Tego Venturi:

I want to talk about interest rates because it was an interesting week with interest rates. You know, we saw the biggest weekly move in interest rates in the law in a long time. You know, the thing that's funny about it. We were on with Chris Cooper from Bay equity. Who's one of our lenders that, you know, local lender here that we work with that that's excellent. He watches that interest rate stuff like nobody else. What were some of your takeaways when, when he talked to our team here the other day, Jane,

Jane Elizabeth:

I think the biggest takeaway is that even at 3%, which is pretty amazing, we're still in absolutely Epic, low interest rates and the affordability.

Tego Venturi:

Well, it was funny. We were joking. They went from 275 to 3 for a lot of people. It's like, Oh my gosh. Yeah.

Jane Elizabeth:

I think just that they went up was a little bit nerve wracking because we watched gas prices go up and now interest rates are going up and wondering if it's an overall trend, we can't help but ask that. But yeah, interest rates

Tego Venturi:

The one thing he said, and I think people need to think about that as if they've gotten a pre-approval

Speaker 2:

That's right. Yeah. That if someone got pre-approved for a loan last week, that they need to check back in, because if they got pre-approved at the real top end of their ability to qualify, they may not qualify even with a quarter percent increase in the interest rate.

Tego Venturi:

And we're not talking about qualifying overall, we're talking about for a certain price point. Right. Cause now they're what they can afford. Might have gone down a little bit, right. Again, talking a quarter point here, but it's, it's amazing. One of the things that I looked at this this week, Jane was predictions about interest rates, all the experts, all the housing economists, all that stuff. And

Jane Elizabeth:

What are they saying? The million dollar question

Tego Venturi:

Experts with air quotes, right? Because I think 2020 was a year of not believing the experts anymore, but sorry, I'm not going to get political here, but anyway,

Jane Elizabeth:

Everyone's got a motive behind their opinion,

Tego Venturi:

But you know, basically what we, what we looked at, the, the group I work with that pulls this data together is we looked at what Freddie Mac said, Fannie May said, which home home, not home builders, mortgage bankers association, and the national association of realtors and, and, and all of them, if you were to just take all of them and look at them, they're saying probably by the end of the year, we're going to be a little bit over 3. Right. And that's, that's it. Now another group that I followed John Burns consulting there, they looked out to 2024 and they're putting a 3.6 on 2024 interest rates point is nobody's expecting a huge change in interest rates. And we there's good chance. I saw some economists talking, there's a good chance. We'll never see six, 7% interest rates again, which, you know, it's again, it's that whole new normal thing. Right. And that could be interesting because as you know, it's effect affected or affordability, even though home prices have gone up, correct? Jane and we only had a couple of minutes left. Cause we, we talked about,uHB one 11, which was super important. I want to just talk about pre-inspections and what's your, your feeling. If you're getting ready to sell your home and somebody says, Hey, should I get a pre-inspection? What do you, what do you say?

Jane Elizabeth:

I say, it's a great idea for a lot of reasons. One of the reasons is when things are going so fast and we're asking buyers to make quick decisions, it's so wonderful for the buyers to have an inspection that they can look over. And it's really like a seal of approval for the sellers too. And it says we don't have anything to hide. This is what we've got. And it also helps the seller not be negotiating in a black hole. Roofs are the, probably the number one rea

Tego Venturi:

And I just want to hear some, some stories, Jane, you've got some stories about what buyers and sellers are going through these days. Can you share something with us that you're experiencing? Thank you. Hold on. I got to cue it up. I always do that to Tracy. That's like, I go, I go, okay, wait, wait, but let me queue it up. If you don't know, our market is like, unlike any market we've ever seen super low number of homes on the market and a lot of buyers, high buyer demand by low seller supply. That's kind of what we're dealing with, right?

Jane Elizabeth:

Yeah, absolutely. It's a really fun market. Very fun unprecedented. The stories I helped buyers and sellers and the thing that is most noteworthy to me is I talk with people who want to sell. Usually the first time I sit down and meet with them, their jaw dropped. When I tell them it's not a matter of, if your house is going to sell, it's a matter of when and how much, how much we're going to get for it. And that's amazing. And it's crazy to be talking like that because I started in 2008, 2009, and we all know what that was like. So that's been really amazing to be able to help sellers finally get what their houses, maybe they paid for them back in 2006 and maybe even a little bit more just to

Tego Venturi:

Way more. I mean, in, unless they just let it go away, then they definitely are getting more than, than even the top of the market in, in Oh six. And so what are you doing? Like you're, you're S you're listing a home and you're getting multiple offers, right?

