The Expert Podcast

Episode Description:

• Overview: A sobering look at the current state of housing affordability in the U.S., based on an article from Deseret News that raises the question: Can anyone afford to live in America anymore?
• Key Points Discussed:
  • High Home Prices: The average home price is over $400,000. With current interest rates, taxes, and insurance, a typical mortgage payment can be $4,000-$5,000 a month, which is out of reach for many people.
  • Skyrocketing Rent Prices: Rent has also increased significantly, with decent apartments costing $2,500-$3,000 a month in many areas.
  • Example of Brita Joslin: A person earning $83,000 a year struggles to rent an apartment because landlords often require tenants to prove they make three times the rent amount.
  • Breaking Down the Numbers:
    • After taxes, an $83,000 salary gives a take-home pay of $62,250 annually, or about $5,187 per month.
    • Landlords typically want rent to be no more than a third of monthly income, which would be around $1,700. However, finding an apartment at this price is increasingly difficult.
  • Home Prices vs. Income:
    • In 97% of U.S. counties, median home prices are now out of reach for many wage earners.
    • Using Google's mortgage calculator, an example shows that someone with a $83,000 salary might only afford a home priced under $300,000.
  • The Reality of Home Ownership:
    • It’s not always about buying the "dream house" with all the amenities. Instead, consider homes in the lower price range (under $300,000) that may require some cosmetic work.
    • By buying a home in the lower price range, you can lock in a fixed monthly mortgage payment (e.g., $1,739) that won’t increase over time, unlike rising rents.
  • The Benefits of Homeownership:
    • Even though the home may not be brand new, buying a home can provide financial advantages in the long term, including equity building.
    • Renting, on the other hand, is a temporary solution with the risk of rent increases and the possibility of lease non-renewal.
    • In five years, your mortgage payment will remain the same, but rental prices are likely to increase, making homeownership a more stable financial option.
  • Conclusion: While it may seem like homeownership is out of reach for many, there are still opportunities to own a home that can provide financial benefits in the long run. The key is being open to properties that may need a little work but offer long-term stability and equity growth.

Tune in to explore how consumers can navigate today's challenging housing market and why homeownership, even with some sacrifices, might still be a smart financial move. 

 Topic: National Review analysis highlights that a six-figure income is now required to afford a median home. The figure needed to service a monthly mortgage payment in 2022 has increased to $107,000, up from $73,000 in 2021.

Key Takeaway: The income required to buy a home has risen by $34,000, marking a 50% increase from the previous year.

Questions for Builders and Contractors:

• How will this income jump affect your business?
• Will you be building spec homes, launching major developments, or focusing on remodeling and additions?
• With more people unable to afford new homes, will remodeling and additions become the primary market for builders?
• What impact will this have on the availability of new homes and home inventories in the future (2025-2027)?

Current Situation in the Housing Market:

• There is already a 3-4 million home shortage in the market. If new construction slows down further, this gap could increase.
• The lack of new homes could also contribute to higher home prices as demand grows.

Historical Perspective on Home Construction:

• Until the 1980s, homes were built to last forever using robust materials.
• Since the 1990s, the focus shifted to homes designed to last for around 40 years, which means some homes built in the 1990s and 2000s could be reaching the end of their lifespan.

Concerns about Existing Homes:

• Are we already seeing homes from the 1990s or 2000s that are beyond repair due to water intrusion, structural issues, or air infiltration?
• As these homes go out of circulation, the housing market could face even more inventory shortages.

Looking to the Future (2030):

• If there is no significant new construction and older homes become unsalvageable, will there still be a shortage of homes in 2030?
• What effect will this have on home prices?

We Want to Hear From You:

• Builders, contractors, and anyone involved in the housing industry: Share your thoughts on how these trends will impact your business and the housing market moving forward.

 In previous episodes, we've discussed how much it takes to buy a home of a certain value, highlighting that in many cases, you almost have to be a millionaire to afford certain homes. Now, we dive into the math behind buying a $400,000 house.

