Homeownership Nightmare: Insurance Skyrockets, Inflation Bites - Are You Next?!

This is episode number 355 of The Homeowner Show. Whether you're DIY or looking to hire, we're here to help you find the best information and options for you and your home. My name is Kevin Hackett, and here with me is Craig Williams.

Hello, hello, hello, and welcome to The Homeowner Show. We are so glad that you could join us for another live episode here in the studio. How you doing, Kev?

I'm doing pretty good, and it is very live.

It's very live. Very live.

Look, we're— we— this is the second week that we've been using new camera. Third week?

Second week.

Second week. New cameras, new equipment, all this kind of cool stuff. We actually now have mounted cameras, which we've never had before. We're stepping it up.

However, stepping up our game.

However, We're trying to figure all this out still. It's not perfect.

New tech is not always— it sounds fun.

Yeah.

Until you start plugging things in and realizing, I don't know how to work this thing.

Well, that's just kind of our MO. We started this show, literally, I remember sitting at Deacon Baldy's and we're sitting here saying, all right, let's do this. And we came up with a number of topics and you're like, all right. You wanna record an episode on Monday? And I was like, what? And you're like, yeah, Monday. I think this was Thursday. Yeah. And I was like, uh, you mean, what about the, the, the stuff? And you're like, what stuff? And I was like, I don't know. I feel like there's stuff. And you're like, all right, let's just do it.

Let's just do it.

That's what's happening right now. Not, not much changes.

With just a dash more wisdom than we had when we started.

That's true. And look, the new equipment is way better.

Yeah.

I mean, our cameras, everybody can tell our cameras are better.

Yep.

They're a lot better. They're a lot better.

So like one of the cool new features is we added a TV in this, the TV was already always here, but like we couldn't look up and see what was happening on the screen live. And so now we can actually, like when we have guests that are remote, we can bring bring them up on the screen and actually see what's happening.

How about that?

Yeah. So I will actually be able to read people's facial expressions for the first time in 8 years. Yeah.

Oh man. That's a, I mean, it's, there's just better equipment that we didn't know about for a long time. And—

Well, no, this, I mean, this thing is less than a year.

Okay.

Like it just came out.

It's incredible. So it's really good stuff. But anyway, man, how you doing these days?

I am, I'm good. We're embarking on many new projects around the property. You and I were looking at a couple tonight, so we'll see what happens with some of that. One of the big ones that I'm looking at here in the near future, and I'm actually thinking about like reaching out to some different companies, is I'm planning on redoing the bar area.

Out in your—

Out on the party deck.

Really?

And making it more into like a service kitchen.

Oh.

Yeah, 'cause we're getting rid of the offset smoker 'cause it just doesn't make any sense in there.

Man, it's tough.

And so, and I've got, I've already got like a 3-bay commercial sink and then I've got a full bar. And so I wanna build out the underside of the bar and then on the, on the side, I want that to be more of like a cook area.

Okay.

I wanna have like 3 different cooking.

Like a griddle flat top?

I've already, well, I've got a griddle flat top and I was, I've been thinking about, could I just like permanently build it in, and I've got the, the cabinet smoker. Um, yeah, so I mean, like, I, I think I've got the pieces, but like maybe we could do something a little more interesting. I don't know. Um, I'm thinking about redoing the kegerator out there. Um, maybe putting like some, uh, chalkboard paint.

Oh, nice.

On the front of that.

Okay.

Just fixing it up, making it look nice.

Yeah.

Um, I haven't been—

I haven't used it a whole lot, honestly, which is a shame because That thing is awesome. It's one of my favorite things about your whole place. And it's been, it's probably been a year since I've gotten anything out of that thing.

Yeah. I, well, I haven't, I haven't made beer in a long time.

Uh, that, um, dude, you, you probably hadn't made beer in over 5 years.

Yeah. It's been a long time.

Yeah.

It's okay. It's like when you get beer for free, you really sort of lose the incentive to like make beer.

It's like, it's a good point.

Beer's a lot of work.

Yeah. Yeah.

It's well, and, and it's a, I hope this turns out like, well, you know, at this, like, again, I haven't done it in a long time, but at this point, like, I've got all my recipes. Like, I, I know how to do it.

Yeah.

Um, it's like you gotta set aside a day.

Mm-hmm.

And, and then some.

Yeah. And then, and I mean, your barrels, you, you, you barrel, you've got a barrel for, if, if you want to do it that way.

Oh, like barrel aging the beer? Yeah.

And which takes even more time. You only, you're barrel's only so big, right? So it's like how much you get out of it.

I mean, like, it's a, it's a process.

It's a process for sure.

So yeah, it's like, it's, it's fun. Don't get me wrong. Like, it's a, it's a great hobby to get into. Yeah. It's, it's, it's not difficult to, to get into. So, you know, it, it's, it's one of those things. Um, but you know, anyway, so there's, there's gonna be a bunch of projects that we're looking at here around the property. I've, I've got a lot of, man, I, my list is so long right now.

Yeah.

It's, it's a little overwhelming, honestly.

Yeah.

And so like, I, I really do feel for like, You look at, sometimes you look at people's houses and you're like, how did it get in such, such disrepair? I can, I can tell you how it happened is they started making a list of all this stuff and then they just got depressed. Yeah. And like, it just felt so overwhelming. They're like, just like, forget it.

Yeah. It's not worth it.

Yep. Yep. So, but I'm not gonna fall victim.

Don't do it.

Yeah.

But I mean, the problem is, is like figuring out what's the most important thing. And I think you, you, you probably have a chopping list. Like, like I, I do, but like, You know, you know how it is.

Like, you want to— the way that you get started with stuff is sometimes you just like, you go to the one that you enjoy the most. What's going to give you the most fulfillment? What's going to make you feel the best about your house?

Sure.

You're like, what's, what's that one thing I could, I could knock out in like half an afternoon and, and like really be like, yeah, I got something done.

Yeah.

Um, and sometimes I think that's the way to get going is, you know, just get that little thing knocked off the list. Okay. That other one doesn't feel so big anymore. I think I could do that.

Mm-hmm.

You know, the ones that are discouraging are when you make like 5 trips to the hardware store.

So frustrating.

