Builder Incentives Reveal the Real Pressure in New Construction

And now live from our Smokehouse Studio, it's time for Real Estate Jerky. All your real estate questions answered by our provocatively lean expert host, Edward Ed Parco, MBA, veteran and president of Lending for Living. We'll give you something to chew on. Real Estate Jerky is on now. That's my California. Welcome to Real Estate Jerky. We always give you something to chew on. I'm your host, Ed Parco, MBA veteran and president Lending for Living. Our studio is located right here in Modesto at Lending for Living with our producer, Mike Murray. We're proud to bring you the latest updates and insights on the real estate market and our community. Thanks to our partnership, iHeartMedia and the station KFIV, you can tune in, never miss an episode by subscribing to our podcast.

Stay up to date by following us on social media. Joining me today is Mike Kelly, Remax executive realtor. Mike, you ready to get moving? Let's make this thing happen. You know, it's been really nice to be able to have our full show play. Full show play? Yeah, the whole hour, not just half of it, but all of it. Yeah. Are you still talking about that that one time? At one one at one four weeks time ago where I played 15 minutes of the show or whatever. At one four weeks? Four week time? 30 minutes. Wow. You Yeah, it's amazing. They talk about how AI can do everything. Well, you can't No, you can't get rid of people and just think it's going to happen. Yeah, it doesn't work that way. We can't. You still need some guys.

Yeah. Cuz it doesn't know when it's doing something wrong. Tell it. It's not alive. What? Sarah Connor. She'll be back. I mean, it's like it's it's not aware. I mean, that's the one thing they were talking about. Everybody thinks AI is going to do somehow to get on that, but anyway, it's in everything. It's going to do all this stuff and it's not doing everything that they thought it was. And they're hiring people back to do jobs that they thought it could handle. And don't be wrong, it's going to help you and help make things better, but also can make things work cuz if you don't know how to talk to it, you're you're going to get nothing but garbage out. Yes. Well, just it's the same old adage that we used forever when computers came out, garbage in, garbage out, right?

Yeah, but the difference was when computers came out, everybody had a huge amount of outlay for computers and then it will eventually help them be more productivity cuz then you had to make all the software that wasn't there. I lived through this. And everything else they had to do first, then they had to get hard drives cuz it was a pain to do floppy drive. This is different. Everybody can adopt AI on anything and go forward on it and that's why it's doing so much. The biggest thing right now that they keep that they're not talking about but Right. is the fact that there the cost to do all this AI stuff, like if you pay for one of these services 20 bucks a month, it's like costing them eight grand for your month uh with what you're doing that.

So they're losing a lot of money and then people like, well, how are they keep going? Well, remember Amazon? How much did it lose for the first eight years or 10 years of its life? A lot of money. And how they're keeping these people propped up each one. Open AI is, I just gave 300 million to this company and then A Open AI just got 300 million from a data center and other stuff. Way more. Yeah. Well, and then one day they won't need all that extra money cuz it'll be you'll be paying It'll be just a few. $11 a month. No, they'll just be a few of them. And that's the newer stuff that's coming out is getting uh a lot cheaper and doesn't cost as much. I remember when I started five coding a year ago with Replit and it would cost me almost like 50 bucks a day as much as I was coding.

That's and that was a lot. Now that 50 bucks maybe a month now for what I'm doing. Yeah, so it's a lot different. Right. Cheaper and I can do more in Faster, cheaper. Well, just you can do more. You can come up with different ideas that doesn't cost so much. Um like that when I was at this event last week, that's why we had a best of last weekend. We apologize, but uh I do have to do other things sometimes. I was in Unfortunately, I was in Texas. Yeah. Dallas, Texas. And it was only 108 and humid. Not a big deal. Well, 98% humidity? It was a lot, but it wasn't that it was a lot. Let's just put it that way. So you didn't go outside a lot is what you're saying? Well, the first when I got there, the Sunday I went out.

I got there on Friday night into Saturday and then went out. And what happened was it was in the morning it was like, oh, it's 82. It's not so bad. Oh, when I'm between these two buildings. Oh man, that's bad. Well, when And then uh the next day was the it started at 87 in the morning humid. It's like, I ain't going outside for that. I ain't doing it. So I didn't get my walks in while I was there because of They have treadmills? No, I know. I can't do a treadmill. It is pretty boring even if they have that little scenery in front like the news. But I did notice a lot of issues. I was talking to a bunch of people from Canada, talking to a bunch of people from Texas and other places. And Canada is having a major problem with their real estate right now.

