The Expert Podcast

Subjects that people love to hear about our real estate and artificial intelligence And there's some troubling information. Especially about artificial intelligence. Look the promises have been made. That…artificial intelligence is going to be good for you. It's going to be beneficial, but what about the job market Are you in a job that's vulnerable to artificial intelligence and many people think that you know your job's not.

At risk, they can't get rid of you And this may be true. But even in jobs which are. Technically. safe. From.

Artificial intelligence. The job itself might become worse. You would think AI would make it easier, but already we're only in the beginning of 2023…

And it may actually be that. AI is. Negatively affecting jobs this early What's it going to be like once it gets kicked in. Well, Here's where it gets troubling…

You're going to see where. Artificial intelligence. Is making jobs harder. It's opposed to make them easier. It almost doubled our workload workers are reporting and this is CNN.

They're reporting that their job is made more difficult by AI not easier because now they have to fix problems that AI created. Right. This is. A reporter. Who.

Or a a writer who used AI. Their company used AI to write stories. They were consistently bad submissions They had the worst stories you've ever seen…

And it doubled our workload. AI tools are thorn in our side. We're going to reach a point We can't handle it…

Right. A lot of people in tech. that AI is going to boost productivity. But as more often the case a longer-term impact is not clear. In fact it may actually be a problem…

Look in theory artificial intelligence. It could be a good thing, right If it's going to make your life more easy more convenient that's great. But there's already problems and that's not even counting the fact that it's taking people's jobs away…

Even remote technology, like. Tele-health. Is under the gun because when you message your doctor even if they reply with AI, They're going to…ding you for. They're going to charge you for…that contact with the AI system. Right So this is already backfiring It's not even really that far into it…

So let's jump to the next subject today Everybody loves to talk about is real estate…

We all want to have a crystal ball…

What are the prices going to be? In a year or two years what are the rates going to be? A lot of people now are taking the very risky step of buying a house now. At a high interest rate thinking the rates are going to come down…

And they might…

But until they do you have to pay the payment the mortgage payment on that high rate. What…

Is the prospectus that the rates are going to come down, not a guest not an opinion, not like what you want to do or wishful thinking, or just say well rates went up they must come down Right There's that old saying everything that goes up must come down. That's only true when it has to do with gravity. Interest rates are not gravity…

Because they don't. They don't. They're not part of the the the rules of physics They're finance finance the physics are two different things. So what are the facts say Well, According to. Different sources…

It's likely that the federal reserve will hike interest rates to a 22 year high. This was July 22nd…

Right That's a couple of days ago…

They paused but the fed is going to hike interest rates. Sky high mortgage rates are causing market chaos as the fed malls more hikes. What is the chaos? Well the chaos is that. As rates go up, see all these houses in the picture 1, 2, 3, 4, 5 There's probably 25 30 houses in this picture.

All and this is in Pennsylvania According to the the caption, all these houses probably have interest rates that are 3% maybe three and a half maybe under three. These people bought these houses at some point in the last, let's say 10 years, maybe 15 years…

When they bought the house they either got a low. rate then. If the rates were low at the time, or maybe they bought it 15 years ago when the rates were six or 7% like they are now. And then the rates went down They refinanced So everybody in these houses according to many industry, Experts. 90 something percent of people who have a home have a rate that is.

Under 6%…

So now. When you look at those potential homes as resale homes people could sell them…

You're not going to get. People wanting to buy these houses. Why not. wanting to sell the houses. Why not Because if you sell that house, You now have to get rid of your mortgage.

If you have a house that has a 6% mortgage and you sell it your mortgage is gone. And when you buy a new house you have to go to the market rates, which is six and a half seven maybe soon to go up. How long is it going to affect the market for…according to some experts for years? It could be a decade. We've seen some…estimates that says.

It could be until 2030 something. Until the housing market opens up right now the only place to…get. Availability at a new home is an R on a, on a property is a new home. Builders are cracking out houses left and right…

with regard to real estate there's another…

A related story. Where now? Elites And this is you know granted this is, this is a biased article, but financial elites are busy piling up or putting up a white picket fence around American dream. So what's happening is. There's hedge funds.

