Your Mortgage Market Reality Check - #74 Faramarz Moeen-Ziai

Mortgage rates can feel random until you trace the chain back to the bond market, oil prices, and political decisions that hit confidence like a hammer. We sit down in Berkeley with Faramarz Mooeen-Ziai of FMZ Loans to talk about what really changed over the past year, why a brief window of rates in the 5s disappeared overnight, and how real estate pros can stay useful to clients when the headlines keep shifting.

FM also walks through what it looks like to build a lending shop from the ground up around one clear idea: the realtor is the customer. We dig into his four-step process, from fully underwritten pre-approvals to hands-on offer support and proactive updates that keep deals from dying in contract. If you care about winning in competitive situations, closing in tight timelines, and protecting your reputation with clients and listing agents, you’ll take notes here.

From there, we zoom out to the big forces shaping affordability: deficits and Treasury supply, Fed decision points, CPI and jobs data, and why oil shocks can take a long time to show up in everyday prices. We also tackle AI from both angles, the excitement and the threat, including what happens when entry-level jobs disappear and “trust” becomes the real differentiator. We finish with one of the most practical ideas of the conversation: the branding gap, and how aligning your brand with who you actually are helps AI search connect you with the right clients.

Subscribe, share this with an agent or lender friend, and leave a quick review if it helps, what’s the biggest change you’re seeing in your market right now?

Please visit Faramarz Moeen-Ziai's business page here.

Faramarz Moeen-Ziai, mortgage advisor NMLS #342090

Declan Spring is a licensed CA REALTOR® DRE#01398898 

Transcript

Quick Ask And Show Setup

Declan 0:00

This is Declan Spring and welcome back to the Mostly Real Estate podcast. Hey, before we jump in, I have a quick ask. I am trying to grow this into a go-to podcast for East Bay Real Estate, for agents, for lenders, and everybody orbiting in this space. And the truth is, there are a lot of people who would enjoy this show, but they just don't know it exists yet. So if you're listening and getting something out of it, help me bridge that gap. Follow or subscribe if you haven't already. And if you've got 10 seconds, leave a quick rating or a review. It really helps to get the show in front of more people. And the biggest one, the biggest thing, share it. Text this episode or any episode to a friend in the business or in an adjacent business. Post it to your Instagram stories or drop it in a group chat. Even just mention it the next time real estate comes up in conversation. When you're out on broker tour, for example. That's how the show grows. One share at a time. And I really appreciate you being part of it and supporting me with this project, which is a labor of love. All right? Okay, let's get into the show. It's been a year since I spoke to my guest, Far Mars Moeen Zai, at FMZ Loans. I always enjoy chatting with FM, and we tend to cover a lot of ground. This conversation is no exception. First, we discuss FM's move to running his own lending shop, his approach to serving his customers and the ways in which he hopes to help them. FM's customers, by the way, in his opinion, are his realtor colleagues. So he has actually a free luncheon coming up a couple of days from today on Wednesday, April 21st, and we talk about the value he hopes to provide there to his realtor colleagues. There's still time for you to go, assuming you're listening to this before April 21st. Then we set course for a general conversation around everything that has happened since our last conversation one year ago. Concerns over the Trump administration's mishandling of almost everything, Mideast turmoil, rising oil prices, the personal toll of Mideast turmoil for farmers. He's Iranian. We wrap it up with talking about AI, the speed of AI, concerns over, on the one hand, the impact on the workforce, and on the other hand, the shared joy of the creative use of AI in business. And we end up uh on the topic of branding, or as FM puts it, the branding gap and how he can help agents overcome the branding gap. There are links in the show notes to the important stuff, contact info, etc. And now I bring you my conversation with Faromars Moinzai. Okay, it's my great pleasure to be back in the studio with uh Farmars Moinsai. And uh so we chatted a year ago. Thank you, Farmarz, for doing this.

Faramarz 3:12

My pleasure. I I love everything that you do, and it's exciting to be on your on your podcast.

Declan 3:18

Things have changed for you, so I really do want to go into some of the changes that have occurred for you professionally here and and congratulate you on uh of course we're not in a studio of mine today, we're at your office here on College Avenue in Berkeley. And uh last time I chatted with you, you were uh you were with cross country.

Faramarz 3:38

That's right.

Declan 3:39

And you're not anymore. What's going on?

Faramarz 3:42

Yeah, so um I had launched FMZ Loans in February of 2026, and uh it's gone really well. Uh it's it's uh we had a couple of weeks of transition of getting everything going, but same team, same level of service, uh, same group that I had. Uh we have a ton of lending options as far as products and things like that. Yeah. And cross country is a great company. I didn't leave. I mean, we actually parted ways on a very friendly basis. And uh I have nothing bad to say about it, wasn't like, oh my god, this place is terrible, I gotta leave. It's actually they're the number one lender in the country.

Declan 4:21

Okay.

Faramarz 4:22

It just was that I I over the last five years since I've been there, I grew my team uh from just me and an assistant to 12 people.

Declan 4:32

Okay.

Faramarz 4:32

And uh my business grew and my team grew, and we became this full business unit, essentially. It was and I I just found that we could operate independently and um offer the same levels of service at great rates and prices and uh be able to execute. So we we made the jump. You know, I've always been entrepreneurial, so uh it's always I felt like this was eventually kind of the the place I was headed to and pulled the trigger and did it.

Declan 5:05

Wow, and you're still a 12-person team? Yes. Wow.

Faramarz 5:08

Yeah, so we have our own marketing, we have uh you know all the support. Um I'm involved in every loan. I speak with every client, I I engage, but the support staff that I have is incredible. And um, they it's it's a lot different than anything I've ever done from a mortgage standpoint, in that I'm able to kind of infuse myself through them so that all of our customers get the same great level of service regardless of who they're talking to.

Declan 5:37

What are what are you enjoying about it professionally? What do you feel like? What are the changes?

Faramarz 5:43

It just feels different. Yeah. You know, it's um you and I talk a lot about the there's a lot of joy in this business, but there's also a lot of grind, you know, um, especially on, you know, I don't know so much about the real estate side, the grind part, but in the lending, sometimes you feel like you're on a hamster wheel of just doing the same thing over and over again.

Declan 6:04

Yeah.

Faramarz 6:05

And when you have the ownership feeling of it, it's fun. You know, it's brought a lot of fun back into it. I'm really enjoying what I'm doing. Not that I ever hated it or anything, but it's added, it's gone up a couple of levels. So from that standpoint, it's been great. Yeah. The other thing is we go from idea to execution overnight. You know, it's not like I'm fighting systems and processes of you know, if somebody changes something for me, they're gonna have to change it for 10 other people. It's like I'm I'm able to design this from the ground up exactly to be the customer service experience that I want my customers to feel. And that part's really fun.

Declan 6:40

Speaking from my own, you know, professional history when I've made a jump from one brokerage to another, which occurs. I I don't like to jump too often. Yeah. But but you know, you there is that concern over what am I what am I missing? Where am I gonna lose business? Something's gonna, you know, did did you find anything like that or not at all?

Faramarz 7:00

Um that's inevitable. I think anytime you make a change, there's gonna be some bumps and bruises. And we tried to really prep for this as much as I possibly could.

Declan 7:11

Yeah.

Faramarz 7:12

Uh I gamed this out with ChatGPT and Claude over and over again. And it did actually bring up a lot of things that was kind of interesting that that I might not have thought about. But having made I'm I'm just like you. I'm not I'm not someone who jumps around a lot.

Declan 7:27

Right.

Faramarz 7:27

I've moved once. You know, I started my career at a company and was there for about 13, 15 years and then moved across country for five years, and this is the final move, I think. So, but that move from five years ago, I do remember it's all about your contact information. So um, luckily in the age of cell phones, I'm not like sitting with a desk phone, office phone, or anything like that. So everybody still has my cell phone number.

