Episode Transcript
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Speaker 1 (00:00):
Buying a home and selling a home shouldn't be stressful. Renters,
homeowners and investors in southern Arizona work with the Win
three Team powered by Epic Reality because they match buyers
with sellers like the e harmony of real estate buying
or selling. This is where you'll find what you're looking for.
This is Home Solutions on K and ST with the
(00:22):
Win three Team powered by Epic Reality. Now the Win
three Team leader, Andy Keel.
Speaker 2 (00:34):
Hi, Good morning, Ann, Welcome to the Home Solutions Show.
This is your host, Andy Keel with the Win three
Team powered by Epic Realty, and I'm joined by Jerry
Sunt with Cross Country Mortgage.
Speaker 3 (00:48):
Morning Andy, good morning.
Speaker 2 (00:51):
I really wanted to start this show off because we
had a meet up at our office last week and
we had a really great time and thanks for the
folks that showed up, and we certainly plan on doing
more of these in the future. At this point, we're
planning on doing them every third Thursday of the month
between six and eight pm at our office over at
(01:15):
sixty sixty one East Broadway, Sweet to twenty eight and
these are open for the public. They're meant to talk
about investment properties and we had just a really great
discussion last night, and Jerry came to this one. It
really livened everything up because we're always interested in talking
about all kinds of things with the economy and interest rates,
(01:36):
and what a just wonderful, robust discussion we had with everyone.
I wanted to share part of what we talked about
last night on the radio, and actually it led me
to a very interesting conversation that I had with i'll
call my good friend Claude. I'm talking about anthropics AI
(01:57):
this morning, based on one of the things that we
were talking about last night. So it started off with
the question that someone had about valuations both on stocks
and on properties, and we had a lot of fun
with this. So I was talking about Warren Buffett and
the late Charlie Munger, and I've actually listened and watched,
(02:20):
sometimes in many cases multiple times, every single one of
their annual meetings going back to nineteen ninety five, so
I could say I'm a pretty avid follower. So I
tended to quote Warren Buffett on this when it comes
to valuation of companies and stocks. We were talking again
about what are the value of investments really? Using the
(02:42):
Warren Buffett approach. Talking about stocks and companies. At this point,
we were looking at what is the intrinsic value? And
Warren Buffett says that really to value a stock or
a company, you'd need to know two things, and only
two things, what is the intrinsic value and can you
buy it at or below intrinsic value? And market psychology.
(03:03):
Everything else is pretty much just fluff. One of the
folks in the audience had a bit of a question
and I wasn't really able to give a great answer
on how do we define intrinsic value? I went down
that rabbit hole with Ai this morning, and I really
want to talk a little bit more because this is
kind of a fun a fun thing, and I apologize
(03:27):
or warn the audience in advance there's going to be
a little bit of math here. I'll try to keep
it simple, but what is the what is the intrinsic value?
And how do you calculate it? So, using Warren Buffett's approach,
value is the future owner earnings divided by the appropriate
discount rate, and he defines owner earnings as net income
(03:48):
plus depreciation plus amortization minus cap X or capital expenditures
minus additional working capital. He also goes on to warn
that this is extremely simplistic, and there's a lot more
that really needs to be taken into account, but we
are going to go pretty simplistic. We don't need to
make it too difficult right now. So I basically asked
(04:11):
AI to give me an example of this, and it's said, here,
I'll give you an example. How about small Town Bakery Incorporated.
We'll use the number of one hundred thousand of net income,
twenty thousand of depreciation, five thousand of amortization, fifteen thousand
of capital expenditures, and an additional ten thousand of working capital.
(04:33):
And based on those numbers, in that formula, it basically
is saying it's intrinsic value is a million dollars because
it's taking the owner earnings of one hundred thousand, dividing
it by a discount rate of ten percent, and that
gives it a value of a million dollars roughly. So
incredibly simplistic view. So I of course wanted it to
(04:57):
elaborate a little bit. How did we get to the
at ten percent discount rate? For one? And well, it
basically goes on to say that we're going to look
at what is the what is the safe rate of return?
And it's going to use the current thirty year treasury
(05:17):
bond yield, which currently I used a calculation based on
last week's rate. If I believe four point eighty seven.
Speaker 3 (05:24):
Roughly yeper five yep.
Speaker 2 (05:27):
And then the additional discount should be for a risk premium,
and generally it's saying five to seven percent for stable businesses.
If it's a higher risk business, it should be a
little bit higher number. We were using about five percent.
It came out to roughly ten percent by using the
combination of those two factors. It was actually a little
(05:48):
under ten when we pressed it for more detail. So
that's how it came to that value. And effectively, as
I understand it, we need to go a little bit
more complicated. So started asking Ai some more detailed questions,
and I said, well, wouldn't we also have to figure
out all the future earnings, the rate of inflation, and
(06:10):
also the increased future early earnings, considering that as years
go by, we should be able to increase our income.
And that changed the calculations, of course, and that's where
it starts getting difficult. Then I decided to shift a
little bit and say, what does that look like if
we were to use the same warn buffet approach on
investment real estate, especially a single family home. So I
(06:32):
took a recent example of one of our clients recently
bought a single family home that was purchased for three
hundred thousand dollars, and then I added some of the
actual expenses and income. So using a twenty one to
ninety five monthly income on that, and we figure about
two hundred and seventy five dollars a month for expenses.
(06:53):
We're taking any mortgage calculations out of the equation here,
just to make it a simple calc And ironically, when
I plug that in using the same formula the intrinsic
value based on the AI, it actually came back at
three ZHO.
Speaker 3 (07:07):
One interesting I thought.
Speaker 2 (07:10):
That was actually pretty fascinating is that because of.
Speaker 3 (07:13):
The debt service, you know, because you know, you're obviously
putting less down, so your rate to return would be
hired versus if there's no debt, that means you put
all your money down, you paid cash for the property.
Speaker 2 (07:25):
Right, So we took the debt service out of the equation,
kind of like how we would use the cap rate calculations.
If those of you aren't familiar with that, cap rate
is how you would generally look at valuing. It's especially
useful for multifamily, and it takes debt service out of
the equation. It's looking at just net income if you
were to pay cash for everything. It's a good apples
(07:47):
to apples comparison if you want to look at two
properties and remove debt service from the equation. So, of
course I had to take it a little bit further. Yeah,
I said, well, let's look at that, say that same house,
and AI of course had to simplify things, and I said, well,
what about the rate of inflation that should be taken
(08:09):
into account and what about rent increases? So then what
was kind of fun is I had it recalculate based
on that, and it came back and said, oh, yes,
we're just giving you a more simple version. But yes,
Warren Buffett would use that more complicated equations. So we
went deeper and what I found then what was pretty fascinating.
(08:32):
Specifically asked the question, can you rerun the above single
family calculations assuming a three percent inflation rate, three percent
annual increase in rents, and thirty years of earnings, and
it came back and said, well, the present value of
the property given that information is four hundred and sixty
eight two hundred and ninety three dollars.
Speaker 3 (08:53):
Got it.
Speaker 2 (08:54):
Gosh, that's awfully interesting, And it says the significant difference
in the this calculation versus the previous one is because
of the future growth and how much it impacts the
current valuation, because we're looking, we're projecting forward in time.
And I paused there and just thought, gosh, if anyone's
(09:17):
out there wondering why Wall Street and some of the
big companies are starting to get into the single family
home market. They've been in multifamily a bit longer, but
we're seeing a lot of that where these build build
rent subdivisions that are being bought up by big companies
like black Rock and Blackstone and some others. Why are
they doing that? And I think this this calculation kind
(09:38):
of enters into the equation as to why any thoughts
on that that one?
Speaker 3 (09:42):
Jerry, no, But I mean that makes sense. Just intrinsic
value is you know, it's it's the extra ad that
you get, and it is you know, it is they've
used it to valuate companies. It's used to evaluate options
and you know, and you apply to real estate, it's
a great way just to look at a bird's eye
(10:03):
view of the future the value of what that asset's worth.
Speaker 2 (10:08):
Yeah, and then it ran it again one more time
because we use with our program, we use a rent
to own model which adds a few other factors into
the mix, where we will assign a future value and
give the resident a chance to become a homeowner and
exercise the option, but there's a trade off for that.
We lock in their price and we have a we
(10:30):
have a ceiling, so we can't make unlimited appreciation, but
we're removing the cap X from the equation, meaning we
typically remove most of our expenditures because it's it's the
job of our resident, because we're we're treating them like
a homeowner to to do basically all of that that
(10:51):
maintenance on the property. So, playing with the numbers that
we just got, I won't go into the nitpick and
details here, but the valuation based and a rent to
own model was pretty significantly higher than the calculation for
just a straight rental because we were able to remove
that twenty five percent at which is kind of the
rule of thumb in the industry, the cap X. Yeah,
(11:14):
and it really added some additional value to the mix.
So anyway, sorry for the rent on this for those
of you that weren't interested in the math, but especially
for anyone that has kind of a stock market background,
it was kind of fun looking at an investment real
estate single family home as if it was looked at
from a Wall Street perspective.
Speaker 3 (11:32):
So yeah, I mean, I think these kind of things
are always fun. And you know, anyone who's in an
investor should dive deeper into the definition of intrinsic value
and look up different ways to apply it to their investments,
because it is an interesting way to look at things.
Speaker 2 (11:49):
Yeah, and I do a fair amount of stock market
investing myself, and I really believe in that formula. It's
just getting too Intrinsic value is not always the easiest
thing to do, and there are some subtle tees and
you know, we don't know what the future yield on
the thirty year bond is going to be, we don't
necessarily know what the inflation rate's going to be. There's
(12:09):
some other factors involved, like how stable of a business
is it and so on, So there's some unpredictability there,
but we try our best to take very educated guesses
on intrinsic value with that. So but anyway, we are
coming up on a break. This is Andy Keel with
the Win three team powered by Epic Realty and we
will be right back.