Jane Elizabeth:

We can't give away all our secrets. But we're very, very thoughtful. Again, it's going to sell, you know, you have to really have a a really bad property for it not to sell right now. It's gonna sell. But we're doing very strategic things. I always say that we get this, I won't give away. We get Cinderella ready for the ball. Right? If Cinderella went to the ball with ashes and sack cloth or whatever she wouldn't have gotten picked by the Prince. You know, she might've gotten picked by the housekeeping staff.

Tego Venturi:

She might've gotten picked, but you probably wouldn't got top dollar. I know analogy gets a

Tego Venturi:

Little weird analogy, but anyway

Jane Elizabeth:

Because you can, you can throw anything at the market. But it's really important to be very intentional about how, how you prepare the house and then how we market it. We've got a lot of things that we do that really help everyone have an equal advantage of bidding on the property. It's the market

Tego Venturi:

Talk about the buyer, but Damon, I want to hear about property management, what you guys are seeing again, you know, I know I rented one of the homes we own here a month or so ago. And I mean, it was, my phone just blew up, rented it out. I mean, like it, like people that wanted to rent it, I had literally people on the phone crying, begging me to rent them the home. They couldn't find anything. Are you seeing the same thing? We are seeing the exact same thing we're seeing, you know, you know, our, our nicer properties are, you know, rents are increasing and we're getting, you know, multiple phone calls that, you know, within minutes of the time we S we post them before they're even, you know, vacated yet. You know, lot of people, you know, renting site and seam you know, last year we were, we were kind of at the beginning of the shutdown, we were thinking that we had this inventory that was going to sit for awhile.

Damon Maddox:

People realizing they can, you know, co you know, telecommute and work from home. You know, they can come to our beautiful city, you know, cost of living is so much cheaper, you know, they're willing to spend, you know, that extra money for, you know, a four bedroom. So they have one designated office space and they really only needed two or three bedrooms and, and all of that yard space. So we're seeing those homes go super quickly. Yep. What about, what about on the, you

Tego Venturi:

Well, there's two bills right now that are working or we're trying to work their way through. Oh, there's Damon. So perfect timing. Let me talk about HB-19 first. So HB-19 was a, or in Damon, correct me if I'm wrong, but HB-19 got postponed. Correct. Is what I understand. Yeah. And I'll introduce you in a minute, Damon, but so HB 19 was they were trying to put a transfer tax on real estate sales. So basically wanted to tax you when you sell or buy a property. And at this point that one has been shot down. So thank goodness for that. But anyway, Damon, Maddox, medics management, if you've been around Albuquerque Ben and you know, around the city, you've probably seen Maddox manage it. Mint signs. I mean, God's statement. How long has your family been in the real estate business?

Damon Maddox:

45 years.

Tego Venturi:

Yeah. There you go. So you guys are kind of legendary in Albuquerque and especially on the property management side. But your, your father has done so much in yourself so much for the real estate world and real estate industry. So thank you for that. But the reason I got you on Damon is we want to talk about HB 1-11 which is, which is out there right now. And so first off, Damon, if somebody wants to reach out to you talk about private property management, how do they get ahold of you?

Damon Maddox:

They give us a call here Maddox management, (505) 242-0989. Or visit our website MaddoxMGMT.com.

Tego Venturi:

Awesome. Tell us about HB 1-11.

Damon Maddox:

So HB 1-11 it's revamping the uniform owner resident relations act which is, you know, the landlord tenant laws for the state of New Mexico. It's definitely something that needs to be looked at from time to time. You know, we, we, last time it was revised was almost 20 years ago. So when we heard that, you know, something was coming along, we, you know, we weren't you know, it was, it didn't catch us off guard, but when we finally saw the actual bill that they're proposing the changes they're proposing there's a lot of unintended consequences.

Tego Venturi:

That was one of my takeaways when I saw it, I started going through it going, Oh my gosh, this is going to backfire especially on, you know, what I would consider some of the, you know, the, the people on the margins, both as property owners, as well as potential tenants and, and stuff. I don't know, is that, was that your take?

Damon Maddox:

That was definitely my take, you know their, their intent is to help grow the workforce housing help us you know, the industry combat the, you know you know, homeless issue that we have in our state in particular, in our bigger cities, but the way they're trying to go about it is, is just, it's, it's going to cause much bigger problems than, than it's not going to fix what they're trying to fix. Yeah.

