEAKER_06 (11:36):
You know, I think it looks good for a lender too.
You refinance out of it, youhave a better position, and then
your your equity starts to grow.
So, and you don't have to loseyour position.
No, I mean, I know, and I don'tknow how it looks like on the in
not the insurance, the mortgageside?
SPEAKER_04 (11:54):
Taxes.
SPEAKER_06 (11:54):
No, the why can I think of it?
Interest interest side.
Yes, thank you.
Interest side.
SPEAKER_04 (11:58):
I'm getting ready to show you.
SPEAKER_06 (12:00):
Okay.
So, but I know you can refi andnot lose that position
necessarily.
SPEAKER_04 (12:05):
And and I think the idea of losing the position,
it's actually circumventing thatbecause you're not losing your
position where you purchased inthe market.
That price, let's say this pastyear we went down by 2%, 1%-ish.
Next year, it's going to kickright back to where we normally
(12:25):
are, about three, four percentyear over year growth.
Yeah.
And you missed out on thatopportunity to lock in, kind of
like buying a stock.
What was your strike price?
What is your cost basis?
My cost basis here is I boughtin 2025 back when the market was
kind of uh, but now rates arelower.
So not only can I refinance, Ican also capitalize on equity if
(12:48):
I were to have the opportunity.
SPEAKER_05 (12:50):
Right.
SPEAKER_04 (12:50):
But yeah, that's good point on that.
So I brought up, JC.
If you can throw up the screenand make sure that we're seeing
this.
So what I did here, and I'mhoping that that looks big
enough on screen.
I don't okay.
So we've got an eight-yearequity comparison for a 30-year
(13:13):
versus a 50-year mortgage.
And I want everyone to firstknow that this is not financial
advice that we're giving.
Please consult your actualadvisor.
But when it comes to loans andstuff like that, I'm I'm
licensed to do this.
So if we're looking at theamortization that was used for
this scenario, we've got a homepurchase for$350,000, which
(13:34):
we're using the the a little bithigher than what the average in
San Antonio is.
I think it's at 290 something atthe moment.
But we've got a 5% downsituation, which gives a loan
amount of 332,500, a 30-yearinterest rate at a 6.7%, and
then we've got a 50-year at an8.25.
(13:56):
And the reason for that iscurrently a mortgage that is a
50-year is not going to be aqualified mortgage.
So therefore, a non-QM lender orsomeone does not that's not
trading this on the open marketor secondary market after the
fact has to originate it,meaning outside of the
parameters of the currentguidelines, which leads the idea
(14:18):
of right now, we also alreadyoffer a 40-year mortgage.
SPEAKER_02 (14:22):
It's it's already there, it's there, no one talks
about it.
SPEAKER_04 (14:24):
Nobody talks about it.
And I've got another point, butI'll I'll let me run through
this before we jump to that, myADD brain.
So zero appreciation.
If there were zero appreciationin this concept, we have them
side by side, a payment, justthe principal and interest would
be the 2156.59 for the 30-yearmortgage, and then for the
(14:46):
50-year mortgage at the eightand a quarter, we're looking at
a payment of 2324.
So in this case scenario,they're not saving much.
And this is more realistic towhat we've been seeing online in
social media and things of thatnature because they've been
keeping these two rates aboutthe same.
So then all of a sudden, we'reseeing a, yeah, it's a$300
(15:09):
difference in payment.
That's assuming that they'regonna get the same rate on a
30-year as a 50.
There's no possible way thatsomebody would tie their money
up investment-wise and only getthe six and whatever percent.
Right.
So just being logical in that.
So then it shows the equityposition after eight years, if
there was no appreciation, andthat's about a$31,000 difference
(15:33):
if you choose a 30-year mortgageversus a 50-year mortgage.
Now, I'm not saying that is agood or a bad thing for anyone,
as long as they know that goinginto it, right?
And that's the house they want,and that's the payment that fits
their budget at the time.
Right.
Who am I to say no?
SPEAKER_02 (15:49):
You know, it'd be super interesting to do is run
these numbers if they wererenting.
Ooh, just absolutely justshowing what they spent during
that same time on renting, butthen also zero tax breaks, all
of those.
SPEAKER_04 (16:02):
All of those things accounted for on their taxes
against their income.
You're exactly right.
And it's still any which ofthese scenarios, in my opinion,
if you are a homeowner now, noproblem.
Yeah, just know that your lendershould be telling you to throw
as much as you can at theprincipal when you can.
Right.
Because this is what the outcomelooks like.
SPEAKER_05 (16:24):
Yeah.
SPEAKER_04 (16:24):
The second point, and you can kill that, JC, that
I had thought of while I wasdoing that, is at a certain
point in time in our history ofreal estate and finance, the max
you could do was a 15-yearmortgage.
Right.
SPEAKER_02 (16:40):
I was literally about to say that.