The pandemic like doubled their prices to like, you know, houses were 500,000 now they're a million. Now their houses are now only 700,000. Yeah, they're having some major real estate problems up there. Wow. Luckily us here, we're not having those except for certain states that everybody moved to and we keep talking about this. And uh I know I talked to so many people who are from Orange County that were there and they're like, yeah, I was in Texas for a year. That's all I can stand. Yeah, I mean, but some people move there and then they're okay with it. Like Austin's a totally different town than Dallas is and Houston is, those kind of things. You're listening to Real Estate Jerky. I'm Ed Parco, MBA veteran and mortgage advisor at Lending for Living alongside Remax executive realtor Mike Kelly.

But what's so nice is I know we've been talking about AI. We'll get into real estate in a second, but you can do so much now that you can make your life so much easier. One of the things I need for what I do is I need to know all the new AI stuff that comes out, everything that happens as soon as it happens. So I created an app called AI Jerky. Um and it's you can go to it's. com. I'm not trying to promote. I'm just saying that's what I did. And it shoots me every more every time something drops about anything. And it's funny cuz I'll get it 12 to 24 hours before I see it on the news. Oh. So like you can do this now or Is that what you mean by drops or or just information? It comes to my it emails to me cuz I'm going to have it text, but what it does, it emails me whatever it is and it says why, what happened, why is this important, why do you need it, you know, the three different things.

And it it just keeps me up to date on the stuff I need to know. So I actually then took it and I'm like, you know, this would be good for creators who need to update have the constant stuff and come out with the newest stuff before everybody else does on YouTube and everything else. So that's one of my markets. But the most important market was just for me to know what's going on. That's cool. Yeah. So little things like that. Well, now I'm doing that for the real estate and mortgage industry. The same thing. So So you know how you I go to HousingWire and some of these other things and that's how we get some news. And then our producer provides us with stuff for the show. And it's all from newspapers and other things.

And it's old. And I want more newer stuff. Like I mean, we just had an article here. They just came out 6 minutes ago. Uh Florida home buyers can breathe easier as insurance markets rebound. And we'll get into that a little bit later, but I'm just saying that's housing market. That's not what I did. But mine will be uh uh 12 hours ago I would have gotten that. Wow. Yeah. I see what you're saying. I'm picking up what you're laying down right now. It just how it's just if you're doing content and you need that information and you want to get stuff out, you're always trying to figure out what to talk about. Well, now you have it, you can get it faster. All right, so let's talk about nationwide inventory before before this first section's over.

Yeah, I was getting excited about that. You got you got a minute or two. I know exactly how far we have. Uh inventory is up 879,764. That increased by 4,980. Those are piddly little numbers. I know, but the big thing that happened, let's see if it's here it is. Uh the median list price is down 2,500 to 440,000. Days on the market's up seven more. It's 70 days on the market. So that's like over 2 months to be on the two month what that 2 months and a few days. Wow. And what's the percentage reductions? Reductions went up again 0. 13 so that's 42. 10. So uh in about another 6 weeks we'll be at 50%. 42. 10? 42. 1 Yeah. Yeah, so a percent. But it had the zero there so it's not an extra one. Yeah.

Gotcha. Yeah. Gotcha. Um wow. Well, it just goes to show you really and I say this all the time, you know, you look at you look at today which is yesterday's numbers to try to predict the future. So react quickly when you when you overprice something. You don't know you don't know you're overpricing it sometimes because the numbers in the past look like, oh, we should get probably this. Market slowed down a little tiny bit. So things will sit a little bit longer. And if you need to get it going fast, make a reaction within the two week period. That's that's crucial. How about and how about this? If you get an offer, Um counter. Yeah. Yeah, cuz I had a client try an offer on a I couldn't don't know how they found this property in the middle of nowhere for $194,000 or whatever it is.

And they wrote an offer that asked for closing costs. It's a VA, no money down, no nothing. And they and the seller would not counter. They refused to counter. And I they were only off by about three grand. And so they had to redo the offer and send it to them. And we'll see what happens after that. Maybe they upset him so much he won't even look at it. It could be, but he had just reduced it so you would think that he would want to get rid of it now. Yeah. And again, in this market you should it's not a bad market. We're still going up 2%. We'll get in that later too a year. But people are like, this is this is really bad. There's so many properties on the market. Not in our area. There's properties on the market, but not anywhere close to what we had during the pandemic or prior to 2019.

Get your real estate and mortgage questions answered by the experts here at Real Estate Jerky. Contact us at radio@realestatejerky. com. You can call me Ed Parco at 209-404-1915 or reach out to Mike Kelly at 209-968-5633. All right, Mike, uh we talked about nationwide numbers are up and the days on the market are up and listing prices are down. And I think that's I think Texas and Florida is messing those two things up cuz not New York cuz everybody's leaving New York. Uh well, yes, they are especially if they're wealthy. And and California is right there with them because we'll get into that too, the stupidity that they've done. Don't Hey, scammers, come to California cuz it's good. You don't never get be able to get turned in.

