Josh Barker Real Estate Podcast #16

Josh: All right, so we are back. I don't know if we're supposed to do this, but...

Joey: Valentine's Day.

Josh: Yes, it is. It's Valentine's Day. So, on behalf of everybody here at Josh Barker Real Estate, I just want to say happy Valentine's Day.

Joey: Yeah. Very nice. Very nice.

Josh: Hope you have something good planned for your wife tonight. That'd be wonderful. Flowers.

Joey: Yes.

Josh: The cards, all that good stuff.

Joey: Or for your husband.

Josh: Yes.

Joey: Right.

Josh: Well, I'm talking about you for your bride. That's what I'm talking about.

Joey: Okay. Well, I thought you were talking to the audience.

Josh: No, the audience.

Joey

Josh: You do the right thing. Take care of your spouse.

Joey: I've got her favorite dessert. I've got her favorite flower. So it's taken care of.

Josh: Got it down. Yes.

Joey: Of course.

Josh: My wife says that she's not actually a huge fan of Valentine's Day.

Joey: My wife isn't either.

Josh: But I told her, I said, "Well, here's a problem with that is that six months from now, you'll have a girlfriend over, and you'll say... And she'll ask me, "What did you get your wife for Valentine's Day?" And if I said nothing, then I'm that guy."

Joey: Yeah.

Josh: So, you have to get something. It's just the way it works. So, I love my wife 365 days of the year, but if we have a special day extra, sounds good to me.

Joey: There you go.

Josh: Knock it up.

Josh: Okay. So, well, we've had some changes since the last time you were here. Last month we had a guest.

Joey: I think Dan Metz, wasn't it?

Josh: That's right. Dan was here. Yep.

Joey: Dan, the man.

Josh: Dan, the man, real estate extraordinaire. So, he definitely was providing some really good information. And now, today for those listeners, and this won't be out for a few days, but the Federal Reserve just came out today, this morning, and the Federal Reserve reports on this, but it was the core inflation numbers. And I wrote a couple of them down just so I get them right. But right now, they came out at 6.4% year-over-year inflation.

Joey: Which is down?

Joey: Because they were reporting in the eights, and some sources said no.

Josh: Yeah.

Joey: 11s. We're going to say eights, but the truth is it's 11s.

Josh: Yeah.

Joey: So, that's moving in the right direction.

Josh: It is. It is. However, the stock market didn't respond all that well because the projection was that it was supposed to be around 6.2 and it came in at 6.4. So, it's like work, work, work more.

Josh: Yeah, not a huge deal. I think everybody understands inflation is coming down, but it just wasn't quite meeting the expectation. I think probably what they're concerned about is whether or not the Federal raised interest rates again. Obviously, the next meeting they have, one more number I'll get out is that month over month was half a percent, and it was projected to be 0.4. And so, month over a month, it did actually still go up as well. So, I think there's some headwind there in terms of inflation still. The Fed's response will likely be to raise the interest rates a quarter percent the next time they meet, which is what most people are projecting. And that puts a little bit of pressure on the mortgage rate too.

Joey: You know what's funny is when you're saying all that.

Josh: Yeah.

Joey: What I was hearing was that it's the Eagles by one and a half and the over-under is 50.5. Yeah. They blew both of those too.

Josh: They blew both.

Joey: From the people who brought you the recession numbers, we've got projections for the Super Bowl. Which money I lost.

Josh: Exactly.

Joey: So, these projections, you have to have to take them. This whole thing is like we were projecting 6.4, but it came in at 6.2, so the stock market tanked. Wow, that shows you what exactly the stock market's built on.

Josh: Well, it's...

Joey: Speculation.

Josh: Speculation, opinion. Well, that was surprising...

Joey: Emotion.

Josh: Yeah. I think they were hopeful because if there, obviously if inflation was going down and meeting expectations...

Joey: Which it did.

Josh: It did. You're right. You're right.

Joey: And it almost hit the number. That's what's crazy. It went down a lot.

Josh: But it wasn't enough. I'm not happy with that.

Joey: Exactly, you missed it by a 0.1.