You know, this is probably thesame conversation that people
were having when the 30-yearmortgage was starting to be
talked about, which was what wasthat in the 50s?
Probably something like that.
SPEAKER_04 (16:51):
So and that idea, it was super like, well, are they
getting in over their head?
SPEAKER_02 (16:57):
Are they exactly okay?
SPEAKER_04 (16:58):
But they're now homeowners.
SPEAKER_02 (17:00):
Yeah.
SPEAKER_04 (17:00):
I mean, most of the homes I've purchased have been
with a 30-year mortgage, unlessthey were investment, which was
12-year note or 12 12-monthnote.
A couple of them we had on15-year notes, but that was back
in the day when rates werelower, you were getting like a
3% on a 15-year note.
I don't see.
(17:22):
I mean, what are your thoughtson that?
Truly, the idea of maybe this isa new norm.
And is it something that havingto go non-qualified mortgage
right now, but at a certainpoint, if it's introduced, hey,
it could then become somethingthat is now just another option
in the tool belt.
SPEAKER_02 (17:42):
Right.
It's funny.
In the car world, there'slong-term loans for higher end
exotic cars.
And I see people that can easilypay cash for these cars utilize
those tools to get like a10-year note on a$600,000 car.
And sometimes they're hedgingbets that that car is going to,
(18:03):
because particular cars willappreciate in value.
And so then it's one, thoseparticular notes are not showing
up on their credit.
Correct.
So they're business peoplesaying, okay, well, now I don't
have this showing up on mycredit.
I can go out and buy, you know,more real estate or more assets,
whatever.
My cash flow is lower because ofthis.
And I and I know when I exitthis vehicle, probably going to
(18:23):
make another$50 or$100,000.
So, well, hell, it makes sense.
Yeah.
You know, at the end of the day,I I feel that within reason, you
know, I don't think we want tobe doing a 50-year note to an
80-year-old couple or maybe ahundred-year-old home.
I don't know.
SPEAKER_04 (18:38):
I mean, I'm just saying, technically, we can't
discriminate in that in thatasset.
That's true, that's true.
You know what I mean?
I've done a I've done a 30-yearnote for someone that was 70
years old.
I'm like, There you go.
Here we go.
SPEAKER_02 (18:48):
Yeah, yeah, yeah.
I mean, well, they'll just sellthe asset.
If they expire, they just sellthe asset.
So I I I think it's a betteralternative for someone to get
into a home that perhaps is justgoing to be locked into renting
right now.
Right.
Right.
It's my opinion.
SPEAKER_04 (19:03):
And and as long as they know, yeah, like I said,
the outcome of that choice,because the average time that
people are staying in theirhomes has increased.
I mean, it went from five yearsto now about eight years.
SPEAKER_02 (19:14):
Yeah, right.
Yeah, that's what we weretalking about the other day.
So it's inherent.
SPEAKER_04 (19:18):
Is that wrong, right?
No, it gives you a little bitmore time to build some equity,
in my opinion, truly.
And knowing that more of yourpayment is going towards the
interest because it's based onamortization.
What's what's the issue here?
You know, if it gets them intothe home.
But I just wanted to paint thereal picture, kind of not apples
to oranges, but apples toapples, because that program is
(19:41):
definitely going to be a littlebit higher interest rate.
Count on about one and a half totwo points higher.
SPEAKER_02 (19:47):
Which is the same they do in the car world.
SPEAKER_04 (19:48):
It's exactly right.
And back to Stephanie's point ishopefully first-time buyers get
that logic because guaranteedinvestors understand the idea of
leveraging your capital.
You know?
Anything you guys want to add onthat before we jump into the
next topic?
SPEAKER_06 (20:06):
The only con I see is just time in the house.
SPEAKER_05 (20:09):
Okay.
SPEAKER_06 (20:10):
Because if you don't have enough time in the house
and there's not enoughappreciation and there's not
enough equity, you're bringingmoney to the table to get out of
it.
That leads into the new billconversation.
SPEAKER_04 (20:20):
Yeah, it's true.
It's true.
That is that is very true.
But then at the same time, andand we can keep going with this
because it's a it's a greattopic.
If they are advised properly bya good lender, by a good real
estate partner to understandthat this is your first home,
not your last.
Let's talk about your exitstrategy at the time that you're
(20:42):
even buying this.
Right.
Down the road, can you seeyourself selling this?
Can you see yourself convertingin it to an investment property?
Exactly.
Now all of a sudden your cashflow is higher because you made
that.
Correct.
True.
And let someone else pay the 50years.
That's right.
That's right.
At that point, what do you care?
Exactly.
No, good point.
Yeah.
Okay.