That's when you're like, this day is just the worst. I could have done 5 things, but I spent 5 trips talking to morons in the aisle that don't know where things are at anyway.

Yep.

So anyway, but we're not here to talk about that.

No.

So we are here. I mean, like one of the number one trending topics online right now in just about every platform is home affordability and the home, what they're calling the home affordability crisis.

Right.

And what we're seeing right now is a surge in the number of properties listed just about everywhere. There's not anywhere where there's like a, what am I, what's the word I'm looking for?

I don't know.

Where there's a lack of homes available.

Oh yeah, yeah.

I don't know what the word for that is, but anyway, there's not a lack of homes available. There's plenty of people trying to sell homes right now.

Sure.

And we're fixing to move into what is generally understood to be the highest volume moving season of the year, which is the beginning of summer.

Yeah.

Because, you know, parents, particularly parents with kids, you know, they wanna hit the beginning of the summer, get moved into whatever new city that they're, so they can figure out schools, so they can figure out who their friends are, they can figure out where they're going to church, they can figure out all that kind of stuff. And so it's just easier to do that in the summer. And so you've got a little bit of a gap, a little bit of a pad, to kind of go, okay, where, what's my new community gonna look like?

Mm-hmm.

So that's gonna be happening soon. But the problem is no one's wanting to buy homes.

It, well, and there's a number of reasons behind that, but you're right there. It's kind of in this, the, this weird place of like, we've got inventory and I mean, there, goodness, there's a house like 3 doors down from mine. Uh, it, it's been on the market for months.

Yeah.

Like 3 or 4 months. And it's a, it's a nice place. So I think that you're right. There's, there's a, you know, an interesting time happening because it's a, it's a popular time to move. It's a popular time to, uh, to relocate and, and go, look, I want a different school district, or I just want this, I wanna upgrade my home or maybe downgrade, whatever. Um, and so we're in a, we're in the kind of a weird lull of like, okay, best time to move, or favorite time to move, I should say.

Yeah.

But we've got some mitigating factors that make people go, yeah, I'm not gonna do that.

Yeah.

You know? Yeah.

I mean, like, just, just right, right here. I mean, this is a report that was released on April 16th from the National Association of Home Builders. Saying that tariffs that have been brought on are going to be causing a cost increase on the average home of around $10,900 per home.

Oh my goodness.

And that the tariffs— and I need to go through and figure out what the connection is, but they're saying that the tariffs are also causing insurance coverage to go up.

Really?

Yeah. And well, I mean, like that, What that could— I imagine what they're saying is because the cost of the home is going up, the valuation of the home has to go up, therefore the coverage has to go up. Yeah. In order— the replacement cost value. We're not going to get too much into insurance tonight because I promised A. Duddle that he could come in and just like rake the insurance industry. So if you're listening to Ryan, we're not going to, we're not going to go too deep. I'm going to, I'm not going to steal your thunder. Um, but like they're saying that tariffs are going to cause an increase in in home insurance.

Okay.

So Ryan, you're coming in. Don't worry about it.

Yeah.

But we have other things too, man. I mean, it's so— okay. I am going to— the insurance portion of this I think is important. And so I just want to talk about the numbers. And so this is a report that came out on the 15th, and this is Axios Dallas, and they really focus— this is a report from the Dallas Fed.

Okay.

And what it says is that the average US home insurance premium has increased by 57% or close to $800 from 2019 to 2024. All right. And by comparison, Texas homeowners insurance premiums increased 73%.

Yeah.

So 57% nationwide from 2019 to 2024. In Texas, 73%, which is an increase on average of about $1,400. Per home.

I, I just threw up in my mouth a little bit because that's disgusting.

It is.

That is—

$1,400 is like what used to be a median home loan payment.

Sure. And, and not only that, I mean, goodness gracious, a lot of times homeowners insurance was around that much a year.

Yeah.

For, for a certain type of like size of home.

Yeah.

And now, like, that's the amount it's going up. Mm-hmm. Like, it just—

Or has already gone up.

Or has already gone up. And not only that, and again, we're not gonna steal Ryan's thunder too much, but like, they're taking away things that they'll pay for.

Right.

And so it's like, so I'm like, okay, let me, let me get this straight. My premium goes up and you are taking away things from that. And even little things like your— like, for years and years and years, most people's, uh, deductible, 1%, right? And what is it now most of the time?

10?

No, it's 2.

2?

2 on the deductible.

Okay.

But, but that's a, that's a 100% increase.

Sure.

From 1%. So let's put it this way. Let's say you're, uh, you're your deductible is, I mean, it is, it's based on your, on your home value, right?

Right.

So let's say a replacement cost. Um, so let, let's say it's $3,000 because it's $300,000. Let's say that's what it is. Well, it doubles. It goes up to $6,000. So you're already like getting, like you're, you're having to pay more to get something fixed if it happens.

Right.

And then you're going, ah, I may not, I, I'm probably not gonna cover that.

I'm not gonna cover this.

I'm not gonna cover that. No, by the way, your, your premium's gonna double. Like, the, the math doesn't math.

No. And that's the, I think that's what most people are frustrated about is that, you know, you're seeing the price go up, but like the actual value of what you're paying for is going down. Yeah. Across the way, at least specifically here in Texas. Right. I mean, it's, you know, yeah.

Yeah, exactly. I mean, it, it affects— I think this is a, a number one thing. Like, most of the time, your, your insurance will go up if they have to make it go up.

Mm-hmm.

I mean, if— I mean, I got a call not too long ago. I think it was like a year and a half, 2 years ago. And, um, I was told, look, sorry, your homeowner's insurance is going up. And it had to do with exactly what you were talking about. The valuation on the home went up. The replacement cost has to go up too. So all of that had to happen. But the problem is when you move, their ability to change your coverage cost is way easier.

Mm-hmm.

On the, on like, it just, it, it's, it's like, it's another mitigating factor of, okay. Now I've got a certain mortgage price, uh, with certain interest price that I've got to be concerned about.

Right.

Now I've got insurance that I've got to worry about. And so once you start factoring like one more exponential in the determination of how I'm going to choose to buy a home, one more is like, ah, it's like what you're talking about is like, I got too much stuff to do around here. Oh, let's add another thing to it. Guess what happens? Drop the ball. Because I'm like, I, I don't wanna deal with it. You know?