Josh: That's a good point. All right, fine, we'll blow past that one. So, Federal Reserve, like loris, will increase their interest rate quarter percent the next time they meet. Based on that information, I still don't think is all that bad.

Joey: No.

Josh: To your point...

Joey: I think it's moving in the right direction.

Josh: Totally agree.

Josh: So, all right. Another one I'll throw at your home inventory is 540 homes for sale.

Joey: That's not a lot.

Josh: It's not a lot.

Joey: It's not a lot at all.

Josh: I know it's pretty crazy. I mean, our absorption rate was climbing. Remember, it was climbing up onto almost a neutral market. It didn't quite get there, but it was right on the edge.

Joey: But it was consistently walking the ladder. It was because it was... When you and I first started this, it was either high ones or low twos, which is insane. That's a total seller's market.

Josh: Yeah, you're right.

Joey: And it slowly walked up. It went past three, and it went into the neutral market. I'm just thinking Star Trek, the neutral zone, then the Klingons came in, and the interest, no, it walked up there, and so we're like, "Oh, it's gonna be a buyer's market." And it just turned right back around and came right back down.

Josh: It did.

Joey: Into what a seller's market is.

Josh: Yeah. It's technically inside a seller's market. If you take the market as a whole segment, of course, every price point sell produces differently, and the results will vary based on the price point, but collectively, right now, we're still in what we consider a seller's market. And that would be anything from zero to three month supply of homes. And right now, we're definitely in that range. We're in the twos right now, for those who are wondering. So, in any case, the inventory thing is interesting. It's down about 20% year over year. New listings last month that came to market. So, it's interesting because we have to watch Ford now in spring and summer. It's like, are we going to see sellers that are in a position where they really want to sell, where they need to get it sold for a number of reasons? What's going to bring that inventory to the market, I think, is a big question for a lot of people right now.

Josh: Your thoughts?

Joey: Well, we have two huge wins attacking each other. We have the tailwind that is, for Redding, lack of supply. We have a super low supply that is a major tailwind. Right. And the...

Josh: For value or for holding value, or we're keeping it from dropping too much? Yeah.

Joey: Yeah, if there's nothing for sale, I mean, this is supply and demand, right, but we have a major headwind and interest rates.

Josh: That's right.

Joey: And even though they're coming down, I mean, they shot up so crazy. We went, like, I think in a 90-day period, we went from 2.875 to almost 8% in a 90, in one quarter, a 90 day, which is crazy.

Josh: Yeah. That's going to shut the market down. I mean it definitely slows things down.

Joey: Major headwind. And so, that's come down a little bit. We're now in the, and you said mid-sixes? We're in the low sixes.

Josh: I'm sure two weeks ago we were 6.125, and right now we're just now...

Joey: And if you wanted to buy a ray gun, you probably could have gotten the fives, although I wouldn't have done that. But I mean, I still think interest rates... I think we're not supposed to get political, but I think as we get close to an election, I think the powers that be are going to do everything they can to cook the books. And so, I think that interest rates are going to get really good.

Joey: This just in...

Joey: Yep.

Joey: So I expect that. So that's why we go back to that thing we talked about you marry the house, and you date the interest.

Joey: Date the interest rate.

Joey: If you find a home you really like, what's going to happen is by the time those interest rates come down, that house will have seen its appreciation as well. It's going to hit faster than the interest rate comes down.

Josh: Interesting.

Joey: The second the interest rate starts to come down is the second the signals are there where people are like, Hey, we're not a recession anymore. Things are starting to pick up. Speculation will kick back in, and housing prices will start ramping up faster than the interest rate comes down.

Josh: Sure.

Joey: So if you can lock in your home price at the lowest point, you don't have to deal with that poor interest rate for a little bit, and then two years later, you're refinancing in the high threes or low fours. You've got the best of both worlds.

Josh: Yeah.

Joey: If you wait until the interest rates as we did before because that's what... If you think about when you saw the market drive up in '19, '20, and '21, what you're seeing is you're seeing houses go up as interest rates are coming down, and although they're directly inverse, the housing prices will go higher up faster, right?