Speaker 1 (12:30):
He makes fine and selling homes easy. He'll do the
work so you won't have to stress. This as Home
Solutions with the Win three team powered by Epic Reality.
Here's the Win three team leader, Andy Keel.
Speaker 2 (12:44):
Hi, and welcome back to the show. This is Andy
Keel with the Wing three team powered by Epic Realty,
and you can reach me at five two zero five
three nine nine five nine one, and I'm again joined
by Jerry Sunt with Cross Country Mortgage and Jerry, if
you'd share your number.
Speaker 3 (13:05):
Sure five two oh three seven zero ninety five seven six.
Speaker 2 (13:09):
And in the last segment we were talking a little
bit about valuations. One of the other things we were
talking about at our meetup last week and again is
on everybody's mind. And the rest of the show, I'm
going to talk a little bit about some of the
items in the news, but before we go to that,
let's talk about a little bit about interest rates. And
it's been an interesting week with administration change. So let's
(13:34):
talk about that, Jerry. What's happening in the world with
interest rates?
Speaker 3 (13:36):
Yeah, you know, it's funny this article that it doesn't
have the name Trump in somewhere in the article. It's
just funny. That is what, of course has grabbed all
the headlines, especially in the financial world. But you know,
I mean a couple of big important points that I
think is that data points that showed up this week.
So mortgage rates are flat. They have not done you know,
they're still right around seven percent. You know. Again, they
(13:59):
were down six percent or close very close to six
percent down back in September of twenty twenty four, and
then that last quarter they really really jumped up. A
million dollar question now is when will they come down
or if they will come down, And that is all
over the board. You know, many different economists. Everyone's an economist,
(14:20):
and you know, we all have our opinions on this
of where the economy is going and so forth. But
I think it's the administration change now it's about a
wait and see. And an interesting data point to that
is that the numbers came out for twenty twenty four
for the resale housing market, and it was the lowest
year of number of sales in the US for resale homes,
(14:42):
not new construction, but resales since nineteen ninety five. I mean,
that's a staggering statistic. I mean, that's a that's a wow.
You know that we were back to nineteen ninety five numbers. Now,
Like everything, it kind of puts a positive spin at
the end that the sale started picking up towards the
end of twenty twenty four, so that bodes well for
(15:04):
moving into the future. Well, then in that same breath,
you look at the consumer sentiment and people's kind of
expectations of the future, and that was much weaker than expected.
So you know, I think I think consumers are cautious
and worried. That's what this tells us. It's kind of
a wait and see game. Now we move into the administration,
(15:26):
and you know, there's a lot of rhetoric that number
one doesn't look like the tariff situation is going to
be as you know, put out there or implemented as
quickly as possible. It's more of a weight and see
type of game, which again is comforting to know that
because that is inflationary and so it's I think basically
Wall Street's in there waiting to see what, you know,
(15:48):
the changes that will happen with this administration over the
next sixty to ninety days, and that will dictate where
mortgage rates go. But I've heard, you know, forecasts on
mortgage rates now Andy that some people are saying that
we're not going to get to six percent till twenty
twenty seven, so that's two years from now. I've heard
other forecasts that say interest rates are going to be
(16:09):
lower by the start of the second quarter of this year,
so just in two months. Who knows. I you know,
it boils down to one simple thing, kind of like
when we were talking about Warren Buffett. You know, warm
Buffet always boils it down to very simplistic information, and
it's all about inflation and unemployment. If unemployment rises, mortgage
(16:29):
rates are coming down. If inflation comes down, mortgage rates
will come down. Those are the two things we need
to watch, and when they do, you will see mortgage
rates come down.
Speaker 1 (16:40):
You know.
Speaker 3 (16:41):
The big thing is is that if the price of
oil really drops, which you know President Trump is really pushing,
if that were to happen, that would reduce inflation and
make it come down quicker, which would affect mortgage rates.
So it's funny that the world economies all affect you know,
the housing because everything's so intertwined when it comes to
borrowing costs. So there you go. That's my snippet for
(17:05):
the week.
Speaker 2 (17:06):
Yeah, And we were just at the event we were
promoting for John Burley last Saturday, and one of the
presentations there I was really fascinated where the presenter was
basically showing that all the Treasury debt that was put
out there during COVID, some of the shorter two and
(17:26):
three year stuff is coming due and it effectively, you know,
the US government has to refinance. Yeah, and the closest
thing that we're tied to in mortgage rates would be
the ten year TYNTE. It's not a direct correlation, but
it tends to be related. So the presenter was basically saying,
(17:47):
because the United States has to refinance all of this debt,
and the way they do that is they auction it
off and they bid the interest rate. If we have
to digest a whole lot of debt, it tends to
push the interest rates up. And his presentation was basically saying,
until we are able to basically get over this debt
hangover for the next couple of years because we have
(18:08):
many trillions that need to be refinanced. There's a high likelihood,
in his opinion, that the rates are going to stay
a little higher. I thought that was an interesting spin
on it.
Speaker 3 (18:18):
Yeah, I mean, if inflation comes down, then then mortgage
rates will come down. The other big thing that people
don't isn't talked about a lot is you're right, mortgage
rates are tied to the ten year yield. The ten
year treasury don't yield. But the other big piece is
that there's a spread. A historic spread between a ten
year treasury and a thirty year fixed mortgage has been
(18:40):
one and a half to two percent, and now you're
looking at things are about two and a half. It
got as wide as three percent. And if that spread
comes in and that is something that can be controlled.
And because if that spread were to come back to
two percent, you know, mortgage rates would be a half
a percent lower than where they would be right now,
(19:03):
so they would drop to six and a half immediately.
How do we get that spread down? And I think
when the administration, when President Trump talks about he wants
to bring, you know, borrowing costs down for housing. I
think that he can't control the bond market goes, but
could he put pressure to try and get that spread
down between the ten year and the in a thirty
(19:25):
year fix. I think he can. So if that's the case,
we may see lower mortgage rates just because that spread
comes back into line to what it has historically been.
Speaker 2 (19:35):
Yeah, and I find it pretty interesting here. It's it's
not an inverted yield curve between the ten and the thirty.
But I'm just looking at the rates on the ten
year bond as of Friday was four point six three
two percent, and the thirty year bond the yield was
four point eight five six percent, So now an additional
twenty years, it's I find that a little fascinating that
(19:57):
it's it's pretty thin. There's only two two tens of
a percent difference in rate. If you're trying to invest
in US Treasury as the ten year versus the thirty year,
you're not getting much of a premium. Does not always
you get a premium, Sometimes it's lower if they expect
rates to go low, and when they refer to that
as an inverted yield curve.
Speaker 3 (20:14):
Yeah, and you know, you're starting to hear chatter that
the contrarian view is to start buying long term treasury
because they're going to drop. Who knows again, I just
think it's a wait and see game. You know, towards
the end of last year, the consensus where mortgage rates
were going to follow the first half of twenty twenty five.
(20:35):
And now I think a lot of people are like,
may not happen as quickly as we thought. However, all
it takes is one bad jobs report one I shouldn't
say bad, or a weaker jobs report showing unemployment ticking up,
or inflation really starting to come down, and you will
see mortgage rates drop like a rock. So you know,
(20:56):
I'm very hopeful that will happen. And you know, you
think about it, if if mortgage rates were to get
into the mid to low sixes, We've already proven that.
It's been proven, you know, many times over the last
couple of years when rates took a dip to the
low sixes, that how much the app mortgage applications shoot
way up, not only on the purchase but on the
(21:17):
refinance side. And there's a lot of people sitting on
equity in their house that would love to get to
it but can't. So the only way to get to
it because they have a three percent mortgage they don't
want to get rid of the only way to tap
into that equity is to take an equity line of
credit that can be anywhere from seven and a half
to ten percent, depending upon credit score and other things. Well,
(21:38):
they'm much higher interest rate there. So it's people want
to get it their equity at their home to pay
off their other debts or pay off you know, do
for what for lots of reasons. And if we can
get that ten if we can get that thirty year
fixed down to six percent, I think it opens up
the floodgates. And if people can tap into their equity, man,
(21:59):
think of about the run we have in the economy.
Speaker 2 (22:02):
So exactly, I actually wanted to point out one of
the other topics that came up the other night, where
one of the gentlemen in the room was asking about
a home equity line of credit on an investment property,
and I believe you came back with a rate in
the vicinity of ten percent. You're going to pay a
premium on investment property. That's just a natural interst rart and.
Speaker 3 (22:26):
A lower loan to value too. So the loan to
value goes down, meaning you can't go to eighty five
percent on an investment property. You're second eighty or seventy
five percent of the combined loans to the appraise value.
So it's a lower loan to value and you're paying
a higher interest rate.
Speaker 2 (22:45):
Yeah, but the point we were trying to make with
that person is it's really nice to have that ability
because if you're not using it, who cares? You're not
paying any interest on an equity line of credit if
the money's not being used, And it's really handy because
it is truly that break glass in case of emergency
type of situation.
Speaker 3 (23:07):
I love that term, Andy, that's exactly right, break glass
in case of emergency. Right. Yeah.
Speaker 2 (23:13):
So, and a lot of folks I don't think realize
they can get a hey lock on an investment property.
Now they Again, loan to value is very important, it's
going to be lower. But how nice is it if
you do have that worst case scenario that you can
tap a chunk of money and if it's an emergency,
So what if you're paying ten percent? That's the purpose
of it. You don't want to use it just for whatever.