Yeah, I listened to an interview earlier and I'll talk about it in a little bit, but you know, our our state numbers, you always got realtor. com that looks at everything. Um they're saying we have 153,242 homes active on the market. And then of course, Redfin just looks at single family homes and that's 115,854. And we're as far as state numbers go, when you're looking at reductions, we're at 41. 4% of all those listings are being reduced before they go they sell. And we're looking at a median days on the market of 29 days, a little bit lower than the national average or national median. Um that it's it's uh it's sad to see so few homes on the market with still a lot of demand. And then if we jump over to how many how many 700?

You said seven In in the county? Yeah. Oh, you didn't get county. Yeah, you were doing nationwide. I mean, you were doing California numbers. California numbers. 153,242. I just glaze over when you start talking. I know you do. It's it's fun to watch. It's like, oh, I heard I heard drones. I don't get to talk. I have to wait. Uh Stanislaus County has uh 778 homes as of today active on the market. Um we have currently 366 additional homes that were on the market that are pending. They're in escrow. They're fixing to be closed. And then the closed that are already fixed and done 283 so far for the month of August. So that's 31 days for August, 283 homes. Um that's a little bit more than a one home per day.

And that's I mean, our biggest months were March and April this year. And it's 300s, right? Yeah, 342 or something like that. And those were because rates, you know, right now our rates are higher than we were in January. So and in March and April were much lower than we were now. The average rate I think I read was 6. 79 last week when they were talking about the NBA was putting out their numbers early. over this week. That's sounds high because we were at low as like 6 and 1/8 for conventional for that same rate a while a month or two ago. Yeah. But I mean we're and we were doing buy downs, 1-0 buy downs for people to get them into contract and that's worked out a lot over the last two months.

You know, nothing like getting a free 1% drop for the first year. Yeah. Um I don't and that's as of what are we, September? As of a day ago is gone. I don't know what they're going to do next. Something. Yeah. I'm sure something will come back to spur that back up. They will. Yeah. They got to take it away so I mean it's important. And builders builders in the main area Builders are ridiculously writing each other. They're given away some so much money to entice people to buy. And you know what? They're buying. Right. Um what those people don't understand, they don't look about it at it until they close escrow and they walk in and they go, oh, there I got to put drapes in or lines. Oh, there's no landscaping in the backyard whatsoever.

This doesn't look like the model. This doesn't look anything like the model. How come it's different? Oh, oh, I already need to upgrade my flooring? Cuz I got the cheap stuff. You know, so you you do get I mean they're the builders I was told last Tuesday at our marketing meeting that um the builders are giving away enough money to where they're getting a permanent buy down and they're quoting like 4 4 and 1/2 uh percent. Well, they were 4 and 1/2. They're not anymore. They probably aren't anymore but that so that was the week previous. Cuz $25,000 is what they were giving. Yeah. And that's on 63% of all transactions for the builders nationwide are giving money. It gets you Yeah, it is. So it tells you It's a lot of money.

what is that house really worth if they're able to give away $25,000 for towards closing costs. And that they don't want standing inventory. That's what it is. They want to keep their people working and they want to keep going cuz the last home buyer number we had, the National Association of Home Building number was nowhere close to 50. I think it was like 38. Yeah. Oh, we were in the Right, we were in the 30s. And that means we are hurting and we're not going to build more than we have to and we're going to close out this track and not probably not start the next one until we know what's going on. Yeah. You know how we talked about the billionaire tax and and we talked about how when when the they were just going to tax the rich when income tax started, you know, many many years ago.

Yes. I talk about that all the time. Yeah. Yeah, and and they found loopholes and so they weren't getting the tax dollars that they figured they would get so they just um start charging everybody income income tax. Yes, that's what happened. So there was a guy on this morning who was talking about how they were projecting on on the billionaire tax that if it passes, they're going to make about 150 billion in in the year uh by taxing the billionaires. What's but he says what most likely will happen is because they're already starting to leave state of California by in droves uh is it's going to we're going to lose 25 billion. Yeah. You know, so they don't think of these unforeseen consequences of these stupid Yeah, and New York already did this.

Uh actually a country did this. I forget what country it was. France or one of the countries did that and everybody left and then they got rid of it and everybody came back and that's the problem. We billionaires will leave instead of giving you 5% of their money. You're listening to Real Estate Jerky. I'm Ed Parcaut, MBA veteran and mortgage advisor and lending for living alongside REMAX active realtor Mike Kelly. Yeah, so that's the problem. You are correct, Mike. Um those those billionaire tax things are not going to work and then they're just going to keep it in there and they're going to lower it on everybody else. And that you shouldn't have to pay You should pay when things change not just because you accumulate it.