Declan 7:53

Yeah.

Faramarz 7:54

And we all so many people just deal on text now versus you know traditional email and all that stuff. Yeah. That it hasn't been that bad. And and because I have everybody's you know, contact information, just making the announcements and then social media on top of that and just getting the word out.

Declan 8:13

Right.

Faramarz 8:13

I don't think there's been a huge real drop off on losing anything like that.

Realtor Luncheon And Branding Help

Declan 8:19

Yeah. Oh, well, good for you. Congratulations. Would you have done anything differently in hindsight, or do you have any cautionary words for anybody?

Faramarz 8:27

I'd say the only advice I'd have is personal outreach. You can't just rely on a blast email or a social media post. Yeah. The first month of leaving um was spent on personal outreach to realtors, right? Uh, all of our professional partners, escrow and title, insurance, all that. Yeah. And then also clients, you know, is calling all of our clients and just walking them through it and what's what's better for them, what are they going to give up, and all that kind of stuff.

Declan 8:57

Before you made, you know, made the leap to FMZ loans, you were doing these really great uh luncheons for for realtors about your your three three-to-one referral engine thing. And uh, so you're still using obviously that model.

Faramarz 9:12

That process is the same. So that was that was an FMZ team process and system that we developed here. Yeah, it wasn't company based, that was our own thing. So, and we mentioned that in the in the in the you know events and seminars. We got one actually coming up this Wednesday where we're loading out our we have a new thing that we're doing with agents, okay, where we're helping you guys develop your personal brand. Okay. And I'm really excited about that. Is that uh if anybody needs help with their branding, what is branding and all that? I mean, it's a really um it's a fun event. Okay, and this is a really interesting one that I think applies to everyone.

Declan 9:51

Okay, well, let's let's talk about that because I I might get the podcast out. Today is April 16th. Yep. So next Wednesday is what, April?

Faramarz 9:59

April 22nd at Berkeley Country Club.

Declan 10:02

Okay.

Faramarz 10:02

Um, up in El Cerrito. Okay. And it's gonna be from it's a lunch. It's gonna be from uh like 1145 check-in, and then the presentation is from 12 to 1.

Declan 10:11

And people should reach out to you. Well, I mean, I'll put something in the show notes, but just shout out at fmzloans.com.

Faramarz 10:17

All my contact information is on there.

Declan 10:19

Fmzeloans.com.

Faramarz 10:21

And and it's a great lunch, too, by the way, if anybody's looking for the number one rule that I was told by this old veteran when I joined this when I started doing loans in 2004. Yeah, feed the realtor, show up at the office with a box of donuts, right? Take them to lunch, yeah, you know, all that.

Declan 10:41

So I'm really happy that you're that you're enjoying this, that uh it's going well.

Faramarz 10:46

Thank you.

Declan 10:47

Do you have days off? I mean, how are you balancing?

The Four-Step Lending Partner System

Faramarz 10:50

Well, that's the great thing about the team. So we're open as a you know, our our team is open seven days a week from 8 a.m. to 8 p.m. Yeah. And we view the realtor as our customer, and that is when our customer is doing business. Yeah. And that's just a fact. And so we modeled our entire organization around serving our realtor customers. And so we have staggered times. I don't, I'm not personally on 24-7, you know, on those hours, but for a lot of those I am. Right. Um, but yeah, we have staggered times fully operational. If somebody gets introduced to us at 10 o'clock on a Saturday morning, yeah, they could be underwritten and approved and are ready to make an offer at six o'clock that night.

Declan 11:31

Let's uh let's just give people an overview, you know, mostly realtors who are listening to this. What it what is it that you're most proud of with your current model? You have put together this system, this approach that promises to deliver something to your uh to your clients who are the agents, right?

Faramarz 11:48

So yeah, just give people a well we think of it as a four-step process is one is our pre-approval process. Our motto, our branding here is the ultimate lending partner, your reputation, our responsibility. Because when you send us a referral, you're putting your name on the line. We take that very seriously. Those aren't just words. We we believe it's our responsibility to make you guys look good.

Declan 12:15

Yeah.

Faramarz 12:15

And so that starts with our pre-approval process. We engage with a live application. Uh, I used to send links to the application to everybody, but with as much as we can, we try to take it live. It's a better experience. Uh we can move quicker, and we're not just randomly waiting for someone to do it on their time. Yeah, you've given us something really precious, right? You met somebody who's interested in buying a home. We want to engage with them as quickly as possible for you. So uh we're open 8 a.m. to 8 p.m., seven days a week. We fully underwrite everybody on every single file at pre-approval. I have an underwriter on staff for me that is a former underwriter that that takes care of that.

Declan 12:52

Uh-huh.

Faramarz 12:53

So when we say that somebody is good to go, they're officially good to go. You're not going to have any surprises. Then we have our loan consultation meeting where they understand everything and we arm them with all the information, answer all their questions, and get to know them on a personal level. And one of the things we do is we share our all about you form with you guys every time we find out what their likes are, hobbies, you know, sports teams, all that. So when we send a closing gift, yeah, they're gonna love it. We're all gonna look good. Right. Then there's the offer process. Now we we've I used to again, pre-approval letter, good luck, let's see what happens. Yeah, we are actively involved with you in that process, determining the price, engaging with a listing agent. Actually, before we started this podcast, I was talking with a listing agent trying to get things worked out so we can get someone in. Okay. And that that is a big deal. When I call listing agents and say, I'm calling to introduce myself, there's an offer coming, and they love that outreach.

Declan 13:48

Okay.

Faramarz 13:49

We talk about the strength of the file, they're fully underwritten. In those competitive situations, we've had our clients' offer get accepted where the listing agent reaches back out and says, We accepted this offer because of you guys, it wasn't even the highest offer. So that that makes my day. The trust, the trust. It's the trust, it's the reliability that's going to close. What's the worst thing that can happen for a listing agent? Is you take the highest offer, yeah, you go down the road for two weeks, yeah, you fall out of contract because of it wasn't fully underwritten, right? All of a sudden, oops, we didn't look at taxes or something.

Declan 14:23

Right.

Faramarz 14:24

Now you've got a seller who is not happy. Right. Now you're coming back on the market with a stale listing. Yeah. And all the buyers out there who saw that that were interested, they're like, that went into contract two weeks ago. Right. And now it's back on the market. I wonder what's wrong with that house if that person didn't want it. All right, let's move on. Let's go somewhere else, right? And there's nothing wrong with a house, but it's a nightmare.

Declan 14:48

It's it's always misinterpreted as being a problem with the house. A condition problem with the house.

Faramarz 14:54

They must have had inspections and found something, right? So it's a tough position. So when you know that you're gonna close, you take an offer, close in 14 days, and yeah, it's rock solid, that is more valuable than an extra $20,000 or $30,000 on a million five house, right? So there's that, and then that there's the communication during the process, proactive communication. We view any inquiry about you know what's happening on such and such, or when is this happening as a failure on our part. And we always try to fix that.

Declan 15:25

Yeah.

Faramarz 15:25

So we want to be proactive and keep everyone in the loop, close on time. And then the fourth piece is we call it uh invested in you. So that's all of the stuff we talk about at the events. We want you to grow your business and we want to be an active participant in it. So we have our referral engine where we engage with your customers and let them know Declan's business is referral-based, and uh this is the timing of this is the critical thing, right? So when we celebrate, we just got our offer accepted, you're pre-approved, everybody's happy. When we hear a big thank you from them, our response is always to say that we love that you love the service. Declan is who sent you over to us. And if you know any friends, family, coworkers who are looking to buy or sell a property, I know that he and us would both love an introduction. So there's a cadence that we go through. Yeah, it's not pushy, it's not salesy, right? Uh, it's very friendly, and we have heard from our customers, the realtors, that their referral business has grown as a function of working with us.