Tego Venturi:

So, give us just a, some of the proposals that are out there that, that concern the property management community and landlord,

Damon Maddox:

The big concerns that we're having with, with the, these changes is the amount of time for, for an eviction both for nonpayment of rent and, and for lease violations right now start to finish, you know, it can take about 28 days to, to go through that whole process from the time you serve that, that first notice if this passes it's, you know, 56 days for you know, for an eviction process for, for, you know, somebody that's been destroying the property, you know violation other than non-payment of rent. They're, they're taking that initial seven day notice and making it a 14 day notice, and you've got to do that twice before you can even, you know, file with the courts. Wow. the other, you know notable things that they want is they they're, they're adding they want to add a source of income as a protected class. Which, you know, it in and of itself is not a bad thing. Right.

Tego Venturi:

Sounds good. On the surface. Yeah.

Damon Maddox:

When, when you're, when you're forcing when Lords to, to take the

Tracy Venturi:

Let's talk about forebearance. I want to get to that topic. So that's been a big topic.

Tego Venturi:

It's a hard topic. Okay. It's funny. I've, I've gone to the chiropractor. I went to the eye doctor in every time I end up just in the last few weeks and every time I end up talking about real estate, right. Oh, tell me about this and tell me once they hear my name.

Tracy Venturi:

I think it's going to be this big deal. So if somebody is coming out of forbearance Tego,

Tego Venturi:

I wanna just talk about some stats, if I may I find me well, yeah. Picking up on your sarcasm.

Tracy Venturi:

No, no, I love it. That you would know stats.

Tego Venturi:

Well, one of the things that's, that's been, um, going on is, yeah. I mean, back at the beginning of the pandemic, there were over 5 million people that took a forbearance plan. And so what that means is they, they went to their lender and said, Hey, can't make my payment because of COVID. And I need to just put a pause on my mortgage payment. So there was over 5 million. Well now we're down to about 2.7 million. Again, we're talking nationwide obviously. And that's good. The thing is interesting is of those people that have come off of that program over 3 million, 52% of them just basically they're paid up, right? They either started making payments or they refinanced, or they sold their home.

Tracy Venturi:

Or they continue to make payments while they filed for forbearance, because they weren't sure if they were going to be able to keep paying their payment, but they were able to.

Tego Venturi:

You know, a lot of those people were probably people that took the forbearance plan thinking, eh, you know, we'll just do it just in case, you know, it's kind of, there was obviously, there was a lot of, um, a lot of mystery back in March and April of last year. And so people just did it. So, and the rest of those, not the rest, but a third of those, um, they basically just said, well, we're going to work something out. So they're actually working out something with the bank, a repayment plan. Yep.

Tracy Venturi:

That could be that whatever they didn't pay, if they actually did skip some payments that they tacked it onto the end of their loan, or they've done sort of some sort of repayment plan that they can afford temporarily or, you know. So that's upon exiting the forbearance plan. Another 33% have a repayment plan. 52% of them are paid in full. What about the other 15%?

Tego Venturi:

The other 15% are in, are in trouble. Right. They're in some sort of loss mitigation plan. So either they're basically not making their payments so they could either just sell their home if they got the equity or if they don't have the equity, then you know, the very last thing would be, it would go into foreclosure.

Tracy Venturi:

Well, they could go to short sale first and sell their home. Right? So we, we negotiate with lenders on behalf of sellers that, ask them if they can't afford to sell their home, because it's not worth enough to pay off the underlying mortgage. We work with the sellers to negotiate, to have the lender take short, what they're owed so that we can get the home sold versus going into foreclosure.

Tego Venturi:

I kind of erased short-sale from my mind, because back in 2009, 2010, we did a fair amount of them. And they were really difficult back then because the bank, there were so many of those properties, the banks weren't geared up for it. Now it's actually a, it's a much easier process. So that's, again, that's one of those options for people that do find themselves, you know, in that, that group of people. I want to just one more comment I want to make, I think it's important. The narrative out there has been that if you're in all those people, the 2.7 million people that are still in forbearance, those are automatically going to be foreclosures and get dumped on the market. And we're going to have this mass flow of homes coming on the market. And that i

Tego Venturi:

Tracy, I want to talk about affordability.

Tracy Venturi:

Changing the topic quickly.

Tego Venturi:

I'm changing the topic quickly.

Tego Venturi:

It's interesting, cause there's been a lot of stories out there talking about affordable housing and that is a conversation that needs to be,

Tracy Venturi:

That's very different from affordability.

Tego Venturi:

Correct. Affordability, you know, when we're talking about homes and in specifically compared to historically, so Tracy, there was a story that came out and a lot of people are seeing these headlines, Oh, there's no affordable housing. And so all of a sudden they think, well, homes are not affordable. The reality is that homes are actually comparatively very affordable historically.