So one of the things they should do one of so with the stock that these people get on all these companies, right? And they they're able to borrow against the stock and never pay any taxes on it. And I was listening to a guy, he said that should change. If you borrow against it and use it for something, you should have to pay taxes on it. But that's how they get around and not pay any taxes. There's ways to do it but not just not to just tax your wealth that's in a bank account or in other stuff just because it's sitting there. When it changes hands or does something else, yes, you should be taxed on it. Or how about not tax at all? I lied. Puerto Rico is looking really good right now. 4% federal tax rate.

4%? That's it. Move there for 51% of the time. That would be the best months out of the year. And and one week that isn't cuz I'm sure there's only six. That's like Texas, right? They have all these places where you can sit outside and about I'm like, how many months do you guys get to do that? And the bartender is like, probably four. Well, think about Modesto too. I mean we we have six six or seven months. You think eight? We get we get eight. Well, I mean this winter unless it's raining, it's just cold. Who cares? Put a little fire pit out. Who cares? Well, and they do. They have those stand up things and Well, it's just like that new silo restaurant, you know, open air restaurant. It's like, okay, you mean uh five months out of the year restaurant?

Right. Or early in the morning restaurant? In Dallas? No, here in the silos. Oh, that's going to be interesting. Uh they're they're promoting the hell out of it and I haven't been there yet. I'd like to go. I've been by it cuz we walk by it. Yeah. Um and a few people that eaten there said the food was good, the service was getting better. You know, you always have those bugs when you first like a soft open. Yeah, there was another restaurant had a soft open in town. Oh, I heard something about there's a new pizza place in town. The wood Yeah, that's over off of Coffee, I think. Oakdale Road. Oakdale Road. Yeah. Oakdale Road? Um I saw the I saw that on Facebook too. No, I I got a I got actually a direct message an actual text from some people and they said, oh, we just ate here and it was really good.

Oh, where? Oh, that's good. Yeah, it's on the other side on on Oakdale. It has pool tables, everything else. Maybe we should talk to them, have them come on the show and talk. Yeah, talk about their stuff. Talk about it. Talk about it. I just hope they have a pesto sauce um butterflied shrimp red onion pizza. Not going to happen. Best pizza I ever had when I lived in LA. Yeah, it was close to the water. That's like that's like that's like getting really good fish in Las Vegas unless they fly it in. Yeah, it was closer. Unless they fly it in. Yeah. Yeah, and drop it from a package. They could do the drone flying now. You you seen those? Yeah, yeah, then that fake one where it dropped in the water.

I didn't see that. Yeah, they yeah, they They did AI? Uh no, they just I'm sure they it was all planned or whatever. Yeah. Oh. Well. All right, so we talked about those things and we talked about the issues with the governor and everything else going on in this town and the the state. We have major issues coming up with the elections in November. You need to get out and vote. If you don't get out and vote, it's your fault. You can't complain. It's your fault. Yeah, it is it is your fault. And and vote differently maybe. If you're not liking the way things are right now, don't vote for the same don't vote one ticket. Vote what makes sense. You mean don't you mean don't vote party lines? Right.

Yeah. Vote what makes Yeah, I mean that's I did that. I voted that way once and I regretted it. Party lines? Non-party. Oh, non-party lines? Yeah. Yeah, and well I I had I got changed after that one. You saw the light? Yeah. Well, I mean when we're younger, we vote one way and then as you get older and you own a business, you do certain things, you just got tired of being taxed so bad. And that's the problem with California. We're overtaxed drastically. To have a company here, the lawsuits and that they can come after you for is ridiculous. What are you laughing about? Did you see what our producer just wrote? No, I just wanted to see if somebody picked up on the change thing. Yeah, it was a joke.

Yeah, the change. It was a joke. Yeah. Hey, we we have a couple minutes um or a minute or so but you were talking about AI earlier and one thing it's creating is it it's creating a mansion shortage in California. Why? Because you got all these people who are AI wealthy um that are buying up all the mansions. So I think maybe one of your other um jobs you create or you know uh businesses is just start building mansions. You know a couple contractors. Yeah, this but that stuff's expensive, man. You got to have a lot of money. You think? Yeah, but Orange County is doing really well. I would just If I was a billionaire, I would move out of this area. I wouldn't even buy over in I mean I wouldn't mind the bay but only certain places.