Declan 16:28

Wow.

Faramarz 16:29

And there's a whole suite of things scripts and listing flyers and all this stuff where we really try to support you with our marketing team in terms of how you can grow your business. Sorry, I'm rambling on, but I get excited.

Declan 16:40

No, no, it's very no, I want you to have a chance to talk about this. I'm very, very happy for you that you managed to get this whole thing going. So if this sounds compelling, again, uh for anybody listening, and if I get the podcast out with enough time to spare, it's uh at the Berkeley uh City Club.

Faramarz 16:57

Country Club. Berkeley Country Club. Next Wednesday, April 22nd. If you want any of the contact information and finding out more, you can go to fmzeloans.com and it's got my email address and phone number and everything on the website.

Declan 17:10

So, you know, so right now you're probably getting a good chance to really test out your systems on purchase because I think refi is probably not happening a whole lot these days. Am I correct? Okay, well, we'll get into close.

Bonds Debt And Budget Risks

Faramarz 17:21

You think before the bombs. We had everybody teed up on February 27th. Rates were in the fives.

Declan 17:29

I know, right? So it was just stolen from us by choice. Yeah, by choice. Oh my gosh. Okay, listen, last year when I talked to you last, what had just occurred at that point in our news cycle was uh the big beautiful bill.

Faramarz 17:44

And you didn't know and also Liberation Day tariffs.

Declan 17:47

Liberation Day tariffs and the big beautiful bill. You were you you weren't terribly impressed by either one. No, right? So what what we what we talked about and what I found really interesting last year was you were concerned about the debt ceiling increase and also the global demand for U.S. bonds and whether or not it would hold up. Let's talk about that. What's gone on in the past year? Were your concerns justified? What are you seeing in the bond market? Because obviously that is a huge impact on mortgage rates, so so is the war. But but just let's talk about the big uh big beautiful bill and you know the impact uh a year on and uh particularly the bond market, because uh you have a better read on that than than I do. I mean, I read your stuff once a week. Friday, I always look forward to your newsletter. Oh, thank you. And I look at all the charts and all the graphs, but um but what what have you seen in the last year since the big beautiful bill passed?

Faramarz 18:45

So what's happened in the last year has been market driven, right? Inflation, jobs, those are the two things. The Fed is the they don't set mortgage rates or the tenure note, but they set the overall environment in the bond market because everything is in relation to them. Okay. The bill passed and there were a lot of estimates on what the impact would be. We don't know yet. We still have that same concern because when a bill passes, it doesn't immediately start happening, like the new tax code and everything doesn't hit the next day. Right. So we're kind of in year zero right now in 2026 of living under the big beautiful bill. Coincidentally enough, we're here right in tax season, right? Mid-April.

Declan 19:36

That's right.

Faramarz 19:37

And so this is the first time we're gonna see the impact on the revenue side of the new, you know, the tax cut that the for billionaires and for corporations and all that stuff and what it has to do. It was supposed to be offset by this amazing growth, right? Yes, and we're not seeing it at the rate where they projected it. Right. So, but they're gonna say that give it time. Let's give everybody their tax cuts and watch them spend it all on the economy, and over the next several years it's gonna be great. So we're still seeing what happens. Right. In addition to that, we now have a new budget proposal that's been submitted where domestic discretionary spending is being slashed in every department and defense is being taken up by 50% to a record. And there's been this there's been this kind of social compact since World War II between the defense industry and the rest of society about the percentage of defense spending versus discretionary domestic spending on things, and when I say that, I mean things like healthcare, like Medicare and stuff like that, things like you know, the EPA, things like you know, whatever. Uh it's investing in you know infrastructure, things like that.

Declan 20:55

Yeah.

Faramarz 20:56

And that that relationship has been going along on a kind of a 50-50 basis. Now I just saw a graph. This would create instantly the largest gap. Defense spending would shoot way up over 50%, and domestic other spending would shoot way down below 50% for the first time ever. Right. So we'll see what happens with this bill. We'll see, you know, do we need to double defense spending? I don't know. We're already spending more than the next 10 countries combined. Yeah. Uh maybe it's the cost of empire, maybe I don't know. But um, I don't know what you do with all that money. Because you see what's happening right now, our asymmetric warfare that's going on right now.

Declan 21:43

And yes, indeed. It's fascinating, isn't it?

Faramarz 21:46

I mean, do we need more three million dollar missiles, or maybe we just need more twenty thousand dollar drones? I don't know.

Declan 21:51

Yeah, that asymmetry is really extraordinary, isn't it? Absolutely. What you know, what has been public policy for a long time and the Shift up you know shift away from what we've known forever as public policy is really quite sad.

Faramarz 22:08

It is.

Declan 22:08

You know?

Faramarz 22:09

It doesn't, it doesn't s it doesn't feel right. You know what I mean? It just doesn't feel right. And so back to the original question financially, if this bill passes as is, it will only compound the debt that were already projected by many economists from the big beautiful bill on the heels of it, exacerbating the problem.

Declan 22:29

Right.

Faramarz 22:29

Further creating a need for more U.S. Treasury bonds, which would flood supply, and there's not maybe as much demand out there.

Declan 22:39

Yeah.

Faramarz 22:39

We haven't done the greatest job of kind of creating a world community in the last 12 months of cooperation and all working together to a common goal of helping each other and things like that. Right. And I think when you combine the need for everybody's investment along with an attitude that is kind of putting up the middle finger at everyone, that I don't know how the combination of those two things will play out.

Declan 23:09

Right. Okay. So what what kind of time frames are you looking at? And how might something like you know a midterm election that unseats Trump from, you know, his his current ability to pretty much do what he wants? How how how would unseating his ability to behave in any, you know, in his autocratic way is it too late? Would it be too little too late? How damaged is everything?

Faramarz 23:33

That's two separate questions. Yeah. I don't know that anything's going to change this guy's behavior. And I think that the only thing is that that fortunately, somewhere in when you find, you know, in the justice system, there's been some resistance put up to some of the executive actions that have been taken unilaterally. Right. Including the tariffs. That was a big deal.

Declan 23:52

Yes.

Faramarz 23:53

Um that was a huge deal. And I don't know, we'll have to wait and see what happens. You know, the part part of part of the whole unhinged nature is that you don't know what the reaction is going to be. It's not none of it is normal, so it's hard to predict. Right. Just when you think you've seen it all, you see all of a sudden, yeah, you know, he's Jesus. But but um I thought he was a doctor. Yeah, well, I didn't see that one coming, is what I'm saying, right? Just when you think like it's that's it. So what will the impact be? Yes, I mean I don't think that the that there will be a veto proof majority. So if a new budget is passed, let's say the Democrats get control of the Senate. If they do, it'll be barely, and they they run crazy in the House.

Declan 24:39

Okay.

Faramarz 24:41

Um if they try to undo those bills and pass a different kind of budget, I don't know that they'll have a veto-proof majority where you're gonna have to get the signature at some point on something. Right. So I don't know how much undoing there can be without a full administrative change. Right. Um now what many economists are projecting um when you look at the analysts and all that stuff, this isn't a today problem.

Declan 25:07

Yeah.

Oil Shock And Stagflation Fears

Faramarz 25:08

Um, even even the shock from the war from an oil price standpoint is not a today problem. The closest thing we had to this was the Arab oil embargo in 1973.

Declan 25:18

Right.