Yeah.

It's where people are.

Yeah. And like, when, when you hear people say, like, I, I don't feel like I can afford a home, I think, you know, and, and I, I, I've said this because I do believe that homeownership is still within reach of the average American. I think, I think most people are just believing that they need more home than what they actually need. Sure. Um, but like all those, all those factors lead you away from the house that you want because they're not stupid. You know, they can recognize that, like, you know, most people be used to be able to look at the price of the home and go, I can afford that. Sure. Now all the rest of the stuff that comes with it, like you have to calculate that. And it's not like you didn't have to calculate it before.

It wasn't such a major additional cost to the home.

Right. Yeah, because like, okay, let's put it, let's put it this way. When I was first buying a home, I went on the internet and I went pull up a mortgage calculator and I could put in the cost of the house, how much money I want to put down, what the interest rate is. It spits out a number, right?

Mm-hmm.

Pretty simple. You can still do that today. However, now you gotta factor in all the other things and you gotta factor in your insurance cost. You gotta factor in, okay, what is my mortgage insurance gonna be? What is this gonna be? What is that gonna be? And all of a sudden it's like, I, it's, it's overwhelming and I, I don't even know where to begin anymore. You know? So I, The, the rising cost of all of these things. And now you're saying that even, even little things like the likelihood of you walking into a home and you going, you know what? It's exactly what I was looking for. I don't want to change anything. I don't want to change the faucets. I don't want to change the

door hinges or the handles or like the, the tile on the floor. I don't want to change the curtains on the wall. I don't want to change any of this.

Mm-hmm.

Like, Pretty, pretty slim.

Sure.

Most of the time you're gonna wanna change something and now you're saying, oh, by the way, Kevin, tariffs are gonna make that almost impossible to purchase.

Yeah.

I mean, it's not just the cost of buying the house, it's the cost of living in the house, you know?

Yes. So, I mean, and as, as, as we're talking about that, you know, I'm, I'm looking at, say you buy a used home.

Okay.

Like not a new home, because typically when you buy a new home, a lot of time you're gonna get new appliances in that home.

Most of the time.

Sometimes when you buy a used home, people take the appliances with them.

Sure.

Sometimes you buy a used home and the appliances don't work no more. Yes.

That's why they left.

That's why they left. So, you know, looking at like just like a cheap set of appliances, and this is like Frigidaire, uh, I mean, basic refrigerator, basic stove and oven, basic dishwasher, microwave. It's, it's $2,000.

And these are, again, and these additional costs that you go, okay, how am I going to do this?

Yeah.

How am I going to afford this? And if, and then what happens if you do what I did, which was a major miss, in my opinion. I, I, I love the person that, um, that took my, you know, wrote my mortgage to begin with, uh, but I feel like she missed something whenever we had, uh, everything was based on the previous owner's taxes, right? Well, guess what? She had an over-65 exemption on the house for years. And so her tax bracket for tax bracket, her taxes, like land taxes, right? For just owning a piece of real estate here in Texas. Uh, they were pretty low.

Yeah.

Well, guess what? Came back the next year and it's like, ah, you don't qualify for that. So they took it away, which is what they should have done.

Yeah.

I don't qualify for it.

Yeah.

But my taxes went up.

So it's— and it not— They just probably didn't just go up.

No, they got jacked. No, they got jacked because, I mean, really, and guess what they had to do though? They had to not only pay for the additional in taxes, which was to the tune of about $400 a month, by the way, they had to backfill the last year.

Mm.

So it doubled.

Double dipped.

It doubled.

Yeah.

No, it went down after a year. It kind of felt like a raise, but But you know, that's where they get you. Yeah. That's where they get you.

Yeah.

So it's frustrating.

Well, and you know, then all the other things that they tell you to do to reduce the cost of owning the home, like, you know, do as much energy efficiency upgrades as you can. Sure. Energy efficiency upgrades are expensive.

Yeah. It's like eating, it's like eating organic food.

Yes.

Like it's really good for you.

Right.

But who can afford it?

Yeah. You know, you need, you need to put a smart thermostat in so it knows when you're home and it knows when you're not. Well, that's going to be Right. You know, you need to, instead of traditional insulation, you put in spray foam. Well, that's going to be 5 times to 10 times as much as the regular insulation. It's good stuff, but like, you know, it's expensive to install.

Yep.

Um, you know, energy-efficient appliances, uh, changing out all the light bulbs. I mean, like all the things that you have to, that costs money.

It does.

You know, and so the, the typical homeowner might look at that and just, well, I'll just live in the dark. Yeah.

Right?

I mean, really.

Yeah.

It's, and I think people are getting stuck in those situations. And not only that, you know, they're also, most people have a memory of lower interest rates than what they are right now.

Oh yeah.

And so they don't, they're like, well, it could have been this, but now it's 6.5%.

Which is, which is like 3 times the amount that it was. It feels like, because 2.75, I realize it's not 3 times, It feels like 3 times. It feels like it. Right?

It feels like it.

OK. But—

It's close enough.

Well, it's close enough. And again, you know, we've talked about this. Historically, still pretty low.

Still pretty low.

Still pretty low.

Yeah.

But when you know people in this room who, you know, have like a 2.75% interest rate, and, you know, me, I got really lucky whenever we bought our house. We're at 4.5%. Yeah.

People would kill for 4.5% right now.

They'd kill for it.

Yep.

Because that extra point and a half, 2 points, changes everything.

Yeah. So, oh, the other one I forgot was windows, changing out the windows.

Oh, well, that's another thing that for our house— I mean, our house was built in 2000. Yes, 26 years old, I get it. But they have single-pane windows. Why? I, I'm— it still baffles me why 26 years ago they were putting single-pane windows in homes.

Probably because they built it and it was way cheaper.

They were. That's exactly why they did it. But again, you talk about energy efficiency, they're not energy efficient at all.

No.

They look great. They look great. And the, but you've been to my house. There are windows everywhere. Everywhere.

Yeah.

And they're big windows.

Get you a bid on that, big boy.