Tracy Venturi:

Totally. When you think about how much of somebody's typical income needs to go towards housing these days, it's very low compared to historical, you know, your percentage of how much you earn that goes towards housing has become much better.

Tego Venturi:

I got a stat for that. So there's a couple of different things you can look at. So there's, there's this, National Association of Realtor does a whole housing affordability index. They've been doing it for a long time. If you go back to 1990 is the chart I have. And what they look at is, you know, the whole package, they're not looking at just prices of home. They're looking at they're accounting for mortgage rates, they're accounting for income. So they're looking at median income versus what homes costs versus what the payments are, including insurances and taxes and everything. And the thing that's fascinating is 2020 was let's see one back to 1990. It is the fourth or fifth most affordable, year, the only years where it was more affordable where the, the post recession. So, you know, 2009, 2010, 2011, 2012, right? Those were the good years, right? We should have all bought more homes back then, right? Just like we all should have bought Bitcoin five years ago, but don't get me started.

Tracy Venturi:

Hopefully when we used to talk about it a lot, some of the people that we mentioned it to did buy it and still hold it because.

Tego Venturi:

When we were doing the show, remember Tracy? We were doing the show back in, when did we start the show? Was it 2010? I don't remember.

Tracy Venturi:

It's been seven plus years. So 13, 14,

Tego Venturi:

And at the time we were saying, it's the buyer's market. It's time to buy it's time to buy.

Tracy Venturi:

That was a tough time to buy though because there wasn't lending programs, right? The lending was very difficult because a lot of the mortgage programs had gone away.

Tego Venturi:

I'm gonna push back on that, the easy lending had gone away. But the people that could actually pay had no problem qualifying, right? It was just that the easy program went away.

Tracy Venturi:

All of the unique programs that catered to different scenarios were not in place. So,

Tego Venturi:

And the reality is those programs for the most part have not come back. A lot of those programs, you know, helps create the housing bubble back in 2008. So anyway, we're getting way off track here, affordability. So the reality is, you know, right now affordability is at a very historic low. And also if you look at another piece of data, it's a percentage of income needed for a mortgage payment. It decreased drastically in 2020. So historic norm is about 21%, 22% of your income toward your housing. And that could be rent. That could be, you know, a mortgage, however, so 21% as of right now, we're at 14.9, 15%. So it's a huge decrease in the affordability, even though home prices have come up.

Tracy Venturi:

So what's helping that Tego is that interest rates are so low, you can afford more house. So because home prices are up, you can still afford them because of the lower interest rates.

Tego Venturi:

Yeah, absolutely. And so I just want to talk about that and just one other chart to talk about

Tracy Venturi:

Let's talk about falling in love with your house, or maybe you have fallen out of love with your house. You know, we've been spending a lot more time home this past year and like Eddie just said, maybe we get to spend a little less time in our home, but we now know what it's like to be home a lot.

Tego Venturi:

Well, it's interesting because like Eddie said in the opening, there is, you know, 20, 20 redefined the meaning of home. And what does home mean? You know, it's not just a house, it's not just a piece of real estate, although many times in our business. And unfortunately it can get kind of mechanical like that, but it isn't, I mean, a home has a lot behind it, right?

Tracy Venturi:

You know, it really does. And there's a lot of satisfaction in home ownership and, and part of why it's easy to fall in love with home ownership. Okay. So we can talk about all of the financial reasons to love being a homeowner. Right. We know it's the single most important way people build wealth.

Tego Venturi:

Let's see, I had to get the right side. That's the left brain. Right? So it's it's yeah. It's the left brain, right? It's the, it's the logical. It's the engineer, the engineer brain. Let's put it that way, right?

Tracy Venturi:

There's a lot of, yeah. Solid sound reasons. Financial reasons. Why to be a homeowner. When, when we talk to people who have owned a home for a few years and they realize how much equity they've built wealth built into their family's financial picture, it's huge. But there's other things about being a homeowner, right? So it's the security comfort stability of being a homeowner, right? You know where you're going to be. You don't have that. Will the landlord decide to sell the house or will the apartment complex be raising my rent?

Tego Venturi:

Well, if I want to paint my bedroom's purple, can I just do that?

Tracy Venturi:

The other thing is the house is uniquely yours. Like you said, if you want to paint your room purple, go find your own house to live in Tego. But you know, you still have to deal with that. The house is uniquely yours and you can decorate it, how you want. You can change it. You can remove walls, you can remodel. You can do different things in your yard and your fencing and it's yours.