The traffic's so bad. Yeah. And like we're so wealthy, you could just have a helicopter come on the top, pick you up and take you to the next building. You could. You could. Man, why don't you? That's a that I don't think that would really happen. Why? This is Real Estate Jerky on Power Talk 1360 KFBV and I'm Mike Kelly, a REMAX executive realtor here in the Central Valley right alongside Ed Parcaut. You know, he's an MBA veteran, mortgage expert and president of Lending for Living. And we were just talking about AI and the shortage of mansions in California now as a result of so many people making a lot of money um on paper. That's a that's a first world problem, isn't it? Well, the biggest issue is going to be um like SpaceX stock was really supposed to do a lot for San Diego County unfortunately because of the where people lived and everything else in other places.

The you know and people borrow against their stock and I was listening to a guy and he was saying once he got so much, you know, stock in this this company went IPO, they reach out to you and say, hey, we'll give you 50% of what the value is and you don't have to make a payment on it. Yeah. Don't have to make a payment on it. That's I like the sound of that. Yeah, so I mean this is no different to what's going on right now as with the dot com, with Facebook, with Google, with all those other companies that came out of everywhere and and made money, Amazon, all that where they're just different things. And and the question's really going to be which one we talked about earlier on in the beginning, which ones are going to be left?

Will they all be left, all the different AI companies? Right. Or will there be just one? Yeah, but again, it's it's going to be the costs unless they get the costs down. But and we we joked about earlier this week and you said, you know, is it going to be beta or VHS? I'm going to vote for beta this time. I want laser disc. I think that's much better. Laser discs, wow. What was the first movie you had on laser disc, you remember? I didn't have any on laser. I was poor. I was rich. I was dirt road poor. Yeah. We couldn't even afford to rent VHSs. I had I had the old cable box that was you could turn the knob a little bit and get the Cinemax and Showtime to watch movies. It would unscramble. And then I realized, oh, that's just that metal piece that they screwed into the cable that stopped it from working.

They just take the you put one of those in and now you get all the channels. Oh, good boy. You were dirt road poor. Right. I got you. Yeah, I was pretty wealthy back in the day, you know, back when I was making 435 an hour but everything else didn't cost that much so I I bought me one and uh in two two movies which I have no clue where they are or what they were anymore. Yeah. And it wasn't perfect. It was Grease. That's one of my favorites. I know. No, it's not. Sorry. All right, so we talked about earlier about inventory nationwide, local, regional, how it's going up. Inventory's going up a little bit, nothing major. Um days on the market, did you tell me what our local days on the market was?

Did you say that number? 29. So see and the nationwide's 42 so we're still way better. Yeah. You know, and inventory I mean now is the time to purchase stuff. I mean Yeah. No, did you say nationwide they went to 70 for um days on the market, right? Yes. Okay. What was your days on the market? 29. What's what's the price cut? Oh, that's 41. So it's so we're 42 so we're And you're 42 and the nation's on 42. So we're pretty close to the nationwide. That's all I wanted to know. Yeah. Yeah. Yeah, I just got a little confused so I was I was just explaining it to myself so. So inventory going up 2. 2% while last year was going down doesn't mean a flood of homes hit the market. It means that last year comparison got easier.

Same store, same shelves. But long story short is when you go down and then you increase by two, you know, if you only have one cell this year and then you do 100% increase, that's only two. Yeah. Yeah. So be careful percentages. They know how to They know how to Yeah, they know how to use them to mess with things. And you've doubled your you've doubled your income. Yeah, there's uh So the biggest thing that's coming up right now is the cost of living is going to be on the 2026 ballot issue with the oil prices being as high as they are because of the war and and gas prices. I mean I got back. I was like, what are you talking about? We're back up a dollar? And the one of the funny things I saw on TV the other night was was it was on Gutfeld they showed that what's her not the Karen Black the Karen Black or whatever the the the mayor but the other one running something Nim Nimneth Nimneth.

she had posted on Instagram how proud she was that it only took nine months to put it to repaint this crosswalk that this area wanted in LA. Nine months somebody could go out there with a brush and do it in 10 minutes and uh the worst part was the picture of it the road was so cracked and destroyed it was it was like what you're proud of that picture? I would have never even posted that but and um uh what's his Corolla Adam Corolla. Adam Corolla yeah. He was like yeah um we pay the highest in uh gas taxes and those are our roads. Right. They fix to fix you know we do it so they can fix the roads and they don't fix any roads. It's the same we're running things we run into here in Modesto and I'm not knocking Modesto I don't need anybody to complain to me but yes we still have the same problem in front of my house we still have cracks in the road cuz they don't pave it they just throw this thing on it.