$30,000, $40,000 easy without even blinking an eye. Yeah. You know? And so it gets to the point where you're just like, they're fine. I mean, that's the exact conversation my wife and I had. It was like, okay, how much energy efficiency am I gonna get out of double-pane windows over single-pane windows? I'm guessing $20 to $30 a month. That's what I'm guessing. Maybe. Let's say that's what it is. How long would it take me to recoup $30,000 to $40,000?

You know what I mean? In energy costs?

Yeah. It's not worth it.

Just run all the fans. That's right. Lights all the time.

It's just, it's not worth it.

Like what my kids do right now.

Um, you're gonna air condition the neighborhood. That's right.

Yeah.

Yeah. Why not?

So, man, I, I, and I understand that it feels overwhelming. Yeah, it does. Like if you're, if you're a rational person and you're, you're good at looking at numbers and analyzing costs and things like that, you can look at it and go, just, this ain't worth it.

It's not. There's no way it is. I mean, the, the, the way it winds up being worth it is if you decided that however many years ago, 5 years ago, pre-COVID, whatever, you bought a house that was over your head or over your needs.

Yeah.

And if you went, you know what, I, I don't need that. I can— I bought a 4,000 square foot house. I don't need a 4,000 square foot house. $2,200 would be plenty. Okay. Now you're probably in a range where you go, all right, I'm going to save $300,000 on, on a, on my, the, the length of my loan and everything. Right.

Right.

Total. That probably winds up saving you money, but most people aren't doing that.

No.

Most people are going, eh, I want more space because COVID did that to us.

Oh yeah.

100%.

Yeah. It changed the way people looked at homes. It changed the way we designed homes.

It does, yeah.

You know, I can't tell you the number of homes that I've gone into, and I don't know that this is necessarily like a COVID thing, and I actually think it's a smart design, but the way they're building homes, if the master bedroom is on the ground floor, if it has a walk-in closet, it almost necessarily has a back door out of the closet going into the laundry room.

Yeah.

Where that laundry room has been sort of towards the front front of the house near the garage.

Yep.

They'll put that master bedroom walk-in closet on the backside of that.

Yeah.

And give you a walkthrough. So that, which is brilliant.

I love it.

Um, you know, and, and, but like, that's, that's one of the newer design things that I've seen. Um, I don't, I, again, I don't know that that's necessarily like a COVID thing, but it's, it's something that I've seen within the last 4 or 5 years.

I call that energy efficiency.

Yeah.

I'm not having to, I, It's my energy that I'm not having to expend.

Ain't having to go around.

That's right. Well, I mean, it's like one of those deals where it's like we looked at some houses whenever we moved here and it's like 2-story homes, lots of 2-story. Houston loves 2-story homes. They're everywhere.

Houston also loves 3-story homes.

Oh, they do. They really do. Especially the Heights. Especially in Houston.

Montrose, all that. Yeah. Where they're tearing down old beautiful homes and they're just putting like 3 houses where 1 house used to be.

And they're, they're just going up 3 or 4 stories. That's the only place they can go. But what they're doing in some of those is they're putting a laundry room on the 2nd floor.

Yeah.

And the 1st floor.

Mm-hmm.

So it's like, eh, you now you gotta buy 4 appliances where you only had to buy 2. So, I mean, but it is energy efficient for the person not having to walk up and downstairs trying to do laundry.

Do the laundry.

Yeah. You know, which I, I've never, look, somehow in my life, I have never lived in a 2-story home ever. We've always been in a 1-story home, um, which is great. So I don't even know the, the problem that is.

I, I don't have a problem with stairs.

Yeah.

I mean, I, I kind of don't have to, 'cause I have to go up 2 flights of stairs to get to my kitchen.

Yes, you do. But well, 1 and 1 and a half.

1 and a half.

Let's be honest. Okay.

Yeah, fair enough. Feels like 2.

Well, by the time you come up and down, it's— that's 1 flight, so it's really 2. It feels like 2 though.

Yep. You ain't going up there to hang out. It's just for the food. Just for the food.

Yep.

Yeah, for sure. Yeah, I'm clearly struggling in that area.

Figured it out.

That's right. I know how to get my calories. Thank you very much. That's right. So I will say in all of this, The silver lining, I think, is the glut of houses on the market. It's going to create a buyer's market, if, if not already.

It's already, it, it's already shifting, I would say. If it's not already there, it is shifting.

And what I, what I would encourage people to do, if you are a buyer right now, you know, when you see something that you're interested in, make a ridiculous offer.

Why not?

I mean, because interest rates I don't think are coming down. And so, but you can only do yourself a favor by making a ridiculous offer. One, you're going to be paying less for the house. Two, it could potentially lower your interest rates, although Ryan will have to fill us in on that one. It could potentially lower your taxes because that's all based off of the value of the home. The value of the home is based off what it sold for. You know, and which I don't think, I don't understand why people didn't realize that during the whole COVID thing was like, you know, houses were going for such a ridiculous price and people were willing to pay them.

Yep.

You know, but you have people come, when you had people coming from states that do taxes differently.

Yeah.

Right?

Yeah.

Whereas, you know, there's no income tax. What do we got here?

Uh, Ryan, Ryan says he knows someone who can—

He knows a guy.

Who can insure him. He put a shameless plug out for himself.

Yes, you do have to pay for that. Yeah, you do. Yeah. Yeah.

So it's— You owe us money now.

It's only $5,000 a—

Right.

It's worth it. It's worth it. It's, yeah. Yeah. Um, no, but when you, when you have people coming from states that have income tax to a state like Texas where there is no income tax, right? It's gonna drastically affect the way that your property is taxed. Yeah. And, and some people just aren't ready for that. I remember you talking about that when you came from Arkansas, cuz Arkansas is an income, income tax state.

It is.

Yeah. And, and so things like, you know, tax on cars.

Yep.

Tax on—

Well, tax on jet skis.

Yeah.

Like motorhomes, jet skis, like boats, any, any recreational vehicle, even, even your four-wheeler. you would have to pay property taxes on, right? Like, um, it's, it's kind of crazy that that's the way that works. But look, I— income tax, no income tax, look, it's no different.

But it's really not. It just, it just spreads it out differently.