So the next topic here is morelocal than anything, because
(21:06):
that's where we get ourfoundation from, where we are
hitting the pavement, is theidea of home affordability and
what it actually is costingthese first-time home buyers,
second-time homebuyers in let'scall San Antonio or just in all
of Texas, because you've got amortgage that is made up of four
pieces.
(21:26):
And a lot of times people areonly talking about the principal
and the interest.
We've had, and you mentioned ita bit ago, insurance that has
risen substantially.
We've had taxes that has risensubstantially.
I'm hoping that they put thatahead of all the other things on
the docket of us relinquishingthe uh need to pay property
(21:47):
taxes.
But yeah, one can hope.
Yeah.
One can hope.
Yeah, one can hope.
So that being said, what is youall's perspective of what is
happening today with ourfirst-time home buyers in our
local market?
Is it the idea that there isn'tinventory out there for them?
The inventory that is there, thepayment is still unaffordable
(22:10):
because of the tax and aninsurance rising compiled with
the higher interest rates.
Or are the buyers just notrealistic enough to go, you know
what, it's my first house, notmy last.
Let me go to the 200, 250 pricepoint and deal with this first
home because when I bought myfirst home, it was$130
(22:31):
something, thousand dollars.
That same house today, mind you,is$220.
You know, expectations.
Am I wrong for thinking thatthey should bring their
expectations down?
SPEAKER_06 (22:43):
I think it's the unknown.
SPEAKER_04 (22:45):
Okay.
SPEAKER_06 (22:45):
I don't home ownership is expensive.
SPEAKER_05 (22:48):
It is.
SPEAKER_06 (22:49):
I am not for everyone.
I have a rental right now that'sa pretty darn nice rental.
And I just spent$12,000 inrepairs for to make this buyer
happy to get out of it.
And it's a lot.
SPEAKER_05 (23:03):
Yeah.
SPEAKER_06 (23:04):
It's like you're right, taxes, insurance all have
gone up, but so have the costs.
Air conditioners are twice asexpensive as if they were,
refrigerators are twice asexpensive as they as they were.
So it's every kind of costinvolved in a home is more
expensive.
SPEAKER_05 (23:19):
Sure.
SPEAKER_06 (23:19):
And you know, you have your big ticket items like
your roof, your AC, your hotwater heaters, but then you've
got those other nuances like agarbage disposal.
So a fuse.
SPEAKER_04 (23:31):
Yeah, a fuse that pops, you got to take the whole
damn thing out and redo it.
SPEAKER_06 (23:35):
Exactly.
Or God forbid, a leak orsomething real happens where you
know it's it's it's costly.
SPEAKER_05 (23:40):
Yeah.
SPEAKER_06 (23:40):
And your even your deductibles are higher now.
So I think that's what haseveryone sticker shocked because
it's everywhere they look, yeah,it's twice as much.
And so I look at the rates and Ithink they're totally normal.
Like, these aren't even high.
Right.
It's not the rate, it's all theother stuff.
SPEAKER_05 (23:58):
Yeah.
SPEAKER_06 (23:58):
And so it's a quandary because an older home,
like you said, lower yourexpectation, get into an older
home.
Well, then you might have amaintenance nightmare.
SPEAKER_04 (24:08):
You're on the money.
SPEAKER_06 (24:09):
And so that's real hard money.
Yeah.
Like it's like I can rolleverything into a brand new
home, and at least I know it'spretty good for 10 years, and I
don't have to worry aboutanything crazy coming up.
SPEAKER_05 (24:23):
Yeah.
SPEAKER_06 (24:23):
And I think that's what a lot of buyers have to
weigh out right now.
SPEAKER_04 (24:26):
That's a good point.
That is a great point.
SPEAKER_02 (24:29):
I think the challenge, because I agree
wholeheartedly with her comment.
And I think the challenge thatsome people have is builders
right now, they're giving awaythe farm.
Yes.
You know, they're buying downrates, they're doing all of this
stuff.
But if their agent is not askingthe right questions, like, what
is your five-year plan family?
What is your 10-year fan, youknow, uh plan family?
(24:50):
You know, if you if they'regoing to be moving very quickly,
especially in San Antonio,because we're a big military
city, they could get, you know,their orders to transfer.
And let's just say they are thefirst ones into a brand new
development, they're screwed.
Absolutely.
They're screwed.
unknown (25:03):
Yeah.
SPEAKER_02 (25:04):
They are going, they're already upside down.
They're not, they're not goingto be able to sell successfully.
And that's the part where I'mjust going to say it so you feel
it.
You know, I see all these agentsthat are selling brand new
entry-level homes and they'regiving away all of these gifts,
like barbecue pits and TV setsand all this other stuff.
And it's like, if you were, youknow, if I'm your agent, this is
what you get.
Well, yeah, because you probablygot a six percent commission on
(25:26):
that.
Eight, ten, yeah, three hundredand fifty thousand dollar house.
And that poor, that poor couple,they're going to be buried in
that home.