(23:35):
It's not meant to be right at check to go
on vacation, It's meant for a true emergency. So just
a really great tool that can be used if you
do have either a high equity or free and clear
investment property. Just get it out there for that emergency
situation at any rate. We are coming up again on
(23:56):
a break. This is Andy Keel with the Home Solutions
show on knis Tea, and we will be back in
just a moment.
Speaker 1 (24:03):
He doesn't want to list your home, he wants to
sell it. This his Home Solutions with the Win three
team powered by Epic Reality. Here's the Win three team leader,
Andy Keel.
Speaker 2 (24:18):
Hi, and welcome back to the show. This is Andy
Keel with the Win three Team powered by Epic Realty.
I'm joined again by Jerry Snutt with Cross Country Mortgage
and we're talking a little bit about interest rates and
the economy and valuations. The last couple of segments, wanted
to really just get into some current events and a
lot of things happening with the administration change, and have
(24:41):
a number of articles that I just like to brush
on and talk about. Most of these come from Yahoo
Finance and I have one here that just some interesting topics.
First one here is Vanguard. Vanguard's S and P five
hundred fund is about to become the world's large just ETF.
(25:03):
Nearly eighteen billion has flowed into Vanguard's S and P
five hundred ETF. Since twenty twenty five, assets into the
fund to have balloon to six hundred and twenty six billion.
Speaker 3 (25:16):
Wow.
Speaker 2 (25:17):
And the point they're making here is there's a pretty
loyal following with this fund because they effectively have the
lowest fees in the whole business. They charge point zero
three percent on an annual basis, and that's even that's
actually less than a third of what the spy would charge,
which I believe is that the I believe that's the
(25:39):
blackstone product the spy. And again talking a little bit
about Warren Buffett, In fact, in his will he talks
about this that when he passes, he'd like his his
wife's assets to literally just be put into an S
and P five hundred index fund.
Speaker 3 (25:58):
And I think that is.
Speaker 2 (25:59):
Set a just a simple way for most folks out
there to just build wealth. If if you don't do
anything above, just take ten percent of what you make,
especially if you do it from an early age. If
you're twenty five years old, to make minimum wage and
put ten percent of what you make away mathematically speaking,
(26:23):
you know, barring some kind of major changes in the world.
But if you went back forty years and put ten
percent away, you couldn't help but be a millionaire today.
And I don't see that not changing.
Speaker 3 (26:36):
Again. A lot of money managers, you know, probably won't
be happy as saying this, but that it really is
the case. When you look at the just putting the money.
It's called the Spider index, that's the SMP index, So
you're you're basically investing a little bit of money in
all five hundred to the top companies out there in
the US, and it is that. But that has given
(26:58):
a rate return of over nine percent going back to
nineteen thirty. So yes, there was a lot lost decade.
And it's funny. I talked to money managers about this
and they will say, well, oh, you know, remember there
was a last decade where the SMB didn't return anything
for ten years. It was flat for ten years. It's
like true, I you know, you can say that about
(27:21):
housing from in from two thousand and eight to twenty eighteen,
in Arizona for that matter. You know, there's there's always
going to be your up and downs, but the long
term nine percent is an amazing return.
Speaker 2 (27:35):
Yeah. And with that again, this is and it's hurt.
This is a show about not just real estate, but
finances and financial literacy. Take this moment to again make
an announcement that coming up next Sunday, I am just
really proud to announce that we are going to have
a very special guest on the show, Sharon Lecter, who
(27:57):
is the co author of an a number of books
with the Rich Dad series, Rich Dad, Poor Dad, cash
Flow Quadrant, and a bunch of others, and then she
also has gone on to author many other books including
Think and Grow Rich for Women, Outwitting the Devil, and
Three Feet from Gold, among a whole bunch of other ones.
(28:17):
So just super excited to share that. So please tune
in next week to hear Sharon's interview, and I'm sure
that'll be a whole lot of fun. So next article here,
I don't like to get political on this, but obviously
with President Trump now in office, there's a whole lot
of changes. And this is another Yahoo Finance article that
(28:41):
says the twin economic disparities Trump needs to manage, and
so during his first week back in office, Trump signed
a flurry of executive orders, some which are aimed at
correcting that imbalance. In one example, he signed a presidential
memorandum to deliver emergency price relief, calling on his administration
(29:01):
to cut down in regulations and find ways to expand
the housing supply. So we pulled up that actual relief.
I'm not going to go into too much there because
it's not a long document, but he really just wants
to expand the housing supply because I think we can
all agree that we do have a housing shortage in
(29:22):
this country, which is partially why we're pushing the prices higher.
And one note here is he says Americans are unable
to purchase homes at historic rates in part due to
regulatory requirements that a loan account for twenty five percent
of the cost of constructing a new home. I thought
that was interesting, and that kind of went on to
(29:44):
what we were talking about earlier, where the home sales
were a little slow with interest rates and prices picking up.
Speaker 3 (29:52):
No. No, since nineteen ninety five, it's the US. The
existing home sales were at the lowest leveling five, which
again I would have to go back. We have to
look at PMA County and compare PMA County. But I
think p MA County had a better than average year
and so we'll have to look at those numbers. Yeah.
Speaker 2 (30:15):
And then there's something else that caught my eye here too,
and I'm sure this is right up here, elly, Jerry.
It's a little article that says, what is NMLS, Now,
how does it help borrowers? So I'll just start with that.
NMLS was launched in two thousand and eight as a
part of the Secure and Fear Enforcement for Mortgage Licensing
(30:38):
Act otherwise known as the Safe Act, in an effort
to protect consumers from predatory lending.
Speaker 3 (30:45):
You have to be licensed. Now that's since two thousand
and eight, I believe.
Speaker 2 (30:49):
Yeah, And I'm going to go on a bit of
a rant here because I'm always I've always been fascinated
by this. So I love you your thoughts on this too, Jerry,
because Arizona and I think this is a nationwide if
I'm not mistaken. To be a mortgage originator, you need
twenty hours of pre licensing training and then you have
to pass a test in Arizona, they require an additional
(31:11):
four hours of Arizona loss. So you can get your
license for twenty four hours of.
Speaker 3 (31:17):
Training, yes, and then you got a pass test.
Speaker 2 (31:22):
Yeah, and then I've always been bothered by this too. Frankly,
for a real estate license in Arizona, it requires ninety
hours and pass a test. And that might that might
sound good or bad. I'm not quite sure, but you know,
when you think about that, either a mortgage lender or
(31:42):
a real estate agent fairly limited period of time that
needs to go into the training. And I can certainly
attest to the fact that with the real estate license,
what they teach you to pass the test really doesn't
There's not a lot of correlation to what we really
need to know in the real world. It's just how
do we pass a certain test. And compare that to
(32:05):
a cosmetology license. And I'm not trying to degrade anyone
that that's a stylist or cuts hair, but you and
I are dealing with people's typically the biggest financial transaction
in their life, and we can get licensed for ninety
hours or less, and in the state of Arizona. To
(32:27):
to actually get a license to cut someone's hair it's
sixteen hundred hours.
Speaker 3 (32:32):
Wow, Oh that's funny.
Speaker 2 (32:35):
So I just, in what reality do we get license
for such an easy time yet? And I gret there's
some hygiene and there's some there's some other difficulties there.
If you know, if you nick somebody or whatever, I'm
sure that that would be a dangerous thing. But is
it any less stringent to work with someone's effectively biggest
(32:58):
financial decision have a few hours. So I just was
fascinated by that one.
Speaker 3 (33:03):
Now, you know, the barrier to entry to mortgage Lenning
has always been very low, so you know, the fact
that they've made it stricter is important because weeds out
a lot of the bad apples. But it's still again,
the barrier's now the bar is not set very.
Speaker 2 (33:17):
High, No, that's for sure. So as we come up
towards the end of this segment, I wanted to just
throw out a couple of other announcements. As I mentioned before,
really excited to have Sharon Lecter as a guest on
the show next week. A couple of notes that coming
up on February twenty second, which is a Saturday, between
(33:38):
two and four pm, we were going to have a
family fun day event or we're also calling it the
Aka Meow Mixer at the Hermitage No Kill Cat Shelter,
And we'll have some details coming up on our website,
which is the Win three team dot com. Again coming
(33:58):
up that will be in free event that we're inviting
the public to. It's a not for profit organization that's
very near and dear to me because I am actually
their treasurer for a few more months before I turn out,
and a great organization because they are a no kill shelter.
We'll have some really fun events. We're going to have
a bouncy castle, We're going to have face painting, we're
(34:20):
going to have I'm not sure we haven't secured the
food truck or trucks, but we will have some food
there and just some drawings and a lot of just
family fun events. So that will be a public event
if you're looking forward to. And we're also going to
have some discounts on adopting some kittens if you're looking
to add a new pet to your home. What a
(34:41):
great event to come to and get a discount on
an adoption. So hope to see many of you there
for that event coming up, And then also are the
Win three Team is recruiting for real estate agents. If
you're looking at either getting license to our license and
looking for a change, feel free to reach out to me.
Andy I two zero five three nine one, and again Jerry,
(35:05):
if you would give your number again, especially in the
last segment we were talking about both helocks investment helocks
and if anyone wants to reach out and get some
help on a low and share your number again, if
you would.
Speaker 3 (35:16):
Please please yeah, five two oh three seven zero seven six.
Speaker 2 (35:22):
Great, and we are coming up on the end of
the segment. We'll be back in just a few moments. Again,
this is Andy Keel with the Win three Team powered
by Epic Realty, and we will be back in just
a few moments.
Speaker 1 (35:36):
This is Home Solutions with the Win three Team powered
by Epic Reality on KNST. Here's the Win three Team leader,
Andy Keel.