It does, because in Arkansas, the, you know, your, your real estate taxes are nowhere near what they are here, but you're also paying for taxes on your car and all these sorts of things every single year.

And so, but that's, I mean, that feels more like a consumption tax. Like if you want to be a moron and have 6 cars, fine. We're going to tax you on them.

Correct.

You know, you want to have 4 jet skis, knock yourself out, Scooter. Because it's like, we're going to get the money back on the back, on the back end.

Right.

In Texas, you can have all that stuff without paying the taxes on it, but like you're just going to pay taxes on the property.

Yeah. Makes sense. Well, and, you know, Ryan, uh, actually just said this. I think it's important. Uh, that the market is softening. He has several carriers that are dropping the rates on new clients just to grow their clientele.

That's encouraging. So, yeah.

I mean, I mean, you're, you're realizing that—

Don't give away too much, Ryan. We're gonna bring you on to talk about all this. Yeah. Yeah. Yeah.

Don't get too far into this. But I think it is important to understand, like, like, something has to shift. Something has to change.

Which, and I think that's, that's what it is. I think the prices on homes are net. Because I, I saw a report the other day, there was like 33,000 homes listed just in Houston alone.

Okay.

You know, and, and it's such a, it's such a vast amount of homes on the market right now. Right. That's why I'm telling people, like, if you see something that you like, look and see how long it's been on the market. And if it's appealing to you at all, make a ridiculous offer.

Yeah. Because what's the worst they can do is say no.

Yeah. And, and, right. Well, what you're doing is if, if nothing else, you're helping the next guy.

Right.

Because, you know, they get, they get 3 or 4 ridiculous offers in a row. They're like, I think our house is overpriced.

Right.

People are making offers like $20,000, $30,000 below list. Like, what's wrong with our house?

Right.

And, you know, if it's been sitting on the market for 60 days, they're probably gonna drop it a little bit. Sure. In response to the ridiculous offers. Also, you could just be like me and just make a ridiculous offer and somebody takes it.

Right.

That, that I've had that happen.

Yeah.

You know, and my wife scolded me when I made it. She's like, you can't, that's rude. And I was like, not until when I get it, you won't think that.

Right.

You know? Yeah. And they did, they took it. Now, you know, it was a builder, so who cares what they feel? Yeah. Doesn't matter. But yeah, it, it, again, it's, you can navigate this.

Yeah. And you don't know, I, I, to your point, you don't know what situation they're in.

No.

I mean, they may be in such hot water with the, with the bank there. they're having to get out from under something.

A loss is better than a foreclosure.

It is. And you don't, and you also don't know like how long they've lived there. Uh, well, you do. I mean, you'll find that out, but like, you, you, especially if you see someone who's been in a home for like 10, 15, 20 years and they're selling, they may not be upside down on anything by taking a massive loss on the house. You know, they may just need to get out and maybe they're moving in with someone else. Who knows? You don't know the situation.

Yeah, it, well, and you know, just, just a negotiation tactic. I mean, like, I, I love this game, by the way.

The hell yeah.

I, I actually wish I could buy more homes. I, I enjoy the whole process. I like finagling.

You're weird.

I do.

I, sure.

Um, but make a ridiculous offer and you know you've got somebody on the line when they don't say no. Mm-hmm. But they come back with a counter.

Right.

It's like, okay, that was intriguing enough.

Yeah.

that they think that their counteroffer will be reasonable.

Right.

Sometimes if the counteroffer is within your budget, mm-hmm, accept it.

Sure.

And then get it inspected.

Right.

Because a good inspector is probably gonna find something.

Right.

And you know, if you don't, and I'm, I'm, look, I'm not saying to be sneaky or weird, but like get in there.

Mm-hmm.

And see if it's actually something you wanna deal with.

Right.

If it's, if the stuff that needs fixing, you want to fix it? Do you want to ask them to— now you've got them at this price.

Mm-hmm.

And if there's stuff that needs to be fixed, well, like, you can either take the cost of the house down, right, based off what it's going to cost to fix this thing, you know. And so there's, there's always negotiations that can happen even after you guys have agreed on a price, right? That's not, that's not set in stone.

No, you've got time. You've got that time to back out also. I mean, you might, you might lose a little bit of money of your, um, Earnest money, you might lose some of that.

Sure.

But you also have a time to get that back too. So there's, yeah. And look, this is one reason to get a really good real estate agent.

Yes.

Because, and look, there's nothing wrong with going with a younger real estate agent. What I mean by younger is not necessarily age. I just mean in the amount of time they've had their license.

Yeah.

when you go with a more tenured real estate agent, they tend to just know some of those things. So, uh, you know, really interviewing your, your real estate agent and asking like, hey, what all do you know? And here's, here's the thing that I've, I've heard a lot is like, they'll, they'll go, oh, well, you know, I'm newer, but I, you know, my brokerage has been around a long time and they can, they can help. That may be true. Yeah, it may be true. So it's not necessarily that you shouldn't go with a younger person, just do your research.

Yeah, most young guys aren't out there on their own anyway.

No, no, no, they can't be.

They're usually sitting— well, yeah, they're sitting underneath someone who typically is pretty seasoned, right? You know, and so—

Exactly. Yeah, so give them their opportunity. Yeah, yeah. I mean, you You, you can't be a real estate agent without a, without being under a brokerage in Texas.

Right.

So now what you find from time to time is someone who has started their own brokerage and is working their own system.

Yep.

So again, you kind of got to work that out a little bit, but, um, I, I think that what we're seeing here is again, going back to the, the beginning of our topic, the, the idea that, uh, Ryan says that's true for many industries. So I, I think the, the idea is that as we move into the summer, I think 2 things are going to happen. One, more people are motivated to buy.

Mhm.

But that increases whenever you're selling a home, you you're wanting to buy also, right?

So you—

it's, it's like this, this pendulum a little bit of they want to sell, you're trying to buy so that they can buy also. Like, I, I think that now's a good time to come in and go, look, find a place that you like, go in with a price you can afford.

Yeah, and have the number in your head.

