Join us as we break down the biggest real estate headlines shaping the market right now! In this episode, we explore the impacts of the 2024 election on the U.S. housing market with expert insights from real estate expert, Jerimiah Taylor (JT). Key topics include election-year housing trends, affordability challenges, rising mortgage rates, and how current policies from the Harris and Trump campaigns could reshape the real estate landscape. JT offers an in-depth look at the market dynamics influencing buyers and sellers during this time of uncertainty, emphasizing the importance of timing and market conditions for those navigating today’s real estate challenges. For more updates follow Movoto on Instagram @movotorealestate or download the Movoto app.
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Sophie:
0:00: Hello and welcome to the Movoto Mic, the official podcast of Movoto.com, the largest privately owned real estate search platform in the US. I’m your host, Sophie Brandeis and I’m here with my co-host Jenna Housson.
Jenna:
0:14: Hey, Sophie. Well, for season two, we’re shaking things up a little bit. Each episode, we will bring you the top headlines for all things real estate and we’ll have experts weigh in with their insights. It will be just like we’re reading the housing market news to you with an expert to kick off this Thursday episode.
Sophie:
0:32: To kickoff this Thursday episode, I am excited to welcome Jerimiah Taylor. We call him JT has been around the block when it comes to real estate with over two decades in the industry. Welcome to the mic.
JT:
0:42: I’m back. I’m here. I’m excited to be here and I’m pretty pumped to read the housing headlines together and I took a quick pre scan at what we’re going to try and I was like, oh, this would be way more fun if I just react in real time.
Sophie:
0:55: Yeah, the housing headlines during this time are pretty, pretty interesting.So let’s let’s get into it.
Headline: What happens to the housing market in an election year?
Author: Jeff Ostrowski
Publication: AOL
Jenna:
1:00: Yeah, we’ll just throw them at you and get your reaction to them. So the first headline is actually a question and I’m just gonna ask it straight to you. What happens to the housing market in an election year?
JT:
1:10: That’s like asking what happens to cold things during hot times on a warm day. Nobody knows, like it’s such a subjective question and there’s so much other data that you really need to answer that question. I think, what happens to housing during this election year? That question I can answer, you know, elections typically involve some level of uncertainty. The certain things are that typically if the current administration is running for re-election, they’re gonna do whatever they can to keep the lights on for the economy and people feeling good, which includes housing, right? And so a lot of times you’ll see housing stimulus and other things in election years, this is like a weird once in a lifetime where like, it’s kind of the current administration but not actually the current administration running against a previous administration. I don’t know. It’s very strange. I don’t know that we’ll ever see anything like this again. But look, here’s the reality and I was just talking about you about this earlier today. Changes in the housing market happen gradually then suddenly.So what I mean by that is in any given month, you’ll see some number of homes come on the market and you’ll see some number of homes come off the market. Generally, in the summer months, we see more homes go off the market than come on. And inventory goes down. In the winter months, generally we see more homes go on the market than come off and inventory goes up.
2:47: That’s like kind of gravity. Now, when the market starts to shift, you’ll see gravity interrupted and that’s exactly what we’ve seen in the last couple of months. So it’s like, hey, we’ve got some uncertainty. It’s an election year which is adding to the uncertainty because you’ve got like geopolitical war uncertainty. Now you’ve got election uncertainty, you’ve got interest rates riding like two decade highs and they like flirted with coming down a little bit in the summer, but now coming into the election, they’re going back up, which is kind of counter to what you would normally expect. Usually rates come down into the election. And then on top of all that, you’ve got more property coming on the market than you have going off by, by a faster pace than we would typically expect to see in like August, September. And so nationally, all of a sudden, we’re in this situation where housing inventory is starting to meaningfully increase. And so I was just looking at the numbers from the National Association of Realtors and we’re creeping over four months of inventory nationally which to put that in perspective, typically 5 to 7 months is a balanced housing market. Meaning if we didn’t list any real estate, we would sell everything that’s on the market within 5 to 7 months.