Josh: Yeah...And it's... Well, the replenishment rate is an issue, too, right? So we have low inventory right now, and then the replenishment rate is low, and when you think about that, it's like, Okay, you and I were talking about this before we started, but it's going to take six months on the optimistic side...

Joey: Minimum.

Josh: Yeah, to produce a home to make available to the marketplace. Right now, we have one major home builder in town that still puts sticks up at a pretty meaningful number. There's a collection of smaller home builders, local people that we're obviously rooting for all the time. They're doing it and producing the product, but they need to run at the larger builder's volume. They're probably smart about it. They're just like, "We don't wanna be sitting in a situation where we're sitting on homes that we can't get sold for the prices we need to sell them at." So I hear some of that from them. Any thoughts on that?

Joey: Well, one of the things that I think about is that that big builder that we're talking about, it's a national level builder, they are not... The people that run that company have done it for quite some time, they're insanely successful, and they have looked at the market and said, "We need to build a bunch of homes." So they either need to be corrected or on a continued path of success, which is their track record...

Josh: Sure.

Joey: Of saying, "Hey look, this too shall pass, this interest rate issue will go, but what won't go away is the lack of supply."

Josh: You're right. If you look here in our marketplace, I was just pulling up these numbers. These are all the census stuff that got done in 2021. 2021, in population, they came in at 182000, of which there were 72000 units, and then 64% of those are owner occupied. So when you think about it, you're like... To your point, we have a pretty big shortage in housing, I think we're over half... Are over 5 million short now, I think through some legal or illegal, it doesn't matter, immigration that's coming in, we're at over probably two million people in the last what? A year or two years? I don't know. I mean...

Joey: It depends on which channel you watch.

Josh: Yeah, that's true. That's a good point.

Joey: It's either 2 million or 2200 billion.

Josh: But I think everybody collectively would agree that that's going to put some demand on housing.

Joey: Yes.

Josh: And so you have the... That's a tailwind in the sense that, a tailwind to value in the sense that when you have short inventory...

Joey: That's demand.

Josh: And growing demand, that's a good thing. I think still today, most markets across the country are experiencing challenges with value because of the affordability issue. Most people are using credit to purchase, and when interest rates go up, the cost for credit also goes up, and so what you qualify for a loan amount goes down, and we've talked about it before, but people go, Well, I've seen rates at 17%, and it's like, that's true. However, the price of those properties at that time was much lower, so with interest rates going up, as you said earlier in the podcast, as quickly as they have, it's still... That's a pretty challenging thing for affordability. And affordability right now is tagged at around 30% or so. There's a... Like 28-30%, let's say.

Joey: Is that what the lender uses, you mean, for what you can afford?

Josh: Yeah, I think...

Joey: 30% of your income, pre-tax?

Josh: Right. I think... Exactly, and I think those reports of your gross taxable income annually at 28-30% is what they figure makes the homes affordable. And if you looked back two years ago, it was... That was the case, and it was because the interest rates were so low, and so the affordability using credit was lining up, but today with rates being at 6.5% and values of homes haven't come down as far as they need to compensate for that, that's kind of where things are at today.

Joey: You know what, and I was thinking about it, you also have a number of what the average income is, and I think if you divide that by the 30%, you get the affordability at about 220,000, which is a quite a ways away from what the average, the medium price home, right? Well, did I do my math right?

Josh: Yeah, I did do this action again. This is everything that's coming from the census, so I'm not saying... I'm not claiming its accuracy, it is what we have, but it said that 62000 was the average household income in 2021.

Joey: Is that Shasta county, or is that...

Josh: Shasta county.

Joey: Okay, okay.

Josh: In the entire county. And I speculate that obviously, it's a little bit higher with wage inflation and things like that over the last year, but not... Let's say it's up by 10%. That would still only put it at 68000 for the... But still... Statistics are a funny thing, right? Like the median, what's the average score on that test? A 62. How many people got a 62? Nobody. What you got were 80 people that got 40 and 20 people that got a 99.

Josh: Right.

Joey: And that's what you're seeing, you have... There're the haves and the have-nots. Income-wise, there is a huge disparity, a gap.

Josh: There is.

