Home Purchase Power Today With Higher Interest Rates

Transcript Of Video:

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- Hello everyone, my

name is Brenden Rendo,

 

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and this is the Orlando Real Estate Buzz.

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I'm here today with Joseph

Dionne, of Home 1st Lending.

 

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And we wanted to take a moment

 

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with the interest rate

changes that have happened

 

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over the past six months,

and do a little breakdown

 

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of what it's done to the purchasing power

 

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for people out there on the market today.

 

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To give you a little idea,

in January of this year,

 

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Home Purchase Power

4:05

the average interest

 rate

was sitting right around 4%.

 

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Okay?

 

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- 4% is really good.

 

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- That's a nice range.

 

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And if you look at the

history, I went back last night

 

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and looked all this history.

 

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Over the past two years,

we averaged right in that

 

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4% window, and actually

dipped down below it.

 

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So what's happened is,

mentally, a lot of people

 

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have gotten used to that

4% mortgage interest rate.

 

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So when we took a little

spike up to 4 1/2%,

 

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I won't tell my age, but when I started

 

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we were averaging about 11%.

 

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When you're still seeing 4

1/2, you're, okay, no big deal.

 

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But, to a lot of people,

because of conditioning,

 

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it's a shock, and it was

a shock to the system.

 

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And I'll go over some other numbers

 

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about web searches a little bit later.

 

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But I think you, have

you felt it, that's it's

 

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slowed down a little bit, the market feels

 

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kind of a little bit softer?

 

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- Yeah, it's a little bit,

and you know, things like this

 

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or when it was four and four

and eighth, or something,

 

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it was right in that

range, nobody questioned,

 

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nobody was just like, "Oh,

I gotta find a lower rate."

 

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- Right.

 

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- Everybody's out there, would say,

 

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"Oh, that rates too high."

 

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- Yup.

 

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- But now, you notice

 

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the market's gotten stronger,

these rates have ticked up

 

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a little bit higher, over 4 1/2,

 

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now we're sitting close to

4.75 our conventional logs.

 

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And people are, "Whoa,

like this is really high!"

 

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- Exactly, and that's--

 

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- An interesting story.

 

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- Yes.

 

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- The crazy part is, let's go back before

 

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you know, seven, eight years ago.

 

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These rates are lower than

historic, before any other

 

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time in history.

 

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- Very true.

 

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Even if you look at the time of the boom

 

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in 2005, '06, and '07, interest

rates still were at the six,

 

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between six and seven percent.

 

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- Yeah.

 

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- I mean, you know, the

houses were appreciating, but

 

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we had the good old liar ones back then.

 

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No more of those.

 

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- (mumbling words), no more to those.

 

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- It has been kind of

kind of a mental shock.

 

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So really, right now,

 

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right now in July,

 

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of 2018,

 

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you're kind of looking at

4.75%, on a conventional loan.

 

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- Absolutely.

 

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- How's the (mumbles)

chain, comparative to this?

 

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- There's no chain right

now, it's sitting where

 

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a buyer that, you know,

 

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said, let's say same

credit, same credit profile,

 

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they're probably right

around four and half.

 

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- Okay.

 

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- Maybe 4.6 to five,

depending on the debt.

 

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- Okay.

 

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- And you if go back a year

or more ago, remember that,

 

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that difference between I could take,

 

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conventional is a little bit bigger.

 

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- Mm-hmm, sure.

 

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- (mumbles) strung a lock.

 

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- Has it?

 

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Okay.

 

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So the big thing is (coughs)

 

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to look at, is what is has this done?

 

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This .75% change in

interest rate increase?

 

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What has that done to your

purchasing power, as a buyer?

 

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But also, what has it done as a seller?

 

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If you've priced your house,

 

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and it's been on the market

say since March, or April,

 

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or even late May, and

you've got it priced here

 

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because you're in the summer

market, things are strong.

 

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What has that done, and

how do you have to look at,

 

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do I have my house priced right now?

 

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Can the person

 

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who may have looked at it back in January,

 

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and was waiting you know,

 

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for the end of school, a lot of people

 

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wait 'til the end of school,

to start their shopping.

 

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And they've seen this spike,

 

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this increase in interest rates.

 

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Maybe they can't afford

that house anymore.

 

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You've got to look at these things.

 

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Joseph, why don't you take

and go through a little bit,

 

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and let's do a comparison

 

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of what someone at 4% could afford,

 

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versus what someone at 4.75% could afford,

 

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as far as purchase price allowance.

 

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- And you know, let's try to make this

 

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as real as possible, right?

 

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So let's just say,

 

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and in Central Florida,

we're right here, you know,

 

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we're Water Springs Central Florida,

 

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and Central Florida market.

 

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Fannie Mae dictates that

the average median income

 

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for someone in Central Florida is $62,000.

 

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- Okay.

 

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- It's 62 and some change.

 

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But for this purpose, let's just be very,

 

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you know, basic.

 

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You make $62,000 a year.

 

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Alright?

 

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So, let's go into,

 

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because nobody just makes money,

 

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we all have expenses too, right?

 

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- Yes.

 

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- Unfortunately.

 

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So what are some of the

most common expenses?

 

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I mean, do you know anybody--

 

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- Your wife.

 

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- Okay.

 

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- I'm sorry, no, no.

 

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I'm sorry (laughs)

 

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- We'll list it there, first off, car.

 

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Let's say, car payment.

 

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I don't think I've done an application,

 

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I would say 95% of my

applications have a car payment.

 

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- That makes sense.

 

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- You know, where you're making $62,000,

 

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you probably don't have you know,

 

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a Pinto, you don't have a baseline,

 

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but you don't have an expensive car.

 

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And let's say you've got a great rate,

 

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and you put a little down,

your payment's 375 a month.

 

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- Where you suppose.

 

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- Right, feasible?

 

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Went to college, to get that

$62,000 a year job you have.

 

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- Yeah, wooh!

 

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- Student loans.

 

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You see 90% of that, so we'll just say,

 

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S.L. for student loans.

 

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Let's say, you know,

 

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you're on a income-based repayment plan,

 

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and that's what, 175, which

is kind of a nice square.

 

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You're making enough, that

you've got to make a payment,

 

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but the reality is, it's probably not

 

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paying down your balance,

with the (mumbles).

 

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- Not a lot, yeah.

 

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- You have a wife,

 

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she's not that expensive.

 

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(laughter)

 

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But you know, about two years ago,

 

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let's say you had a credit card at Jared

 

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and you're paying $75.00 a month on that.

 

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And you like to have a

little extra spending money

 

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so you got a second credit card

 

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and that's $50.00 a month.

 

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Right?

 

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So.

 

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- Pretty reasonable.

 

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- We've got not too much.

 

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Standard profile, we've got car payment,

 

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student loans, credit card,

 

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and credit card.

 

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That's about what I see 90% of the time.

 

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- Okay.

 

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- Pretty basic, kind of cost.

 

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Nobody's really (mumbles)

 

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some people will be a

little bit lower or higher

 

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but this is just a great example.

 

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So with that buying,

 

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like with scenario, $62,000.00

 

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these monthly debts,

you're gonna still qualify

 

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for a $300,000.00 house

 

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at a 4% interest rate.

 

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Right?

 

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We're starting to give you

 

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let's just say, 4% interest rate,

 

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300,000 home and this not

saying you wanna spend

 

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300,000 but it's just kind of,

 

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saying maximum debt to income.

 

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This is where you have

maximum you can afford.

 

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- Right now, what is Fannie

letting you get away with

 

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on debt?