4:03: We all know balance is a myth and typically you only live in balance when you’re passing through it. For the last, call it, five years since COVID, we’ve been living in this like 1 to 2 to maybe three months of housing inventory in most markets. Naturally, it’s hovering around three months. So it’s been like an extreme seller’s market which has helped fuel price increases. So this last year where we’ve had rates higher than expected for longer than expected, kind of slowing wage growth stalled out ish job market. Then you add in all this uncertainty and interest rates staying high. Suddenly we are almost back to like a balanced demand market which if nothing changes means coming into next year, you could actually see some opportunities for a buyer’s market depending on what the administration that gets elected does to stimulate the economy and the housing market, right?
Headline: Election Anxiety Is Stalling the Housing Market, Agents and Mortgage Lenders Say
Author: Alena Botros
Publication: Yahoo Finance
Sophie:
4:47: Right and we will get into the different parties later. The next headline is election anxiety is stalling the housing market. This is by Alena Botros from Yahoo Finance. And she is basically saying that this specific election, the housing market is stalled a little bit.
JT:
5:03: No, actually I would agree with that and I think that aligns with what I’m trying to make, which is like, I, I’m sitting in a city right now called Tucson Arizona and I was looking at the Tucson housing market. Historically, there’s like 1516 100 ish homes a month that come on the market in the month of September. Last month it was 1767. Historically, there are 1211 100 homes that sell in the month of September. Last month it was 900. So there is a meaningful thing that is happening, like people are actually worried about what’s to happen with the election, which we can talk about. That’s smart or not coupled with like I said, slowing job growth, slowing wage growth and prices being still up year over year in a meaningful way. And yeah, I do, I feel like I feel like I’ve anecdotally heard more. People say I’m gonna wait and see what happens with the election before I make X Y Z major purchases. And I think that’s showing up in the housing market, the car market, just about every major purchase market, right?
Sophie:
6:10: So is that smart? Would you advise people buying houses to wait? Where is that anxiety coming from?
JT:
6:11: I think it’s called Fear. Which fear is an acronym. Most people don’t realize it’s called false evidence appearing real fear exists in your head. Warren Buffett said it best, I think that I don’t know, butcher the quote it’s like when others are greedy, be fearful and when others are fearful, be greedy. So when everybody else is freaking out, that usually means there’s a buying opportunity and I’ll tell you that there is like, we’re buying property, we’re getting some good deals because the people that put their house on the market in this market, they have to sell the house. Right?
7:08: And so if you’re a buyer, when people have to sell, that’s how you get good deals. The other thing too is like, nothing lasts forever, right? But in, in real estate is scarce in a way that I don’t think people really appreciate like if you want to buy you know, a Toyota Sienna, they make millions of those, right? And like if you miss out on the white one with the black leather, oh well, you’ll find another one. You just go find it somewhere else. If you miss the like corner lot house in the school district you wanna be in there may not be another one. And so I think that’s the part that, that people they get tripped up on like trying to time the real estate market. And I don’t know that that’s always the best idea because real estate is scarce. Like there there is a thing called location that is a real thing.
Headline: Housing Groups Weigh in on Harris’s and Trump’s Housing Plans
Author: Frances Nguyen
Publication: Shelter
Jenna:
7:35: I wanna switch gears slightly. I read this headline from Francis Ngyuen that says Housing Groups Weigh in on Harris’s and Trump’s housing plans.S he was mainly focusing on housing being very top of mind for both of the candidates. My main question here is why is housing top of mind? Why is it even on the ballot? Why should voters be paying attention to this at all?
JT:
7:58: The housing policy is a really interesting thing because it’s extremely nuanced, right? We’ll see a little history to like, think about how we got here. So go back to the early two thousands, 2001, we had a mini recession, rates went up. Housing market softened a little bit, but then it came back really strong. And and prices ran way up until we had the housing market led recession that that really happened in like started in 2006, but we saw the recession hit in 2008, right? During that time, there were multiple stimulus programs, there was TARP and HAMP that came out that were there to like stimulate the housing market. Historically, those were done as tax credits.