According to an analyst, to comfortably afford a $400,000 home, your net take-home pay should be between $10,000 to $11,000 per month. This translates to an annual income of $165,000 to $195,000, depending on your state, taxes, and other factors. So, you’re looking at a near $200,000 salary to purchase a $400,000 home, which is a significant income.

The Breakdown:

• Average monthly payment for a $400,000 house: $3,037
• Assumptions:
  • 7% down payment
  • 6.6% interest rate (likely to go higher)
  • 1% tax rate (can be higher in some states)
  • $140/month homeowners insurance (might be a little low)
  • 0.5% PMI

It’s important to note that your mortgage payment should ideally not exceed 28% of your gross income. However, if you have additional debts (car payments, student loans), you may need to aim for a lower mortgage payment.

Mortgage Rates:

• Mortgage rates are expected to keep climbing, possibly nearing 9% before they start heading lower. Don’t expect them to return to the 3-4% range seen in 2021 anytime soon.

House Pricing in Different Markets:

• The median home price in 2022 was around $400,000, which is what this calculation is based on. In some areas, $400,000 will get you a decent house, but in high-demand metro areas like California, you may not find anything livable at that price.

Affordability in Other Price Ranges:

• In some markets, you can find livable homes for around $250,000, which can help you transition from renting to homeownership and begin building equity.

Episode Description:

• Introduction:
  • Discussing why mechanic's liens are no longer a viable option for getting a car title.
  • In the past, it was a legitimate way for automotive shops to get paid for repairs, but this has changed over the years.
• Interview with a Mechanic:
  • A mechanic shares his challenging experience with a car brought in for repairs that was never picked up.
  • The mechanic explains how trying to get a title through a mechanic's lien was a long and frustrating process.
• History of Mechanic's Liens:
  • Automotive shops used to rely on mechanic's liens for titles, especially for cars left unclaimed.
  • In 2015-2016, many shops abused the process to help individuals get titles for cars they hadn’t worked on, leading to the tightening of regulations.
• The Tightened Process:
  • States have cracked down on mechanic’s liens. Many now require a detailed audit process before accepting a lien.
  • Shops must prove they performed authorized work, notify the owner, and auction the car publicly.
  • The process is time-consuming, requiring certified letters and public ads for auction.
• Why Mechanic's Liens Aren't Worth It:
  • Even for legitimate shops, the process is complicated and costly.
  • A court-ordered title is a faster, cheaper alternative with fewer hoops to jump through.
• State Regulations:
  • States have started implementing stricter audits to prevent fraud, including checking the shop’s financial records.
  • Mechanic's liens are often rejected due to lack of proper documentation or fraudulent practices.
• Case Example:
  • A mechanic shares an example where a repair shop tried to use a mechanic's lien for a car they worked on, but the process was rejected twice after being audited.
• Cartitles.com Insights:
  • According to cartitles.com, the process for obtaining a mechanic's lien is complex and should only be used when absolutely necessary.
  • States often require the car to be auctioned, and any proceeds beyond the repair costs must be turned over to the state.
• Alternatives to Mechanic's Liens:
  • If you’re not a licensed mechanic or trying to get a title for a car that wasn’t worked on, a mechanic’s lien won’t work.
  • Other methods are faster, cheaper, and more reliable.
• Conclusion:
  • If you are considering a mechanic's lien, think twice. There are better options available that won’t take months to complete.
• Call to Action:
  • Book a one-on-one live consultation with experts at actualhuman.com for more personalized advice on car titles, liens, and more.

Thank you for tuning in to this episode of Actual Human Advisory! 

Overview: If you're in the market for a used electric vehicle (EV) or even a gas vehicle, it might be worth waiting until January 1st, 2025. New laws coming into effect could provide substantial incentives, tax credits, and discounts, especially for used EVs. Many vehicles that didn’t qualify before could now receive up to $4,000 towards the purchase.

Key Points:

• New laws starting in 2025 will offer huge incentives for used electric vehicles, not just new ones.
• Used EVs are becoming more popular, and as more new EVs have entered the market in recent years, there are more used options available.
• Market value of used EVs has decreased, making them a more affordable option.
• Tax credits could make used EVs an irresistible choice, especially for secondary or commuter vehicles.
• Although not ideal for long trips or as a primary vehicle, a used EV could be a great, affordable second or commuter car.
• If you’re not sure about an EV, start researching and consider it as an option. You might even use it to negotiate a better price for a gasoline vehicle.