Yeah.
So is that doing the rightthing?
I don't know.
You have to have theconversation.
Perhaps they did have.
I hope to God they had theconversation.
Yes.
Because we've seen it more oftenthan not, where someone calls us
to list their home and it'slike, oh wow, you're off a
(25:48):
Petranko.
Good luck.
Good luck.
I love you, but good luck.
SPEAKER_04 (25:52):
Yeah.
We got to be real with you.
Yeah.
And a lot of times they did notset them up for failure.
SPEAKER_02 (25:59):
They set them up for failure.
SPEAKER_04 (26:01):
Correct.
Yeah.
Yeah.
And that's what I'm seeing quitea bit.
Go ahead.
SPEAKER_06 (26:04):
Well, back to your point about lowering your
expectations.
This is where I get frustratedwith this generation of new home
buyers or first-time homebuyers, is that they want the
new home look.
Yes.
They want the updates.
Yes.
I saw a house the other day andI'm like, this house's roof is
brand new.
They did the AC, they did allthe things that matter, and
(26:25):
you're not interested because itneeds granite and flooring.
Yep.
Like, deal with it.
That's right.
You know, you could do thislater.
SPEAKER_05 (26:33):
That's exactly right.
SPEAKER_06 (26:33):
But then you want to go buy the house the flipper did
that's pretty, but it's a trainwreck.
SPEAKER_04 (26:39):
And you have no idea what's behind the walls.
SPEAKER_06 (26:41):
Exactly.
And so it's like, I I'm withyou.
If I were a first-timehomebuyer, I'd be looking for
grandma's house that somebody'staken care of.
That's right.
I wouldn't go out and buy a newhouse.
I'd stay far away from them.
But if that's people don't thinkthat way.
They want it all.
SPEAKER_04 (26:58):
What about the idea?
And I think this is alsosomething that is plaguing our
first-time homebuyers locally,is the level at which they are
willing to compromise onlocation.
If your work is here, you grewup over here, and now you're
finding out that, oh shit, thosehouses are 500,000.
(27:19):
That's not a first-timehomebuyer type home.
And you're just like, I'll justkeep renting, versus being able
to go over to the Petrenko areaof town and get you something
for 300 that could basically bethe same home, to be honest.
Right.
But the idea of, oh, I want toassociate with this area or this
(27:41):
side of town, I have heard thatquite often, especially in the
last year.
What are you guys' thoughts onthat?
I know you deal with a littlebit different clientele and they
get to pick where they'rethey're wanting to be, but what
is your experience with thatfirst-time, second-time home
buyer and lack of compromise?
SPEAKER_06 (28:01):
Well, it's funny.
I just moved a family here fromHouston.
So imagine Houston drive time,commute.
They bought their house 45minutes away from where they
work.
SPEAKER_05 (28:14):
Okay.
SPEAKER_06 (28:15):
Because of where they wanted to live, which is
normal.
Because she was like, we justwant to be within an hour.
I'm like, what?
We want like five minutes.
SPEAKER_04 (28:22):
That's kind of the point that I'm getting to is and
and you almost made that betterof a point because someone as
close as Houston is totally usedto that kind of commute.
That's nothing.
Whereas San Antonio, if it's notwithin 20 minutes, it's too far.
SPEAKER_05 (28:38):
Right.
SPEAKER_02 (28:38):
Is that very different mindset?
Yeah.
The San Antonians, I think, Ithink all of that would change
over time because we are gettingsuch an influx of people coming
into this market that areexpecting, you know, better
food, better shoppingexperience, better housing,
yada, yada.
But the drive time, like when Iused to live in Houston, yeah,
it would take me an hour to getout of the galleria.
That's right.
(28:59):
And that was normal.
SPEAKER_03 (29:00):
It took me 30 minutes to get to the office
today, and I was pissed.
Isn't that weird?
Do you see what I'm saying?
That was JC.
Jay sizzle on the ones and twos.
There you go.
SPEAKER_02 (29:11):
So I mean, you know, I think each family just needs
to figure out what they'rewilling to compromise on.
At the end of the day, you'reyou're gonna compromise on
something.
You're you're never gonna get ahouse that checks off every
single box.
What is it that you can put upwith and be okay with?
Good point.
You know, very good point.
SPEAKER_04 (29:28):
And and that point in itself, how difficult is it
to get a buyer to understandwhat you just said?
SPEAKER_02 (29:38):
I I think that comes with conversations more than you
know, examples, conversations,experience, experience,
definitely.
Our own experience.
SPEAKER_04 (29:46):
Now, let me ask you in your experience, and this is
something that I can speak tofrom a lending side, the way
that you speak to that buyer, Iwould go as far as to say a
little bit more firm, a littlebit more.
More as a matter of fact versusthe touchy feely, what do you
want?
No, no, no, no.