8:57: So meaning like if you bought a home during this year, you would, then when you filed your taxes, you would get some straight credit back to your taxes. So if you paid no income tax, you would get a $5000 check back or 3000 or whatever you qualified for. The devil is always in the details with these housing plans and So the, the reason that it’s on the ballot is because in the great recession, we had a lot of people exit the housing market and the housing industry. So meaning skilled trades went and did something else because we went from having a million new housing starts a year to like to call it 250,000. I don’t know the exact number, but it’s anecdotally correct, like directionally correct that number never recovered and we were on pace for it to recover right in time for COVID to happen. And COVID put all the supply chain constraints and slowed us all the way back down to like 2010 and 11 building numbers.
9:55: And so inventory never caught up. We had this lost decade of housing inventory creation and then COVID happens. And so now here we are in 2024. We’re see, and you’ve got the like mortgage lockdown effect that you have these millions of people with these 3% interest rates that aren’t selling their homes. Builders can’t really build these things fast enough and builders have been burned enough. So they’re very reluctant to be super speculative in what they’re building and they’re nervous about price. And so you still have this glut of housing inventory that just ain’t gonna come to market, right? And what both of these administrations are trying to spur is they’re trying to increase affordability because we know that homeownership is the single biggest driver of wealth in the US. And so they want to make it easier for the first time home buyers to get into these properties. But then they also want to create incentives for people to move and sell and to get the market moving because it’s such a huge piece of the US economy.
10:58: So now all that’s to say, both administrations have proposed something, none of it is law, none of there’s no bill written, there’s no proposal that’s out there for either one of them. They have different headlines. So the Harris administration has, their headline is $25,000 down payment assistance. Now on the other side, the Trump proposal is a tax credit. He hasn’t really talked about how much the tax credit is or who it will go to or what it will do. So, it’s like they both kind of have housing on the mind.
11:44: But I think either way the takeaway for me and I had a conversation with a group of realtors earlier today is like, I would be building my list today of who are all the people that are first time buyers that like free money they want to get in line. So that when this thing is announced, because I think there will be something, they can make sure that they get their part of it. And I think that’s the key is like knowing there’s gonna be something and just doing the work now to get kind of home ready. So you’re pre qualified, you know, you got your credit in order, you’ve got all your ducks in a row so that you can make it happen.
Headline: Housing on the ballot: Harris, Trump push different plans for tackling housing affordability crisis
Author: Sally Ho and Alex Veiga, Associated Press
Publication: The Hill
Sophie:
12:18: This next article touches on exactly what you just talked about. The headline is Housing on the Ballot Harris Trump Pushed Different Plans for Tackling the Housing Affordability Crisis. Can you talk a little bit more about the affordability crisis? The two different ways the candidates are going to tackle it, maybe touch a little bit about their plans to deal with the utilization of federal lands.
JT:
12:41: I’ve listened to long form interviews with both candidates. I am not going to claim to be a policy expert by any chance by any stretch of the imagination. What my interpretation of this is, is that what the Harris administration is proposing is effectively how do we help the government subsidize the cost of housing for, you know, some number of disenfranchised or less fortunate people. On the other side, what it strikes me is that the Trump administration, like while he hasn’t had this like concrete plan, he’s a real estate guy, right? He’s a real estate developer and he builds buildings and so what I would expect to see from him and what they talk about is deregulation. And so when you look at the reason that a lot of property is really expensive and not being built, especially in like highly regulated municipalities like California is because because, this stat is a few years old, something like 40% of the cost of doing a new construction development in California is regulatory overhead, meaning plans permits, studies, things like that.