Slurry seal it just kind of fills the cracks a little bit that they Yeah. It does till the summer and then um they crack and you see it again and then water will sit there and pour during you know pool there during the winter and it cuz it's not for my sprinklers because I got smart I put rock in the front of my grass and in front of everything else where the the flower beds is the rocks so when I water my grass nobody knows cuz it doesn't go into the go into the actual Yeah. Well that's a good thing I mean it's still It goes to the actual flower beds. It needs the flower beds and you're you're watering your your plants and you're being you're being uh conservative on the use of your water yeah.

Is that what it is? Oh you're listening to Real Estate Jerky I'm Ed Parcaut MBA veteran and mortgage advisor at Lending for Living alongside RE/MAX executive realtor Mike Kelly I can't even talk today I got no That's okay it's not there's not a lot of days you can talk um you get a little tongue tied sometimes. Too much. It it happens it happens. Did you so back to the cost of living on the 2026 ballot before it got off my site 47% of registered voters say cost of living is their single most important factor in deciding their midterm vote. Yeah. So if we can get rid of those guys and just do the 63 that it's not percent we would be okay. Yeah. Yeah cuz they're going to vote for the wrong side.

They're well there's no wrong side. Well they're saying on well the question is I wasn't asked I was not part of the survey. No I I want to know who yeah I've never been surveyed. Were you? It's yeah on handling cost of living 71% of US adults disapprove of president's performance and 22% approve that's a 49 point gap who did they ask? Well all the dem all the Democrats. Okay by the way nationally represented sample you know how big the sample was? 1,000 people. Yeah 1167 1,167 margin of error 2. 9% point. Yeah that gives you that gives you a true picture of the nation doesn't it? Yeah sure does. Wow. Cuz if we didn't have cuz if we uh that's like then why are they complaining about the Electoral College?

If they're fine with this the sample. Yeah. Uh no other issue comes close to the 47% in that survey immigration crime foreign policy cuz those are all handled except for in our state you know some blue states and I and New York and part of California. Right. And they're going to fight they're going to fight it but we're still doing their doing their jobs. Everybody's worried about the grocery receipt and and they're that DOJ just opened something because the beef prices are up. Well I'm pretty sure it's about some regulation that was put in place four years ago that messed with the beef industry but I could be wrong. The DOJ opened up investigation because beef prices went up? Yeah our high. And just who?

The beef industry. The DOJ I didn't into the people selling beef yeah at the grocery store yeah. Wow. Well the other problem is like we we're losing a grocery stores here in Modesto now right? Yeah. Yeah. I I yeah it's it's sad to see O'Brien's go um they've been amazing they've been it was sad to see Angelo's go I mean and how many years ago did that go? I don't know what Angelo's I don't know cuz I've never even heard of it. You probably never heard of it it was probably gone before. I remember Lucky's and Lucky yeah Lucky's and New Deal and then Richlin Market. Well Richlin they were picked up by somebody weren't they or did they all just close? No Save Mart is actually the one that was picked up by an LA firm and they're still around but all these these old mainstays of Modesto they were great markets.

Yeah so your biggest so the biggest ring right now is you have mortgage rates are up food prices are up or you know diesel gas is up everything's up but people's paychecks are not and that's the problem. Gas is up. Right. Yeah. Go ahead. I'm glad that Gavin Newsom got put that um task force together to discover why um the oil companies were just gouging Californians. That's because you told them to get rid of the refineries and you put so many real regulations on it. Right. And guess what he made that statement and nothing happened. All right so back to your um AI money and mansion shortage that's San Francisco you didn't say where it was at. Uh the median San Francisco sales prices up 25% from a year ago in June alone 44 homes sold at least a million dollars or over asking at least a million dollars over asking.

Yeah. That's crazy. That's that that is FU money. That well yeah and I I was going to call it That's exactly what that is. I was going to call it stupid money but that is FU money. And cuz then they then they come in and they tear down a $7 million home or gut it and start over. Um a 1,600 square foot home three-bedroom condo listed for 2 million is described by the listing agent as entry level for families there. One agent described a property with 50 offers on it at the top end all cash bids of 25 million and up have been outbid that was their counter. Wow. Yeah. The rental side is the same story Reuters reporting uh listing drawing 20 200 inquiries within four four hours and bidding wars on rental itself one couple took a 5200 a month two-bedroom site unseen for rent.

They just needed a place to stay. Yeah well they needed something. Yeah that's crazy. Uh new job still can't find a two-bedroom in budget. Yeah what budget you need to go find you need to unless you that's the problem is people who get the money just causes everything to go up and that's the same thing what happened with when we moved to Texas not we me personally but Californians New Yorkers everybody with money raised the prices for everything. Um so if you're buying a $2 million home most of these people are paying cash and you put 20% down 400,000 your loan amount's one 1. 6 million principal and interest not talking taxes and insurance is 10,527. Right. So yeah. That's big dollars. It is.