Speaker 2 (35:46):
Hi, and welcome back to the show. This is Andy
Keel with the Win three Team powered by Epic Realty,
and this is the Home Solutions Show on KNST. I'm
again joined by Jerry Sunt with Cross Country Mortgage. And
on the break we were just talking a bit about
the wildfire situations and just the terrible issues that are
(36:06):
going out up California with the fires and insurance claims.
And believe you had an article you wanted to talk
about jury.
Speaker 3 (36:12):
Yeah, and I think it's so important. So I was
on Instagram and there was a lady describing that, you know,
she had lost her house in the fire and she
was having difficulty with her insurance company with the claim
simply because she did not add to put the title
of her property in the name of her trust, and
(36:33):
she did not add that trust to the insurance policy.
So incredible information. I know, I'm a big believer of
trust and putting real estate in a trust, but I
personally also have not added the trust to the insurance policy.
And so immediately I called my insurer and said, hey,
(36:54):
we need to add my family trust as an insurance
on the policy. And it's funny. They said, yes, please
set this copy of your trust. This is valuable to do.
And I share this because we hear often that it
is valuable to put your house in the name of
a trust. I don't know how many people go that
next step and then let the insurance company know that
(37:16):
the title has been now put in the name of
the trust and that that trust needs to be listed
as an additional insured and that could affect the payout
if in case of a loss. So again, simple thing
to do, very valuable information. And if your house and
a trust, please make sure that the trust's name is
an insured on your homeowner's policy.
Speaker 2 (37:38):
Yeah. I think that's a really good point. And actually
that brings up something that happened to me literally just
this week. We had an insurance claim where during one
of the windstorms, a tree fell and took out a
chunk of the roof on one of the properties that
we have, and we got the supplemental check, which was
just an additional little over one thousand dollars. It was
(38:01):
an owner finance property, so it was made out to
my LLC and the LLC that funded us. So I
ran over to get the endorsement from the other party,
and in my haste, I forgot to sign it myself.
I forgot to endorse it myself, but it was going
into my bank account, so I didn't even think to
do that. And guess what happened. Not my bank, but
(38:23):
the other bank kicked it back for improper endorsement and
we got popped in NSF. So I'm thinking Oh, that's
a little irritating, but okay, we can submit the check
a second time. So I endorsed it properly. We put
it through again, and they'd already stopped payment on it.
So now we have to go back and get the
check reissued again, probably wait another three to six weeks
(38:45):
for the insurance company to ground to it. So the
point is, it really feels like the insurance companies are
doing whatever they can to make it really difficult on
us to submit claims. And I can personally attest to
how much pain this is because we actually had a
situation about a year and a half ago. We have
a chunk of our portfolio in an Oklahoma city and
(39:08):
they had grapefruit size hail go through and just decimate
the whole town. And we had thirteen insurance claims and
thirteen new roofs that we needed, not to mention a
lot of siding and window damage in one fall. Swoop wow.
And you know this stuff does happen. I mean, even
in Tucson, we have these windstorms and hail that can
take out sections of the town, so.
Speaker 3 (39:29):
You know we need to have any I think insurance
has become such a major topic and when you look
at the price of how much insurance has risen for
just about every consumer. You know, anyone that has insurance
has probably noticed an increase, whether in homeowners in auto.
It's one of the biggest components that as far as
inflation goes over the last few years. We need to
(39:50):
get an insurance agent on the show and talk about
these things because it is becoming a bigger and more
important part of a family budget. We're using, oh insurances,
you know, it's a small number, not anymore, and especially
if you've had claims, it's really impacting the you know,
household incomes. We will we will need to do that
(40:12):
in the near term future.
Speaker 2 (40:14):
Yeah, we actually have that in the work, so that
will be on an upcoming episode where we're going to
have an insurance agent as a guest and talk about
some of these things. And I'm sure we're going to
have a lot of good tips there. So good call
to action for the audience. Just a good reminder you
should always at least once a year get with your
insurance agent. Just review your policies, make sure you have
(40:34):
the proper coverage. Another thing that's really important too. I mean,
we've had the bump in prices during COVID in the
last few years. If you haven't reviewed what your property
is insured for, and you haven't looked in about three
four years, you might be radically under insured. And that's
part of the problem with some of these California wildfire situations.
(40:55):
The properties are just a little under it too severely underinsured.
Speaker 3 (40:59):
Yep.
Speaker 2 (41:00):
Always a good thing to check on that. Make sure
that the policy matches the title. If you've moved in
into a trust. We don't think to call the insurance
company and tell them, but it's it's darned important that
we do that. So thanks all that.
Speaker 3 (41:13):
You know, the interesting topic and this is why I'd
love to have his agent that has deep knowledge of this,
you know, on the show. But you know, when you
have these ultra luxury homes that are worth twenty five
thirty million dollars, you know, I think insurance companies they'll
only ensure for X amount and anything above that had
(41:34):
to be the owner's you know, responsibility to pay, and
that could be ten million, fifteen to twenty million dollars
in some of these cases, and we can say, oh, well,
they've got the money to pay for it. Some do,
some don't. And it'll be very interesting to see how
this all plays out for sure.
Speaker 2 (41:52):
Yeah, and we one of our mutual clients that was
at the meet up the other night that that does
own some property in California, and he's definitely afraid of
what's going to come of that with his policies. I
don't know if he said they were getting canceled or
he was worried that there's a high probability. He just
he's literally a loss what to do for insurance. So
(42:13):
it'll be interesting. We'll certainly circle back to that and
get an expert on the show to talk about that.
So I have one more article that caught my eye
from Yahoo Finance that I thought was pretty interesting, and
it's titled most Americans are dissatisfied dissatisfied with their savings,
survey shows Yahoo Finance poll twenty twenty five. Survey shows
(42:36):
only twenty two percent of Americans are completely satisfied with
the amount of money they've saved. They do go on
to say in this article, credit card debt also reached
record highs. I don't have actually any statistics in this
article to talk that, but that seems to be in
line with a lot of the news headlines that we've
(42:56):
been seeing, and they go on to share some key
finding that I thought many of these were interesting, says.
Only twenty two percent of respondents report being very or
completely satisfied with their savings. Well, thirty five percent are
very or completely dissatisfied. Forty percent of women are very
or completely dissatisfied with their savings, compared with twenty eight
(43:18):
percent of men. Nearly half forty eight percent of respondents
saved less in twenty twenty four compared to the previous year,
with only twenty one percent saving more. Not too surprised there,
With inflationary numbers and certain key things like insurance. Nearly
(43:39):
half forty seven percent of respondents cite the cost of
living as their biggest obstacle to savings. Not particularly surprising.
One third of respondents couldn't cover bills for even one
month if they lost their income. That scares me.
Speaker 3 (43:54):
Yeah, that's a scare, right, I mean, that's just paycheck
to paycheck.
Speaker 2 (43:59):
Yeah, And we clearly have a subset of the population
that isn't really saving enough. And I don't mean to
preach on this, but it's so important to have at
least several months of cash reserves in case the worst happens,
because I mean, most of us in our lives do
get laid off or lose our job a few times,
(44:19):
and if you don't have that cushion, it's a pretty
scary thing. So going on to forty four percent of
the respondents believe they will save more in twenty twenty five,
with optimism highest among gen Z sixty three percent and
millennials fifty three And then they go on to say
sixty percent of respondents say they are more optimistic about
(44:40):
their finances for the coming year with Trump as president.
The optimism crosses generational lines with gen Z seventy percent
of gen Z are the most optimistic. I find that
interesting that our young folks are more optimistic than those
of us that are a bit older. Yeah, right, Going
on here, it says two thirds of respondents say the
(45:02):
cost of living for the average family in their area
is not affordable. Overall, our survey found that most respondents
describe the cost of living in their area as not
very affordable. Forty five percent will another twenty two percent
say it's not affordable at all. One quarter of Americans
say they live comfortably, and then it goes on older Americans,
(45:24):
baby boomer, boomers, silent, or greatest generations were more likely
to say they live comfortably than forty percent. Thirty one
percent are able to meet the basic expenses with a
little money left over for extras, while another thirty percent
are just able to meet their basic expenses. Twelve percent
say they don't have enough money to cover their basic
(45:44):
living expenses. Again, not not too terribly surprising with inflation area,
but it starts getting into some housing here that I
thought was was a bit interesting. Nearly half of the
respondents in our surveys saved less than twenty twenty four
compared to twenty three, and then overall, women were more
likely to say they've saved less money in twenty four
(46:06):
than they were in twenty three fifty three percent of
the women versus forty two percent of the men, especially
millennial and gen X women fifty seven fifty nine percent, respectively.
Speaker 3 (46:18):
The basic of this is that people are saving less,
and you know that is just because they're getting squeezed
by many different you know angles obviously, inflation is everything
is just more expensive than what it used to be,
and unless people change their spending habits or their patterns,
that they're not going to be able to save and
possibly racked up debt and go the other direction and
(46:40):
get more debt on the books. The only real solution
is bring down the Inflation's got to come down. Rates
have to come down, or people have to change their
their spending patterns. People change their spending habits or patterns.
That probably means that corporations will not have their their
blockbus outlook or revenue that they've had because they'll be
(47:03):
less sould. It's just the nature of what needs to happen.
And you know, I think we're going to find a
happy medium here, hopefully very very soon. This in twenty
twenty five.
Speaker 2 (47:12):
Yeah, I certainly hope so as well. And with that
we are coming up on the end of the show.
Thank you so much for joining us on the Home
Solutions Show on K and ST and again this is
Andy Keel with the Win three team powered by Epic
Realty and Jerry sent with Cross Country Mortgage. Look forward
to having you join us next week for our very
special guest, Sharon Lecter. Hopefully tune in next week. Thanks
(47:34):
so much,
Buying a home and selling a home shouldn't be stressful. Renters,
homeowners and investors in southern Arizona work with the Win
three Team powered by Epic Reality because they match buyers
with sellers like the e harmony of real estate buying
or selling. This is where you'll find what you're looking for.