13:49: Well, if you deregulate ostensibly, you could reduce the cost of new housing development by a meaningful amount of money. Now, deregulation obviously comes with other risk, right? And so there’s a, there’s like a real trade off that you have to make there. Yeah, and that’s, and that stat was from specifically San Diego County probably four or five years ago. And, and that was, wasn’t even like in the coastal development zones that was like overall development and you get in the coastal development zones. It can be even more than that just because of the number of studies and, and things that you have to do for protected species and invasive species of plants and all these other things. And so that’s a very real thing, right? And if you think about the ways to increase housing supply, you can do it by sprawl like meaning you build a bigger city or you could do it by density. Well regulation is what prevents density like vertical density. And so there’s a whole other argument about like, can the federal government even like change local zoning ordinance or does it like is that within their jurisdiction? But pretend for a minute they can, if they like, ubiquitously made it where across the country you could increase density at some level to increase supply at some level and they just streamline some of that regulation stuff. That’d be real interesting.
15:05: The, other thing that I think isn’t being talked about enough by either candidate that really massively impacts housing affordability is homeowners insurance. Whether you want to believe in climate change or not, there are very different things happening in the weather patterns of our country and across the world in the last few years than ever before. And it’s made insurance actuaries jobs much harder than they ever have been. And so we’re seeing things I never thought I would see in my lifetime, which is like AAA rated global insurance brands pulling out of key markets like State Farm and others saying, hey, I’m no longer gonna write insurance in this state and that’s just, that’s wild. And it’s what it’s created is a place where a big part of your affordability problem is this big step up in homeowners insurance. And so like I have a, a client that I was just trying to help with a, with a place in California and his homeowners insurance is like the reason that they are trying to refinance and move because it’s going from something like $1000 a year to $4700 a year. And for the average person that’s a meaningful job, that is a big jump. And that’s interesting.
Jenna:
16:23: Jerimiah, what do you think that that means for the future? Do you think that we’ll see more first time home buyers uncomfortable with the idea of making those purchases because of those insurance policies? Or what do you think the mindset or the anxieties if you will around that be like?
JT:
16:40: Probably a little bit out of my depth, but what it seems like to me is that these insurance companies did, did weren’t able to plan properly for some of the losses that they’ve incurred in these like natural disaster, name storm type events. And so to me, it feels like they’re playing a bit of catch up that like this massive jump in premium is like, wow, well, if this is gonna keep happening, we have to like catch up and then be ahead also, right. So you have this big stair step in premium.
17:08: I think it’s a bit like a reset moment for that industry. And they’ll have to think about how do we, how do we do this from somebody who has never really lived in? Like, I live in Arizona, like the only thing is it gets hot like your air conditioner breaks here. Now let’s say that and watch, we’re gonna have like a tornado. But I look at people that live in the path of named storms, right? Like, they’re in Houston or they’re in South Florida. And it’s like, they’re like, oh, this is the fourth time my house has been knocked down and like, we will rebuild it again and it’s like at some point, good judgment should say, like, you probably shouldn’t build another house there or you should build a house that is literally a fortress that can’t be knocked down by any level of storm and can survive underwater. And so I think that that’s like the same house getting affected year after year after year is like this weird new concept that the industry is gonna have to deal with and change.
18:03: And I think you’ll see some policy shift because also FEMA doesn’t have an unlimited amount of money to deal with this. And now you’re seeing floods in areas where people didn’t have flood insurance and, and if you’re uninsured, like I don’t know about, I would assume most people if their house went away along with all the belongings in it and then it was not a covered event because they didn’t have flood insurance. That’s like a game changer. And so I think that there’s probably a period of time where it’s real weird.And then within a few years it’ll sort itself out and you’ll see some solution.
Headline: Mortgage rates back at 7% as bond market investors stage rebellion
Author: Matt Carter
Publication: Inman
Jenna:
28:35: That’s an interesting take on that, Jerimiah. I want to pivot into this article by Inman, Matt Carter actually wrote it. The headline says Mortgage Rates Back at 7% as Bond Market Investors Stage Rebellion. I want to ask you, what do bonds have to do with mortgage rates? And there’s also a quote in here that says, “it’s a conceivable scenario that the bond vigilantes are definitely mounting up.” What is a bond vigilante? What should we know about this?
JT:
19:04: So I’m gonna give you my explain it like I’m five version of this.
Jenna:
19:09: Perfect.