Joey: Minimum wage, and then the people that earn dramatically more than that.

Josh: It's a great point because when you look at that number because people are purchasing a home, it's probably going to skew to the higher side of that scale obviously, and that's what...

Joey: Absolutely.

Josh: And that's kind of what we're hoping for, I mean, to have a really strong economy, you want to have people have savings, and they're taking that in savings, and they're investing, and the first place that most people start to invest is in themselves, in their home. They make that investment into buying a property that they're going to live in since they're either paying rent or you will be paying a mortgage. If they're going to be paying for living either way, you might as well be accumulating some assets along the way, right?

Joey: Yes.

Josh: But I think you're right. I think it's going to be interesting to see, but the rate right now, at 6 1/2, still puts some pressure on value. Would you agree?

Joey: Oh, absolutely.

Josh: Okay.

Josh: Be like, Oh, I could do that. So the rental market for a minute talking recently with some property managers up and down the state, and then several here locally, the number that's coming up a lot is a vacancy rate around 8%.

Joey: And what's a healthy market?

Josh: Well, last year it was probably averaging around 4%, which is white hot.

Joey: What is healthy? Just like you said?

Josh: Yeah, that's a good point. What I mean.

Josh: I bet you it's probably healthy right now.

Joey: I was going to say 8% doesn't sound unhealthy to me.

Josh: It doesn't. 8% sounds like rents are likely not increasing anymore.

Joey: And I think people got ridiculous. I heard some rents. We rented out our rental and were told we did not rent it out for enough. Right. Like.

Josh: Well, you're supposed to rent everything out for more than your mortgage. You know what I mean? So like, how much should I ask for it? Well, what's your mortgage?

Joey: Fair enough. But I would love to even go down the road on that discussion for a second. But we don't have to. I don't want to get sidetracked.

Josh: But I can agree when we get to the end of that one.

Joey: Well, because if you're buying, if Okay, we are going to go down this rabbit hole.

Josh: Yeah, go for it.

Joey: Okay. So, "Hey, look, I'm buying a rental." Why would you have a rental? Obviously, it's an investment portal. It's different from, well, my personal home because I don't want to... I want to live here. So this is different. There's emotion involved, right? But if I have a rental unit, it should be looked at like an investment vessel.

Josh: Absolutely.

Joey: So now you're comparing it to something like a retirement account. And which is usually in stocks and funds. Right. Okay. So you say, well, rent it out from more than your mortgage. Well, that's ideal.

Josh: I mean, it may not be a reality because...

Joey: Yeah, that's perfect.

Josh: It doesn't. What's your mortgage? Right?

Joey: That sounds a lot like buy low, sell high.

Josh: Sure, who can argue with that?

Joey: Yeah. Do it every day. So, if you're saying you were going to put money in retirement because it was going to appreciate over time. You didn't, unless you're like, "No, I only buy dividend-paying stocks, or I only buy municipal bonds or tax." or something like that. You were putting money into something that wasn't giving you anything back because it would grow over time. So if you did have a mortgage where you said, "Hey, my mortgage is $1,700, and my rent is $1,100, so I'm upside down $600, $7,200 a year." If you put money into the stock market, and we won't get into it like your employer does matching funds, but you put, what are you upside down? And in the stock market, we just had one of the top five worst years ever in the stock market, which it lost on average 30%. Right? How do you not look at that like that's an investment? How do you not look at that? Like, "Yes. My mortgage is locked in at, did I say $1700?"

Josh: Yeah.

JoeyJoey: Okay. Fast forward seven years from now. What is your rent now? And your mortgage should still be at $1700 unless interest rates drop dramatically and you refinance.

Josh: And you refinance all this. Yeah.

Joey: And hopefully you didn't refinance and cashed out and go buy a Corvette and pretend like somehow that's part, that No, that's just like you cashing out stock and buying Corvette. Yeah. If you did refinance, you could refinance for less. Yep. For what you owed. You didn't have to pull out every penny. Because that's now unless you're buying another and so on. So I would say that idea that, like, your rent should cover your mortgage sounds good. But in the last couple of years, I've seen a lot of people do that, and that's where I think these rents came that were like, what? You know what I mean?