Your goal was to buy a home, andthis is this, this, this is what
(30:08):
you wanted in that home.
So this is what we found typeconcept of shit or get off the
pot because this is what you'reasking for.
Exactly.
SPEAKER_02 (30:16):
And this is what you can afford.
SPEAKER_04 (30:18):
And then on the lending side, I'm going, This is
what you can afford.
Right.
So it's kind of a one and two.
But in the experience of that,do you feel like you would have
to have a different type ofconversation with that type of
buyer?
SPEAKER_06 (30:33):
It's hard, Mark, because I have overstepped my
bounds.
Sure.
And then I feel like I amsteering.
And so I have to hear them,guide them, but they're only
going to hear what they want tohear.
SPEAKER_02 (30:50):
Yeah.
They have what are they called?
Happy ears is a good idea.
Happy ears.
SPEAKER_04 (30:53):
Yeah, they got those, what is it called?
Rose colored uh earphones.
So the idea of them believing,because it's definitely not
steering.
In my opinion, it's advisingbecause they told you something.
Now you're giving the advice.
In this market, in this day andage, would someone see that as
(31:17):
steering versus giving somestraight up old school advice?
Is is that the fear?
SPEAKER_06 (31:23):
No.
Because of the type of buyers?
I always tell people this istalking to like a sister,
brother, mother, daughter, youknow, if if you were my family
member, I I can't sleep at nightunless I'm a thousand percent
honest.
Sure.
And and and and have them see itfrom all views.
SPEAKER_05 (31:42):
Yeah.
SPEAKER_06 (31:43):
But being in this situation recently ourself,
emotion drives logic, it doesflags.
And it's crazy.
Emotion wins over logic everytime.
SPEAKER_04 (31:55):
It's very true.
That's very true.
And we could transition nowbecause the idea of what Robert
and I were talking aboutbeforehand is me and Kristen
would love to sell our property.
I mean, we we planned on beingthere three years, and here we
are, year five, six, going,okay, well, I guess we're just
gonna stay here for a little bitlonger, knowing that we have
(32:17):
tons of equity, knowing that theopportunity we could use that
for and leveraging, et cetera.
But the idea of, okay, we got tosell this, find another one.
What is that other one gonnalook like?
Are we gonna have to throw halfthis money at that to get to
back to where we want to becomfortable?
All of those things.
(32:38):
And the only solution would benew construction, but then
you're building custom, you payfor custom.
SPEAKER_02 (32:46):
Yeah, pay to play.
SPEAKER_04 (32:47):
Absolutely.
What are your thoughts ontoday's homeowner on the second
market?
I I know you mentioned earlierthe type of buyers you're
dealing with or debt, divorce.
I mean, we we know that.
The must sells, the must moves.
We know that's coming from thesame logic that I'm going over
(33:07):
right now, basically, inaddition to the fact that we got
a 3% interest rate.
SPEAKER_05 (33:11):
Yeah.
SPEAKER_04 (33:12):
What why?
SPEAKER_05 (33:13):
Right.
SPEAKER_04 (33:13):
You know how has the homeowner or the I'm sorry, the
home shopper these days beenswayed and almost steered to new
construction, to be honest.
SPEAKER_06 (33:28):
1,000.
Thank you for saying that.
I have felt that so deeply, andI'm like, how is that fair?
You know, they get away withthat.
Gosh, where do I start?
I think we have to break this upinto three sectors.
You've got the first time homebuyer, the move up buyer, and
then you've got the semi-customor yeah, semi-custom and the
(33:49):
custom.
Okay.
So four four segments.
SPEAKER_05 (33:51):
Okay.
SPEAKER_06 (33:52):
So the first time home buyer is almost always
going to be geared toward rate.
SPEAKER_02 (33:56):
Yes.
Rate and payment.
Rate and payment.
SPEAKER_06 (33:58):
That's right.
And and honestly, naive.
Naivette.
SPEAKER_04 (34:02):
Absolutely.
Well, it that time in their lifecycle, they're looking at I'm
choosing between continuingrenting, staying on my mom's
couch, or finally owning my ownhome.
So the only thing they havefinancially to compare it to is
what is rent and what is thepayment over here.
SPEAKER_06 (34:17):
Right.
And what they don't understand,I love it when these new home
sales counselors say, yeah, thebuilder is buying your rate
down.
No, you're paying for that ratedown.
It's just rolled in the price.
Right.
Because you're obscenelyoverpaying for this house.
When I walk in some of thesehomes that are$400,000, I'm
like, this thing is a$200,000house wrapped in a$400,000 bow
(34:40):
because it is not a$400,000house.
And when you go to sell thisagainst homes that are older,
that are actually nicer, you arescrewed.
Yeah.
unknown (34:48):
Yeah.
SPEAKER_06 (34:49):
Because you're now paying and playing in the same
sandbox as a pre-owned seller.