Have the number in your head. You got to get a pre-approval letter anyway. Walk in and go, look, I mean, that may be your, your bargaining chip right there. You may walk in and go, look, this is a, this is a $600,000 home. I can only pay $450,000 for it. Uh, that's all I'm— look, that's all I'm approved for.

That's what I got.

That's what I got.

Yeah.

You want to take $450,000? And they may tell you to go butt a stump, but they may go, eh, what about $475,000?

And you're like, hmm, could I swing it?

Could I swing it?

Yeah.

Do I have any leverage somewhere else that I could pull from? that we hadn't pulled from yet.

Although, you know, I don't encourage this strategy. Like, I, I, you know, but you're gonna tell us. Well, no, I mean, no, I just don't encourage people to like buy above what they feel like they can afford.

Agreed.

You know, buy below if you can.

Yeah, for sure.

I mean, as much below as you can.

Yeah, for sure.

For what you need. I mean, like, shoot, if you are a married couple, buy a 2-bedroom, 1-bath, right? And live your life happy, happy, happy.

Yep.

You know, with the extra money you stick in the bank until you need something otherwise.

Right. Yeah.

You know, smart. Don't be house poor.

No. How, uh, we, we've talked about this a lot and you can read books upon books upon books. If you're going to be poor somewhere, don't be house poor. There's just no reason. Like there's so many other options than being house poor, you know? And I mean, goodness, if you're going to be house poor, Do it in a way that you can make money off of it. Buy a duplex.

Something like that.

You know what I mean?

Yeah. Because, you know, house poor is choosing to be poor for the next 30 years for most people.

Right. If, if you make it that far, and most people don't because they're going to sell and now they're upside down or now they can't, they didn't, they didn't actually make any money off of it because of this, that, or the other.

And it's like, pull, pull that one up because he, Okay.

Uh, oh yeah, that, that's the problem.

100% true.

Yeah.

100% true.

Yeah. Most people don't even have a budget.

No. Yeah. No. And, and not only do they not have a budget, they don't even, like we talked about this, like they don't even know where their money's going.

Nope.

They have so many stupid subscriptions.

Yes.

They have, I mean, just like money is just running out the door and they have no idea which direction it's going.

Right. I mean, have you seen that? What is that? Uh, there's, there's a, a commercial that there's people walking around and going, hey, pull it up right now. And it'll, how many, how many subscriptions do you think you have? And people are like, I don't know, like 5.

I think we talked about this last time. It's Rocket Money.

Rocket Money.

Yeah.

They pull it, it's like, you have 27 subscriptions. And they're like, what?

Yeah. It's a brilliant ad campaign.

It is.

And because, and the reason it's, it's a good ad campaign is because it resonates with people. Mm-hmm. Because the average American has zero idea how many subscriptions they have.

Correct.

I mean, I, and I, I say that, like, I probably couldn't tell you the number of that I have.

Right.

But, like, I feel like I'm a little bit different in, like, I have a lot of stuff for, like, our business.

Mm-hmm.

I have a lot of stuff personally.

Right.

I have a lot of stuff for the podcast.

Right.

You know, it, it, it's not that I don't know how much money's going out the— I know how much money's going out the door. I couldn't tell you what the subscriptions all are for.

Right.

I know that they're all pulling levers for me.

Right.

And doing things.

Right, and there's a lot of ways to leverage that kind of stuff. For example, um, asking yourself the question, like, you've got a subscription to Netflix. Great. How often are you watching it?

Yeah.

Realistically, like, how often are you watching it? Are you watching it every day? Are you watching it 3 times a week? Um, because there's another lever you can pull that a lot of people don't think about, and it's like, switch phone carriers. that offers free Netflix.

If you really have to have it.

Right.

But you don't.

You don't.

You don't need it.

No, you don't. And, but that's kind of my point, right? It's like, think about it another way. I mean, because what it's, this is what they want you to do. Set it and forget it. You know? I mean, I—

There are 2 streaming services that I get for free.

Okay.

Because of my cell phone.

Yep.

And because of Amazon.

There you go.

I get Amazon Prime. Well, I take that back. I get 3 for free.

Okay.

So because I have Amazon Prime, I pay for like their whatever package so that we get next day and all that fun stuff.

Right. That's a normal— everybody in the world has that. It feels like.

I know, but like—

But it's something that people probably don't think about.

No, but there's additional things that come with that subscription. Most people just buy it because they want the, you know, Prime delivery and all that kind of stuff.

Correct.

But you also get Prime Video.

Yes, you do.

You also get Paramount.

Mm-hmm.

You also get unlimited photo storage.

Yeah.

Most people don't know that.

No, most people don't.

You know, and, and so like there's a lot of things that come with that subscription. Well, with my cell phone subscription, I get HBO for free. Okay. You know, do I need more than 2?

Probably not. No.

Do I have more than 2? I do.

Of course.

I can afford it though.

Yeah.

I can.

Right.

I also have 3 subscriptions to AI.

Oh yeah.

There's that.

There's that.

It's like, do I think the average person needs 3 subscriptions to AI?

No.

No. Me as a business owner and a podcast host and all the things that I do.

Yep.

Like my networking stuff that I, I have to have it. Sure.

It's vital.

It's, it's, I'm, it's like having 3 additional employees is what it is.

Oh, for sure.

If you use it right, most people don't use it right. They use it as a search engine. Right. I'm using it to complete tasks. And automations, right? And so like, can you have a lot of subscriptions and be, you know, financially secure?

Yeah, of course.

But like the average person isn't.

Right, yeah.

We just know that.

Right.

And so like most people are just getting— and so what I'm saying is it's sort of like dieting. You know, what people have found to be successful in dieting, and I'm just talking about food consumption, I'm not talking about exercise.

Sure.

But like when you, when you start dealing with like a food problem, you reduce it down to the basic essence of what you have to have on a daily basis. And that never includes fast food.

Nope.

It never includes ice cream and candy and cake and all that kind of crap. You know, it's like I need meat and I need vegetables and I probably need a little bit of fruit.

And water.

And water.

That's it.

Like if most people would do that, not only would they be more healthy, but they would be a little bit more financially better off.

Yeah, that's so true. It, no, it really is.

And so, you know, but like when you do that, you begin to realize what you actually can survive on.

Right.