Josh: Well, I kind of...

Joey: $2100 for a three bedroom, two bath in Starview Estates.

Josh: Well, because of the mortgage.

Joey: Exactly.

Josh: You know what I'm saying?

Joey: Yeah. And now they're like; I have a vacancy.

Josh: Right. Because it's a running joke with property managers that they'll know what the fair market rent is for that three bedroom, two bath, two car garage. And let's say it's hypothetically $1,800 a month, but the person has a mortgage at $2000. So the property manager says, well, the rental rate for this right now should be around $1800. Well, I need $2100 because that's my mortgage. And it's an ongoing joke. It's like, it doesn't really matter what your mortgage is. It matters what the fair market is for the rent period.

Joey: Exactly.

Josh: If you can't find a tenant, it's going to sit vacant. Right? So there's pressure. Here's the good news for those who are out there that are looking at rentals as an... What is your option at this point? The rental rates are coming down a little bit as the vacancy rate has climbed. And it's likely you won't see rental rates climbing in terms of how much it is per month. It's probably going to stay pretty much the same in the short term. Now, if you're sitting in a unit right now that's under rent, which some people are, the landlord might incrementally raise it because it's below rent now. That's possible. But as a whole, there's some pressure. VRBO is the same thing. Have you seen that with the vacation rental market? It's starting to soften. Tell us a little bit about what you see in there.

Joey: It's the same concept. People are tightening their belts, and inflation is going to hit across the board. And so the vacation, everything should see... That's the whole idea of raising the interest rate. Everything should start to see us slowing down to try to calm the economy. So it hurts when it's eggs and cheese and bread that's getting hit, but it's meant to stop brand-new truck purchases. Big TV, vacation, it's meant to slow that down. So that the spending catches up, so it's doing what it's supposed to do.

Josh: Yeah. Well, that's interesting because right now, but if you look macro and some of the policy changes, like they did some quantitative tightening for our listeners, they're like, okay, what the heck is that word? It's just essentially what the Federal Reserve will issue a lot of bonds. And when those bonds come back, they have a choice once they reach maturity. They can take the money. They receive back and go buy more bonds or more, sell more bonds again or provide liquidity to the market. Or they can just essentially destroy the cash. Federal Reserve doesn't have to hold cash. They print it. So when they collect cash, they just destroy it. And right now, they're tightening the money supply. And that's going to have an impact on people having access to credit. And so that's to your point, you're seeing these effects of a monetary policy that's tightening. You're seeing interest rates going up, and Warren Buffet said it best when he described interest rates as gravity to add the value of an asset. So as you turn up the interest rate, and it rises, it actually has a greater pull on the value of assets and really across a lot of different markets. So like you talked about the stock market. Obviously, it's going to show up there. It's showing up in the housing market now with interest rates going up, and there are a lot of other investment classes where it's doing the same thing.

Joey: You know what's funny is I'm not an economist, but I play one on TV, I'm not an economist, but I love to listen to some of this stuff. And sometimes, the logic makes sense to me and other times. I'm kind of thrown. And I was reading like when inflation rates are high and interest rates go up. It was like collectible assets. It was like collector cars, wine, and art. And I thought, "What you're really saying is wealthy."

Joey: The lower classes get hit. They have no options.

Josh: Yeah.

Joey: Right, they get hit, the stock market gets hit and so I thought about that idea of, so wherever, the interest rate really only affects the working class.

Josh: It does.

Joey: And the lower working class, it doesn't affect the hiring class.

Josh: Not at the same level.

Joey: I mean, not at the same level.

Josh: No.

Joey: And so one of the things that we talk about that I because we're talking about real estate in general. We try to get specific about the Redding market but within the market. There are if you are a renter. If you can afford to buy, you should buy. It doesn't matter. It does not matter. Housing is not going to get cheaper. When we say cheaper, I don't mean, hey, that house was listed for $365 last year, and now it's listed for $352. That effectively doesn't matter in the scheme of things that $13,000 doesn't even exist. We're talking about houses that were at $365 and now they're at $280 that's.

Josh: That's significant.