And guess what?
Your house doesn't look so sexyanymore.
SPEAKER_04 (34:55):
That's right.
SPEAKER_06 (34:56):
So I my heart goes out to these first-time home
buyers because a lot of them aregoing in there without agents,
thinking they're saving money.
They're paying this ridiculousamount of money up front for
their loan buy down.
SPEAKER_05 (35:11):
Yep.
SPEAKER_06 (35:12):
And they're stuck.
They're going to be in thosehouses for, I think I did the
numbers.
I think it's almost seven yearsbefore they see any kind of
equity.
unknown (35:20):
Wow.
SPEAKER_06 (35:20):
And that's sad.
SPEAKER_04 (35:21):
Yeah, because the idea is these, these we could
run appreciation, let's say, atan eight-year mark, but it's not
the same level of appreciationbecause they're not in the same
comparable pool.
Right.
SPEAKER_06 (35:36):
1000%.
Does that make sense?
Absolutely.
Absolutely.
SPEAKER_04 (35:39):
Can either of you explain that a little bit
better?
SPEAKER_02 (35:42):
We'll we'll go super simple.
Everyone, at least people aroundhere, know they know Alamo
Heights.
Alamo Heights is landlocked.
Alamo Heights, you can get amillion dollar teardown, but
it's location.
You're paying for location.
And we talked about Petrenko,using that as an example.
There's an abundance of land onPetrenko.
So how could anyone, this isjust using simple logic, say
(36:03):
it's going to be the sameappreciation?
No, a developer can go buy somemore land off of Petrenko, and
now they're making more newhouses that are going to compete
against yours for the next 20years.
That's right.
That doesn't exist in AlamoHeights.
That's why their appreciationfrom a percentage basis has
always been so much more higherthan other areas like that.
So and they each serve theirpurpose.
(36:25):
Absolutely.
I'm not dissing you knowPetranko by any stretch of the
imagination.
If that's what you can afford,if that's the area you can be
in, then giddy up.
It's it's better than renting.
It's always better than renting.
SPEAKER_04 (36:35):
Yeah.
SPEAKER_02 (36:36):
But the reality is, like she's saying, it I I I
think it's longer.
I think it's probably in thismarket and the way things have
played out, I think it'sprobably going to be closer to
10 years before they ever startseeing any type of relative
appreciation.
SPEAKER_04 (36:51):
Only because, like you mentioned, let if we're
talking about an area likePenko, if we were to have said
that, let's say 10 years agowhen they started that first
couple of establishments goingout, even Calibra going out that
way, they're still buildingthat.
They're still building.
So I drove down there the otherday and I'm just like, oh my
(37:11):
gosh.
Yeah.
At a certain point, you finallyget an opportunity to go, okay,
the neighborhood's finally builtout.
We get to see what our valuesare.
So you list their home andanother subdivision open.
Another subdivision opens up.
It's like, dang it.
SPEAKER_02 (37:23):
Now you're competing against them.
Yeah.
SPEAKER_04 (37:25):
Yeah.
And that being the case, becausehonestly, what is it that we
could do other than lobby that'snot going to work, where they've
got way better lobbyists.
SPEAKER_06 (37:36):
Way better.
SPEAKER_04 (37:37):
And they own plenty of land, is realistically to
continue to play the game.
Yeah.
You know, and it's affectinglenders, it's affecting the the
realtor that doesn't focus onthat type of thing.
It's affecting the realtor thatis super honest with their
customer, scaring them away ornot doing what they want.
(37:59):
And realistically, I don't thinkthat that's the case because
what realtor is going to want togo, no, let's not do new
construction.
That six percent looks good.
But in many cases, you're alsonot seeing realtors go, okay,
I'm getting six percent on thisdeal.
Let me throw three percent atthe sales price to help these
customers understand what'sgoing on.
Because I'm not realistically inthe norm of getting more than
(38:23):
three percent.
You know what I'm saying?
I mean, I don't want to be thatguy that gives away stuff, but
at the end of the day, couldthat help?
Would it help?
It could.
Why is the builder doing it thatway instead of doing it the
other way?
SPEAKER_06 (38:37):
Well, we know that sells.
It sells, and so many agentsaren't selling, they need that
money.
So if there's if DR Horton'soffering eight percent, heck,
that's that's gonna feed myfamily for several months.
SPEAKER_02 (38:49):
That's right.
SPEAKER_06 (38:50):
Thank goodness we're not in that situation, but a lot
of agents are a lot of agentsare.
SPEAKER_02 (38:53):
So many of these social media agents I just see
they're posting, and I noticedit the other day new
construction sales, newconstruction sales, and like
always new construction.
And I thought to myself, Iwonder if they even attempt to
sell a resale home.
Right.
I mean, they're they're trying,they're chasing that paycheck.