 

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- So the debt to income,

 

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total debt to income is,

 

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we can get all the way up to 49.999.

 

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We have a standard 50%.

 

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- Okay.

 

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- The other key is, is to get to that

 

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you know, this person right here

 

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has to be doing a good job

 

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so we'll say they have a 720 credit score.

 

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- Okay.

 

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- So fair enough.

 

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- Alright.

 

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- So, we're at 300,

 

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you saved up a little bit you know,

 

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you've got 5% down

 

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which would be $15,000.00 you know.

 

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So now you're gonna be

financing $285,000.00.

 

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- Okay.

 

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- Alright, so what does that look like?

 

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So there's a couple of things.

 

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You will just plug in some square numbers,

 

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again 4% interest rate.

 

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So, let's say you know, 4% on a 285 loan

 

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is gonna be roughly $1,360.00 a month

 

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for a principal and an interest payment.

 

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- P and I.

 

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- P and I.

 

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But we need the tax--

 

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- The TI.

 

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- The TI, too yes.

 

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- You know, so you write interest.

 

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Let's go at it $300,000

 

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120 a month sounds pretty reasonable.

 

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- Yeah, that's sounds reasonable.

 

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- You know, maybe, maybe a little bit

 

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on the conservative side.

 

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- Yeah.

 

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- But it's not gonna be

much lower than that.

 

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Let's just a your, your taxes are 300.

 

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- What?

 

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- What are we not, we're

missing one piece on this.

 

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You only put 5% down.

 

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- You brought it.

 

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- 4% rate, so you've got

mortgage insurance, too.

 

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- Yes, mortgage insurance.

 

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- And this is something that

is really important because

 

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I've noticed a lot, and I love, I love,

 

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I love Zillow.

 

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I'm not gonna talk a whole

(mumbles) about Zillow.

 

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(laughter)

 

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- I will.

 

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(laughter)

 

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- But, this is what it means

 

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that (mumbles) very, very low

 

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is on every house, they talk about

 

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what's your payment?

 

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You know what that does?

 

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They give you this number.

 

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- Yes.

 

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- And that number is not accurate

 

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so you go, I can buy a $300,000.00 house.

 

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- I kind of like their Z estimate.

 

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- I don't know (mumbles).

 

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(laughter)

 

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So you've got that, and

we do this whole math

 

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right there (mumbles) right.

 

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- Yeah.

 

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- Eight, another eight.

 

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So around 1885.

 

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- Okay.

 

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- This completes your dent to income,

 

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it's gonna be over 49 and a half

 

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on the back-end.

 

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- Okay.

 

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_ You're pretty much maxed out right here.

 

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- You're maxed out.

 

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You're not going any higher.

 

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- This is (mumbles) no HOA

 

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because that's a factor

 

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we have to evaluate, too.

 

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- That's true.

 

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- So this is 4%, so we can't go 4% today.

 

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We can get it back in January remember.

 

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We can't get it today in July

 

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so what is it doing if my rate

 

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goes from a four to what

the current market is,

 

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so let's say I'm super, super picky.

 

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And I just couldn't find what I liked.

 

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- Yup.

 

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- At 300,000.

 

00:09:40:09 00:09:44:13

Now we're at a 4.75 so what

happens is that principal

 

00:09:44:13 00:09:45:24

and interest payment adjusts

 

00:09:47:07 00:09:49:05

because now your principal

and interest goes up.

 

00:09:49:05 00:09:51:21

What actually happens is the

key to the similar payment

 

00:09:51:21 00:09:53:14

to qualify within your debt to income--

 

00:09:53:14 00:09:55:01

- Yup.

 

00:09:55:01 00:09:56:03

- You just dropped your

buying power all the way

 

00:09:56:03 00:09:58:14

down to $275,000.00.

 

00:09:58:14 00:09:59:10

- Okay.

 

00:09:59:10 00:10:01:22

- So what is, what is $275,000.00.

 

00:10:03:02 00:10:04:07

It's about $25,000.00 difference

 

00:10:04:07 00:10:05:23

between you know, (mumbles) I owe

 

00:10:07:02 00:10:08:19

more on my webstream during that (mumbles)

 

00:10:08:19 00:10:10:17

probably would cost 25,000

 

00:10:10:17 00:10:13:08

but, what is that gonna do nowadays?

 

00:10:13:08 00:10:15:09

Like, you just over six months,

 

00:10:15:09 00:10:17:24

seven months time, you lost 25,000.

 

00:10:17:24 00:10:18:19

- You lost

 

00:10:20:24 00:10:21:19

25K.

 

00:10:24:21 00:10:26:04

25,000 in purchase power.

 

00:10:27:07 00:10:29:03

That's huge.

 

00:10:29:03 00:10:30:00

That's really bad.

 

00:10:30:22 00:10:33:08

Now I'll tell you a

place where I've seen it

 

00:10:33:08 00:10:34:18

in the past several months,

 

00:10:34:18 00:10:35:18

we've had the opportunity

 

00:10:35:18 00:10:36:19

to sell a couple properties

 

00:10:36:19 00:10:37:18

in Sweet Water.

 

00:10:37:18 00:10:39:04

- Okay.

 

00:10:39:04 00:10:39:25

- It's actually by where I live.

 

00:10:39:25 00:10:42:07

And they're a little bit older homes.

 

00:10:42:07 00:10:43:03

- Swarming, big yards.

 

00:10:43:03 00:10:44:22

- Yeah, big yards, love it,

 

00:10:44:22 00:10:47:01

absolutely love the area.

 

00:10:47:01 00:10:51:24

But what you saw is back in

the early part of the year

 

00:10:51:24 00:10:53:19

these four bedroom, two bath homes

 

00:10:53:19 00:10:55:01

you know, 2,000 square feet

 

00:10:55:01 00:10:56:21

about 2,500 square feet.

 

00:10:56:21 00:11:00:17

Starting now between 350 and $400,000.00.

 

00:11:02:05 00:11:05:18

Well, all of a sudden if

you look at Sweet Water

 

00:11:05:18 00:11:07:09

in the number of price reductions,

 

00:11:07:09 00:11:09:15

they've had over the

past couple of months,

 

00:11:09:15 00:11:11:24

it's numerous because people

 

00:11:11:24 00:11:13:11

had to bring it down.

 

00:11:13:11 00:11:17:15

You have sellers who are pricing homes

 

00:11:17:15 00:11:20:20

for the 4% market.

 

00:11:20:20 00:11:22:10

- Mm-hmm.

 

00:11:22:10 00:11:25:10

- Stretching it, everyone's you know,

 

00:11:25:10 00:11:28:19

it's unfortunate and one reason why

 

00:11:28:19 00:11:30:11

I asked Joseph this, and the reason why

 

00:11:30:11 00:11:35:11

I'm doing this is I hate

the 30 second sound bite.

 

00:11:35:14 00:11:36:10

Freakin' hate it.

 

00:11:36:10 00:11:39:23

It pisses me off and I really look at this

 

00:11:39:23 00:11:42:14

as going beyond the economy.

 

00:11:42:14 00:11:44:19

Really getting into what

 

00:11:44:19 00:11:47:01

effects you as a customer,

 

00:11:47:01 00:11:49:16

as a client because when we just sit

 

00:11:49:16 00:11:51:13

and look at the 30 seconds

 

00:11:51:13 00:11:53:23

you know, the were

later, the later realtors

 

00:11:53:23 00:11:54:19

do a great job.

 

00:11:54:19 00:11:56:13

They put out a monthly (mumbles).

 

00:11:56:13 00:11:59:16

But if you look at the

numbers that they've put out

 

00:11:59:16 00:12:02:01

currently, it looks great.

