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Real estate is something that everybody has been talking about for a long time, and obviously we know that that's something that's extremely important as far as you know, building wealth and you know, bridging the wealth gap, and you know, home equity, and it's a variety. Everybody knows why real estate is good at this point, right, or can be good, but it's some disturbing times that we're living in. Stock market has corrected itself several different times over the last decade.
Real estate has never really crashed since two thousand and eight. Real estate prices continue to go up. Right, even when the economy is slowing down, it has no signs of slowing down or at least, you know, fully crashing or pulling back. Even though people are not making as much money year over year. Right, It's not like people are
making tremendously more money. Inflation is a huge problem. Inflation has been going crazy, interest rates have been going up, so at a certain point, it becomes hard to justify buying real estate. Right. So I want to get you your take on I have. I have my views on this, but I want to I want to let you start the conversation and then we'll just take it from there.
Yeah.
First, thanks for having me on the show, guys. I really appreciate it. I really feel as if look, I always say the same thing, don't buy nothing you can't afford, right, And we are in inflation every times right now. It's no denying that the store prices are crazy. Anything you look at buy is high right now. Real estate is one of those things that is going to continue to rise,
in my opinion, because of simple supplying demand. There's not enough supply out there for even a little bit of the man that's out there right now, and there is still a lot of demand out there in the market, even with interest rates being at eight percent right now for a thirty year conventional mortgage, and that's what a excellent credit score of seven to sixty. Right So we have this argument, and I saw your posts and the comments is just like I mean, the comments are going crazy,
and everybody's going to always have this debate. Well should you buy? Should you rent? Well, you got to do something. If you rent, you pay somebody's mortgage regardless. That's just how I look at it. So if you are going to pay somebody's rent, me personally, I'd rather you pay here or pay somebody's mortgage. I'd rather you pay your own mortgage and own the house. Now, obviously you don't
want to buy nothing that you can't afford. But if you can afford it, I still think you should go out there and buy, but just make sure you're really focusing more on the deal. In today's market, not really focused on too much of the interest rate. But you got to focus on the numbers. You got to focus on the deal. You always got to remember real estate is especially a mortgage. You can always refinance a mortgage
if you qualify at some point. As very important if you qualify right, because a refinance is not a guarante. Is not something that you could just walk into the bank and say, hey, rates are five percent right now, refinance my mortgage. No, you still have to go through a qualification process, but you always have to keep that in your back pocket. Today's seven eight percent mortgage rate
can easily be four or five percent when that market drops. Now, what I would tell everybody who's watching this, and I'll tell you guys this too, What do you think is gonna happen when these rates do drop a year from now, two years from now, where do you think is gonna happen? Prices? Prices is going to go just like this, They're gonna skyrocket.
So I think we're in a position right now. And or honesty, if you do not buy something right now while there is less competition in the market with higher interest rates, you could be priced out even worse than you are today in two to three years. So for me, I'm always going to encourage especially black and brown people to go out there and buy real estate because our wealth is trapped in the real estate market.
They say, we look like reallyt So I got to ask the question, what do you say to everyone who says you just say that because you're in the real estate industry.
Yeah, I get that all the time too, and I love that, right.
It's the question to be asked, and.
It's a fair question, right because people say I'm biased because I'm trying to make a commission. Well, guess what, guys, I'll make more money if the market does crash, So me telling you go out here and buy now, like either which way, it doesn't hurt. A true professional like myself, someone who's been in this business for twenty plus years that has a book of business, I know how to make money in any of these type of markets. Good market,
bad market, left right. My sole purpose of being on the internet is one to provide leads for my mortgage business, obviously, but two to provide information so that way our people don't get screwed over, and a lot of our people over the past twenty thirty years, forty years, fifty years, I've been screwed over in the real estate space because no one has ever taught us how to buy home.
So I'm always going to be biased of home ownership because not just because it's something that I do for a living, is because I see the benefits as a homeowner of owning your own home. It's nothing better than.
That MG you talked about two thousand and eight, and it's something that you would end the business right you were navigating through that there was a crash. Shotty brought up about that that monthly mortgage payment being fifty two percent higher during that crash at the time that percentage is This episode is brought to you by P and
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An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from El Salvador accused of murdering a Texas. Man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy nom the United States
Secretary of Homeland Security. Under President Trump, attempted illegal border crossings are at the lowest levels ever recorded, and over one hundred thousand illegal aliens have been arrested. If you are here illegally, your next you will be fined nearly one thousand dollars a day, imprisoned, and deported. You will never return. But if you register using our CBP home app and leave now, you could be allowed to return legally.
Do what's right. Leave now. Under President Trump, America's laws, border and families will be protected.