You could've I can't I can'tlive with myself with that.
(39:14):
That's just not how I operate.
SPEAKER_04 (39:15):
But then you go, okay, well, who is monitoring
all this stuff?
We we have we have people thatwe have to abide by.
We've got our CFPB, but on youguys' side, you realistically
only have the consumer.
The consumer's the one that'sgonna make their choice based on
that social media content of thenew construction home versus a
(39:36):
video of Stephanie telling thetruth like it is.
Yeah, you see what I'm saying?
It's like damned if you do,damned if you don't.
Yeah.
SPEAKER_06 (39:43):
Well, and they're so good, those builders are so good
at creating an emotionalattachment with the model homes.
I laugh.
I walked in a house the otherday, and this house was such a
piece of crap.
But the furniture and stuff theyused to stage it was what you
would see in a luxury home.
Yeah.
And you're not looking at thehouse, you're looking at the
furniture, and I'm like, thesepoor kids are buying these.
(40:04):
Wait till they walk in to seetheir home.
SPEAKER_02 (40:06):
And they're like, Wow.
SPEAKER_06 (40:09):
Exactly correct.
Yeah.
SPEAKER_03 (40:10):
And it's I remember I had milk crates in the first
place.
Carbor with the table.
Like, let's go get some stain.
We'll make it look better.
SPEAKER_06 (40:19):
And I'm not trying to diss the the new home sellers
or the new home sales, because Iknow there are some good ones
out there.
But it's just seems like thesereally massive companies that
are are building so many, yeah,just just to put more sticks in
the ground and people in themthat are and then you've got
your devil's advocate that ifyou don't go along to get along,
(40:41):
yeah.
SPEAKER_04 (40:41):
I mean, where do you sit now?
As that new home sales counselorthat is being pushed to push
this.
True.
Yeah, you're gonna say, Well,I'm not standing for that.
Well, I don't have my realestate license.
No, I'm gonna shut up and dowhat I need to do to make this
money.
SPEAKER_06 (40:55):
Right, right, right, yeah, yeah.
Right, right.
SPEAKER_04 (40:59):
I mean, I'm not a diss on sales counselors or
anything of that nature, but Idon't know of any of them that
research market data and thatare talking about economics of
uh things.
SPEAKER_02 (41:10):
They're just trying to sell their product, correct.
Yeah, correct.
SPEAKER_06 (41:13):
But to your point about the west side and the
growth out there versus a nicheneighborhood, I I was at
actually yesterday with somesome young clients, and I was
looking at this going, yeah,this is a good deal.
There's nowhere else to build.
SPEAKER_05 (41:26):
Right.
SPEAKER_06 (41:26):
They have sure.
Yeah, where you were showingyesterday, 100%.
That's what I'm saying.
This is the first time home bar,they were giving a four and a
half percent rate.
I was like, this is a win.
SPEAKER_04 (41:34):
Y'all are good.
Yep.
And if the math makes sense,correct, they know what goes
into it.
Right.
Who who are we to say no?
Yeah.
That you're meeting theirdesires, their goals, all of the
you check in the boxes.
Right.
You know, but I think it is itis a shame on those that are not
going through the checks andbalances to be able to check
(41:55):
those boxes.
They're pretty much just puttingthem where their boxes are
checked.
Right.
SPEAKER_02 (42:01):
That makes sense.
Yeah, totally makes total sense.
SPEAKER_06 (42:03):
But I think where the absolute deals right now at
the end of the year are thosehomes that are on the ground
right now that builders want toget rid of.
SPEAKER_02 (42:11):
Oh, absolutely.
There's no doubt it's at allprice points.
SPEAKER_06 (42:13):
All price points.
SPEAKER_04 (42:14):
So let's wrap up with that, if you don't mind.
Tell us about that concept ofhow that works for the folks out
there that may not know.
You've got realtors out there,you've got home buyers out there
that listen into the show.
What is the difference betweengoing and buying a pre-owned
home, a brand new home that Ibuild from the ground up, or one
(42:36):
that is currently just sittingon the market?
SPEAKER_06 (42:39):
Ooh, this is my favorite.
I convinced him, I was like,Robert, this is the time to buy.
We need to go now.
No, this, if there is a speck onthe ground, these builders do
not want to carry it into 2026.
They will make you a deal, adeal of a lifetime.
SPEAKER_05 (42:55):
Yeah.
SPEAKER_06 (42:56):
I mean, this honestly, if if there's a deal
to be had in the next decade,that's it.
SPEAKER_02 (43:02):
Yeah, it's it's there, there's definitely a
window of opportunity right nowif you're a buyer, right?
And and you can make a goodfinancial smart decision on you
know, location, what you're whatyou're gonna be up against, you
know, years down the road, etcetera, et cetera.
It it it is the time to buy.
It really is the time to buy.