 

00:12:02:01 00:12:04:15

Whoa, median price from last year,

 

00:12:05:14 00:12:07:22

June of last year to June of this year,

 

00:12:07:22 00:12:09:23

you had 7% increase.

 

00:12:09:23 00:12:11:07

That's fantastic.

 

00:12:11:07 00:12:12:03

- That's a great (mumbles).

 

00:12:12:03 00:12:15:11

- Yeah, it sounds great for long term.

 

00:12:16:08 00:12:17:04

Alright.

 

00:12:17:04 00:12:18:18

But let's look at the other numbers.

 

00:12:18:18 00:12:19:25

Percentage of sales,

 

00:12:19:25 00:12:21:19

down 11%.

 

00:12:21:19 00:12:24:13

Pending sales, down 12%.

 

00:12:24:13 00:12:27:10

New listings, down 11%.

 

00:12:27:10 00:12:30:17

Inventory, down 17%.

 

00:12:30:17 00:12:33:23

So you're getting conflicting information.

 

00:12:33:23 00:12:36:14

One part makes it sound

like, wow, it's fantastic.

 

00:12:36:14 00:12:38:04

The other part, you're looking going,

 

00:12:38:04 00:12:41:19

"Wait, those are some

pretty big negative numbers,

 

00:12:41:19 00:12:42:23

"that are sitting on there."

 

00:12:42:23 00:12:44:15

And what's the key?

 

00:12:44:15 00:12:48:07

Interest rate average, 4.61

 

00:12:48:07 00:12:51:12

and that just, when I look at numbers

 

00:12:51:12 00:12:53:23

and we get the (mumbles)

numbers every month.

 

00:12:53:23 00:12:56:16

What are the things that I always look at

 

00:12:56:16 00:12:58:07

is original price,

 

00:12:58:07 00:13:00:05

versus sold price.

 

00:13:00:05 00:13:02:12

- This is what they

listed for, versus what--

 

00:13:02:12 00:13:03:11

- Yeah.

 

00:13:03:11 00:13:04:17

- What they're actually willing to pay.

 

00:13:04:17 00:13:06:21

- Because unfortunately

what happens a lot of times

 

00:13:06:21 00:13:09:14

we get with Zillow and

some of these other points

 

00:13:09:14 00:13:12:10

all you see is the final list price.

 

00:13:12:10 00:13:13:06

- Mm-hmm.

 

00:13:13:06 00:13:15:21

- Not the original list price

 

00:13:15:21 00:13:17:18

and any, and any price reductions.

 

00:13:17:18 00:13:19:16

So yeah, so I started to (mumbles)

 

00:13:19:16 00:13:21:21

on $390,000.00.

 

00:13:21:21 00:13:23:08

That was great.

 

00:13:23:08 00:13:27:01

No hits, well let's drop it to 375.

 

00:13:28:05 00:13:29:23

Whoops, no hits.

 

00:13:29:23 00:13:31:22

Let's drop it to $350,000.00.

 

00:13:32:24 00:13:37:05

Oh, fantastic, we sold it for $349,000.00.

 

00:13:38:09 00:13:39:15

So what does this look like?

 

00:13:39:15 00:13:41:20

Well, we sold the house

 

00:13:41:20 00:13:45:16

at 99.9% of the listing.

 

00:13:46:21 00:13:48:17

No, you didn't.

 

00:13:48:17 00:13:49:24

- No you didn't.

 

00:13:49:24 00:13:51:09

(mumbles) list price.

 

00:13:51:09 00:13:53:12

- This of the current list price.

 

00:13:53:12 00:13:55:15

It's not the real number.

 

00:13:56:13 00:13:57:12

So one of the things that I did

 

00:13:57:12 00:13:58:25

is I pulled the chart

 

00:13:58:25 00:14:00:25

going from January of this year

 

00:14:00:25 00:14:02:24

until July of next year.

 

00:14:02:24 00:14:04:21

Here's the interesting thing.

 

00:14:04:21 00:14:06:19

The original median price

 

00:14:06:19 00:14:10:06

in January was $224,000.00.

 

00:14:11:08 00:14:13:11

These are Seminole County numbers,

 

00:14:13:11 00:14:14:10

just to let you know.

 

00:14:14:10 00:14:15:06

I pulled just for Seminole County.

 

00:14:15:06 00:14:17:07

- Not (mumbles) just Seminole.

 

00:14:17:07 00:14:18:06

- Just Seminole.

 

00:14:18:06 00:14:20:03

July of this year,

 

00:14:20:03 00:14:21:16

the July numbers for this year

 

00:14:21:16 00:14:24:10

median price, you think has gone up.

 

00:14:24:10 00:14:27:13

- You said, it said 75 was what we saw.

 

00:14:27:13 00:14:29:03

- Yeah, so we (mumbles).

 

00:14:29:03 00:14:31:01

- (mumbles) maybe 230's?

 

00:14:31:01 00:14:34:25

- No, 225.

 

00:14:34:25 00:14:38:12

Median price is actually stabilized.

 

00:14:39:13 00:14:42:03

We did see a spike back in May

 

00:14:42:03 00:14:44:24

up to $233,000.00

 

00:14:44:24 00:14:46:11

but since May--

 

00:14:47:12 00:14:50:05

- May was when this piece.

 

00:14:50:05 00:14:51:00

- Yes.

 

00:14:51:00 00:14:52:22

- Started (mumbles) some

of the biggest (mumbles).

 

00:14:52:22 00:14:54:09

- Started to pop up.

 

00:14:54:09 00:14:55:08

- Right, yeah.

 

00:14:55:08 00:14:56:04

January was here,

 

00:14:56:04 00:14:57:11

and it goes up a little bit.

 

00:14:57:11 00:14:59:17

February, March, April, and May (mumbles).

 

00:14:59:17 00:15:01:19

- We could've spiked, yeah.

 

00:15:01:19 00:15:04:17

- 65 to four point

interest, boom, boom, boom.

 

00:15:04:17 00:15:06:00

Really got up

 

00:15:06:00 00:15:07:21

and a lot of that is not because

 

00:15:07:21 00:15:09:18

you know, banks are being greedy at all.

 

00:15:09:18 00:15:10:24

- No.

 

00:15:10:24 00:15:11:20

- It's because the economy is actually

 

00:15:11:20 00:15:12:17

getting stronger where (mumbles).

 

00:15:12:17 00:15:14:08

- Exactly.

 

00:15:14:08 00:15:15:04

- The people don't like to hear

 

00:15:15:04 00:15:16:20

that interest rates are going up

 

00:15:16:20 00:15:17:20

'cause it's actually a quick bit because

 

00:15:17:20 00:15:19:16

when it was held at the four

 

00:15:19:16 00:15:22:03

or you know, we go back further in time

 

00:15:22:03 00:15:24:06

add it was you know, the high three's

 

00:15:24:06 00:15:25:11

and such, this is

actually not good at all.

 

00:15:25:11 00:15:27:02

Like it was great for our wallets.

 

00:15:27:02 00:15:28:11

- Oh (mumbles)

 

00:15:28:11 00:15:29:09

- For a time card.

 

00:15:29:09 00:15:30:09

- We loved it.

 

00:15:30:09 00:15:31:09

- But his the economy,

 

00:15:31:09 00:15:32:12

as the entire nation

 

00:15:32:12 00:15:34:15

it was saying, "Hey we

weren't doing well,"

 

00:15:34:15 00:15:35:24

because--

 

00:15:35:24 00:15:36:24

- Exactly.