Sponsored by the United States Department of Homeland Security was thirty three percent, So we're about twenty two percent higher than that period of time. Is this will we're headed. There's going to be a correction, there's going to be a crash. Obviously you said you're gonna make money either way. But I'm looking at from the standpoint of the person that was saying, yes, you should buy a home. As interest rates go higher, it becomes much harder to put
down this twenty percent down payment. So it's kind of a dilemma, right the interest rates are going up, I can't afford to it, so I might have to rent, but there might be a price point where I'm getting priced out in the event that there is a crash. There's a dilemma here that I'm not sure people are going to figure out how to navigate through.
So I'm glad you brought out two thousand and eight and a lot of people like to bring that up right and try to compare statistics from that era to today. But you also can't forget that the mortgage industry was completely different than what it was today, Right, People, if you had a post back then, you can get a mortgage. Now you're getting fully underwritten, So it's a different synopsis
right then. Also, you got to look at look at the inventory from two thousand and seven, two thousand and eight, two thousand and nine. At any given one of those years, you had over ten eleven months of supply on the market. You had two to four million foreclosures happening every single year.
Right. We don't have.
Those type of situations in today's market, So the underlying factors are completely different. If you're looking at two thousand and eight thousand market compared to twenty twenty three housing market, it's completely different. Now when you talk about income people being in like the inflation times, yeah, this is a
completely different story, right. I don't think we've ever been through this at this level country where prices have rolls this fast, just for everything that you're looking to buy, no matter what it is.
Right.
So I guess only Tom would tell what's really going to happen once that really starts kicking in and really kind of hurting people more than what is hurting them now. But I think me personally, we're not going to see a huge flux of inventory hit the market because most of the mortgages right now, I think seventy percent of all mortgages are below four percent interest rate. Those folks are not Russian to sell their sell I know.
I was gonna say, is that the silver lining and all this? Right, I was looking at the statistic. It's eighty percent of the stand and US mortgage that is under five percent, under five percent.
Yeah, that means that you have a.
Large population of people that have a pretty good mortgage rate and they just are going to sit there and not do anything. Yeah.
But also look at this too, you have fifty percent I think it's like fifty percent of all mortgages have at least fifty percent of equity in the property too, right, So now you have low rates top with most of Americans, majority of them have fifty forty thirty percent equity in their homes. And home prices are still going up this year two to four to five percent, just depending on what the market is. No, we're not going to see twenty twenty five percent appreciation year of a year like
we've seen during the pandemic years. But appreciation is still appreciation, yallars, So you have these underlying factors that we didn't have in two.
Thousand and eight.
Folks, didn't have, you know, all of this equity in their homes back in those days. And then again, the most important factor is the qualification of yesterday's borrow compared to today's borrow. Today's borrow is being vetted and being underwright and more thoroughly. There's more rules, there's more regulations to protect the homeowners. There's more modification programs that are out there in today's market that wasn't even an existence until the market crash, and these programs had to be
created to say people from losing their homes. Everybody got to realize the banks are not in the real estate business. They're in the lending business. They don't want to own your home, so they're gonna do whatever.
We have an honest conversation, Yeah, let's be causing a lot of disinflation and pricing us out of the market. Like, here's an amazing concept. Let me ruin a housing market from two thousand and two to two thousand and six with all the ninja loans. The White House has to call me and to fix it. And then all of a sudden, I change all of the modifications, so now I have a better book of buyers. When I say that I want to be the biggest landlord in the world.
I can make sure that those loans are favorable as I'm pricing everybody out.
Yeah, I mean, look at all the institutional investors. They're all killing this market right now. Look at you know, all how they buying property site unseen right. Look at the Zillos of the world, and all these different corporations that will buying all these singles families. Over the past couple of years, even before it started really getting a lot of news play, if you look at even seventeen eighteen nineteen, the institutional investors have been buying up real
estate for a very long time, driving up prices. It's just now when the rates dropped everybody started really getting in. The pandemic obviously helped everybody's attention. You ain't got nothing to do, you home, right, you're paying attention now. But this is not nothing new. And like we all know this, institutional investors are always going to continue to invest. Their job is to make money, period, point blank. And the housing market is up for grabs, so they're going to
continue to invest. And this is why for me, I don't really see a crash happening. I don't really see. I see a correction still going to happen, right, definite, and every what goes up has to come down at some point.
Right.
An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from El Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy nom the United States
Secretary of Homeland Security. Under President Trump, attempted illegal border crossings are at the lowest levels ever recorded, and over one hundred thousand illegal aliens have been arrested. If you are here illegally, your next you will be fine nearly one thousand dollars a day, imprisoned and deported, you will never return. But if you register using our CBP home app and leave now, you could be allowed to return legally.
Do what's right, leave now. Under President Trump, America's laws, border and families will be protected.
Sponsored by the United States Department of Homeland Security,