And what, you know, like what you used to believe that you needed no longer becomes necessary. And so you all of a sudden begin, you gain a superpower of perspective and go, oh, I can actually survive and thrive with a lot less.

Sure.

And be healthier and have more money.

That's a deal.

But like, it's not a deal for people. They don't take that deal because they're unwilling to give up the thing.

The sacrifice. Yeah. So for example, I'm, uh, so, uh, I told you just before we started the podcast, I've lost a pretty good amount of weight recently and people will think I'm crazy, but I've, for, uh, just starting as of, uh, today, I hit 3 weeks that I've been dieting. I've only eaten lunch for the past 3 weeks.

So you're kind of like reverse fasting.

Yep. And I'm, I'm only eating lunch and it's a, it's a low carb lunch. So I'm not eating burgers. I'm not eating French fries. I'm not, you know, drinking Dr Pepper. I'm not, uh, you know, doing, doing stuff that I would love to have. I'm not eating sandwiches and, you know, lots of bread, lots of carbs. I'm not doing that. even though I'm only eating in that window, 'cause a lot of people say eat whatever you want to in a certain window and you can kind of do that. That's not what I'm doing. I'm eating one meal a day and it's low carb. And a lot of people would say, you're crazy, I can never, how are you doing that? And I'm like, I'm just doing it.

Yeah.

And it's fine. And you know what I'm doing? I'm losing weight, I'm sleeping a lot better, and I've got more energy throughout the day. And I've been doing that for 3 weeks. So again, the question really comes down to, are you willing to do what's difficult to get to the result that you want to get to? And the truth is, and most people don't ever talk about this, you may not even know this. Do you know how long you have to do something before it becomes a habit?

I think it's like 20 days or something like that.

It's 2 weeks. Yeah, it's 2 weeks. So it's even less than that. 2 weeks. If you do the same thing for 2 weeks, it becomes a habit. And that's not that long. You, you go 2 weeks, 2 weeks without watching Netflix, guess what? You're gonna go, I don't need it. Yep. It's not a big deal.

Don't even miss it.

That's— I don't even miss it. You know, Starbucks, I don't do it for 2 weeks. I don't need it.

Oh dude, I used to be a Starbucks fiend.

Really?

Oh man.

I didn't know that about you.

Oh, well, So, I mean, back in the day when I was working at a church, I mean, that was kind of like my thing is I would—

Sure.

I'd get up, get ready for the day. I'd head to the office and I'd probably go meet somebody at Starbucks. Okay. Yeah. Like, it was just like the thing that you did back in the early 2000s. Right.

You're not wrong.

It's where you met people. It's where you went for meetings, all that kind of stuff, dude. And I could put away some Starbucks and man, did they get a lot of my money.

Oh yeah.

I mean, even then it was expensive. Sure. But you know, like, but I would get like the big one, the venti. Oh yeah.

It's one of my favorite.

Back when they actually, I mean, like, okay. Uh, well, okay. 2, 2 things can be true. The, the amount of choices that they have at Star— I hate going to Starbucks now. Yeah. The amount of choices that they have there, like as flavors and interesting, it's, there's not enough.

Yeah.

They used to have way more.

Oh, they did.

They used to have way more choices.

You're not wrong. They did.

Um, they don't have that anymore. Yeah.

Yeah.

That being said, when my wife and daughter went to New York, I guess that was— Oh yeah.

About a month ago.

Yeah, something like that.

Yeah.

It seems like it may have been longer than that.

Maybe.

One of the, a friend of ours that went with them is a bigwig over at Starbucks.

Okay.

And I didn't realize, I didn't know this. There's a 3-story Starbucks.

Oh really?

Is it like at the Empire State Building?

3-story?

Oh my goodness. Something like that.

Okay.

Um, and so one level is like, uh, if I'm remembering right, one level is just like regular Starbucks. One is like a retail store. Oh, and then one is like fine dining Starbucks.

What?

Yes. So like you have a waiter.

There's actually—

there's a menu with like, not like the crap that they serve you, like, but like there's actually banana bread prepared dishes.

What?

Yes.

Okay.

And they said it was incredible.

Really?

It's called Starbucks Select.

Okay.

And so they brought me back a 2-pound bag of whole bean bourbon barrel aged coffee beans.

Ooh.

I actually had a cup this afternoon when I got home from work.

And?

And it was the first time I'd made it.

Okay.

And I was just like, oh, this is so good.

Oh.

This is so— and I think it was like $30.

Oh, goodness gracious.

For a pound or whatever.

Oh my goodness.

Yeah. But I was like, yeah, there's a reason.

I know why.

There's a reason.

Yeah.

It's so good. Yeah.

But I think that the problem there is we recognize if you start thinking about it, is that something you need? No, it's not. And it's not that you look, we're, we're over here saying these things and recognize that we like the things that we consume.

100%.

Both of us are foodie type of people. We enjoy going and eating nice food. Um, that, that's who we are. That being said, can I do it cheaper? Yes. So I'll tell you, recently, just with, with the cost of everything going up, we you know, gas is out of control. Yeah. I, I had a friend from California recently posted gas. It was $5.99 for gas.

Oh gosh.

Yeah. And we here in Texas are complaining cuz it's almost $4. Um, so that goes up. Well, guess what? That means that the price of food goes up because they gotta transport that.

Yeah.

Everything that gets transported, it trickles down.

Everything trickles down from, from energy.

That's exactly right. Yeah. So Everything is going up. And so my son, he's so funny, man. We were coming back from baseball tournament the other day and it was one of those deals. We had 2 games in one day. And so we'd taken some snacks and those sorts of things. But after the game, it was like an hour home. It was like, we gotta stop and get some food.

Mm-hmm.

So we stopped at Cane's and he goes, I'm really sorry. I know you were having to pay for baseball and now we're paying to go out to eat. And we looked at him and we're like, look, you realize we don't really go out to eat throughout the rest of the week. We plan on this. This is when we're going out to eat. And he was like, oh yeah, I guess we used to eat out sometimes during the week. And I was like, yeah, we shifted. We didn't just add another day that we go out to eat. We took that away in order to be able to afford things because it's just so expensive.

Yeah.