 

00:15:36:24 00:15:37:22

- The program was pulling brakes,

 

00:15:37:22 00:15:39:10

they were pressing

brakes to keep (mumbles).

 

00:15:39:10 00:15:40:07

- They were (mumbles)

 

00:15:40:07 00:15:41:03

but artificial involvement.

 

00:15:41:03 00:15:41:24

- There was, they perfect

basically giving a,

 

00:15:41:24 00:15:43:18

like a penicillin shot--

 

00:15:43:18 00:15:44:17

- Exactly.

 

00:15:44:17 00:15:46:01

- To the housing project.

 

00:15:46:01 00:15:47:07

- Exactly.

 

00:15:47:07 00:15:48:07

So those days are over.

 

00:15:48:07 00:15:50:22

We've got the normalized rates.

 

00:15:50:22 00:15:52:13

But I the Feds is

actually doing a good job

 

00:15:52:13 00:15:54:04

of doing so.

 

00:15:54:04 00:15:55:00

- Yeah.

 

00:15:56:10 00:15:57:11

- But your still getting that

 

00:15:57:11 00:15:59:20

mental breakdown where people

 

00:15:59:20 00:16:01:12

are just saying, "Whoa"

 

00:16:01:12 00:16:02:22

for a second.

 

00:16:02:22 00:16:04:18

So, let's look at this.

 

00:16:04:18 00:16:09:08

May we were at $233,000.00 median.

 

00:16:11:03 00:16:11:23

Okay.

 

00:16:12:23 00:16:17:09

June, we're at 229,900.00

 

00:16:21:05 00:16:26:05

and then July, we're

seeing that 225,000.00.

 

00:16:27:01 00:16:29:15

So these are the median original prices.

 

00:16:29:15 00:16:30:24

Original prices.

 

00:16:30:24 00:16:32:16

So we've actually,

 

00:16:32:16 00:16:33:16

it's tightened out,

 

00:16:33:16 00:16:35:05

the market's tightening

 

00:16:35:05 00:16:37:19

so for sellers, you've got to look at this

 

00:16:37:19 00:16:39:05

and go, "Ooh."

 

00:16:39:05 00:16:40:05

- Can I ask some questions?

 

00:16:40:05 00:16:41:17

- Sure.

 

00:16:41:17 00:16:42:17

- And this might just be that

 

00:16:42:17 00:16:45:13

(mumbles) the mortgage side

and not the real estate side

 

00:16:45:13 00:16:49:06

but isn't this like, isn't

this peak buying season?

 

00:16:49:06 00:16:50:02

- It is.

 

00:16:50:02 00:16:51:16

- Isn't this when most people are buying

 

00:16:51:16 00:16:54:08

which doesn't that mean this

should be going another way,

 

00:16:54:08 00:16:55:17

right?

 

00:16:55:17 00:16:56:16

- Right.

 

00:16:56:16 00:16:57:12

Well here's a very interesting thing.

 

00:16:57:12 00:16:59:03

This is the geek in me

 

00:16:59:03 00:17:00:12

'cause I am a geek.

 

00:17:00:12 00:17:01:12

(laughter)

 

00:17:01:12 00:17:02:11

If you look around this room,

 

00:17:02:11 00:17:03:22

you would realize I am a geek.

 

00:17:03:22 00:17:04:23

Alright.

 

00:17:04:23 00:17:08:09

I went on to some of the top local realtor

 

00:17:08:09 00:17:09:19

web pages.

 

00:17:09:19 00:17:10:22

I'm not gonna tell you what they are,

 

00:17:10:22 00:17:12:19

but I'll tell you I did.

 

00:17:12:19 00:17:13:17

(laughter)

 

00:17:13:17 00:17:14:13

And their bell curve

 

00:17:14:13 00:17:17:09

for web traffic looks like this.

 

00:17:18:16 00:17:19:16

- So this is now.

 

00:17:19:16 00:17:20:19

- This is now.

 

00:17:21:16 00:17:24:09

This, was May.

 

00:17:25:11 00:17:29:13

Their hits totaled averaged about 14,000

 

00:17:30:21 00:17:32:21

and you know, this is a great parameter

 

00:17:32:21 00:17:33:22

for the real estate market.

 

00:17:33:22 00:17:34:20

You know why?

 

00:17:34:20 00:17:36:12

Because 95% of people

 

00:17:36:12 00:17:39:17

start their home search on the web.

 

00:17:39:17 00:17:40:21

- Mm-hmm.

 

00:17:40:21 00:17:43:07

- So, you watch, one thing I always do

 

00:17:43:07 00:17:44:20

is I watch the web tracker.

 

00:17:45:20 00:17:49:02

Because you can tell

how the market is also

 

00:17:49:02 00:17:50:21

based on the web tracker.

 

00:17:50:21 00:17:53:17

Well, this is now July.

 

00:17:55:02 00:17:56:10

And they dropped down

 

00:17:56:10 00:18:01:07

to under 6,000 web hits

 

00:18:01:07 00:18:02:21

and that's four or five,

 

00:18:02:21 00:18:03:17

I can't remember exactly,

 

00:18:03:17 00:18:07:11

four or five different very good

 

00:18:07:11 00:18:09:05

realtor-based web pages here

 

00:18:09:05 00:18:10:23

in Orlando that are locally based.

 

00:18:12:04 00:18:14:15

So, again, here it is.

 

00:18:14:15 00:18:17:09

Matches up to these numbers.

 

00:18:17:09 00:18:18:21

Now here's another interesting number

 

00:18:18:21 00:18:20:04

that I love.

 

00:18:20:04 00:18:21:22

Is I took a look

 

00:18:21:22 00:18:24:23

at the difference from

the original meeting

 

00:18:24:23 00:18:26:06

original priced median

 

00:18:26:06 00:18:28:10

versus the sales price median.

 

00:18:28:10 00:18:30:10

Well, in January (mumbles).

 

00:18:36:02 00:18:38:21

In January the difference

 

00:18:40:06 00:18:42:22

was $34,000.00.

 

00:18:44:17 00:18:46:10

- So original list price

 

00:18:46:10 00:18:48:02

to where they actually sold for.

 

00:18:48:02 00:18:48:23

- Right.

 

00:18:48:23 00:18:49:18

- $34,000.00.

 

00:18:49:18 00:18:53:10

- So this was sitting at 224 median.

 

00:18:53:10 00:18:56:10

Median actual sales price was 190,000.

 

00:18:57:22 00:18:59:05

- So does that mean--

 

00:18:59:05 00:19:00:01

- Different (mumbles).

 

00:19:00:01 00:19:02:10

- That on access (mumbles)

overpriced 34,000.

 

00:19:02:10 00:19:03:06

- Yeah.

 

00:19:03:06 00:19:04:02

- Right?

 

00:19:04:02 00:19:04:23

- Slower, slower markets,

 

00:19:04:23 00:19:06:17

what happens in a slower market?

 

00:19:06:17 00:19:08:07

You try and get a bigger,

 

00:19:08:07 00:19:11:03

bigger discount off the the list price

 

00:19:11:03 00:19:11:24

which make sense.

 

00:19:11:24 00:19:13:10

- Yeah.

 

00:19:13:10 00:19:14:06

- Okay.

 

00:19:14:06 00:19:16:16

Well, what's now in July

 

00:19:16:16 00:19:18:23

we're at, we're at July.

 

00:19:25:20 00:19:30:00

The difference is $12,000.00

 

00:19:31:20 00:19:33:19

tightened up immensely.

 

00:19:35:00 00:19:37:07

So you've got a 225,

 

00:19:38:11 00:19:39:08

nice numbers, huh.