JT:
19:10: That’s what we want and and like with the asterisk that there’s gonna be somebody way smarter than me that listens to this and says like, oh he’s an idiot. You got this totally wrong. This is how it works. This is my working understanding of the bond market and how it impacts interest rates and real estate and mortgages from 23 years in the industry. Ok? What you have to understand is that mortgage companies are nothing more than digital manufacturing businesses. They put together a saleable asset that is a mortgage loan, right? That mortgage loan is then packaged and bundled with a bunch of other mortgage loans like it and the rights to that loan are sold off to some investor that is buying and selling and trading mortgage backed securities, ok?
19:58: Generally over time, you can see a fairly tight correlation between the 10 year treasury bond yield and 30 year mortgage prices. and the difference between the two I’ll refer to as “the spread”. In normal economic times, the spread between the 10 year treasury bill and the average conventional 30 year mortgage is like 1.5%, maybe 2% if it gets a little weird. Today, the 10 year is trading at like 4 27 4 25 somewhere around there. So if we were in a normal time, that would mean you should expect on a 30 year mortgage rate to get a rate somewhere around 5.75% to maybe 6%. Well, the reality is the average conventional mortgage rate is more like 7% today. And so what that means is the spread is higher than it would historically be. And so when I hear this headline of like “bond traders waging war”, I think there’s really two things happening. One is that less than 60 days ago, the 10 year was at 3.5%. The Fed was cutting rates and it was on its way down. I think what’s happened is that the people that, who buy and sell those 10 year treasury bonds are looking at the Fed’s decision and they’re looking at the macroeconomic data and they’re saying like we think maybe the Fed has it wrong, we think it is more secure to have our money elsewhere and that is driving the yield up on the 10 year bond, right? When the yield goes up, mortgage rates are fairly closely correlated.
21:45: Now, the second piece is, if you believe that you’re in a highly inflationary cycle, it is less attractive to buy 30 year mortgage backed securities because you are buying a fixed interest rate product that has a long maturity cycle, right? And it’s, and so you want a premium for buying this fixed interest product that has a long maturity cycle. So if you’re in this inflationary time, and you think The Fed hasn’t actually tamed inflation, you’re gonna say, OK, now, I know historically this should trade for six, but I want six seven because I think things are gonna be tough. I’m gonna be in this for longer than I may need to be and I don’t know when I’m gonna get paid back on, right? And so I think that there’s really two things at play here is that the 10 years trading quite a bit higher, it’s like three quarters of a point higher than it was in the last 60 days. And then second is that, I think that there’s still some uncertainty about whether the Fed really has their arms around this economy. And so people want a premium for pledging funds into these long term, fairly illiquid assets.
22:48: And so, so all that’s to say like post election, post the fed meeting, that’s this week, post the job openings report. That is this week and we have one more fed meeting towards the end of the year. If those things, all if the like if the wind blows a different direction, right. And let’s say that those bond traders and the people buying and selling mortgage backed securities start to feel like the Fed does have their arms around this thing. And some of the election like discomfort, quiets down, it is reasonable to think that the spread could snap back to that like kind of historical 2% over the 10 year Treasury. And so even if the 10 year Treasury doesn’t trade back down a bunch. Like let’s say it trades back down to 3.9 or 4. You could get back to a place where you have a 6% mortgage rate before the end of the year without like a crazy amount of things changing.
Headline: U.S. housing market is on the ‘verge of a vicious cycle,’ which is ‘not good for America,’ Lennar Mortgage head warns
Author: Aarthi Swaminathan
Publication: Market Watch
Sophie:
23:45: The next headline kind of goes back to what you were talking about earlier in the episode, how both of the political candidates don’t have anything written into law yet. It’s just their ideas. This whole article was written around Laura Escobar, the President of Lennar Mortgage and chair of the Mortgage Bankers Association. So the headline is, US Housing Market is on the Verge of a Vicious Cycle, which is not good for America. And the main quote that I pulled here is: “enough is enough my message to every policymaker in Washington DC is going to be simple, stop talking about affordability and start delivering on affordability.”