And so Ryan's point is so well taken. Most people don't have a budget. They don't have a clue where their money goes. And at the end of the, at the end of the month, you're going, there's no money, right? There's, there's more month than there is money.

Yeah.

And what am I supposed to do? Well, you put it on a credit card.

Well, this is why Ramsey's, uh, program is so powerful for a lot of people because like when you, when you finally reach a, When you hit rock bottom is when Dave Ramsey comes into play and he's like, look, put it into envelopes. And when the envelope's empty, you're done.

You're done. You can't do it anymore.

It's a, because it's a powerful way for people to look at their budget and go, oh, that's where it went.

That's it.

And like when you, and there's something psychological that happens when you're pulling cash out rather than swiping a card.

Right.

The card is ethereal.

It is.

The cash is real.

Yep.

And so there's something in your brain that goes, eh, I don't need that. And it puts it right back in the envelope, you know, and says, maybe next time.

Maybe next time.

So yeah. Yeah. But like all this is just, you know, it's difficult lessons and sometimes you gotta learn 'em the hard way.

Yeah.

But also, I don't know that there's a home affordability crisis. I think we're dealing with a lot of inflation.

Yep.

And I do know that wages have not kept up with inflation.

Without question.

And so that's a big problem.

It is.

But I will tell you as a business owner, like, profit hasn't kept up with inflation either.

No.

Like, no one's willing to pay more for the services that we're providing.

That's right.

You know, there's, there's some, there's some of them out there that you're just gonna have to because they're necessarily going to go up because those costs are going up and you all have to have air conditioning.

That's right.

You know, and you all have to have plumbing. And so like if their prices for their materials and stuff goes up, that's just the way it is.

It is what it is.

When, when it comes to service stuff, you know, like home cleaning and, and pest control and, and stuff like that, you know, the, It's not as, it's not as much of a fixed cost as some other businesses.

Right.

And, but, you know, like our, like, you know, year over year for us, you know, our, our revenue has gone up, but our profit has gone down.

Ah, interesting.

You know, and, and part of that is, you know, we were bringing on new employees and different things like that. And so our margins are getting smaller.

Sure.

But like, you know, as you grow, your profit should sort of remain steady if you're, if you're running your business right. And that's just not possible when you're, you know, having, when you're in such a competitive market.

Right. Well, well, it's one of the things that everybody is shopping harder than they ever have.

Yeah.

And they should. We talk about it all the time. You should shop. You should get multiple, uh, estimates on the things you're having done. We've, we've harped on this since day one on this podcast. Um, but the, even though we've been singing the song, nobody does it still. No, they don't. It's so, well, but there's, there's multiple reasons. So many contractors don't answer their phone.

I was, but I was, I was listening to somebody the other day that said they ran the numbers on this and they said based off the results that we see out in the marketplace is that with people that watch YouTube videos and Facebook videos and stuff, about 1% of the people actually take the advice, even though, even, even if they believe that it's true, about 1%, 1% of people will actually take the advice that they hear online. Um, which is crazy.

Shocking. That is. Yeah. Especially whenever you're watching a video of someone doing it or seeing it happen. Yeah, whatever that thing is. Uh, well, I, and I think in general, we've, we've put ourselves in such a busy lifestyle that doing anything is, it takes so much time.

To add something.

Yeah. Can I just get it done as quickly as possible? You know? And so I, I get it. I really, really do. But the reality of it, you take a, you take a person who's a remodeler, and we're talking about, you know, buy a new home, maybe you want to remodel some stuff. You get 3 different quotes to replace, I don't know, cabinet doors in your kitchen. One of the quotes is $5,000, one of them's $7,000, one of them's $8,000. Which one are you going to take?

Mm-hmm.

You can take $5,000. Is the guy that's $8,000 probably better? He probably is. He's putting the same cabinet doors on. Why is it different price. He's probably better. He probably knows what he's doing. He probably sources his stuff really well. Like, but how am I supposed to afford that?

Yeah.

And so what winds up happening is the guy that did it for $5,000, he's making a whole lot less money than the other one because materials are just going up and up and up.

Yeah.

And so then 3 years from now, oh, maybe I didn't put cabinet doors on because $5,000 was too much. You go back and it's like, ah, I saved up $5,000 to go get cabinet doors. Guess how much they are? $6,500 now. And it's like, what in the world? Yeah.

So, well, but like, there's like, just talking in like cabinet doors and drawers, like, is the $5,000 guy gonna put the quiet slides?

Yeah, right.

You know, exactly. Is he gonna put the self-close?

Right.

Like the soft close?

Sure.

All that stuff. Because that makes a huge difference. on the experience of the actual cabinet, right? But can you cut corners and not put those things in?

Sure.

Yeah.

Yeah.

And when your margins are small, what are you going to do?

Do you have to?

Cheapest thing you can.

You have to. It's all you can do.

Yeah.

And then, but you know, and it's why I think we see more people going, I'll just go to Home Depot and buy them and put them in myself.

Yep.

And, and great if you have that mentality and you can do it. Do it. I mean, the reality of it is if you want to go put soft, soft close drawers in, I did, I did them in my house. You can be done. It's really not that difficult. You just have to take the time. You got to be precise. You got to, you know, have a little bit of, you know, patience, patience, type A personality, right? All that kind of stuff. But can you do it? Absolutely you can.

Yeah.

Um, but at the end of the day, whenever you screw it up and have to call the contractor and get them to do it right, to begin with, now you're paying more.

Yeah.

So it's a lot. It's a lot. And I, you're right. Is there a housing affordability crisis? I don't know. I look, we've said it for months now. I think many people are going to have to change their attitude about what homeownership looks like. And you may need to buy less of a house than you thought you needed.

Yep.

Smaller. Maybe different neighborhood than you thought. Don't be house poor.

Nope, don't do it.

So what else?

That's it, man.

All right, well, listen, thank you guys for listening. And, uh, Ryan, we're gonna get you on before too long. And, uh, we appreciate all of you out there. If you haven't already, please go like and subscribe all our channels— Facebook, YouTube, Instagram. Uh, share our information wherever you can. We would really appreciate it. And, uh, look, we look forward to just continuing to put out really good content for you guys. We appreciate you. Until next time, we'll see you later. See ya!