This is Home Solutions on K and ST with the
(00:22):
Win three Team powered by Epic Reality. Now the Win
three Team leader, Andy Keel.
Speaker 2 (00:34):
Hi, Good morning, Ann, Welcome to the Home Solutions Show.
This is your host, Andy Keel with the Win three
Team powered by Epic Realty, and I'm joined by Jerry
Sunt with Cross Country Mortgage.
Speaker 3 (00:48):
Morning Andy, good morning.
Speaker 2 (00:51):
I really wanted to start this show off because we
had a meet up at our office last week and
we had a really great time and thanks for the
folks that showed up, and we certainly plan on doing
more of these in the future. At this point, we're
planning on doing them every third Thursday of the month
between six and eight pm at our office over at
(01:15):
sixty sixty one East Broadway, Sweet to twenty eight and
these are open for the public. They're meant to talk
about investment properties and we had just a really great
discussion last night, and Jerry came to this one. It
really livened everything up because we're always interested in talking
about all kinds of things with the economy and interest rates,
(01:36):
and what a just wonderful, robust discussion we had with everyone.
I wanted to share part of what we talked about
last night on the radio, and actually it led me
to a very interesting conversation that I had with i'll
call my good friend Claude. I'm talking about anthropics AI
(01:57):
this morning, based on one of the things that we
were talking about last night. So it started off with
the question that someone had about valuations both on stocks
and on properties, and we had a lot of fun
with this. So I was talking about Warren Buffett and
the late Charlie Munger, and I've actually listened and watched,
(02:20):
sometimes in many cases multiple times, every single one of
their annual meetings going back to nineteen ninety five, so
I could say I'm a pretty avid follower. So I
tended to quote Warren Buffett on this when it comes
to valuation of companies and stocks. We were talking again
about what are the value of investments really? Using the
(02:42):
Warren Buffett approach. Talking about stocks and companies. At this point,
we were looking at what is the intrinsic value? And
Warren Buffett says that really to value a stock or
a company, you'd need to know two things, and only
two things, what is the intrinsic value and can you
buy it at or below intrinsic value? And market psychology.
(03:03):
Everything else is pretty much just fluff. One of the
folks in the audience had a bit of a question
and I wasn't really able to give a great answer
on how do we define intrinsic value? I went down
that rabbit hole with Ai this morning, and I really
want to talk a little bit more because this is
kind of a fun a fun thing, and I apologize
(03:27):
or warn the audience in advance there's going to be
a little bit of math here. I'll try to keep
it simple, but what is the what is the intrinsic value?
And how do you calculate it? So, using Warren Buffett's approach,
value is the future owner earnings divided by the appropriate
discount rate, and he defines owner earnings as net income
(03:48):
plus depreciation plus amortization minus cap X or capital expenditures
minus additional working capital. He also goes on to warn
that this is extremely simplistic, and there's a lot more
that really needs to be taken into account, but we
are going to go pretty simplistic. We don't need to
make it too difficult right now. So I basically asked
(04:11):
AI to give me an example of this, and it's said, here,
I'll give you an example. How about small Town Bakery Incorporated.
We'll use the number of one hundred thousand of net income,
twenty thousand of depreciation, five thousand of amortization, fifteen thousand
of capital expenditures, and an additional ten thousand of working capital.
(04:33):
And based on those numbers, in that formula, it basically
is saying it's intrinsic value is a million dollars because
it's taking the owner earnings of one hundred thousand, dividing
it by a discount rate of ten percent, and that
gives it a value of a million dollars roughly. So
incredibly simplistic view. So I of course wanted it to
(04:57):
elaborate a little bit. How did we get to the
at ten percent discount rate? For one? And well, it
basically goes on to say that we're going to look
at what is the what is the safe rate of return?
And it's going to use the current thirty year treasury
(05:17):
bond yield, which currently I used a calculation based on
last week's rate. If I believe four point eighty seven.
Speaker 3 (05:24):
Roughly yeper five yep.
Speaker 2 (05:27):
And then the additional discount should be for a risk premium,
and generally it's saying five to seven percent for stable businesses.
If it's a higher risk business, it should be a
little bit higher number. We were using about five percent.
It came out to roughly ten percent by using the
combination of those two factors. It was actually a little
(05:48):
under ten when we pressed it for more detail. So
that's how it came to that value. And effectively, as
I understand it, we need to go a little bit
more complicated. So started asking Ai some more detailed questions,
and I said, well, wouldn't we also have to figure
out all the future earnings, the rate of inflation, and
(06:10):
also the increased future early earnings, considering that as years
go by, we should be able to increase our income.
And that changed the calculations, of course, and that's where
it starts getting difficult. Then I decided to shift a
little bit and say, what does that look like if
we were to use the same warn buffet approach on
investment real estate, especially a single family home. So I
(06:32):
took a recent example of one of our clients recently
bought a single family home that was purchased for three
hundred thousand dollars, and then I added some of the
actual expenses and income. So using a twenty one to
ninety five monthly income on that, and we figure about
two hundred and seventy five dollars a month for expenses.
(06:53):
We're taking any mortgage calculations out of the equation here,
just to make it a simple calc And ironically, when
I plug that in using the same formula the intrinsic
value based on the AI, it actually came back at
three ZHO.
Speaker 3 (07:07):
One interesting I thought.
Speaker 2 (07:10):
That was actually pretty fascinating is that because of.
Speaker 3 (07:13):
The debt service, you know, because you know, you're obviously
putting less down, so your rate to return would be
hired versus if there's no debt, that means you put
all your money down, you paid cash for the property.
Speaker 2 (07:25):
Right, So we took the debt service out of the equation,
kind of like how we would use the cap rate calculations.
If those of you aren't familiar with that, cap rate
is how you would generally look at valuing. It's especially
useful for multifamily, and it takes debt service out of
the equation. It's looking at just net income if you
were to pay cash for everything. It's a good apples
(07:47):
to apples comparison if you want to look at two
properties and remove debt service from the equation. So, of
course I had to take it a little bit further. Yeah,
I said, well, let's look at that, say that same house,
and AI of course had to simplify things, and I said, well,
what about the rate of inflation that should be taken
(08:09):
into account and what about rent increases? So then what
was kind of fun is I had it recalculate based
on that, and it came back and said, oh, yes,
we're just giving you a more simple version. But yes,
Warren Buffett would use that more complicated equations. So we
went deeper and what I found then what was pretty fascinating.
(08:32):
Specifically asked the question, can you rerun the above single
family calculations assuming a three percent inflation rate, three percent
annual increase in rents, and thirty years of earnings, and
it came back and said, well, the present value of
the property given that information is four hundred and sixty
eight two hundred and ninety three dollars.
Speaker 3 (08:53):
Got it.
Speaker 2 (08:54):
Gosh, that's awfully interesting, And it says the significant difference
in the this calculation versus the previous one is because
of the future growth and how much it impacts the
current valuation, because we're looking, we're projecting forward in time.
And I paused there and just thought, gosh, if anyone's
(09:17):
out there wondering why Wall Street and some of the
big companies are starting to get into the single family
home market. They've been in multifamily a bit longer, but
we're seeing a lot of that where these build build
rent subdivisions that are being bought up by big companies
like black Rock and Blackstone and some others. Why are
they doing that? And I think this this calculation kind
(09:38):
of enters into the equation as to why any thoughts
on that that one?
Speaker 3 (09:42):
Jerry, no, But I mean that makes sense. Just intrinsic
value is you know, it's it's the extra ad that
you get, and it is you know, it is they've
used it to valuate companies. It's used to evaluate options
and you know, and you apply to real estate, it's
a great way just to look at a bird's eye
(10:03):
view of the future the value of what that asset's worth.
Speaker 2 (10:08):
Yeah, and then it ran it again one more time
because we use with our program, we use a rent
to own model which adds a few other factors into
the mix, where we will assign a future value and
give the resident a chance to become a homeowner and
exercise the option, but there's a trade off for that.
We lock in their price and we have a we
(10:30):
have a ceiling, so we can't make unlimited appreciation, but
we're removing the cap X from the equation, meaning we
typically remove most of our expenditures because it's it's the
job of our resident, because we're we're treating them like
a homeowner to to do basically all of that that
(10:51):
maintenance on the property. So, playing with the numbers that
we just got, I won't go into the nitpick and
details here, but the valuation based and a rent to
own model was pretty significantly higher than the calculation for
just a straight rental because we were able to remove
that twenty five percent at which is kind of the
rule of thumb in the industry, the cap X. Yeah,
(11:14):
and it really added some additional value to the mix.
So anyway, sorry for the rent on this for those
of you that weren't interested in the math, but especially
for anyone that has kind of a stock market background,
it was kind of fun looking at an investment real
estate single family home as if it was looked at
from a Wall Street perspective.
Speaker 3 (11:32):
So yeah, I mean, I think these kind of things
are always fun. And you know, anyone who's in an
investor should dive deeper into the definition of intrinsic value
and look up different ways to apply it to their investments,
because it is an interesting way to look at things.
Speaker 2 (11:49):
Yeah, and I do a fair amount of stock market
investing myself, and I really believe in that formula. It's
just getting too Intrinsic value is not always the easiest
thing to do, and there are some subtle tees and
you know, we don't know what the future yield on
the thirty year bond is going to be, we don't
necessarily know what the inflation rate's going to be. There's
(12:09):
some other factors involved, like how stable of a business
is it and so on, So there's some unpredictability there,
but we try our best to take very educated guesses
on intrinsic value with that. So but anyway, we are
coming up on a break. This is Andy Keel with
the Win three team powered by Epic Realty and we
will be right back.