Tego Venturi:

Well, and I know so many people and will, will resonate with this is I, you know, there's certain projects that we do around the house that are just kind of like this meditative zen kind of thing, right? Mowing the lawn, doing yard work. I know, I know people go, well, that's work. It's like, well, no, it didn't. It depends what type of work you do. But sometimes just doing some physical work is, is great. And it's therapeutic. And I like it. I know that's, I'm doing all left. I'm left brain, your right brain

Tracy Venturi:

Sort of ironic that you would say that yesterday afternoon I was cleaning the yard from all of our dogs and it was like beautiful. It was like 64.

Tego Venturi:

Like they didn't, they didn't mow the lawn. Is that what you're talking about?

Tracy Venturi:

No. I was picking up after our three dogs and something you wouldn't know anything about. I can't relate at all. I find it sort of cathartic. Like you said, the dogs are outside, they like that I'm outside. It was a beautiful day. It felt very rewarding for me. But anyway, and today was trash day, so it's all gone

Tego Venturi:

And you're already wearing a mask. So it was all good. No masks, no mask in the yard. Yeah. Got it. Yeah.

Tracy Venturi:

So so anyway, then there's the whole wealth building thing. But the other thing that I think we haven't talked about much Tego when it comes to being a homeowner is your sense of community, right? That you're a part of something. You have some vested interest in knowing your neighbors. And when you go to the park meeting people, when you're out on walks, it's, it's your community, you're paying attention. You're more security aware for your neighbors and t

Tego Venturi: I've heard this and I don't know why this keeps coming up, but why people think you need 20% down to buy a home?

Tracy Venturi: You know, I heard people this week, somebody on our team asked the rest of them, said, how do I tell somebody, no, you don't need 20% down to buy a home. And I'm like, really people still think that, and this was millennial, this was millennials that felt like you couldn't buy without 20% down. And it wasn't wise, even if you could buy with less than 20% down,

Tego Venturi: If you're a fan of Dave Ramsey. And obviously the financial guy, I mean, he, I mean, that's his thing, right? He says, put 20% down and do a 15 year mortgage. Now, I don't know if he still believes that with a 3% interest rate, the money is so cheap. I mean,

Tracy Venturi: Yeah. He doesn't believe in debt. He doesn't, he doesn't believe in debt or credit cards. Right. So it depends on who you're listening to.

Tego Venturi: Part of his thinking is he deals with so many people that get themselves in trouble with debt. That may be that's part of his paradigm.

Tracy Venturi: I think he realizes there are a lot of people who can't manage a credit card or finances. And so they just have to like, not, it's just cut it, cut it all off and pay it all down. And don't open up credit cards again or have debt, however, with interest rates at 3% and sometimes below I don't know, locking in a, a monthly mortgage rate right now, even if prices are up is still a great time to be a buyer.

Tego Venturi: I think so. And, and I, you know, had this conversation with another realtor that was saying, well, what do I do? You know, I don't know how to tell my buyers because I'm afraid they're going to overpay. And then I'm going to have to sell the home for them last year. And I'm like, well, hold on a second. Do they need a place to live? Is this is what homes are selling for right now. Okay. Do we know what's going to happen in the future? You know, so I mean, it's like, it's tough. Cause Tracy, we went through 2009, 2010, 2011, when people were having to sell their homes for $50,000 less than they paid for them. Right. I mean, we saw some of that. I just do not see that in the card anytime in the next few years, I just don't. I mean, we're going to have a slowdown. Absolutely. I just don't see a big decrease in home prices anytime soon.

Tracy Venturi: Right. So it's a big myth, 20% down for buying a home is a big one.

Tego Venturi: I really took that off track time. Yeah. Yeah. Getting back to where we were getting back to what we were actually talking about. So this study, Tracy want to talk about that it was a profile of home buyers and sellers that the national association does. And they said, you know what, actually people really put down

Tracy Venturi: And what they really put down first time, home buyers, about 7%, which is interesting because three and a half percent down is an FHA borrower loan minimum. And a lot of first-time home buyers are FHA borrowers with 3.5% down. But that means there's a bunch of them that are putting 10% or more down, which is great. And hopefully, hopefully families are helping them if they don't have more than three and a half percent down and they're gifting them that money so that they can have more equity in their homes. Because yeah, I'm saying if you're in a position to give to what a better gift you can give your child than to build wealth through you know, through real estate all home buyers though, it's a average of 12% down, down payment. So the 20% hasn't come in yet 20% doesn't even come in with repeat buyers they're at 16%.

Tego Venturi: Yeah. So it's interesting. And you know, the reason and just to clarify, why somebody would want to put 20% down is because of mortgage insurance, right.

Tracy Venturi: For some loan programs. So mortgage insurance is something that's insurance, that's money that's paid. Every time you pay your payment, that's given to a company that's insuring to