Reminder:

• You have access to live one-on-one consultations with licensed experts in various fields such as investigations, insurance, civil court, real estate, and business development.
• If this episode sparks any questions or if you'd like to dive deeper into a topic, use the link below to get personalized advice from a licensed expert.

Closing:

• Thank you for watching another video at [actualhuman.com].
• For questions or comments, drop them in the link below.
• Don’t forget, you can access live consultations for expert advice.

Cyber Attacks and Ransomware Payments: Cyber attacks and ransomware are so pervasive that governments may step in to make payments illegal. This is part of a broader push to address these growing threats.

Background on FCPA (Foreign Corrupt Practices Act):

• The FCPA was introduced nearly 30 years ago in response to corruption in foreign countries.
• Companies were often forced to pay bribes to foreign governments to set up factories or divisions.
• The U.S. government passed the FCPA to make paying bribes illegal and protect companies from being penalized for refusing to engage in corrupt practices.

The Similarity to Ransomware:

• Ransomware payments, like bribes, have become widespread, with companies and insurance companies struggling with the situation.
• The government is considering creating laws to make paying ransomware ransoms illegal, similar to how the FCPA addressed foreign bribery.

Ransomware as a Potential Violation of the FCPA:

• If ransomware hackers are part of a government or act as its extension, paying ransom may already violate the FCPA.
• The U.S. government is working on finding ways to disrupt ransomware networks, which involve thousands of hacks annually.

Cyber Insurance and Ransomware:

• Cyber insurance policies can cover many aspects of cyber attacks, including monitoring, repairs, and business disruption, but typically, they don't cover ransomware payments.
• The government is considering prohibiting insurance companies from covering ransomware payments, which could significantly impact companies.

Controversy Over Paying Ransoms:

• There is ongoing debate about whether paying ransoms should be illegal or if protections should be built into the system.
• Cyber insurance is one option businesses can use to protect themselves from cyber attacks, with services such as active monitoring, response teams, and risk management.

Conclusion:

• The debate over paying ransomware ransoms continues, and the government may intervene.
• Cyber insurance remains an essential tool for businesses to protect against cyber threats, but the future of ransomware payments is uncertain.

Consultation Offer:

• Remember, you can schedule a live one-on-one consultation with experts in various fields, including private investigators, insurance brokers, title examiners, and more, through ActualHuman.com.

 The Importance of Surety Bonds in Construction

• Construction contracts often involve large sums of money, making trust and reliability critical.
• Clients depend on contractors to deliver projects on time, on budget, and to the agreed quality.

Risks Faced by Clients

• Delays or substandard work can disrupt clients' business operations or investment plans.
• Ensuring the usability and timelines of projects is crucial for clients' success.

What is a Surety Bond?

• A surety bond is often a contractual requirement, guaranteeing the contractor’s performance.
• Typically issued by bonding companies or insurance agencies.

Opportunity for Contractors: Even When Not Required

• Use a surety bond as a sales and business development strategy.
• Obtain a quote for a bond even if it’s not required, and include the offer in your bid.

Advantages of Including a Surety Bond in Your Bid

• Sets your bid apart by demonstrating reliability and professionalism.
• Clients may prioritize your bid over others due to the added performance guarantee.

Elevate Your Competitive Edge

• Highlight the surety bond prominently in your bid.
• Educate clients on its benefits to secure contracts and outpace competitors.

Additional Resources and Support

• Access live one-on-one consultations with licensed experts in various fields.
• Topics include investigations, insurance, surety bonds, civil court mediation, and more.
• Links to bonding agencies and expert consultations available below.

Connect With Us:

• Questions or comments? Drop them in the link below.
• Explore expert guidance and personalized consultations to delve deeper into construction and business strategies.

Thank you for tuning in to this episode! Visit actualhuman.com and subscribe for more insightful content. 