There are deals to be had in allprice points, good points,
(43:23):
multi-million dollar and below.
Yeah, you know, entry level allthe way to the top.
Yeah, builders are willing tomake deals right now.
So if you are uh a a buyer,now's time to buy.
SPEAKER_06 (43:35):
Yeah, absolutely.
And then even new or pre-owned.
Yeah, I mean, I the price dropsthat we have seen in this last
quarter are significant.
They're not ten thousanddollars, they're 20, they're 50.
Yeah, there are some incredibledeals right now.
And I know there's a lot ofpeople out there that are afraid
because of all the uncertainty,but when is life certain?
(43:56):
That's what I get so confused.
I'm like, when has it ever been?
So it's like if you're a savvybuyer, I'd be talking to a
lender right now.
Yeah, I'd be buying because thisis the this is gonna be a short
window.
SPEAKER_04 (44:08):
I have to agree with that.
I truly do.
And I think the those thatstrike while this iron is hot
will not only reg not regrettheir decision, but they may
encourage others to do the sameand therefore kind of breed some
type of movement of okay, enoughis enough.
It's time to start doing thisthing again.
(44:29):
Get out of the idea of we'regonna buy a house and two years
later flip it mindset becauseeverything is supposed to be
about making money on your firsthome.
I think that's what 2020, 2021,2022 misshaped a lot of
first-time home buyers andrenters.
SPEAKER_02 (44:50):
It's supposed to be what it's supposed to be,
exactly.
Yeah.
This is the funny thing.
It's like when you look at, andI know if I start saying this,
she's gonna have the data forit.
The amount of valuepercentage-wise, that properties
increased during COVID, now thatwe're seeing adjustments, I
would venture to say that if youwere to go back and find a
(45:10):
property that someone did a deepdiscount on to get it sold in
today's market is still sellingit at more money than they would
have right before COVID.
So did they really lose?
No, not really.
You know, they didn't get thethe massive the top peak, the
top peak for sure, but they'restill doing okay.
SPEAKER_04 (45:29):
And you know what?
You're accurate on that.
I I I did pull the data forthat, and it you're absolutely
correct.
All prices of homes in Texastechnically are still higher
than what absolute it is.
Yeah, you didn't hit, like yousaid, the peak of it, but you
absolutely are making equitymore than you normally would.
SPEAKER_02 (45:47):
Right.
You're still you're still doinggood.
And I think that's that's thepill, including ourselves, that
it you struggle with.
Yeah, like gosh, I mean, Ireally, I'd really like to get
this number.
Yeah.
Okay.
Well, you're not.
That's right.
Or maybe you're you're gonnahave to hold on to it for
another five years or something.
I don't know, but you're stilldoing good.
You're still you're still aheadof the game.
I agree.
I agree.
SPEAKER_04 (46:06):
Well, you guys have anything else to add?
That was a damn good discussion.
We we hit a lot of I lovegetting out of paint with you,
man.
SPEAKER_02 (46:13):
We have some good talks.
SPEAKER_04 (46:14):
Um, well, it it it comes from a place of we are
students to our own game.
We continue to learn as well.
We do the research, we find out,and then we are able to apply it
to what we're doing in oureveryday life because it's that
we eat, breathe, and sleep andshit.
Real estate.
That's what we do.
SPEAKER_06 (46:32):
Unfortunately, unfortunately, yeah.
If I could just say one lastthing to your listeners, it's
like if you're if you'rethinking about buying or selling
a house, stop listening to theheadlines, stop reading.
It is such a local thing, andeverything that they put out
there is national and it are itis crazy.
(46:52):
What's happening in Austin?
It's like a different countrycompared to what's happening
here.
SPEAKER_05 (46:56):
So true.
SPEAKER_06 (46:57):
Versus the East Coast and the West Coast.
It's like, stop, stop looking atthat.
Talk to you right here.
Talk to your local people.
They know what's going on, theycan advise you.
SPEAKER_04 (47:06):
Yeah.
No, that was great.
Guys, as always, ourconversations are top-notch.
I appreciate you guys taking thetime and spending with me to
have this discussion for thoseout there that need to hear it.
And for you guys out therelistening, I'm hoping that you
are getting some of this andstuff that can stick and that
you can then apply to what youdo, whether you're a home buyer,
(47:27):
home shopper, you're ahomeowner, or a real estate
professional.
Maybe these are conversationsyou guys should continue to
have.
And if you're not having them,start.
Um, and for those out there,just kind of like Stephanie
said, but in a uh lessunorthodox way, shit or get off
the pot.
Till then, we'll catch you onthe next one.
SPEAKER_00 (47:51):
And it's just taking small steps, meaning you don't
try to get it.
SPEAKER_04 (47:54):
If you're still sending out pre-approval letters
and praying your realtors sendyou the next lead, you're
already behind.
SPEAKER_01 (48:01):
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