Faramarz 25:19

And that was a fraction of the of the what we're seeing right now as a result of this um you know, blockade slash blocking of the Strait of Hormuz. So if it resolves itself now, right, and there's some question as to whether that will, is this treaty a head fake for a ground invasion, is it actually real attempts at peace? If it if it resolves itself, then it will have been the equivalent plus of the 1973 oil shock, which took five years to work its way through and impact everything, to where in 1978-79 the net result was stagflation, high interest rates, and all that. So, and the reason is that the oil is such a core component of so many things. The first people to feel it is the people who are using oil right now, jet fuel, transportation, things like that. Yeah, it then percolates through to the goods that are being transported, it then percolates through to fertilizer and when fertilizer prices go up in April, you feel the shock in the fall when those things that were supposed to be planted are supposed to get harvested and they're not there at the grocery store anymore. Right. So a lot of these things are long-term impact that where the dominoes have started to fall, but we don't necessarily feel it yet.

Declan 26:40

Right.

Faramarz 26:41

Um, so we'll see what happens. Yes, but it has to be addressed.

Declan 26:45

Yep.

Faramarz 26:46

Right? So I think, and it's gonna fall on the next administration.

Declan 26:50

Yeah, of course it is.

Faramarz 26:51

I mean, and this feels like almost like that, you know, at the end of the Bush administration, the George W. Bush administration, yeah. The financial crisis has started, right? Markets are falling apart, the troops are in Afghanistan, here's the keys to the place. I'll see you later. Right. It was just a complete handoff of a mess. And I I fear that the next administration is probably gonna be doing a lot of unraveling and damage control, damage control, and and dealing with what is being created now.

Declan 27:25

So right now, inflation, we anticipate like inflation uh is is just gonna trend up. I mean, how could it not, right? And has to. And and before the war, I think the Fed, correct me if I'm wrong here, the Fed had kind of switched to um they were they were less concerned about inflation, they were looking more at employment uh or unemployment, I should say. But now they've where are they now? They've got to be, they can't just unemployment, they gotta be looking at more than just unemployment again. If inflation's back in the in their sites, right?

Faramarz 27:58

Yeah, this is really interesting because it's almost similar to a COVID situation. They're looking at both, right? They have what's called the dual mandate. Yeah, they want to keep unemployment below 4%, it's now at 4.3, and they want to keep inflation, let's call it below three. Traditionally it was like around two, but the the market is kind of just thrown in the towel on ever getting to two. Right. When we were at 2.7 and holding, they kind of said, okay, that's they didn't literally say this, but they started to raise rates indicating that that's good enough. Right. As long as it's not going up, that's good enough for now.

Declan 28:32

Right.

Faramarz 28:32

So now we're back over three, right? Right. Um, the reason I say it's similar to COVID is that war and oil blockade and all that stuff, the Fed has nothing to do with it. Right. The traditional inflation that the Fed fights is demand-driven inflation. The economy is on fire. Everybody's making money, they're all buying everything, and there's not enough goods for all the stuff, all the demand, so that prices are going up. So let's kill the demand by making money more expensive, essentially. Right? Right. And even that takes six months to a year to really take effect, but eventually percolates through the system and you kind of contract the money supply. This was the problem during COVID. They said, look, we don't have anything to do with this. This is a supply chain problem. Every warehouse worker and ship worker is locked in their homes because nobody can communicate or whatever, congregate with each other.

Declan 29:28

Yeah.

Faramarz 29:29

Whether the Fed raises or drops rates with supply chain, and even when the inflation showed they said it was transitory, then they got barbecued for not seeing this, right?

Declan 29:40

Yeah.

Faramarz 29:41

They everybody said, You guys are fools for calling it transitory. This inflation is sticking, and so they started to raise rates aggressively, and then they were too late. And we just got out of that. So now they're being really careful. Same situation. We don't have anything to do with flow of oil, right? Fed interest rate doesn't mean that more oil hits the market or any of that. But they're very afraid of committing to that same narrative because a little bit of greed kicked in because when after the supply chain stuff was worked out, prices were set and people were buying at those prices.

Declan 30:22

Yeah.

Faramarz 30:22

So margins improved. That's why stocks are on fire, right? Is that people who were selling those goods said, ooh, okay, our our price, our wholesale prices have gone down.

Declan 30:32

Yeah.

Faramarz 30:33

But these appear to be the new prices everybody's willing to pay, so our margins are good. Let's just keep it there. They didn't lower prices to kill inflation, right? Right. So there's a concern that, I mean, oil goes into plastics and this and that and fertilizer. Is that, you know, will that be the case again? Do we have to get out ahead of it and kill demand?

Declan 30:50

Yeah.

Faramarz 30:52

While our unemployment rate isn't where it needs to be. Right. So they're caught in this, they're caught in a box again, you know, and it'll be interesting to see. And we've got a new Fed chief coming in. Yes. So there's a lot going on there that we'll have to wait and see what it's impossible to predict what's going to happen.

Declan 31:12

Oh, it's totally impossible from one end of the day to the how do you think Trump, you know, where do you think he gets his energy from? His his ability to just, you know, throw throw out, you know, comment after comment from one end of the day to another. You know, how about the uh how about the proposal? Hey, maybe Iran and the state should uh get into the toll business together.

Faramarz 31:35

Yeah.

Declan 31:35

The utter madness and and speed at which he comes out with all this stuff, it like people, it's just become normalized now. Isn't that the weirdest thing?

Faramarz 31:45

That's the saddest thing. It's is that the news media and there's there's this out and the and the public.

Declan 31:51

Yeah.

Faramarz 31:53

You get worn out by the outrage.

Declan 31:54

Yeah.

Housing Inventory And Buyer Psychology

Faramarz 31:55

So any one thing would have been enough to end a political career of somebody else. And this goes back to the 2016 election. Yeah. You name it. You just take your pick of affairs, sure. Porn stars, foreign policy statements, fighting the Pope. Fight the Pope. Wiping out civilization. Wiping out civilization. A picture of you as Jesus. That's just in the last week. Right. So, yeah, and so it but it doesn't get covered in the same way. There's this leeway that he has, and where does he get the energy? I don't I don't know that it's anything other than uh cognitive decline. You know, the Democrats got blamed for hiding Joe Biden's cognitive decline in the last year of his presidency. Yeah. Until it was exposed on the on the debate with Trump.

Declan 32:48

Right.

Faramarz 32:49

I guess the good thing is that he didn't have a phone and wasn't a big tweeter. Right.

Declan 32:54

Right.

Faramarz 32:55

Or we might have seen something like that. I don't know. Right. I mean, he seemed to have it together from a thought process, but but with Trump, it's on public display. And this this seems to be cognitive decline on display for everyone.

Declan 33:08

Yeah.

Faramarz 33:08

And I think when you have an extreme narcissistic personality like this, it's a psychologist talking about it. As you get older, it doesn't get better, it gets worse. Right. And um that that I think that's what we're seeing is is the impact.

Declan 33:23

I mean, it's it I mean, it's amazing that things are not worse than they are, actually, in in many ways.

Faramarz 33:27

Although this conflict Yeah, that is a very glass half-full perspective as the nation is at war and negotiating to try to get back to hopefully where we started.

Declan 33:39

I don't know. I guess I am glass half-full in the sense that I have this hope that that you know the next person in that office will be able to make apologies on behalf of a nation that is really, really sorry for what has occurred. The only question, Declan, is what's left. We're one year in right now. I know, right? We've got three to go. I know, I know, but hopefully he can maybe at least get somewhat neutered by, you know, by a a midterm that you favors the Democrats, although I don't think there's any neutering.

Faramarz 34:16

I think if here's the thing is when this guy gets squeezed, his response is not super rational and it's not docile. Right. And um there is no adult in the room anymore like John Kelly or all these people in his first I think I think the bottom line is when when he won in 2016, he was as surprised as anyone.

Declan 34:39

Yeah, absolutely.

Faramarz 34:40

There was no there was no plan to win. Right. And when they asked him the next day who's in your cabinet, he had no idea, he didn't have a single name.

Declan 34:48

Yeah, yeah.

Faramarz 34:49

So he had to quickly assemble and he picked from you know uh Republican history's greatest hits for his cabinet. Yeah. This time with Project 2025, they they saw that they blew a chance at inflicting what they're doing now.