Key Discussion Points:

• Challenges in the Housing Market:
  • Consumers have been waiting for favorable interest rates and prices for 2-3 years.
  • Buyers have faced obstacles like bidding wars, low inventory, and now high interest rates.
  • Brief periods of low interest rates were overshadowed by high prices.
• Current Market Conditions:
  • Inventory has increased compared to 2020-2021 but is still below pre-pandemic levels.
  • Prices have surged significantly, some doubling in value compared to earlier years.
  • Prices are stabilizing, with some discounts on highly marked-up properties.
• Improved Opportunities for Buyers:
  • Buyers now have more options for mortgage contingencies and inspections.
  • Slightly more properties are available to choose from.
• Interest Rate Challenges:
  • Rates have risen from 3% to 7-8%, limiting affordability.
  • High rates, combined with price appreciation, continue to block many buyers.
• The Smart Money Perspective:
  • JP Morgan is investing $1 billion in single-family rentals.
  • This indicates their confidence that home prices have bottomed out or won’t drop significantly.
• Advice for Buyers:
  • Waiting for prices to drop could mean losing equity-building opportunities.
  • Renting for another year might cost as much as potential price reductions.
  • Even with modest price decreases, buying now could offset rental losses and build equity.
• Historical Interest Rates Context:
  • Rates in the 7-9% range are historically normal.
  • Recent 3% rates were an anomaly.
• Key Takeaway:
  • JP Morgan’s move into the single-family market suggests a potential buying opportunity.
  • Consider your options carefully and factor in both market trends and personal financial goals.

Mortgage Overview:

• Current mortgage rates around 7.5%, with a $200,000 loan amount leading to a monthly payment of approximately $1,400.

Property Listings:

• Sebring, FL:
  • Price: $175,000
  • Features: 2 bedrooms, 2 bathrooms, 1,500 sq ft, 2-car garage, decent front lawn.
• Tallahassee, FL:
  • Price: $195,000
  • Features: 4 bedrooms, 2 bathrooms, larger number of bedrooms, smaller square footage, carport, large front yard.
• Sebring, FL (Cheaper Option):
  • Price: $169,000
  • Features: 2 bedrooms, 1 bathroom, 1,100 sq ft, no carport or driveway, remodeled interior with stainless steel appliances and laminate floors.
• Ocala, FL (Rural Option):
  • Price: $180,000
  • Features: 2 bedrooms, 1 bathroom, remodeled home, private backyard, new kitchen with stainless steel appliances, laminate floors, fresh paint.

Mortgage Payment Estimate:

• A home priced around $180,000 would have a mortgage payment around $1,000 per month.

Next Episode Preview:

• Theme: Properties with more than five acres for extra space and elbow room.
• Be sure to subscribe and like the video to stay updated!

 Key points:

• Common theories about housing prices potentially crashing due to past trends and rising interest rates
• Comparison to the 2008 housing crash:
  • The 2008 crash was caused by people owning houses they couldn’t afford or didn’t need, often with risky mortgage conditions like variable rates
  • Today, homeowners are more financially stable with solid vetting and down payments
• Housing as a non-liquid asset:
  • Unlike stocks, houses are not easy to flip; selling requires a major commitment (e.g., closing, moving, transferring utilities)
  • People typically don’t sell their homes unless they need to
• Supply and demand dynamics:
  • Housing demand is increasing due to population growth, but supply is limited
  • Even if buyers can’t afford homes, prices may not crash unless sellers are willing to lower their prices

Housing market numbers:

• A rise in U.S. population outpaces the increase in available homes
• New construction and residential permits aren’t enough to meet demand

Factors preventing a crash:

• Sellers aren’t likely to lower prices drastically unless they absolutely have to sell
• Most current homeowners have affordable mortgages and equity, reducing the chance of mass sell-offs

Conclusion:

• Housing prices may stabilize, but a crash is unlikely without widespread desperation to sell
• For prices to crash, both a buyer and a willing seller are necessary
• Key takeaway: A market crash isn’t solely driven by buyer affordability; sellers also need to agree to the price drop for a true crash to happen

Listen to learn more about why the housing market may not crash despite rising interest rates!