I don't swim in that pool I tried to but uh I didn't get wet. No cuz you saw Baby Ruth in there. One of my favorite movies. Yeah. And that's you know so we'll get into more of this so Okay we we shall do that Real Estate Jerky on Power Talk 1360 KFB is always bringing you the latest information on the real estate industry and if you have any questions or comments you know we have an email address or email address so yeah so if you have any questions and comments about our discussion today feel free to email us at radio@realestatejerky. com. We do. Here alongside RE/MAX executive realtor Mike Kelly he's got one job. I do yeah one job. You only have one job we have three jobs. Maybe two. That was uh in Living Color remember back in the day.

Nope. Oh. Kind of. Yeah I know you didn't it was I watched it a little bit. I watched it a little bit but you know I'm that older generation right? Yeah I know you didn't even watch Jefferson's. You know our humor you didn't think we were funny and uh your humor What are you talking about? Don't let the doorknob hit you where the good Lord split you that was the best line ever Archie Bunker. That wasn't that wasn't yeah that wasn't really my generation but uh That was before or after? Before. Yeah. And it wasn't even my generation and I my I saw reruns yeah. Well you were reruns yeah. I didn't watch that I didn't watch that show rerun with rerun on it. You didn't Okay. All right so let's go first uh A block we talked about AI how it's affecting stop worrying about your job it's just to help you advance and but if you want to make something today it's amazing what you can do and you can sell it um to somebody else and they can do something with it.

Right. But back to we talked about inventory nationwide's up a little bit days on the market is up a little bit and um price reductions are about 42% nationwide and close to here in Modesto we'll just round up the 41 to 42. Yeah. And our inventory is not through the roof it is nowhere close to 2019 numbers and nowhere close to pandemic or great recession numbers. Yeah those numbers I remember talking about you know we had 12 months of property on the market and thinking how are we going to get through this how are we going to sell through this this inventory. Easily people picked up. We we Black Rock came back from the war and was able to buy all of them cuz they they found all the gold and and the money.

We don't have any. Yeah. Basically true. Okay that that let's that was a joke we don't if if you want to go after anybody it's Mike Kelly uh I know. All right so let's talk about this didn't happen to us so when our kids moved out I remember Rochelle moved out to go to college the first thing Marsha did was she wanted a bigger closet so we turned that room into a closet that was one way for Marsha you know a nice little to get dressed for work and everything. Yeah. And that's how she turned out smart. Well that and that way we didn't cut a thing through it or change everything so when we go to sell it it would be a major issue but that was what we didn't so hey by the way you're not coming back cuz mom took over your room some people put exercise equipment in it now our Brady house when the last person left which was Blake uh all rooms are now something one's a gym one's we made the other one into the studio instead having it at work.

Right. And that's like when kids come there's a couch. Yep. They don't stay long. No that's uncomfortable actually it's probably a pretty comfortable couch but Well it's a pull out so it's still all right but they don't stay long well then so this whole thing is um parents who expect to be empty nesters at 50 instead three of their adult kids are living at home and the oldest is moving back after graduation. I know it's tough out there but there's no thank you. Yeah. Yeah I mean our biggest problem is we weren't empty nesters until after that because Blake was the youngest and he's only been he's been what eight years so Oh. Yeah. Yeah so I was like 50 we'll just say yeah so it's pretty close to that but the problem was one of our kids already had a kid you know Eli's 10 so we were at 50 we had a grandson but we still had two kids at the house.

Yeah. Which is which is hard to be a grand Not usual. No exactly we're like you didn't even let us be empty nesters so sorry. Yeah. Ask your sister maybe she'll watch. When our kids left um they left never came back it's kind of interesting. Yeah we had one waffle but then we left um so the 50 so most people assume their house would be quiet series of you know have a get a basement then it won't matter. They could have a sewing room they could do all these things. So I mean so I don't get this but some people are like oh my kids are going to leave and they're going I'm like if you do a good job I was talking about this at the event with about a mentor um if you have a mentor a coach or whatever their their goal is to make you better than them so that they eventually leave you if you're still with them five years into it 20 years into it that's not a good job yeah exactly.

Same with parenting. Yeah. You parent your kids to be able to go into the world and Survive. Not survive but actually flourish do better than you did our goal is to have our kids do better than their parents. Right. And that's that's the goal well if they're still at home something happened. Yep. And I'm if you don't agree with me that's okay that's how the world works. You don't have to agree with me. I was lucky to have good parents and I I suffered from I didn't want to outperform my dad it took me a while to get over that you know I was embarrassed that I was making more money than him and then I talked to him one day and he goes Jesus that's exactly what you're supposed to be doing get back out there and and make make as much as you possibly can okay papa.