Declan 35:07

Right. I I agree a hundred percent.

Faramarz 35:08

And so now you have I don't know who the adult in the room is when the Democrats win in in Congress. I mean, they're already trying to subvert the election. I mean, that's the kind of action that's you know, yeah, yeah.

Declan 35:20

I mean, that's the big fear now, is like it's it there's you know, I mean, even Victor Orban, you know, conceded. I mean, I I don't see that happening with this guy. I mean, it's he still won't concede, you know, the 2020. So, I mean, it it's amazing, like guys like you and me and all of our colleagues, and we're just trying to go about an honest day's work. I know. Do you know what I mean? We're just trying to go about an honest day's work with all the emotion of just living, and and we have this, you know, we have this, as you said, narcissist who's just it incapable of self-reflection and is just gonna lash out and blame everything else around him and take take everyone down. And and uh that's just the way he is.

Faramarz 36:02

Yeah, and I think what drives it a lot of it is he's addicted to being in the headline. There's just a complete disregard for the impact and lives and you know all that stuff. So anyway, I mean where it comes back to here is talking about wanting to just do an honest day's work, is it comes up in our conversations with people. Yeah, when there's this level of chaos and uncertainty, yeah, um, we get asked all the time what's gonna happen with rates, or what's gonna happen with the housing market? Our price is gonna crash, is this crazy? Is this this? Is this that? Right. And it gets back to the emotion, and we have to do a lot of reassuring of people that this too shall pass. Right. Is that I mean, that's the one thing that you know, the ultimate advantage that these places like China and Iran and you know, Vladimir Putin have is that they can wait it out.

Declan 36:57

Yeah.

Faramarz 36:57

They're not going anywhere, and there's an election coming around the corner in the US every couple of years.

Declan 37:02

That's right.

Faramarz 37:03

And so if they don't like it, they can just kind of wait it out and things will change and get better. And yeah, locally.

Declan 37:12

Locally, there is one thing that uh, you know, at least we can kind of point to when our clients ask us if, you know, is is there a crash coming? Which, you know, there is there is almost this uh there's almost this desire for a crash. Uh, some people I speak to, they're just like looking for the but there's they've always been like there's always been people like that. But then we can really, really locally here, and I I can't speak outside of the market I work, but locally we're seeing such uh a drought in terms of inventory that uh that it seems like a lot of home sellers, you know, they have the equity, they have the lifestyle, they have, they can wait it out as well. They're just not the the number of properties on market this year versus last year, even, and last year wasn't a great year, is just really, really woefully short of where it needs to be. And so that's the kind of thing we can point to at least and say, you know, there's not a crash coming. There's just there's just fewer and fewer people willing to engage the market because they don't need to. They have all the equity in the world they want, they pay down all the things.

Faramarz 38:11

You just have to look at history. All of this has been seen before. Vietnam was way worse than this from a chaos. And I mean, we had people in the streets burning things down, you know.

Declan 38:23

Oh, yeah, thousands of bombings, you know, domestic.

Faramarz 38:26

I mean, there was there was that domestic disturbance that that was a hundred times worse than what we have right now.

Declan 38:32

Yeah. People are not as organized as they were.

Faramarz 38:34

We had interest rates in the teens in the early 80s. Yes. We had all kinds of things have happened, and real estate is almost undefeated in year-over-year appreciation. Right. There have been eight years since the end of World War II, that's 80 years, that have seen any kind of negative decline. And four of those years was less than uh, I think I want to say it's like less than two or three percent, and they were scattered. The other four years were worse, but they were all the financial crisis. Right. And that was a very unique animal, the financial crisis. Right. Where um, you know, we've talked about it before, but like, you know, the lending standards and the guidelines and the corruption and and so the new rules that we're operating under, the and the new the new ways that we underwrite files and how much people have to put down. Right, none of that exists. You can't you can't be, you know, selling shoes at Nordstrom and buy your 18th investment property at the same time, right?

Declan 39:36

So yeah, yeah, that's true. But so so on that note though, you know, last time we talked uh about when I chatted with you last year, we talked about you know the CFPB. Yeah, and you know, we were like that's just basically gone, right? Yeah, and and then you were worried about I think you said skeezy loans, skeezy loans coming back, and so you know, so they're so what is the potential for you know those kinds of underpinnings, coming back, skeezy loans, bad idea loans?

Fed Watch Jobs Data And CPI

Faramarz 40:05

You know what's interesting is that it looks like because you talk you go to these industry conferences and stuff like Mortgage Bankers Association and all that, you start talking to people. Yeah, it looks like the lessons were actually learned, and nobody wants to lose money and go bankrupt anymore, right? So the the market is saying, like, yeah, okay, we could theoretically release a stated income product or whatever.

Declan 40:29

They're there, right?

Faramarz 40:30

But you saw what happened, right? So investors are I think they actually were on a roller coaster ride that they didn't understand in 2006 and 2007. Interesting. I don't think it was a scheme.

Declan 40:46

Okay.

Faramarz 40:46

I think they actually believed they drank the Kool-Aid.

Declan 40:50

Okay.

Faramarz 40:51

Values are going up, and this is a huge boom. And we look at these great new products. Everybody owns homes, right?

Declan 40:56

Right. Um So once so you're saying once those products got road tested, led to a global recession, even though the possibility for them to re-emerge, the appetite's not there in the professional community. That's right. Okay.

Faramarz 41:09

I'm not seeing investors in a rush to loosen up underwriting guidelines with or without the CFPB.

Declan 41:16

Huh. You're keeping my glass half full.

Faramarz 41:18

There you go. Yeah. I like the market is this is an Adam Smith situation. The market has corrected itself.

Declan 41:26

Right, right. Okay. This is great. So so you this is the thing about the current administration that kind of fascinates me, is like, you know, there's always going to be a push, it seems to me, towards corruption and just uh milking everybody for every nickel and dime they're worth. But at the same time, you're telling me that the professional uh the professionals are not inclined to go any any direction like that. No?

Faramarz 41:54

Well, let's just say they found a different way to do it.

Declan 41:56

Okay.

Faramarz 41:58

The corruption is there. Uh we live in a corrupt world. Yeah. It's just that they're not, they don't want to lose money.

Declan 42:05

Right, okay.

Faramarz 42:06

That they took a beating. Right.

Declan 42:08

They're not doing it, they're not doing, I get it. They're not doing it for moral reasons.

Faramarz 42:11

No, it's not a moral thing. No, no. Institutions that we thought would be here forever disappeared. Lehman Brothers. Yeah. Washington Mutual, a very good bank. Yeah. No longer exists, right? There's all these, there's all the world savings. So there's um there's lessons that were learned there. I mean, you kind of saw the same thing with uh what happened with First Republic. Okay. Is a great bank. Yeah. Super just great. Yeah. Um, amazing service. Uh everybody who banked there loved them. You don't see allegiance like that ever.

Declan 42:44

Yeah.

Faramarz 42:44

And in their effort to really retain these high net worth clients, they offered um loans at below market interest rates. Yeah. And didn't do the right moves in terms of hedging and getting out of that and all that stuff. So their their goodwill towards their clients was led them to going out of business. Right? So the eagle loans. That wasn't a corrupt thing. Yeah. It's just that when when a cash call came, right, they their their bond portfolio was worthless. Wow. Because it was below market. So um I got it. Yeah, I mean, I so I think in the financial services industry, the conservatism is still there from a let's not go crazy standpoint.