JT:
24:25: Here’s the reality. Put aside all like salacious headlines that get people to click on things. Let’s just look at the facts. September of 2023. Ok, to September of 2024. If I was gonna go get a home loan in September of 23 I was gonna pay and, and I’m, I like literally like you guys can’t see this, but you can hear this thing. I’m looking at a rate sheet that compares mortgage interest rates from October 23 to April to July to September if a mortgage broker wanted to get a rate, that was called at like six and a quarter in October of 2023 the mortgage broker would have had to have paid almost five points. So on a $200,000 house five points is like 10,000 bucks, ok?In October of 2024. So one year later today, that’s six and a quarter percent interest rate instead of costing five points cost 0.36. So it’s less than a half a point or like 1000 bucks in that same time period, houses have gotten more expensive, meaning the average sales price for the average house across the US went up by roughly 2.5% year over year. So if the cost of money got 5% cheaper for the broker to buy it. But the house appreciated by 2.5%. Technically, is the house more affordable or less affordable than it was a year ago? It’s more affordable.
26:07 So there’s this confluence of three things. There is what you earn. There’s how expensive is the thing you’re buying and what is the cost of your debt? The reality is people are making more money. The thing that they’re buying is yes, more expensive, but their debt is cheaper than it was a year ago. So I hear that article and I’m like, they’re just out of touch like things are actually more affordable than they were now. All that being said, like the average house payment today is like $2300 a month, which I think for the average worker is totally out of whack. But that’s kind of like life, right? It’s like life gets more expensive the longer you live it. And so I, I think short of a time machine, I don’t know how you actually fix the affordability problem of taking us back in time to where I could like put $5000 down and have an $800 a month mortgage. And when you look at our housing market, the the magic of the US housing market is actually the availability of credit, right? Like if I generally haven’t been late on a bill in the last six months and have a paycheck, I can buy a house in America and that’s not the way it is in the rest of the world. And like, yeah, you may not like where that house is and you may not love the neighborhood and it may not have all the amenities that you want and you may not be able to afford your Netflix subscription and your iphone 16 when you buy that house. But getting that foot into the market, that’s what the people that came generations before us did that. Now they live in the house that’s worth $2 million that they paid 80,000 for, right?And that’s, that’s the beauty of real estate is it’s scarce and that’s why owning it is such an important part of building wealth, right?
Sophie:
27:59: I read this article a few months ago that talked about how credit and home ownership is the key to the American dream.
JT:
38:04: Yeah, but I had a, I like got to this guy that is like a wealth manager to very wealthy people and I am not a very wealthy person to make it crystal clear. I’ve bought some real estate and done well with it. And in talking to him, I was like, so, like, what’s the difference between the really wealthy people and everybody else? I was like, what do they do? Different? He’s like, oh, super simple answer. I was like, oh, I’m listening and he goes, they, take leverage and they stay concentrated and I was like, what does that mean? He’s like, well, they’re really good at one thing. They’re super convicted about it and then they go borrow a lot of money and they make bets on that thing that they’re really convicted about and then they get an astounding upside off of it. So it’s like the more leverage you can take and the more concentrated you can be and the more right, you can be, the faster you get rich. And I was like, that also feels like the more leverage you take, the more risk you have because if I borrow $3 and I only have one, yes, I can make nine, but I could also have negative two and he’s like, yeah, precisely right.
Headline: Mortgage rates will be high throughout 2025 even as the Fed lowers borrowing costs, Goldman Sachs says
Author: Kelly Cloonan
Publication: Business Insider
Jenna:
29:13: I like the simplicity of the way he broke that down. I’m not saying it’s easy, but I like the simplicity of it in the, in the way it, it comes across. I want to read you one more headline from Business Insider that says, Mortgage Rates will be high throughout 2025 Even as The Fed Lowers Borrowing Costs, Goldman Sachs says. You hear this, what’s your response?