BlackRock Blackstone JP Morgan. Poor hundreds of millions of dollars. That our purse. single family homes. To rent them out…

Right So at the same time you have high interest rates and you have nobody wanting to sell their homes. You now have the few homes that do come on The market are being purchased by hedge funds…

I'm sure. That as a viewer of this channel you have some opinion about that…

So start typing. What's the opinion you have about interest rates going up Do you think it's going to go up or do you think they're going to come back to out? Do you think that real estate is going to become more available or is…

It's going to continue to be tight for another decade It's like some people say, do you think that corporations should be able to buy up houses to rent? When individuals want to buy them to live in. I'm sure you have an opinion about that…

Owning a house. Is a cornerstone of. Financial security In fact, The largest percentage of personal net worth personal assets is in homes is in real estate…

So if homes are not. As much available to everyday buyer Sullivan you have to rent. It takes away that financial security off the table And you might say well, there's advantages to renting There are advantages to renting You don't have to cut the grass You don't have to fix up the house. Right You don't have to worry about anything That's true. But that extra responsibility also offers you some advantages, your mortgage doesn't go up once you buy the house.

Once you lock once you get a mortgage on the house and you buy a house until you refinance would you never have to do if you don't want to, your mortgage payment stays the same If you rent the house they can go up every year a hundred bucks 150 200. Right We've seen that. You also can't get non-renewed if you're renting a house and the owner decides well I want to. Sell it to my cousin or I want to just sell and cash out. You have to move.

If you own a house you don't have to move…

At the same time, there is normally in overtime appreciation of real estate value So houses go up in value for the most part Have there been exceptions Sure. In 2008 there was a housing market crash They went down. 15%. But if you look at the chart, They went right back up to where they were within a few years So it wasn't permanent. People who hung in there did Okay…

What about now Well there was a flattening out of prices at the beginning of this year. It's still unclear what's going to happen. Going forward. But a lot of experts say they're going to go back up again. Only because of inventory.

Look if something happens in the economy if there's a big recession or people need to dump their homes. Yeah Housing prices might go down. But remember if you buy a house…

And the price. down It's not money out of your pocket. Right You don't lose the money You don't have to write a check If your house let's say is you buy it for 400,000 and then two years later it goes down to three 50 You don't have to reach in your wallet and write a check for three 50 You still live in the house. It's just on paper It doesn't mean anything. Right You don't lose any money only if you wanted to sell it…

So that housing market going down doesn't hurt you as a homeowner In fact it might help you a little bit because your property taxes are based on value and your insurance is based on value So if the property value goes down you might actually save some money on insurance. You don't really care if you're if you're looking to stay put or not. Sell your house housing prices go down Who cares? Right. If housing prices go up…

Same thing you don't really benefit if you're actually existing homeowner unless you want to buy a different house later Now your house carries you up to that level You could sell it and then upgrade to another house. If you're not in the housing market it's tough to upgrade later because the house you would have bought…

Went up way more than the house you can stand And that's what we recommend If you're, if you're not in the housing market you're not, you know buying a house because of. Too much money or the house is too expensive or the rates are too high. There's a strategy that consider that is buy the cheapest house You can stand. If it's not your dream house if it's too small if it needs work if it needs paint still buy the cheapest house you can stand, don't buy anything that needs…structural work or any major repairs, but buy the cheapest house you can stand. So at least you're in the conveyor belt.

The escalator of housing prices. And then at some point you can trade it for your dream house or whatever the case might be You might decide you like it Okay. And fix it up and. And stay there for awhile. But at least you're in.

It's tough because you need a big down payment The biggest factor now is not so much. The…

The…payment because most houses the mortgage payment is still less than what the rent would be It's coming up with that down payment. Right If you buy a $400,000 house. Even 5% down is 20,000 in down payment. Plus closing costs which could be another five or 6,000. You know you could be talking 25 grand.

Just two. At the lowest down payment If you want to put 10% down you might need 50,000. Out of pocket It's a lot of money. Right So…be aware that it's, it's a challenge but if you can just get over that hump get into a house your payments will probably be about the same as rent plus the deductible. And you know there's pros and cons You're going to have to cut the grass You're going to have to fix the plumbing.

If the, you know something breaks it's on you as the owner I get that That's, that's part of the deal. But the amount you spend on maintenance on a house. Is nowhere near the gains you make on fixed monthly pay. in upgrades Everybody has an opinion Some people are going to say now the renting is better That's fine. Definitely tell us, you know we like to hear what you have to say in the other viewers on the different channels Like to hear what you have to say.

Okay.