 

00:19:39:08 00:19:40:18

- Yeah.

 

00:19:40:18 00:19:43:25

- 225,000 median versus a 213,000

 

00:19:46:16 00:19:49:14

sales price, so $12,000.00.

 

00:19:49:14 00:19:54:14

- So, what's been (mumbles)

literally the market's

 

00:19:54:24 00:19:57:22

gone a little bit just 'cause it's gotten

 

00:19:57:22 00:19:59:14

better, more quicker.

 

00:19:59:14 00:20:00:21

- Well.

 

00:20:00:21 00:20:02:17

- Is it because of the price better?

 

00:20:02:17 00:20:03:19

- To me it's a couple things.

 

00:20:03:19 00:20:06:14

One, they're priced better.

 

00:20:06:14 00:20:10:03

If you notice, our line really

 

00:20:10:03 00:20:13:10

looks like this now as

far as price increases

 

00:20:13:10 00:20:14:20

in homes.

 

00:20:14:20 00:20:15:16

Alright.

 

00:20:17:16 00:20:18:12

So, we've leveled off,

 

00:20:18:12 00:20:19:08

we really kind of leveled off

 

00:20:19:08 00:20:21:19

on the prices, and actually

the past couple months

 

00:20:21:19 00:20:23:20

the median has come down just a hair.

 

00:20:23:20 00:20:25:13

So, the sellers are learning that,

 

00:20:25:13 00:20:29:05

"Hey, I can't overprice the houses.

 

00:20:29:05 00:20:31:22

"If I price it right, I'm gonna get closer

 

00:20:31:22 00:20:34:03

"to what I'm looking for."

 

00:20:34:03 00:20:36:14

What the real true value of the house is.

 

00:20:36:14 00:20:38:12

- So we can't dream too big.

 

00:20:38:12 00:20:39:14

- Right, and then the,

 

00:20:39:14 00:20:42:01

and then the buyers are realizing,

 

00:20:42:01 00:20:44:03

"Okay, it is competitive."

 

00:20:44:03 00:20:46:15

The inventory is tight,

 

00:20:46:15 00:20:48:22

so yes, am I gonna have to

pay closer to what they're

 

00:20:48:22 00:20:50:07

asking for that house?

 

00:20:50:07 00:20:51:04

Yes, I am.

 

00:20:52:22 00:20:57:19

So, these, the details and the data

 

00:20:59:11 00:21:00:09

when you break up the numbers,

 

00:21:00:09 00:21:02:12

you get beyond that 30 seconds--

 

00:21:02:12 00:21:03:16

- Mm-hmm.

 

00:21:03:16 00:21:07:09

- Sound play, there's a

lot of information there

 

00:21:07:09 00:21:08:23

and when you're looking to price a home

 

00:21:08:23 00:21:11:11

these you got it a look at these things.

 

00:21:11:11 00:21:13:23

You know, when you're

looking at buying a home

 

00:21:13:23 00:21:15:17

you wanna know this type of stuff.

 

00:21:15:17 00:21:17:11

Okay, for this subdivision.

 

00:21:17:11 00:21:19:11

Let's take a subdivision in Sweet Water.

 

00:21:19:11 00:21:21:03

How many price decreases have they had

 

00:21:21:03 00:21:23:05

in the past two months?

 

00:21:23:05 00:21:25:03

You know, what's, what's the tendency

 

00:21:25:03 00:21:27:02

within that, within that subdivision?

 

00:21:27:02 00:21:28:02

You know, what's the tendency

 

00:21:28:02 00:21:29:16

within that town?

 

00:21:29:16 00:21:31:22

So I think what we're gonna see really

 

00:21:31:22 00:21:35:03

over the next probably six months

 

00:21:35:03 00:21:36:10

is we're gonna see this

 

00:21:36:10 00:21:38:14

even though the inventory is still tight.

 

00:21:39:16 00:21:40:13

You know, we've only got I think

 

00:21:40:13 00:21:43:03

7700 or 7500 homes you know,

 

00:21:43:03 00:21:44:18

on the MLS.

 

00:21:44:18 00:21:47:00

So even though the market is tight

 

00:21:47:00 00:21:49:17

because people's wallets

 

00:21:49:17 00:21:50:21

are gonna be tighter,

 

00:21:51:25 00:21:54:03

you're gonna see this number

 

00:21:54:03 00:21:55:24

this difference stay tight

 

00:21:57:04 00:21:59:01

and they're gonna be much pickier

 

00:21:59:01 00:22:03:18

because you've lost $25,000.00

 

00:22:04:16 00:22:07:10

in purchasing power.

 

00:22:07:10 00:22:09:15

- I really just wanna,

I feel like this is huge

 

00:22:09:15 00:22:11:23

because if you sell a house, right?

 

00:22:11:23 00:22:12:19

- Mm-hmm.

 

00:22:12:19 00:22:16:06

- What do you, almost 95, 99%

 

00:22:16:06 00:22:17:20

have to do after that?

 

00:22:17:20 00:22:18:22

- Buy another house.

 

00:22:18:22 00:22:19:17

- Buy another house.

 

00:22:19:17 00:22:22:12

So you just listed in January

 

00:22:22:12 00:22:25:04

and then you lost 34,000

 

00:22:25:04 00:22:27:05

as you went through this, right?

 

00:22:27:05 00:22:28:13

- Mm-hmm.

 

00:22:28:13 00:22:32:00

- And then you lost 25,000

 

00:22:33:05 00:22:35:11

you know, on your purchasing power.

 

00:22:35:11 00:22:39:03

So you really lost 59,000.

 

00:22:39:03 00:22:40:02

- Where's the (mumbles)?

 

00:22:41:23 00:22:43:10

- (mumbles) website.

 

00:22:43:10 00:22:44:17

Right?

 

00:22:44:17 00:22:47:10

(laughter)

 

00:22:47:10 00:22:48:07

You gotta go to the camera first.

 

00:22:48:07 00:22:49:09

(laughter)

 

00:22:49:09 00:22:50:10

This 60,000.

 

00:22:50:10 00:22:51:15

- Right (mumbles).

 

00:22:51:15 00:22:52:14

(laughter)

 

00:22:52:14 00:22:55:20

- Yeah, that's almost

$60,000.00 in loss because--

 

00:22:55:20 00:22:57:19

- Oh, sure yeah (mumbles).

 

00:22:57:19 00:23:00:14

- Like this is the

challenge right there is--

 

00:23:00:14 00:23:01:13

- Yup.

 

00:23:01:13 00:23:03:18

- You are trying to get

as much as you could

 

00:23:03:18 00:23:06:24

but you didn't listen to the professional

 

00:23:08:03 00:23:11:20

that was telling you where the values are

 

00:23:11:20 00:23:13:22

and how because you're

going in as a realtors

 

00:23:13:22 00:23:15:06

what--

 

00:23:15:06 00:23:16:04

- Yeah.

 

00:23:16:04 00:23:17:11

- Sell it for the most

and you're (mumbles).

 

00:23:17:11 00:23:19:03

- You always wanna get the best,

 

00:23:19:03 00:23:20:11

best value for your client.

 

00:23:20:11 00:23:21:18

- Mm-hmm.

 

00:23:21:18 00:23:22:23

- You know, you wanna maximize the value

 

00:23:22:23 00:23:25:11

but sometimes, I'll tell you

one of the hardest things

 

00:23:25:11 00:23:27:15

for a lot of realtors to do--

 

00:23:27:15 00:23:28:11

- Mm-hmm.