JT:
29:38: High is relative. So they, we, we, whoever we is,, really started keeping track of mortgage rates sometime in the eighties and like the historical average interest rate for the amount of time that we’ve been keeping track of. It is kind of right about where we are now. It’s in the mid to high sixes. There was a period of time in the early eighties when it was actually high and you had 18 to 20% mortgage rates and then there’s a period of time just a few years ago where there was like, actually really low and you had mortgage rates that started with ones and twos. Historically, having a mortgage rate in the sixes and sevens is kind of normal and I don’t think that’s an unhealthy place for us to be. It’s typically not the number that makes it, that’s problematic for people. It’s the change and, or rate of change. And so for people that were looking at a house, you know, two years ago at 4% and they were like, man, that $500,000 house at 4% that payment is really high. And I don’t know if I want to buy that. Now. They’re looking at that house. That house is not 500,000 anymore. Four years, two years later, it’s probably now 520 or 550,000 and the rate went from 4 to 7. And so now the payment that was, you know, 2400 a month is 3500 a month for the same house. And they’re like, man, this is too expensive and it’s like, well, and there’s nothing out there that says it’s going to get,
Sophie:
31:24: I think one of the main things I’ve learned from working with you, JT, for over, I guess a year and a half now is that the world is just expensive and there’s no time to wait basically when it comes to real estate.
JT:
31:40: Yeah. And, and like the, I have this graph that I’ve, that I’ve used when I’ve done some talks and I’m like, just pretend you are the person with the worst freaking timing in history in the worst market in history, right? And let’s say you bought a house in Las Vegas in like June of 2006 or somewhere, right? Plus or minus around there and then like a year and a half later in December of 2007, you got a job transfer and you had to move, you took a 50% bath on that house, right? And so what happened is a lot of people got into that situation and I did a lot of short sales. I would talk to people and they’d be like, hey man, I gotta get out of this. I’m like 200,000 upside down it’s never gonna come back and I’m like ok well what are you doing? And they’re I have a renter in there and it’s like ok well what is, what’s the rent to pay? And they’re like call it I’m gonna make up a number 1800 a month and I’m like cool and what’s your mortgage? So well it’s like 1600 a month I’m like oh so they’re covering the mortgage like yeah but like if something breaks, like then I gotta pay for it and the value is just never gonna come back, I’m gonna be upside down forever. Well, the reality is, had they held on for like 24 months, they probably would have been able to sell it at almost any break.
33:09: Even had they held it for five years, they would have had equity and had they held it until now they would have had a life-changing amount of wealth that somebody else would have paid the mortgage payment on because the house would have more than doubled in value. And that’s why like, with real estate, the key is time in the market and super cliche, it’s time in the market not time being the market, right? And so, yeah, I, you know, nobody knows what the future holds.
33:37: We’re certainly in very unprecedented times. But if you look back at organized real estate for the recorded period of time, there’s no 10 year period that you could have bought a home and sold the home 10 years later where you would have lost. And so as long as you’re buying with that, as your time Horizon history says, you’re gonna be a winner where people mess up. Like they try, you know, you see people that try to fix and flip and they miss time the market, meaning they, like they buy it in July and try to sell it in December. Well, seasonally that’s a bad idea where they buy a house and it needs more repairs and they don’t know what they’re doing and they get it over their head. Yeah. Sure. People lose money on real estate all the time. But if it’s like, hey, this is where I’m gonna live, this is where I’m gonna create my life, raise my family, raise my cats, dogs, whatever you have. Right. And like, I’m gonna be here for a while. It’s, it’s the smartest investment you can make.
Sophie:
34:34: All right. Well, that was a loaded episode. I appreciate you taking the time to talk through everything with us. I had a great time and I feel honestly so much more informed.
JT:
34:44: It is a very interesting time in housing. It’s a very interesting time in the American experiment and I think I would be really happy if more people took the time to like, try and understand each other and take care of themselves. And so if,, people listen to it and they get this far, do your best to try and understand the other side or the perceived other side. Cause I think often you’ll find you have more in common than different and put your mask on before you help others because if you help yourself and put you in a position to help other people, what a note to end on.