Declan 43:31

I'll take that. So walk me through, if you would, because I think this would be interesting. Um, walk me through the the you know the good feeling, let's say, I don't know, six weeks ago or thereabouts, when rates went below six percent, and the sense that we all had that this was going to be a recovery year and this was gonna be a because we've had a few difficult years in real estate, you know, coming out of the pandemic market and all of that kind of thing. And we had This point in time, right before the war of choice in Iran, and 5.9 and the re five, you know, your phone was ringing again and everything was going well. And then this happens geopolitical unrest in the Middle East again. Walk me through, you know, what happened for you in those few weeks. Well, how did it feel?

Faramarz 44:21

On a very personal level, it was extremely complicated.

Declan 44:26

Yeah.

Faramarz 44:27

Because um, I'm Iranian and I have family in Iran. From a personal standpoint, even that was complicated because most you saw it in the riots and stuff, most Iranians do not like this regime.

Declan 44:46

Okay.

Faramarz 44:46

That has mismanaged this country for the last 45 years.

Declan 44:51

Yeah.

Faramarz 44:52

And um whether for whatever reason, whether you don't agree with the theology or whether you don't agree with the lack of human rights, lack of freedom of the press, the way that they've done economy, all that stuff.

Declan 45:07

Okay.

Faramarz 45:08

So on one hand, you're like, ooh, cool, regime change. But then it turns out immediately that they can't pull it off, and it's not even the goal. Like, forget it. Um and it's not coming from within. Right. It was never gonna be easy. Right. And it was never gonna be peaceful. Right. Autocrats and monarchs do not surrender peace just walking away, generally speaking.

Declan 45:31

Right.

Faramarz 45:32

So there's a lot of uncertainty, and then there's a concern for my family that's over there, right, who we had no communication with for a couple of weeks until we found out that I'm sorry. You know, yeah, thank you. Yeah, but they're okay right now. Um and we figured out contingency plans and all that, but it's still in flux. Yeah. So all of that is still in flux as far as um you know what's happening. Um as the as all of this is happening, uh, on February 27th, I boarded a plane for a two-week for a like a 10-day vacation in the dolomites of Italy skiing with my wife.

Declan 46:14

Wow.

Faramarz 46:15

And we land, my my dad texts me and says, You're never allowed to go to Europe again with your wife. And I said, Wow, what's going on? I look, and then out of nowhere, missiles are flying. And the reason he was saying it was kind of a little inside joke because uh we got married in late August 2001 and went honeymoon in Cannes for a month and 9-11 happened.

Declan 46:34

Oh man, uh okay, yeah. Yeah, I'm with your dad on this one.

Faramarz 46:38

Yeah, so I'm I'm I'm not my track record of that is not great.

Declan 46:42

You're gonna be a feature in the prediction markets, yeah. That's right. That's right.

Faramarz 46:46

FM has planned another European vacation. Everybody sell. So so all of a sudden we're there and um and are trying to process everything and get in touch with our family and all this other stuff. And and at the same time, what was this kind of you know, this final last check with my team on oh good, we've got all these refines teed up and everyone's going into contract and everything's set, turns into a bunch of calls about what's gonna happen now.

Declan 47:15

Right.

Faramarz 47:15

Right? Because it wasn't instantly obvious what was gonna happen, but it kind of unfolded after the first week to ten days that this Strait of Hormuz shut down, oil prices going up, inflation rates shoot up, what's the Fed gonna do? Stock market crashing and bond yields rising is a bad combination. Yeah, usually it's a you it's a seesaw between the two of them. When you have that combo, you know something extremely bad is happening to the markets. Everybody's running to cash, they're selling everything, right? Right, right. So that's what happened to my business is that I'm trying to do triage on this thing and talk people through it. And it's it what can you say? It's like we have to wait and see now. Yeah, we have to wait and see. The purchase market has been very strong. People have essentially, yes, it comes up in conversation, but they've essentially ignored it. Our applications per week are staying exactly where they were in February coming through March. Yeah.

Declan 48:15

Okay.

Faramarz 48:15

It's not like people have jumped off the sidelines and decided not to buy a house. I think everybody, because you said it, Declan, war of choice. Yeah. We're not embroiled in some existential civ civilization versus civilization battle. Right. Like a World War II type situation. It's it feels like this thing that can be turned off whenever somebody decides to turn it off, which sucks. That we're even in it.

Declan 48:41

Right.

Faramarz 48:42

So it's like and there's no good options for us on the US side.

Declan 48:48

Right.

Faramarz 48:50

I'm sure the Iranians don't want to continue to be bombed.

Declan 48:53

Right.

Faramarz 48:54

Um they've shown that they can wait it out. Yeah. So I don't I don't know. They keep talking, you know, as we record this, they keep talking about, you know, getting together and pieces around the corner.

Declan 49:07

I just don't that's impossible.

Faramarz 49:08

I just don't know what it looks like.

Declan 49:10

Yeah, no, it's impossible to know. And this guy is so unpredictable.

Faramarz 49:13

Yeah, I just don't know what it looks like that we don't come out of this looking stupid forever going down this.

Declan 49:18

Well, Iran's doing okay, they've been demolished in many ways, but uh at the same time they've come out stronger, you know, you know, than they were the day before the bombing.

Faramarz 49:31

From a geopolitical standpoint, you took this thing that was dying on its own. Yes. And you gave it life.

Declan 49:39

Yes. It's really remarkable.

Faramarz 49:41

They're on the phone now with France and Great Britain and elevated, and and they're not putting out there some crazy guy in a turban screaming death to America. They're putting out guys in business suits talking rationally about coming to an agreement to have a toll booth at the Strait of Hormuz and have uh reparations and reconstruction. It's like what? Yeah, it's on the thing. And they're not they're they're not their uh oil is being now sold freely, except for the blockade, but they're off the sanctions list and Yes. Russia too. Russia too, yeah.

Declan 50:15

I mean, it's really hard when when administration policy is could be done by, you know, honestly, one of my kids and be more skillful. The situation, though, locally in our real estate market is such that our inventory is so low right now that you know that it it's just the values just continue to go up because and that's gonna continue.

Faramarz 50:39

I saw a stat 80% of the homeowners, somewhere around 80% of the homeowners in the country have an interest rate of 5% or below.

Declan 50:50

Yeah.

Faramarz 50:50

That unlock was coming. You know, yeah. When we got to 599, 5.875 and starting to drift down, all of a sudden somebody selling their house with a four, you know, three and a half, four percent interest rate, yeah, rolling to five and a half is a lot more attractive than going to seven, right? Which is where we were back in September. Right. Yeah. I mean, rates are still great. Yeah, I'm a scared of I'm a little scared of where they're gonna go, right, as this as the impact of the oil percolates through the system. So but right now I think there's a window for buyers to actually lock into something that could possibly look like a pretty good deal at the end of summer. Right. I think long-term unemployment is a big deal, and the Fed's gonna have to walk this highwire act, and the new Fed share coming in, he's not, you know, the Fed share can't decide on their own what to do with interest rates, but influence-wise, they're probably gonna want to lower rates. So a year from today, year and a half, we could be seeing lower rates. But what I've been doing, if you look at the timeline of these 80% of these folks that are below 5%, they generally got refinanced or purchased in COVID. Yeah. Five years ago now. Yeah. What I'm seeing, this is purely anecdotal evidence. I haven't seen any stats on this, but what I'm hearing from my clients from five years ago is life events are forcing their move regardless of interest rate. There you go. Because more children have been added. Right. The kids that were two or three are now seven and eight. School's a big deal. Yeah. Um, a third has now come on, or the kids that were 13, 14 are now off to college, right? And they want to make a move.

Declan 52:34

Right.

Faramarz 52:35

Um, I think five years is just a natural kind of life, you know, line. Yeah. Where yeah, we've been hanging on to this two and a half, three percent, but that's it. Like it's time to make the move.

Declan 52:48

Yeah, things can change in a half a decade.

Faramarz 52:50

Yeah, things can change. And that's what that's what I it's again, purely anecdotal, but right. I noticed this starting about, I don't know, four or five months ago when rates were much higher than they are now.