 

00:23:28:11 00:23:30:22

- Is to actually look

your client in the face,

 

00:23:30:22 00:23:33:16

and say, "Yeah, I know you've

got the nicest kitchen,

 

00:23:33:16 00:23:35:01

"you've got the nicest bathroom,

 

00:23:35:01 00:23:37:07

"you've got the nicest yard.

 

00:23:37:07 00:23:41:25

"But I'm sorry, it does not

make that much of a difference

 

00:23:41:25 00:23:43:08

"in the value."

 

00:23:43:08 00:23:44:04

- Yeah.

 

00:23:44:04 00:23:46:14

- You know, comparables are comparables.

 

00:23:46:14 00:23:48:24

- You can have of course,

but the Kaughs have granite.

 

00:23:48:24 00:23:50:06

- Right.

 

00:23:50:06 00:23:54:07

And it's one of the, honestly

one of the hardest things

 

00:23:54:07 00:23:57:20

is when, "Well Zillow said

it was worth this much."

 

00:23:57:20 00:23:58:20

(laughter)

 

00:23:58:20 00:23:59:16

- You're Zestimatg.

 

00:23:59:16 00:24:01:18

- Yes, the essence.

 

00:24:01:18 00:24:02:14

Well, here's the thing.

 

00:24:02:14 00:24:03:23

Anyone who wants their Z-estimate

 

00:24:03:23 00:24:08:04

and the 60,000 other

automated evaluation models

 

00:24:08:04 00:24:11:00

that take a look, we sold a house,

 

00:24:11:00 00:24:14:22

the Z-estimate was $257,000.00.

 

00:24:17:06 00:24:18:11

Gorgeous house.

 

00:24:18:11 00:24:21:19

House was redone by one

of the best builders

 

00:24:21:19 00:24:24:06

in the county.

 

00:24:24:06 00:24:26:16

And practically gorgeous.

 

00:24:26:16 00:24:28:13

We sold the house,

 

00:24:28:13 00:24:30:09

I think it was for $357,000.00.

 

00:24:33:15 00:24:35:07

You know the Z-estimate changed to?

 

00:24:36:07 00:24:37:03

$300,000.00.

 

00:24:38:05 00:24:40:02

(laughter)

 

00:24:40:02 00:24:42:07

I was dying laughing.

 

00:24:42:07 00:24:45:23

And again, details, you wanna have fun?

 

00:24:45:23 00:24:47:24

Go into the back page of Zillow

 

00:24:47:24 00:24:49:06

where they hide it,

 

00:24:50:08 00:24:51:12

and look at their numbers.

 

00:24:51:12 00:24:53:15

They came out with their

numbers in February 2018,

 

00:24:53:15 00:24:56:08

they come out with their

numbers all the time.

 

00:24:56:08 00:24:58:22

On average, they're off 5%.

 

00:25:02:14 00:25:03:18

5%, okay.

 

00:25:04:18 00:25:06:16

On a $300,000.00 house,

 

00:25:08:07 00:25:10:17

you're 15 grand off.

 

00:25:11:15 00:25:13:11

But it's not 15 grand in one way,

 

00:25:13:11 00:25:16:25

you can be 15 grand too high,

 

00:25:16:25 00:25:18:12

or 15, excuse me, too high

 

00:25:18:12 00:25:20:01

or too low.

 

00:25:20:01 00:25:21:22

So you really gotta $30,000.00 swing

 

00:25:22:18 00:25:25:00

on what the real value of your house is.

 

00:25:25:00 00:25:28:01

And this is only for 40% of the market.

 

00:25:29:05 00:25:33:11

The other 60%, they average 10 to 20%

 

00:25:33:11 00:25:34:07

I believe it is.

 

00:25:35:14 00:25:36:10

- Okay.

 

00:25:37:19 00:25:42:09

- So that's, that's, that's

why we spend so much time

 

00:25:42:09 00:25:44:14

(mumbles) the price and

valuations accounts.

 

00:25:44:14 00:25:45:25

- So that's why you can't rely on

 

00:25:45:25 00:25:47:00

a computer algorithm.

 

00:25:47:00 00:25:47:21

- Exactly.

 

00:25:47:21 00:25:49:09

Because they don't know.

 

00:25:49:09 00:25:50:10

'Cause what they're doing is

 

00:25:50:10 00:25:52:05

they're taking okay,

 

00:25:52:05 00:25:53:04

first it's your house.

 

00:25:53:04 00:25:56:01

You know, something,

you're taking your house

 

00:25:56:01 00:25:58:08

and then they're going, to like summarize

 

00:25:58:08 00:25:59:22

over on the other side of Tuscaloosa,

 

00:25:59:22 00:26:01:20

and because it's in

the geographical area--

 

00:26:01:20 00:26:02:16

- Okay.

 

00:26:02:16 00:26:03:21

- Okay?

 

00:26:03:21 00:26:04:20

Two totally different subdivisions.

 

00:26:04:20 00:26:06:02

- Two miles to be exact.

 

00:26:06:02 00:26:07:25

- Two miles and they average them out.

 

00:26:09:06 00:26:10:04

They can't do it that way.

 

00:26:10:04 00:26:12:08

- Once a (mumbles) neighborhood.

 

00:26:12:08 00:26:13:08

- Exactly

 

00:26:13:08 00:26:14:03

- And then they would say--

 

00:26:14:03 00:26:15:05

- A move up.

 

00:26:15:05 00:26:16:04

- Establish it.

 

00:26:16:04 00:26:17:03

- Yes, a move up.

 

00:26:17:03 00:26:18:24

- There you go, neighborhood.

 

00:26:18:24 00:26:20:02

- Exactly.

 

00:26:20:02 00:26:21:10

- So I mean, I think these

numbers are out of point

 

00:26:21:10 00:26:23:05

and I don't wanna leave and you know

 

00:26:23:05 00:26:25:21

the design here is not to

sit there and scare anybody

 

00:26:25:21 00:26:26:17

or (mumbles).

 

00:26:27:13 00:26:28:19

- Correct.

 

00:26:28:19 00:26:29:18

- (mumbles) the goal here

 

00:26:29:18 00:26:31:19

is to give you a little bit more knowledge

 

00:26:31:19 00:26:32:24

and a little bit more power

 

00:26:32:24 00:26:35:06

in understanding what is happening

 

00:26:35:06 00:26:36:12

because guess what?

 

00:26:36:12 00:26:38:23

That 4.75 we talked about isn't,

 

00:26:38:23 00:26:41:00

it's not stopping right there.

 

00:26:41:00 00:26:41:24

- No.

 

00:26:41:24 00:26:43:19

- You know, they're projecting

over 5 by the end of,

 

00:26:43:19 00:26:45:17

the Feds have already announced another--

 

00:26:45:17 00:26:46:16

- What four more--

 

00:26:46:16 00:26:47:14

- At least--

 

00:26:47:14 00:26:48:14

- Four more or three more.

 

00:26:48:14 00:26:50:05

- They're projecting at

the start of the year

 

00:26:50:05 00:26:51:23

they said three rate increases

 

00:26:51:23 00:26:53:00

to the Fed fund rates

 

00:26:53:00 00:26:55:19

which is based, like

it's what the government

 

00:26:55:19 00:26:58:08

gives banks to borrow money overnight.

 

00:26:58:08 00:26:59:07

- Okay.

 

00:26:59:07 00:27:00:17

- It's kind of a round

about simple explanation.

 

00:27:00:17 00:27:02:23

So if that goes up,

then the give it charges

 

00:27:02:23 00:27:03:19

banks more money.