Speaker 1 (12:30):
He makes fine and selling homes easy. He'll do the
work so you won't have to stress. This as Home
Solutions with the Win three team powered by Epic Reality.
Here's the Win three team leader, Andy Keel.
Speaker 2 (12:44):
Hi, and welcome back to the show. This is Andy
Keel with the Wing three team powered by Epic Realty,
and you can reach me at five two zero five
three nine nine five nine one, and I'm again joined
by Jerry Sunt with Cross Country Mortgage and Jerry, if
you'd share your number.
Speaker 3 (13:05):
Sure five two oh three seven zero ninety five seven six.
Speaker 2 (13:09):
And in the last segment we were talking a little
bit about valuations. One of the other things we were
talking about at our meetup last week and again is
on everybody's mind. And the rest of the show, I'm
going to talk a little bit about some of the
items in the news, but before we go to that,
let's talk about a little bit about interest rates. And
it's been an interesting week with administration change. So let's
(13:34):
talk about that, Jerry. What's happening in the world with
interest rates?
Speaker 3 (13:36):
Yeah, you know, it's funny this article that it doesn't
have the name Trump in somewhere in the article. It's
just funny. That is what, of course has grabbed all
the headlines, especially in the financial world. But you know,
I mean a couple of big important points that I
think is that data points that showed up this week.
So mortgage rates are flat. They have not done you know,
they're still right around seven percent. You know. Again, they
(13:59):
were down six percent or close very close to six
percent down back in September of twenty twenty four, and
then that last quarter they really really jumped up. A
million dollar question now is when will they come down
or if they will come down, And that is all
over the board. You know, many different economists. Everyone's an economist,
(14:20):
and you know, we all have our opinions on this
of where the economy is going and so forth. But
I think it's the administration change now it's about a
wait and see. And an interesting data point to that
is that the numbers came out for twenty twenty four
for the resale housing market, and it was the lowest
year of number of sales in the US for resale homes,
(14:42):
not new construction, but resales since nineteen ninety five. I mean,
that's a staggering statistic. I mean, that's a that's a wow.
You know that we were back to nineteen ninety five numbers. Now,
Like everything, it kind of puts a positive spin at
the end that the sale started picking up towards the
end of twenty twenty four, so that bodes well for
(15:04):
moving into the future. Well, then in that same breath,
you look at the consumer sentiment and people's kind of
expectations of the future, and that was much weaker than expected.
So you know, I think I think consumers are cautious
and worried. That's what this tells us. It's kind of
a wait and see game. Now we move into the administration,
(15:26):
and you know, there's a lot of rhetoric that number
one doesn't look like the tariff situation is going to
be as you know, put out there or implemented as
quickly as possible. It's more of a weight and see
type of game, which again is comforting to know that
because that is inflationary and so it's I think basically
Wall Street's in there waiting to see what, you know,
(15:48):
the changes that will happen with this administration over the
next sixty to ninety days, and that will dictate where
mortgage rates go. But I've heard, you know, forecasts on
mortgage rates now Andy that some people are saying that
we're not going to get to six percent till twenty
twenty seven, so that's two years from now. I've heard
other forecasts that say interest rates are going to be
(16:09):
lower by the start of the second quarter of this year,
so just in two months. Who knows. I you know,
it boils down to one simple thing, kind of like
when we were talking about Warren Buffett. You know, warm
Buffet always boils it down to very simplistic information, and
it's all about inflation and unemployment. If unemployment rises, mortgage
(16:29):
rates are coming down. If inflation comes down, mortgage rates
will come down. Those are the two things we need
to watch, and when they do, you will see mortgage
rates come down.
Speaker 1 (16:40):
You know.
Speaker 3 (16:41):
The big thing is is that if the price of
oil really drops, which you know President Trump is really pushing,
if that were to happen, that would reduce inflation and
make it come down quicker, which would affect mortgage rates.
So it's funny that the world economies all affect you know,
the housing because everything's so intertwined when it comes to
borrowing costs. So there you go. That's my snippet for
(17:05):
the week.
Speaker 2 (17:06):
Yeah, And we were just at the event we were
promoting for John Burley last Saturday, and one of the
presentations there I was really fascinated where the presenter was
basically showing that all the Treasury debt that was put
out there during COVID, some of the shorter two and
(17:26):
three year stuff is coming due and it effectively, you know,
the US government has to refinance. Yeah, and the closest
thing that we're tied to in mortgage rates would be
the ten year TYNTE. It's not a direct correlation, but
it tends to be related. So the presenter was basically saying,
(17:47):
because the United States has to refinance all of this debt,
and the way they do that is they auction it
off and they bid the interest rate. If we have
to digest a whole lot of debt, it tends to
push the interest rates up. And his presentation was basically saying,
until we are able to basically get over this debt
hangover for the next couple of years because we have
(18:08):
many trillions that need to be refinanced. There's a high likelihood,
in his opinion, that the rates are going to stay
a little higher. I thought that was an interesting spin
on it.
Speaker 3 (18:18):
Yeah, I mean, if inflation comes down, then then mortgage
rates will come down. The other big thing that people
don't isn't talked about a lot is you're right, mortgage
rates are tied to the ten year yield. The ten
year treasury don't yield. But the other big piece is
that there's a spread. A historic spread between a ten
year treasury and a thirty year fixed mortgage has been
(18:40):
one and a half to two percent, and now you're
looking at things are about two and a half. It
got as wide as three percent. And if that spread
comes in and that is something that can be controlled.
And because if that spread were to come back to
two percent, you know, mortgage rates would be a half
a percent lower than where they would be right now,
(19:03):
so they would drop to six and a half immediately.
How do we get that spread down? And I think
when the administration, when President Trump talks about he wants
to bring, you know, borrowing costs down for housing. I
think that he can't control the bond market goes, but
could he put pressure to try and get that spread
down between the ten year and the in a thirty
(19:25):
year fix. I think he can. So if that's the case,
we may see lower mortgage rates just because that spread
comes back into line to what it has historically been.
Speaker 2 (19:35):
Yeah, and I find it pretty interesting here. It's it's
not an inverted yield curve between the ten and the thirty.
But I'm just looking at the rates on the ten
year bond as of Friday was four point six three
two percent, and the thirty year bond the yield was
four point eight five six percent, So now an additional
twenty years, it's I find that a little fascinating that
(19:57):
it's it's pretty thin. There's only two two tens of
a percent difference in rate. If you're trying to invest
in US Treasury as the ten year versus the thirty year,
you're not getting much of a premium. Does not always
you get a premium, Sometimes it's lower if they expect
rates to go low, and when they refer to that
as an inverted yield curve.
Speaker 3 (20:14):
Yeah, and you know, you're starting to hear chatter that
the contrarian view is to start buying long term treasury
because they're going to drop. Who knows again, I just
think it's a wait and see game. You know, towards
the end of last year, the consensus where mortgage rates
were going to follow the first half of twenty twenty five.
(20:35):
And now I think a lot of people are like,
may not happen as quickly as we thought. However, all
it takes is one bad jobs report one I shouldn't
say bad, or a weaker jobs report showing unemployment ticking up,
or inflation really starting to come down, and you will
see mortgage rates drop like a rock. So you know,
(20:56):
I'm very hopeful that will happen. And you know, you
think about it, if if mortgage rates were to get
into the mid to low sixes, We've already proven that.
It's been proven, you know, many times over the last
couple of years when rates took a dip to the
low sixes, that how much the app mortgage applications shoot
way up, not only on the purchase but on the
(21:17):
refinance side. And there's a lot of people sitting on
equity in their house that would love to get to
it but can't. So the only way to get to
it because they have a three percent mortgage they don't
want to get rid of the only way to tap
into that equity is to take an equity line of
credit that can be anywhere from seven and a half
to ten percent, depending upon credit score and other things. Well,
(21:38):
they'm much higher interest rate there. So it's people want
to get it their equity at their home to pay
off their other debts or pay off you know, do
for what for lots of reasons. And if we can
get that ten if we can get that thirty year
fixed down to six percent, I think it opens up
the floodgates. And if people can tap into their equity, man,
(21:59):
think of about the run we have in the economy.
Speaker 2 (22:02):
So exactly, I actually wanted to point out one of
the other topics that came up the other night, where
one of the gentlemen in the room was asking about
a home equity line of credit on an investment property,
and I believe you came back with a rate in
the vicinity of ten percent. You're going to pay a
premium on investment property. That's just a natural interst rart and.
Speaker 3 (22:26):
A lower loan to value too. So the loan to
value goes down, meaning you can't go to eighty five
percent on an investment property. You're second eighty or seventy
five percent of the combined loans to the appraise value.
So it's a lower loan to value and you're paying
a higher interest rate.
Speaker 2 (22:45):
Yeah, but the point we were trying to make with
that person is it's really nice to have that ability
because if you're not using it, who cares? You're not
paying any interest on an equity line of credit if
the money's not being used, And it's really handy because
it is truly that break glass in case of emergency
type of situation.
Speaker 3 (23:07):
I love that term, Andy, that's exactly right, break glass
in case of emergency. Right. Yeah.
Speaker 2 (23:13):
So, and a lot of folks I don't think realize
they can get a hey lock on an investment property.
Now they Again, loan to value is very important, it's
going to be lower. But how nice is it if
you do have that worst case scenario that you can
tap a chunk of money and if it's an emergency,
So what if you're paying ten percent? That's the purpose
of it. You don't want to use it just for whatever.