Joey: That's significant. We're not going to, in my opinion, we're not going to see that. We're not going to see that because we've taken a major hit on interest rates. The market has leveled out over a year, it might fluctuate, especially the other thing you brought it up when you were talking about you what was the rate that you gave, you gave something about the rate of homes and you kind of hinted that there are segments in the market that are getting hit much differently.

Josh: Oh, sure. Where the demand is at.

Joey: Yeah, the houses that were listed at $795 are now on their second price reduction and they're at $740, that's, you see that. For the houses that were listed at $295, I would argue I'd bet you that there are no price reductions unless they were a $210,000 house listed at $295. The lower end is the part that can't. It's not easy to replace.

Josh: It's more compact.

Joey: It is.

Josh: Yeah. So you'll see larger reductions in value as the price goes up and then as you get down into the lower price point because the demand, again, is so much higher in the lower price point because that's where a lot of people can afford them, they're coming down, they've come down some, but not nearly as much as the higher part of the market has.

Joey: So back to that, if you are in the lower end and you're renting, and you can afford a mortgage, buy the house. Marry the house, date the interest rate, and when interest rates get reduced because I haven't met anybody that doesn't think in the next two to three years, interest rates won't come down even more.

Josh: Right.

Joey: I don't know anybody that doesn't do that. So you can refinance, but like we said at the beginning of the show, the housing market will climb faster than the interest rates will come down because as soon as the signals are there. They are letting all the investors...

Josh: Everybody's back in.

Joey: They'll jump back in hard, so we, in my opinion, we've seen the correction. Have we seen the correction at the high end? Probably not. It's probably not done. The people that were, there were a lot of houses that were like $850, $795, and I looked at them, I'm like, really, really, well, that's what I want. Good luck.

Josh: You're probably a hair more optimistic on that than I am, to be very transparent with you. Because I see the interest rates having a, a pretty significant headwind to value right now, and so that's, for me, I'm looking at it going when as if interest rates drop down to like five and three quarter home values stabilize, but I think there is this disparity of about seven to 10% right now between what the median buyer can afford and what the median home is selling for. And I see that number being in existence today. Now how we bridge that gap, there are multiple ways to do it. You could have the rates going down, and then the value doesn't change. You could have values coming down, or you could have a combination of both. But once we do, I'm looking at it that way because I assume that's when volume could pick back up again. And you need volume in the marketplace. I mean, right now, the volume hit that we've had, it really only affects lenders and real estate agents. That's not a big deal. But part of the volume issue is that people need to be able to have options, and they need to be able to afford those options. I mean, if you want to get someone to move, they have to have a reason to. They need to be able to see something they would want to move to.

Joey: Yep.

Josh: And so, having the inventory grow will actually spur more transactions also, so it'll be, it's going to be an interesting year, man and probably one of the more exciting ones, because when the market shifted last time in like oh '07, '08, and, we hit the financial crisis sometime, I think in the '08. And I remember at the time when it was like, we already knew this whole thing was going in one direction. You know what I mean? It was like.

Joey: Oh yeah.

Josh: There was no question at all. It was like, this is the direction that's going.

Joey: We've been drinking all night. We're in a casino. It was 3:00 AM.

Josh: We know what the next day's going to feel is.

Joey: This is, yeah.

Josh: And it was like every day was groundhogs day every day and selling real estate in that environment and having to sell a house if you're a property owner in that environment was very stressful. Because there was a high level of emotion. A lot of people were losing money. Everything else. This one's totally different. This one's more like we know there's going to be either a slight recession, which by the way, is dropped down to a likelihood of 55% according to Kiplinger. We'll see if it happens or not. Most people are leaning towards yes. But we'll see. But, you see this now, and it's like we all feel like it's coming, but we don't nearly think, I don't know, there are very many people that think it's going to be very bad. You see the stuff on the media and stuff like that, and they're, because, they're there to sell stories and things like that. But when you look at the actual data for supply relative to demand right now, those numbers look pretty healthy.