Declan 53:00

Right.

Faramarz 53:01

Um, you know, like again, long, I guess six months ago, October, November. Yeah. That people were coming in and we were quoting 6.757%, and they didn't care. It's like we're doing it.

Declan 53:14

Right.

Faramarz 53:14

You know, so I think I think some of that will continue. I think as every year goes on, yeah, the pressures increase from those reasons why people move to get houses back on the market.

Declan 53:27

Okay. Your um your take on Do you think the integrity of the Bureau of Labor Statistics is is Do you think it's do you think it's holding up or it's so hard to say with this administration to trust anything.

Faramarz 53:41

Right. When the guy at the top just lies and makes stuff up and demands that everybody else who works for him does it, and fires the Bureau of Labor Statistics chief and puts their own person in, the the system through which the labor statistics come is so complicated and is so distributed that it would be very difficult to game the numbers. Uh-huh. Okay. This is why we have revisions.

Declan 54:12

Yeah.

Faramarz 54:13

Because you have offices all around the country that feed up into other offices.

Declan 54:19

Uh-huh.

Faramarz 54:20

Some man some are tracking certain industries, some are tracking companies, some are tracking, you know, some are tracking whatever, and they're all feeding into this system that feeds into another system.

Declan 54:30

Uh-huh.

Faramarz 54:31

And these numbers could get passed through, and some of it is just data that they don't have when the deadline is, because the data is not available. So they get they literally get it. It's not that they're not saying we made a mistake.

Declan 54:45

Right.

Faramarz 54:45

They're saying that three weeks later, three weeks into April, some March data came in. Yeah. And so here's my here's what I have for April, and here's my revisions for March. And actually, I got some new stuff for February, too. Here's my new stuff for February. Right. It's not that they're going back and saying, oops, I I screwed up the math. They're just the the data wasn't there, right? So for somebody at the top to say, hey, we're doing a great job as an administration because unemployment rate is down to two and a half percent when it's really 4.3. Yeah. It's almost impossible. Okay. There's just too many checks in the system.

Declan 55:21

Okay. Okay. Well, that's that's a good thing.

Faramarz 55:24

It's a good thing.

Declan 55:24

That's a good thing.

Faramarz 55:25

So this administration lacks the intelligence and the patience to fake something so complicated.

Declan 55:32

Yeah, you're you're you're right there for sure, 100%. So what are the um what are the big things looking at the the calendar and the way that you look at the calendar and announcements and stuff coming up? What are you looking uh toward as far as you know data over the next uh and announcements over the next month?

Faramarz 55:49

Well the big one on our calendar right now is the Fed you know replacement, July. Right. Powell out, Walsh in, and what that means. Right. You know, so I think the August meeting, September meeting, um, the quarterly meetings that the Fed has are really the biggest meetings on the calendar. Right. Because that's when they reset their dot plot with the predictions of where they think rates will go and all that. Yes. So I think the next big Fed meeting that's a biggie is probably the September meeting for two reasons. First one under the new watch, new dot plot under the new watch, uh-huh. And probably enough market data to get a decent read on inflation trends given the spike in oil prices that we're experiencing right now. Right. So, and that's a little long term out there. Um, you know, in the interim, you've got, I mean, the big one for us every month is jobless claims and CPI.

Declan 56:50

Okay.

Faramarz 56:50

You know, it's the dual mandate, jobs and inflation. Right. First Friday of every month, 5 30 in the morning, right? Here comes the jobs, and then the week after that usually is CPI. Yeah. Uh consumer price index. And so those those are those are ones we'll be watching closely. The CPI numbers you kind of have to take with a grain of salt because you know there's a big thing coming. It's like standing on a beach in Miami and you look up and the sun's out and the weather's great, but everyone's telling you there's a category five hurricane coming in three days or whatever. Like so inflation's coming. Yes. Um we just don't know how big or how when uh you know when exactly and all that.

Declan 57:31

Right. If we did, we wouldn't be doing this job. That's right. Yeah.

Faramarz 57:34

These questions come up in our pre-approval meetings with clients, and we have all kinds of data that we go over.

Declan 57:40

Yeah.

Faramarz 57:40

That real estate is still the number one wealth builder in the country.

Declan 57:44

Okay, good.

AI Speed Job Loss And Real Estate Trust

Faramarz 57:44

That over the course of the last 80 years, it's almost undefeated. Right. It's basically undefeated if you take out the financial crisis. Right. Um, people get worried about AI jobs, what's gonna happen?

Declan 57:57

Yeah, let's talk about AI. Let's let's move into AI. Um, because I want to like uh spend a little bit of time on AI because it's it's the other thing that's coming. It's here. But can we just just I just want to keep on something at the uh sort of uh level of economics where you're more comfortable first? Is um I'm seeing the word stagflation more and more and more and more. So just very simply, just give us what is stagflation, what are your concerns? What is the possibility of it coming back in? And why is it such a bad word?

Faramarz 58:26

Okay, so normally when your economy is booming, like we talked about earlier, and everybody's employed, because everybody's employed, there's demand for employment, so your wages are going up. Okay, everybody's making more money, uh-huh, they're buying more stuff, they're paying more for the stuff, and now inflation starts to kick in. Okay. And we want to slow it down a little bit. We don't want to go into like a recession or something, but that's when the Fed raises rates to slow it down.

Declan 58:53

Okay.

Faramarz 58:54

That's the normal inflation. What we're what we're looking at as a possible of stagflation is unemployment is rising, people are making less money because there's no demand for labor, and prices are going up from some other event.

Declan 59:10

Right.

Faramarz 59:11

Like oil and things like that. So now, as opposed to everybody's making more and spending more, everybody's making less and prices are going up. So the economy is stagnant and you and you have inflation. Right. That's brutal. Right. Because that squeezes everybody at the bottom really hard. It's the worst economic condition. Oh, and that's the fear is that we are we are dealing with um an economy that's not adding jobs for a lot of reasons. Immigration policy is one. Yes. Um, AI is another. And slowdown is another. Right. Right. So you have all of these things combining to all of a sudden reduce demand on labor, which reduces you know, wages aren't keeping up with inflation all of a sudden. So even people who have jobs can buy less and they feel the squeeze. Right. It's the worst.

Declan 1:00:08

So stagflation is a real possibility, too. Yes. Yeah. Okay.

Faramarz 1:00:12

We're not there yet, though. We are not quite there yet because the inflation hasn't fully kicked in yet.

Declan 1:00:17

But right, but this is the concern.

Faramarz 1:00:19

This is the concern. That's what we had in the late 70s, early 80s.

Declan 1:00:24

Okay. Yeah, gosh. Fondly remembered by nobody. Yeah. And so let's talk about AI, because AI is on the one hand fun and exciting, and on the other hand, might be the end of humanity.

Faramarz 1:00:36

Yes.

Declan 1:00:36

Right?

Faramarz 1:00:36

So like somewhere in between.

Declan 1:00:38

It's somewhere, yeah, yeah. So there's the accelerationists, and then there's the then there's the the people who just think it's like we're just we have it, what do they call it? The last invention. This is the last invention. And so um so I want to talk about concerns you might have over AI and employment, because you know, here in the Bay Area, uh, that's we're more sensitive to that, maybe. I don't know. Uh we have we have I'm hearing stories from our San Francisco realtor colleagues that you know, and reading the news and the data, things are nuts there, but like, you know, on the higher end, but even the condo market has started to recover there.

Faramarz 1:01:17

San Francisco's booming. San Francisco's booming. San Francisco's back, baby. Yeah. And that helps us in the East Bay. It helps us in the East Bay. We get a ripple from them every time.

Declan 1:01:24

But but is it booming for everyone in San Francisco? Like what what are we talking about?