(23:35):
It's not meant to be right at check to go
on vacation, It's meant for a true emergency. So just
a really great tool that can be used if you
do have either a high equity or free and clear
investment property. Just get it out there for that emergency
situation at any rate. We are coming up again on
(23:56):
a break. This is Andy Keel with the Home Solutions
show on knis Tea, and we will be back in
just a moment.
Speaker 1 (24:03):
He doesn't want to list your home, he wants to
sell it. This his Home Solutions with the Win three
team powered by Epic Reality. Here's the Win three team leader,
Andy Keel.
Speaker 2 (24:18):
Hi, and welcome back to the show. This is Andy
Keel with the Win three Team powered by Epic Realty.
I'm joined again by Jerry Snutt with Cross Country Mortgage
and we're talking a little bit about interest rates and
the economy and valuations. The last couple of segments, wanted
to really just get into some current events and a
lot of things happening with the administration change, and have
(24:41):
a number of articles that I just like to brush
on and talk about. Most of these come from Yahoo
Finance and I have one here that just some interesting topics.
First one here is Vanguard. Vanguard's S and P five
hundred fund is about to become the world's large just ETF.
(25:03):
Nearly eighteen billion has flowed into Vanguard's S and P
five hundred ETF. Since twenty twenty five, assets into the
fund to have balloon to six hundred and twenty six billion.
Speaker 3 (25:16):
Wow.
Speaker 2 (25:17):
And the point they're making here is there's a pretty
loyal following with this fund because they effectively have the
lowest fees in the whole business. They charge point zero
three percent on an annual basis, and that's even that's
actually less than a third of what the spy would charge,
which I believe is that the I believe that's the
(25:39):
blackstone product the spy. And again talking a little bit
about Warren Buffett, In fact, in his will he talks
about this that when he passes, he'd like his his
wife's assets to literally just be put into an S
and P five hundred index fund.
Speaker 3 (25:58):
And I think that is.
Speaker 2 (25:59):
Set a just a simple way for most folks out
there to just build wealth. If if you don't do
anything above, just take ten percent of what you make,
especially if you do it from an early age. If
you're twenty five years old, to make minimum wage and
put ten percent of what you make away mathematically speaking,
(26:23):
you know, barring some kind of major changes in the world.
But if you went back forty years and put ten
percent away, you couldn't help but be a millionaire today.
And I don't see that not changing.
Speaker 3 (26:36):
Again. A lot of money managers, you know, probably won't
be happy as saying this, but that it really is
the case. When you look at the just putting the money.
It's called the Spider index, that's the SMP index, So
you're you're basically investing a little bit of money in
all five hundred to the top companies out there in
the US, and it is that. But that has given
(26:58):
a rate return of over nine percent going back to
nineteen thirty. So yes, there was a lot lost decade.
And it's funny. I talked to money managers about this
and they will say, well, oh, you know, remember there
was a last decade where the SMB didn't return anything
for ten years. It was flat for ten years. It's
like true, I you know, you can say that about
(27:21):
housing from in from two thousand and eight to twenty eighteen,
in Arizona for that matter. You know, there's there's always
going to be your up and downs, but the long
term nine percent is an amazing return.
Speaker 2 (27:35):
Yeah. And with that again, this is and it's hurt.
This is a show about not just real estate, but
finances and financial literacy. Take this moment to again make
an announcement that coming up next Sunday, I am just
really proud to announce that we are going to have
a very special guest on the show, Sharon Lecter, who
(27:57):
is the co author of an a number of books
with the Rich Dad series, Rich Dad, Poor Dad, cash
Flow Quadrant, and a bunch of others, and then she
also has gone on to author many other books including
Think and Grow Rich for Women, Outwitting the Devil, and
Three Feet from Gold, among a whole bunch of other ones.
(28:17):
So just super excited to share that. So please tune
in next week to hear Sharon's interview, and I'm sure
that'll be a whole lot of fun. So next article here,
I don't like to get political on this, but obviously
with President Trump now in office, there's a whole lot
of changes. And this is another Yahoo Finance article that
(28:41):
says the twin economic disparities Trump needs to manage, and
so during his first week back in office, Trump signed
a flurry of executive orders, some which are aimed at
correcting that imbalance. In one example, he signed a presidential
memorandum to deliver emergency price relief, calling on his administration
(29:01):
to cut down in regulations and find ways to expand
the housing supply. So we pulled up that actual relief.
I'm not going to go into too much there because
it's not a long document, but he really just wants
to expand the housing supply because I think we can
all agree that we do have a housing shortage in
(29:22):
this country, which is partially why we're pushing the prices higher.
And one note here is he says Americans are unable
to purchase homes at historic rates in part due to
regulatory requirements that a loan account for twenty five percent
of the cost of constructing a new home. I thought
that was interesting, and that kind of went on to
(29:44):
what we were talking about earlier, where the home sales
were a little slow with interest rates and prices picking up.
Speaker 3 (29:52):
No. No, since nineteen ninety five, it's the US. The
existing home sales were at the lowest leveling five, which
again I would have to go back. We have to
look at PMA County and compare PMA County. But I
think p MA County had a better than average year
and so we'll have to look at those numbers. Yeah.
Speaker 2 (30:15):
And then there's something else that caught my eye here too,
and I'm sure this is right up here, elly, Jerry.
It's a little article that says, what is NMLS, Now,
how does it help borrowers? So I'll just start with that.
NMLS was launched in two thousand and eight as a
part of the Secure and Fear Enforcement for Mortgage Licensing
(30:38):
Act otherwise known as the Safe Act, in an effort
to protect consumers from predatory lending.
Speaker 3 (30:45):
You have to be licensed. Now that's since two thousand
and eight, I believe.
Speaker 2 (30:49):
Yeah, And I'm going to go on a bit of
a rant here because I'm always I've always been fascinated
by this. So I love you your thoughts on this too, Jerry,
because Arizona and I think this is a nationwide if
I'm not mistaken. To be a mortgage originator, you need
twenty hours of pre licensing training and then you have
to pass a test in Arizona, they require an additional
(31:11):
four hours of Arizona loss. So you can get your
license for twenty four hours of.
Speaker 3 (31:17):
Training, yes, and then you got a pass test.
Speaker 2 (31:22):
Yeah, and then I've always been bothered by this too. Frankly,
for a real estate license in Arizona, it requires ninety
hours and pass a test. And that might that might
sound good or bad. I'm not quite sure, but you know,
when you think about that, either a mortgage lender or
(31:42):
a real estate agent fairly limited period of time that
needs to go into the training. And I can certainly
attest to the fact that with the real estate license,
what they teach you to pass the test really doesn't
There's not a lot of correlation to what we really
need to know in the real world. It's just how
do we pass a certain test. And compare that to
(32:05):
a cosmetology license. And I'm not trying to degrade anyone
that that's a stylist or cuts hair, but you and
I are dealing with people's typically the biggest financial transaction
in their life, and we can get licensed for ninety
hours or less, and in the state of Arizona. To
(32:27):
to actually get a license to cut someone's hair it's
sixteen hundred hours.
Speaker 3 (32:32):
Wow, Oh that's funny.
Speaker 2 (32:35):
So I just, in what reality do we get license
for such an easy time yet? And I gret there's
some hygiene and there's some there's some other difficulties there.
If you know, if you nick somebody or whatever, I'm
sure that that would be a dangerous thing. But is
it any less stringent to work with someone's effectively biggest
(32:58):
financial decision have a few hours. So I just was
fascinated by that one.
Speaker 3 (33:03):
Now, you know, the barrier to entry to mortgage Lenning
has always been very low, so you know, the fact
that they've made it stricter is important because weeds out
a lot of the bad apples. But it's still again,
the barrier's now the bar is not set very.
Speaker 2 (33:17):
High, No, that's for sure. So as we come up
towards the end of this segment, I wanted to just
throw out a couple of other announcements. As I mentioned before,
really excited to have Sharon Lecter as a guest on
the show next week. A couple of notes that coming
up on February twenty second, which is a Saturday, between
(33:38):
two and four pm, we were going to have a
family fun day event or we're also calling it the
Aka Meow Mixer at the Hermitage No Kill Cat Shelter,
And we'll have some details coming up on our website,
which is the Win three team dot com. Again coming
(33:58):
up that will be in free event that we're inviting
the public to. It's a not for profit organization that's
very near and dear to me because I am actually
their treasurer for a few more months before I turn out,
and a great organization because they are a no kill shelter.
We'll have some really fun events. We're going to have
a bouncy castle, We're going to have face painting, we're
(34:20):
going to have I'm not sure we haven't secured the
food truck or trucks, but we will have some food
there and just some drawings and a lot of just
family fun events. So that will be a public event
if you're looking forward to. And we're also going to
have some discounts on adopting some kittens if you're looking
to add a new pet to your home. What a
(34:41):
great event to come to and get a discount on
an adoption. So hope to see many of you there
for that event coming up, And then also are the
Win three Team is recruiting for real estate agents. If
you're looking at either getting license to our license and
looking for a change, feel free to reach out to me.
Andy I two zero five three nine one, and again Jerry,
(35:05):
if you would give your number again, especially in the
last segment we were talking about both helocks investment helocks
and if anyone wants to reach out and get some
help on a low and share your number again, if
you would.
Speaker 3 (35:16):
Please please yeah, five two oh three seven zero seven six.
Speaker 2 (35:22):
Great, and we are coming up on the end of
the segment. We'll be back in just a few moments. Again,
this is Andy Keel with the Win three Team powered
by Epic Realty, and we will be back in just
a few moments.
Speaker 1 (35:36):
This is Home Solutions with the Win three Team powered
by Epic Reality on KNST. Here's the Win three Team leader,
Andy Keel.