 

00:27:03:19 00:27:06:09

Banks are gonna charge the consumers

 

00:27:06:09 00:27:07:08

more money.

 

00:27:07:08 00:27:10:12

So what happens is that

what kind of drives this--

 

00:27:10:12 00:27:11:10

- Yup.

 

00:27:11:10 00:27:12:18

- Is the (mumbles) it's

not the only factor

 

00:27:12:18 00:27:14:08

like they originally had to start

 

00:27:14:08 00:27:15:25

in the year they projected the rate

 

00:27:15:25 00:27:17:14

now they're saying four.

 

00:27:17:14 00:27:18:16

We're already at two

 

00:27:18:16 00:27:19:12

which basically is another two more

 

00:27:19:12 00:27:20:08

for the year.

 

00:27:20:08 00:27:21:06

- Yeah.

 

00:27:21:06 00:27:22:01

- We're gonna be around five.

 

00:27:22:01 00:27:24:01

And the reality is the stable economy

 

00:27:24:01 00:27:27:03

should be at five and a half to six.

 

00:27:27:03 00:27:28:10

- Yeah.

 

00:27:28:10 00:27:29:08

- Right in there.

 

00:27:29:08 00:27:31:11

- Our GDP, number which

is supposed to come out

 

00:27:31:11 00:27:33:14

next week, is projected to be something

 

00:27:33:14 00:27:35:01

we haven't seen in years.

 

00:27:36:02 00:27:40:01

4%, that's a boom.

 

00:27:40:01 00:27:40:22

- Yeah.

 

00:27:40:22 00:27:41:18

- That's a boom.

 

00:27:41:18 00:27:42:15

4% is a boom.

 

00:27:43:20 00:27:46:09

So, everything is pressure

 

00:27:46:09 00:27:48:19

on all interest rates is gone this way.

 

00:27:48:19 00:27:50:05

What may hold it now,

 

00:27:50:05 00:27:51:23

Europe, China.

 

00:27:51:23 00:27:52:18

- Other markets.

 

00:27:52:18 00:27:54:11

- Other markets because right now

 

00:27:54:11 00:27:56:19

the US is the only booming economy.

 

00:27:56:19 00:27:58:07

Everyone else is struggling.

 

00:27:58:07 00:27:59:22

- What's nice about this though

 

00:28:01:01 00:28:02:08

is the economy is booming

 

00:28:02:08 00:28:04:08

and what I'll say here is,

 

00:28:04:08 00:28:07:19

we're not seeing housing

market go, go, go, go up.

 

00:28:07:19 00:28:08:14

- Right.

 

00:28:08:14 00:28:09:19

- Like before.

 

00:28:09:19 00:28:10:14

It's gone up a lot, don't get me wrong.

 

00:28:10:14 00:28:12:00

You know, but the key is like,

 

00:28:12:00 00:28:14:02

when a lot of people talk about

 

00:28:14:02 00:28:16:05

the previous housing collapse,

 

00:28:16:05 00:28:17:22

the Recession, everything that was started

 

00:28:17:22 00:28:18:21

because of housing.

 

00:28:18:21 00:28:20:06

- Yup.

 

00:28:20:06 00:28:21:01

- And you've noticed we've tightened up

 

00:28:21:01 00:28:21:22

on underwriting.

 

00:28:21:22 00:28:23:02

Appraisers--

 

00:28:23:02 00:28:24:01

- Oh yeah.

 

00:28:24:01 00:28:25:00

- They don't have,

 

00:28:25:00 00:28:25:24

and say loan officer,

 

00:28:25:24 00:28:26:20

you can't, I just can't call an appraiser

 

00:28:26:20 00:28:30:03

and say, "Hey, I need

that value at 300,000.

 

00:28:30:03 00:28:31:18

"I'll take you to lunch tomorrow."

 

00:28:31:18 00:28:34:08

No it doesn't, now maybe 15 years ago

 

00:28:34:08 00:28:35:10

you could do that.

 

00:28:35:10 00:28:36:09

- Yeah, yeah.

 

00:28:36:09 00:28:37:08

- You know, during the boom

 

00:28:37:08 00:28:38:07

you could do it.

 

00:28:38:07 00:28:39:06

You can't do that.

 

00:28:39:06 00:28:40:06

Like I can't even talk to 'em anymore.

 

00:28:40:06 00:28:41:02

I have to go through our

appraisal management company.

 

00:28:41:02 00:28:42:01

They--

 

00:28:42:01 00:28:42:25

- Exactly.

 

00:28:42:25 00:28:44:05

- Everything's separate and

they done all these things.

 

00:28:44:05 00:28:46:03

They tightened up how we underwrite.

 

00:28:46:03 00:28:47:09

They're starting to loosen up

 

00:28:47:09 00:28:49:17

because now we have technology

 

00:28:49:17 00:28:51:17

and data that could say there you go,

 

00:28:51:17 00:28:53:12

okay and that's why when we talked about

 

00:28:53:12 00:28:55:19

49.999--

 

00:28:55:19 00:28:56:18

- Yup.

 

00:28:56:18 00:28:57:17

- That debt to income, you know,

 

00:28:57:17 00:28:59:09

a year ago, it is was 45%.

 

00:28:59:09 00:29:01:10

But they went up because what they found

 

00:29:01:10 00:29:04:04

is they looked at, they

looked at FHA and VA

 

00:29:04:04 00:29:05:22

and all these other type of buyers

 

00:29:05:22 00:29:07:22

that were over 45 and they were like,

 

00:29:07:22 00:29:09:07

"Wait a minute."

 

00:29:09:07 00:29:12:14

Being over 45 isn't a

catalyst for defaulting

 

00:29:12:14 00:29:13:18

on your loan.

 

00:29:13:18 00:29:15:01

There's other pieces that are

 

00:29:15:01 00:29:17:07

and guess what, with technology,

 

00:29:17:07 00:29:18:18

Fannie Mae which you know,

 

00:29:18:18 00:29:20:11

Freddie Mac, you know,

 

00:29:20:11 00:29:22:19

these entities can now look at

 

00:29:22:19 00:29:25:08

your FICO, your totality

of your credit file

 

00:29:26:08 00:29:28:00

and they can go, "Hey,"

like, "You have a 720,

 

00:29:28:00 00:29:29:23

"but we saw that last year why had,

 

00:29:29:23 00:29:32:17

"you missed three

payments on a student loan

 

00:29:32:17 00:29:33:22

"and then the year before that,

 

00:29:33:22 00:29:35:11

"you missed a payment on a car,

 

00:29:35:11 00:29:36:23

"and the year before

that, you missed this."

 

00:29:36:23 00:29:39:20

And they're going, "We

don't like that as much."

 

00:29:39:20 00:29:43:03

You know, whereas before

the system was only

 

00:29:43:03 00:29:43:24

intlelligent enough to go,

 

00:29:43:24 00:29:46:19

"You have a 720, you're

not missing anything now."

 

00:29:46:19 00:29:49:09

- Yup, I remember, okay,

here's our there scores.

 

00:29:49:09 00:29:50:17

- Yup.

 

00:29:50:17 00:29:54:02

- Oh, we got a 745, 720, and a 650.

 

00:29:54:02 00:29:55:08

Oh we get to take the middle one.

 

00:29:55:08 00:29:56:16

Thank God.

 

00:29:56:16 00:29:57:16

(laughter)

 

00:29:57:16 00:29:58:21

- And we still use the middle one

 

00:29:58:21 00:29:59:17

but guess what?

 

00:29:59:17 00:30:01:21

Now we take that 650 into consideration.