You're listening to Real Estate Jerky I'm Ed Parcaut MBA veteran and mortgage advisor at Lending for Living alongside RE/MAX executive realtor Mike Kelly if you have questions or comments for us feel free to reach out by emailing us at radio@realestatejerky. com. That's how it's supposed to be you know and but Yeah. Let's change a little bit. What happens when the wife makes more money than the husband? Husbands have a problem with that. He gets emasculated. Yeah, but I'm joking. Only mine does on paper, so yeah. I I'm I'm good. That makes my life easier. Yeah. I got friends whose wives make more money than they do and they are so proud of their wives and supportive and you know, that's a that's a nice healthy way of being.

Uh if if you got a problem with your wife making more money than you, you go make more money. Make more money. Don't don't create a problem in the family. Just go make more money. The um so back to the empty nester thing. Redfin work found empty nester boomers own roughly 28% of the country's largest homes versus 14% of millennials with kids. Yeah. Well, yeah. So if you're smarter, you got a smaller house so that you don't have to move. But it's funny how many people their kids leave and they've been in the same house, 2,000 square feet, and all of a sudden they get a 3,500 square foot, you know, whatever because they don't have to pay for college anymore, they don't have to pay for all that.

And I'm going, why are you wanting to increase your payment? I I don't get that either. I want to I want to travel. I don't want to have to pay for more stuff. That's even like getting the new vehicle I'm possibly getting. I'm like, do I really want to? I just don't have a payment right now. It's kind of nice without a payment, isn't it? You know, the company pays for it, but Still, you got to make the money in that company. Is that how that works? I thought you just pay checks. I have checks. Yeah, and I'm not out of money if I'm not out of checks. The government will pay for it, right? Yeah. That's that's how it should be. Well, let's go since I brought that up. There you go. Democratic socialism is communism.

Right. Stop. They're It's like when they change the words for everything. Oh, she was attacked. No, she was raped. Um all those things. Stop saying the nicer word so it doesn't seem so bad. Democratic socialism is communism. Communism is bad. It's never worked for anybody. Right. But look at Norway. Yeah, but they don't Nobody advances. All it does is make everybody equally with no money. Yes. Miserable. That's all it does. Everybody's equal because nobody has any money. Yeah. Right. Yeah, where has it worked? I love what it did with Venezuela. What? Venezuela. Venezuela. You know, they were one of the richest countries in the world there for a while and then uh communism took over, socialism took over, and look at a dump it is now.

Well, the problem, the reason why it's such a big thing right now is because the boomers own so much real estate and real estate went up so much over time and now that uh the kids now can't afford anything. That's the issue. They think they'll never be able to afford a home and so they think socialism, communism, whatever you want to call it. I'm just going to say communism, is the answer. It's not the answer. Right. No. Cuz all you're going to do is then everybody's going to be in slums. There's movies you can watch that shows everybody in the projects and other things that they had. Yeah. Is that what you want to live in? Squalor. Um then the boomers, you know, here's the thing. If they got rid of capital gains tax on primary residences, you'd see a flourish of people selling their homes.

They don't want these. They're in their late 60s, early 70s, heck, their 80s. They don't need a 2,500 square foot home, a 3,000 square foot home. They'd love to get rid of it. The problem is they're going to pay so much money in taxes and you know, government says, oh, it's fantastic. There's more tax dollars. It's not fantastic. You You can't go broke paying taxes. Yes, you can. But you shouldn't have to. You've worked your whole life for a piece of property that's Oh, you're talking about the property tax? Yeah, making money for you and then you're a victim of the property the capital gains tax and property tax. Hell, after 65 you shouldn't have to pay property tax anymore. Well, that's the problem there cuz there's a lot of places like Texas that people are losing their homes in their 65 because they can't afford the taxes and that's a wrap.

Right. It's It's Yeah. We thank you for being here. We really appreciate you listening to us. Again, we and I think we picked up Wednesday night at 7:00 p. m. as a replay. All right, so if you have questions or comments for us, email us at radio@realestatejerky. com. Give me a call, 209-404-1915. Reach out to Mike Kelly, 209-968-5633. If you missed the show, don't worry. You can find us wherever you find your favorite podcast at. Proud to be living in this country. You can still build personal wealth through home ownership. Join us every Saturday at noon and Sundays at 3:00 p. m. on PowerTalk 1360 KFIV. Mike, thanks for being on the show today. Pleasure to be here, Ed. Thanks for tuning in to Real Estate Jerky.

We'll talk to you next week. Cuz we got small towns and farmland. Folks who still make a living with their hands. Where I come from a man is still a man. That's my California.