Speaker 2 (35:46):
Hi, and welcome back to the show. This is Andy
Keel with the Win three Team powered by Epic Realty,
and this is the Home Solutions Show on KNST. I'm
again joined by Jerry Sunt with Cross Country Mortgage. And
on the break we were just talking a bit about
the wildfire situations and just the terrible issues that are
(36:06):
going out up California with the fires and insurance claims.
And believe you had an article you wanted to talk
about jury.
Speaker 3 (36:12):
Yeah, and I think it's so important. So I was
on Instagram and there was a lady describing that, you know,
she had lost her house in the fire and she
was having difficulty with her insurance company with the claim
simply because she did not add to put the title
of her property in the name of her trust, and
(36:33):
she did not add that trust to the insurance policy.
So incredible information. I know, I'm a big believer of
trust and putting real estate in a trust, but I
personally also have not added the trust to the insurance policy.
And so immediately I called my insurer and said, hey,
(36:54):
we need to add my family trust as an insurance
on the policy. And it's funny. They said, yes, please
set this copy of your trust. This is valuable to do.
And I share this because we hear often that it
is valuable to put your house in the name of
a trust. I don't know how many people go that
next step and then let the insurance company know that
(37:16):
the title has been now put in the name of
the trust and that that trust needs to be listed
as an additional insured and that could affect the payout
if in case of a loss. So again, simple thing
to do, very valuable information. And if your house and
a trust, please make sure that the trust's name is
an insured on your homeowner's policy.
Speaker 2 (37:38):
Yeah. I think that's a really good point. And actually
that brings up something that happened to me literally just
this week. We had an insurance claim where during one
of the windstorms, a tree fell and took out a
chunk of the roof on one of the properties that
we have, and we got the supplemental check, which was
just an additional little over one thousand dollars. It was
(38:01):
an owner finance property, so it was made out to
my LLC and the LLC that funded us. So I
ran over to get the endorsement from the other party,
and in my haste, I forgot to sign it myself.
I forgot to endorse it myself, but it was going
into my bank account, so I didn't even think to
do that. And guess what happened. Not my bank, but
(38:23):
the other bank kicked it back for improper endorsement and
we got popped in NSF. So I'm thinking Oh, that's
a little irritating, but okay, we can submit the check
a second time. So I endorsed it properly. We put
it through again, and they'd already stopped payment on it.
So now we have to go back and get the
check reissued again, probably wait another three to six weeks
(38:45):
for the insurance company to ground to it. So the
point is, it really feels like the insurance companies are
doing whatever they can to make it really difficult on
us to submit claims. And I can personally attest to
how much pain this is because we actually had a
situation about a year and a half ago. We have
a chunk of our portfolio in an Oklahoma city and
(39:08):
they had grapefruit size hail go through and just decimate
the whole town. And we had thirteen insurance claims and
thirteen new roofs that we needed, not to mention a
lot of siding and window damage in one fall. Swoop wow.
And you know this stuff does happen. I mean, even
in Tucson, we have these windstorms and hail that can
take out sections of the town, so.
Speaker 3 (39:29):
You know we need to have any I think insurance
has become such a major topic and when you look
at the price of how much insurance has risen for
just about every consumer. You know, anyone that has insurance
has probably noticed an increase, whether in homeowners in auto.
It's one of the biggest components that as far as
inflation goes over the last few years. We need to
(39:50):
get an insurance agent on the show and talk about
these things because it is becoming a bigger and more
important part of a family budget. We're using, oh insurances,
you know, it's a small number, not anymore, and especially
if you've had claims, it's really impacting the you know,
household incomes. We will we will need to do that
(40:12):
in the near term future.
Speaker 2 (40:14):
Yeah, we actually have that in the work, so that
will be on an upcoming episode where we're going to
have an insurance agent as a guest and talk about
some of these things. And I'm sure we're going to
have a lot of good tips there. So good call
to action for the audience. Just a good reminder you
should always at least once a year get with your
insurance agent. Just review your policies, make sure you have
(40:34):
the proper coverage. Another thing that's really important too. I mean,
we've had the bump in prices during COVID in the
last few years. If you haven't reviewed what your property
is insured for, and you haven't looked in about three
four years, you might be radically under insured. And that's
part of the problem with some of these California wildfire situations.
(40:55):
The properties are just a little under it too severely underinsured.
Speaker 3 (40:59):
Yep.
Speaker 2 (41:00):
Always a good thing to check on that. Make sure
that the policy matches the title. If you've moved in
into a trust. We don't think to call the insurance
company and tell them, but it's it's darned important that
we do that. So thanks all that.
Speaker 3 (41:13):
You know, the interesting topic and this is why I'd
love to have his agent that has deep knowledge of this,
you know, on the show. But you know, when you
have these ultra luxury homes that are worth twenty five
thirty million dollars, you know, I think insurance companies they'll
only ensure for X amount and anything above that had
(41:34):
to be the owner's you know, responsibility to pay, and
that could be ten million, fifteen to twenty million dollars
in some of these cases, and we can say, oh, well,
they've got the money to pay for it. Some do,
some don't. And it'll be very interesting to see how
this all plays out for sure.
Speaker 2 (41:52):
Yeah, and we one of our mutual clients that was
at the meet up the other night that that does
own some property in California, and he's definitely afraid of
what's going to come of that with his policies. I
don't know if he said they were getting canceled or
he was worried that there's a high probability. He just
he's literally a loss what to do for insurance. So
(42:13):
it'll be interesting. We'll certainly circle back to that and
get an expert on the show to talk about that.
So I have one more article that caught my eye
from Yahoo Finance that I thought was pretty interesting, and
it's titled most Americans are dissatisfied dissatisfied with their savings,
survey shows Yahoo Finance poll twenty twenty five. Survey shows
(42:36):
only twenty two percent of Americans are completely satisfied with
the amount of money they've saved. They do go on
to say in this article, credit card debt also reached
record highs. I don't have actually any statistics in this
article to talk that, but that seems to be in
line with a lot of the news headlines that we've
(42:56):
been seeing, and they go on to share some key
finding that I thought many of these were interesting, says.
Only twenty two percent of respondents report being very or
completely satisfied with their savings. Well, thirty five percent are
very or completely dissatisfied. Forty percent of women are very
or completely dissatisfied with their savings, compared with twenty eight
(43:18):
percent of men. Nearly half forty eight percent of respondents
saved less in twenty twenty four compared to the previous year,
with only twenty one percent saving more. Not too surprised there,
With inflationary numbers and certain key things like insurance. Nearly
(43:39):
half forty seven percent of respondents cite the cost of
living as their biggest obstacle to savings. Not particularly surprising.
One third of respondents couldn't cover bills for even one
month if they lost their income. That scares me.
Speaker 3 (43:54):
Yeah, that's a scare, right, I mean, that's just paycheck
to paycheck.
Speaker 2 (43:59):
Yeah, And we clearly have a subset of the population
that isn't really saving enough. And I don't mean to
preach on this, but it's so important to have at
least several months of cash reserves in case the worst happens,
because I mean, most of us in our lives do
get laid off or lose our job a few times,
(44:19):
and if you don't have that cushion, it's a pretty
scary thing. So going on to forty four percent of
the respondents believe they will save more in twenty twenty five,
with optimism highest among gen Z sixty three percent and
millennials fifty three And then they go on to say
sixty percent of respondents say they are more optimistic about
(44:40):
their finances for the coming year with Trump as president.
The optimism crosses generational lines with gen Z seventy percent
of gen Z are the most optimistic. I find that
interesting that our young folks are more optimistic than those
of us that are a bit older. Yeah, right, Going
on here, it says two thirds of respondents say the
(45:02):
cost of living for the average family in their area
is not affordable. Overall, our survey found that most respondents
describe the cost of living in their area as not
very affordable. Forty five percent will another twenty two percent
say it's not affordable at all. One quarter of Americans
say they live comfortably, and then it goes on older Americans,
(45:24):
baby boomer, boomers, silent, or greatest generations were more likely
to say they live comfortably than forty percent. Thirty one
percent are able to meet the basic expenses with a
little money left over for extras, while another thirty percent
are just able to meet their basic expenses. Twelve percent
say they don't have enough money to cover their basic
(45:44):
living expenses. Again, not not too terribly surprising with inflation area,
but it starts getting into some housing here that I
thought was was a bit interesting. Nearly half of the
respondents in our surveys saved less than twenty twenty four
compared to twenty three, and then overall, women were more
likely to say they've saved less money in twenty four
(46:06):
than they were in twenty three fifty three percent of
the women versus forty two percent of the men, especially
millennial and gen X women fifty seven fifty nine percent, respectively.
Speaker 3 (46:18):
The basic of this is that people are saving less,
and you know that is just because they're getting squeezed
by many different you know angles obviously, inflation is everything
is just more expensive than what it used to be,
and unless people change their spending habits or their patterns,
that they're not going to be able to save and
possibly racked up debt and go the other direction and
(46:40):
get more debt on the books. The only real solution
is bring down the Inflation's got to come down. Rates
have to come down, or people have to change their
their spending patterns. People change their spending habits or patterns.
That probably means that corporations will not have their their
blockbus outlook or revenue that they've had because they'll be
(47:03):
less sould. It's just the nature of what needs to happen.
And you know, I think we're going to find a
happy medium here, hopefully very very soon. This in twenty
twenty five.
Speaker 2 (47:12):
Yeah, I certainly hope so as well. And with that
we are coming up on the end of the show.
Thank you so much for joining us on the Home
Solutions Show on K and ST and again this is
Andy Keel with the Win three team powered by Epic
Realty and Jerry sent with Cross Country Mortgage. Look forward
to having you join us next week for our very
special guest, Sharon Lecter. Hopefully tune in next week. Thanks
(47:34):
so much,
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