 

00:30:01:21 00:30:03:09

We price on the middle,

 

00:30:03:09 00:30:04:07

that low one,

 

00:30:04:07 00:30:07:15

now we have to go, why is

that one so much lower?

 

00:30:07:15 00:30:08:21

So that's why it's changing

 

00:30:08:21 00:30:09:23

and that's what's you know,

 

00:30:09:23 00:30:11:09

that's one of the pieces

 

00:30:11:09 00:30:12:16

we market housing.

 

00:30:12:16 00:30:14:06

These things are not rising his quickly

 

00:30:14:06 00:30:16:01

as they were.

 

00:30:16:01 00:30:16:25

- Yeah.

 

00:30:16:25 00:30:17:23

- Like--

 

00:30:17:23 00:30:18:19

- We, we needed it.

 

00:30:18:19 00:30:19:22

We, quite honestly,

 

00:30:19:22 00:30:20:18

we needed it.

 

00:30:20:18 00:30:22:04

Because I'm sorry, but there's just

 

00:30:22:04 00:30:27:04

you can't have 10, 12% appreciation

 

00:30:27:11 00:30:29:04

continuously in the market.

 

00:30:29:04 00:30:32:08

It doesn't make sense.

 

00:30:32:08 00:30:35:13

You know, it just, we

needed a little pressure

 

00:30:35:13 00:30:38:04

up to help stabilize the market.

 

00:30:38:04 00:30:39:21

Is what we really needed.

 

00:30:39:21 00:30:41:21

Now hopefully what we'll see

 

00:30:41:21 00:30:44:15

really over the next six months to a year,

 

00:30:44:15 00:30:46:22

is that when this growth rate,

 

00:30:46:22 00:30:48:14

unemployment worries

 

00:30:48:14 00:30:50:16

is we're gonna see, start to see

 

00:30:50:16 00:30:54:09

people get pay increases.

 

00:30:54:09 00:30:55:06

I think that's the one thing

 

00:30:55:06 00:30:56:11

where we're seeing--

 

00:30:56:11 00:30:57:07

- That great.

 

00:30:57:07 00:30:58:11

- We're seeing a little bit of lack

 

00:30:58:11 00:31:00:06

is, is the pain.

 

00:31:00:06 00:31:03:12

What is interesting, I

saw a number the other day

 

00:31:03:12 00:31:05:05

there's actually more people

 

00:31:05:05 00:31:06:20

quitting their jobs

 

00:31:06:20 00:31:08:02

than ever before.

 

00:31:08:02 00:31:08:24

(laughter)

 

00:31:08:24 00:31:10:08

Yeah.

 

00:31:10:08 00:31:11:08

(laughter)

 

00:31:11:08 00:31:12:25

- Oh, man.

 

00:31:12:25 00:31:14:02

- Oh, man.

 

00:31:14:02 00:31:16:00

- Anne strives (mumbles).

 

00:31:16:00 00:31:18:05

- And it's because the see opportunity.

 

00:31:19:06 00:31:20:17

And there's optimism.

 

00:31:20:17 00:31:21:21

And it's a nice,

 

00:31:21:21 00:31:23:10

it's a nice feeling.

 

00:31:23:10 00:31:24:14

- We're no longer

looking at life stagnant.

 

00:31:24:14 00:31:26:00

- Yes.

 

00:31:26:00 00:31:27:00

- Where the economy is stagnant.

 

00:31:27:00 00:31:27:23

- Yeah, what's, but it's funny

 

00:31:27:23 00:31:30:18

because I think there's still

a lot of people out there

 

00:31:30:18 00:31:34:09

who went through that housing crisis.

 

00:31:34:09 00:31:35:05

- Mm-hmm.

 

00:31:35:05 00:31:37:16

- You know, people who lost their homes.

 

00:31:37:16 00:31:38:13

- Yeah.

 

00:31:38:13 00:31:39:20

- And they're looking at it now

 

00:31:39:20 00:31:41:19

again and they're a little bit nervous.

 

00:31:42:16 00:31:43:22

I think probably one of the next (mumbles)

 

00:31:43:22 00:31:46:01

we're gonna do is 'cause I watched,

 

00:31:46:01 00:31:47:03

I've read some articles

 

00:31:47:03 00:31:48:19

over the pat week

 

00:31:48:19 00:31:52:00

is Millennials and others

 

00:31:52:00 00:31:53:08

they're actually starting to feel that

 

00:31:53:08 00:31:54:23

renting is better than owning.

 

00:31:56:00 00:31:59:20

And long term, I still don't see that.

 

00:32:00:22 00:32:02:12

You know, I don't see it.

 

00:32:02:12 00:32:05:06

That's not the American dream.

 

00:32:05:06 00:32:06:23

You know, it's not.

 

00:32:06:23 00:32:08:07

You know, and I think that's something

 

00:32:08:07 00:32:09:12

you know, we need to look at,

 

00:32:09:12 00:32:10:12

we need to show 'em,

 

00:32:11:12 00:32:13:02

hey, you still can own,

 

00:32:13:02 00:32:15:05

you still can you know,

 

00:32:15:05 00:32:17:04

you still, there's still

opportunity out there.

 

00:32:17:04 00:32:18:17

But I think a lot of those

 

00:32:18:17 00:32:20:20

saw what happened to their parents.

 

00:32:20:20 00:32:21:16

- Yeah.

 

00:32:21:16 00:32:22:19

- As they crashed.

 

00:32:22:19 00:32:23:19

- Mm-hmm.

 

00:32:23:19 00:32:24:15

- And now, they're at that stage

 

00:32:24:15 00:32:25:11

and they're like,

 

00:32:26:08 00:32:27:23

"Well, my parents went through this."

 

00:32:27:23 00:32:31:05

You know, it kind of reminds

me of my grandparents.

 

00:32:31:05 00:32:32:01

Because my grandparents

 

00:32:32:01 00:32:32:23

were very frugal.

 

00:32:32:23 00:32:35:18

My grandparents went

through the Depression.

 

00:32:35:18 00:32:37:15

And anyone who's my age,

 

00:32:37:15 00:32:39:00

18, 19.

 

00:32:39:00 00:32:40:07

(laughter)

 

00:32:40:07 00:32:41:23

Anyone who's my age,

 

00:32:41:23 00:32:45:04

you know, their grandparents

 

00:32:45:04 00:32:47:05

you know, who went through the Depression

 

00:32:47:05 00:32:49:03

they kept, they had all their money

 

00:32:49:03 00:32:51:10

and they never lived at

the end of their means.

 

00:32:51:10 00:32:52:09

- Mm-hmm.

 

00:32:52:09 00:32:53:08

Yeah.

 

00:32:53:08 00:32:54:14

- And I think there's, we're

seeing a little bit of that

 

00:32:54:14 00:32:56:17

in the Millennials.

 

00:32:56:17 00:32:58:03

They're not out stretching.

 

00:32:58:03 00:33:00:23

They saw what happened to their parents.

 

00:33:00:23 00:33:02:01

- So a payments (mumbles) for.

 

00:33:02:01 00:33:04:11

You're definitely gonna want to stay tuned

 

00:33:04:11 00:33:05:14

for the next one.

 

00:33:05:14 00:33:07:20

It's Joseph Dionne with Home 1st Lending.

 

00:33:07:20 00:33:11:14

- Brenden with, Brenden Rendo

with Homes in Orlando team

 

00:33:11:14 00:33:13:13

and Nexthome Neighborhood Realty.

 

00:33:13:13 00:33:15:06

Thank you four time today,

 

00:33:15:06 00:33:17:00

hope we taught you something.

 

 

<end subtitles>