Joey: Yeah, so the optimism comes from. When I, my optimism is based on the lower end of the local market, It's not based on the higher end of the major cities. So those I think are going to tank, I think they're going to, that's what I mean, like if you look at this like the stock market tanks, but at the same time some stocks go up, and there's a time when the stock market's total bull run and there's companies filing bankruptcy.

Josh: Sure.

Joey: So I look at the lower end, let's say, say under $360,000 in Redding, and I say, can you replenish supply?

Josh: No.

Joey: No, you can't so it'll fluctuate a little bit, even 7% if you said, Hey.

Josh: But it's all based on affordability.

Joey: Exactly.

Josh: It's not on it's supply and demand.

Joey: And that's why I said, so we're talking to renters.

Josh: I totally agree.

Joey: If you're talking about people that are thinking about flipping homes and they want, they're going to buy single-family homes.

Josh: Yeah.

Joeyjoey: As investments, that's a very different conversation.

Josh: Oh yeah.

Joey: It's very, very different. Right. So I still believe in this, this lower end, and I think it's because of supply, the lack of supply and how hard it is, how difficult it is to replenish the supply.

Josh: Oh yeah.

Joey: Interest rates can come down tomorrow as soon as the two guys run for president and they start pistol-whipping each other. Well, whoever's got the strings on the Fed will have interest rates lowered. And whoever's got the strings in the FBI will make sure what we see and read on Twitter. Right. So it's like, they will do.

Josh: We'll go way deep now.

Joey: Yeah they will do what they do. Right. So I'm optimistic and the other side of it is I say, okay, what are your... So let's talk to the hiring and go, okay, cool. I'm not a first-timer.

Josh: You got three minutes, tell me your story.

Joey: Do you want me to finish this one?

Josh: Please Go for it.

Joey: Okay, so we were off to hammer. I said I wanna tell you a little story about three little pigs, right?

Josh: Oh, the three little pigs.

Joey: Yeah that was the story.

Josh: Tell the listeners a story of three little pigs.

Joey: There were three little pigs, right? And their mom, their financial planner, the puppy society, the puppy, let's see who gets that movie reference. They said, Hey, look, you need to take this money. You need to invest in it. And the first little pig invested in crypto. Oh yeah, it was doing great. And then came along Logan Paul and his army, and they destroyed crypto. And let's see how they're doing. They've got 20 cents in the dollar. Then the second little pig put all his money in the stock market because the bull run was so great.

Josh: So good.

Joey: In the last year, as I said, the top five worst years ever for the stock market lost 30% value.

Josh: Hey, I've got friends that are brokers, man. Let's not beat them up too bad. Okay.

Joey: I'm not going to. Hey, it's not their fault. They're not the ones that said, yeah. 93 PE ratio. That sounds valuable.

Josh: I'm going to tell them to make sure they turn this off for the last four minutes.

Joey: I'd like to invest right. And the third little pig bought a house. So in the last year, the third little pig says, oh man, am I down a whole 8%?

Josh: That's an excellent point.

Joey: And the other two little pigs knifed him in an alley because they had lost everything. So that's the story of three little pigs.

Josh: That's the three little pigs.

Joey: So we're all eating ham.

Josh: So we're all eating ham.

Joey: There you go, that's my story.

Josh: Oh, what a treat, buddy. To summarize this thing right now, I would say that. Okay, relax. I think the point is it's not really all that bad.

Josh: I mean, the values have come down a little bit, and a lot of that's because of interest rates. I think everybody can respect that. We do have some headwinds with some higher interest rate environments, probably in the short term, which will have some consistent pressure on value because of the affordability. But when you look at supply and demand right now, all of those factors are very healthy. We're not oversupplied for the market. Valuations are strong because of the demand that's still there. And people, and this is one of my greatest things. One of the greatest things I like about the market right now is that people are purchasing properties with fixed mortgages for the most part. And that means that they could if they can afford the payment today, they're most likely to be able to afford to go into the future. And that's a good thing. So. All right. Well, hey, I appreciate you taking the time with us today. As always, it's always fun.

Joey: My pleasure.

Josh: I hope that the audience enjoyed the conversation with you as much as I did, and we'll catch up with you next month.

Joey: Thank you.

Josh: Thanks buddy.