Faramarz 1:01:29

Well, it's never booming for everyone, but there is a trickle-down effect.

Declan 1:01:32

Okay.

Faramarz 1:01:33

Because we're very lucky here. We happen to be living, once again, in the part of the country where jillions of dollars of investment are being pumped into.

Declan 1:01:45

Right.

Faramarz 1:01:45

Everybody from NVIDIA to whatever, you name it. It's your who's who of everybody in AI. Right. AI is getting investment dollars, and that money goes into these companies who then, you know, yes, AI is replacing a lot of jobs, but these these other jobs are opening up and they're very lucrative because not many people can do them, and so those people are spending money and going out and whatever, buying houses and food and cars and all that stuff. So locally, so far, so good. Right. The big shift is in software sales. Now, the smart the smart companies here who are in software development, yeah, doing things like SaaS and ads and all that kind of stuff, have gone into AI. Yeah. They're leaning into it. And it's true that so we're not at the automated bot stage, so it's true that yes, they can do a lot of, you know, you can get a lot more efficient. One person can do six people's job. Right. But the interesting thing is that we're shifting from a task-based need to an imagination and artistic need. Uh-huh. Right. Because now whatever you imagine that was cost prohibitive possibly before, yeah, can now be executed. Right. And the gap between what you imagined and having it executed is much smaller and cheaper.

Declan 1:03:12

Yeah, that's true.

Faramarz 1:03:13

So, what a company really needs is as many artistic, imaginative people to come up with the possibilities that then AI can execute on at this stage right now.

Declan 1:03:22

Right, right.

Faramarz 1:03:22

So that's 100% what it lacks. It's an interesting shift. Instead of like key key programmers and punchers and coders, it's a different, you know, it's a different class of people that you're looking for.

Declan 1:03:33

Yeah, we can vibe code our way to the Wonka Volume.

Faramarz 1:03:35

Vibcode our way to the yeah, exactly. We'll loop around the moon. So that all that's kind of interesting. But the fact is that nationally, it's true. Um, I mean, I mean, I even talked to law firms. My clients, you know, they're a partner at a law firm. They said they're not hiring associates at all. AI does all the research, Lexus Nexus for them, and all that stuff. Right. The associates they have now are plenty. Yeah. Um, they might even be cutting. Um, and I think that story is probably playing out across of a lot of other industries. Right. I know it is in mortgage for sure.

Declan 1:04:05

Yeah. Um yes, yeah, yeah. Gen Z is at the you know, is at the front of this. Yeah, but not even Gen Z. What are they? Jan Gen Alpha? Isn't that the younger ones behind them? I've I stopped counting. Yeah, right. I know what you mean. But anyway, kids coming out of well, actually, I think kids who came out of high school maybe a couple of years ago are the ones who are most impacted by this because the decisions they made out of high school, maybe during the pandemic, actually.

Faramarz 1:04:32

Yeah.

Declan 1:04:34

Every generation gets kicked somehow, right? Yes. So they had the pandemic. Hey, no problem for you because we're all in lockdown. Right. And who a couple of years later, oh, and by the way, no jobs either.

Faramarz 1:04:44

Yeah.

Declan 1:04:44

At, you know, at entry-level positions.

Faramarz 1:04:46

And that was a quick shift. It went from you can't you can't have enough programmers, go get go get your computer science degree, and there's a job waiting for you, to it is now the the worst thing to have.

Declan 1:04:59

Right. It's yeah, it's become just a real problem and welcome to death for years. Yeah. Yeah. So so unemployment is so AI is it's both fantastic and and full of promise, and at the same time, it it's just gonna have effects.

Faramarz 1:05:20

You look at this um latest release from Anthropic.

Declan 1:05:24

Yeah, right. And the one that they're well, not even the they couldn't they couldn't even let it out of the cage. They're having 40 other companies test it so that they project glass one. Yeah, yeah.

Faramarz 1:05:35

So that was a great testing, great example of you know, back to the glass half full of testing and benevolence and all that stuff. They could have just released it.

Declan 1:05:44

Right.

Faramarz 1:05:45

And the world would have imploded, literally. I mean, it what they what they found were cracks in um were breach possibilities. Right. Everything from your bank account to your phone was all of a sudden on. The table for bad actors. Right. When the thing starts improving on itself, the time to what I was using last September was great. When Claude released their new version in mid-February, it was leaps and bounds beyond anything I could have ever imagined would be possible in September. Right. Um, the things that we've been able to do in our business with the AI tools that are available to us right now. Right. I couldn't even like I said, uh a year ago I wouldn't have even thought possible.

Declan 1:06:37

Okay.

Faramarz 1:06:38

It would have been on that five years away horizon type of thing.

Declan 1:06:41

Right, okay. So that's very exciting, right?

Faramarz 1:06:43

It's very exciting, but then what tells us is that the pace of change is accelerating. Yeah. Whenever this gets released, whatever it is that does.

Declan 1:06:50

And it's coming.

Faramarz 1:06:51

It's coming. And they've released the data on it, not the actual release of the software, but they've they've on the Project Last Wing site, there's a there's a statistical breakdown of how it's better. And you can really see that with that level of power, um, the next release, which is probably three months away, and then another one is one month away or whatever, and then you know, open AI is doing their thing, and so is Gemini and everybody.

Declan 1:07:20

Right.

Faramarz 1:07:21

There's this AI arms race going on, so they're very motivated to continue to improve using AI to improve AI. That it's hard to like like I said, if you would have asked me that in September, where do you think we'll be in April? I wouldn't have thought up the things that I have to at my fingertips right now.

Declan 1:07:38

Yeah.

Faramarz 1:07:39

So where am I gonna be a year from now? I don't know.

Declan 1:07:41

Yeah, because I I think a year ago we barely touched on AI. Yeah. And here we are, and the speed, as you said, is just it's shocking. Yeah, shockingly fast. I found the same thing as well.

Faramarz 1:07:53

I think your industry's safe. I don't know about mine.

Declan 1:07:56

I it's it's people getting into the businesses. Often it's entry-level stuff is really the thing. And then you're gonna have this gap between, you know, between the the the pros, the people who are seasoned, yeah, and you know, sort of came into a business at the ground level and earned their way up. You're just gonna have this gap where they're just those people won't exist, and you go from zero to seasoned, and there's nothing in between, and that's a weird thing.

Faramarz 1:08:24

That is a weird thing. Yeah, in in in real estate, you can have an AI engine that is analyzing the contract and generating it, that is reviewing a home inspection, that is doing all of the paperwork and giving you all kinds of advice and do whatever. Yeah, at the end of the day, this is where you're gonna live. Yeah, you're gonna walk in that door every day. Right. And it's something you touch.

Declan 1:08:49

Right.

Faramarz 1:08:49

I don't I never show up with a bag of money at closing. Mine's all electronic, you know? Yes, yeah. So but but there's a there's an experience that I have that is hard to replace too. I get that, but that that's gonna be easier to erode. The fact that you have to touch and feel a house, and you I want a Declan Spring walking in with me who says, ooh, look at that. I know what that crack means. Right. It's a foundation issue, or I know that's I don't ever see, I don't I don't know. And maybe I'm completely insane.

Declan 1:09:22

Maybe a year from now we'll have a robot realtor with an AI brain walking you through the I don't know, but well, this this this the thing about the speed and the rate of change is just you you you can say now, oh it can't do this or it can't do that, but like we just like six months from now, will it have caught up? I mean, yeah. There is something about AI that uh that misses the mark in certain in certain things. Like it it doesn't operate from a feeling basis, right? It doesn't feel and and so that's what makes us, I think, uniquely human, and it's important in my work because we're dealing with emotion and feelings, right? So the the thought process that an awful lot of people have around their money and around sort of living and purchasing of real estate in the residential realm at least, it's very feeling and emotional based. And that kind of confuses the the robot because the robot's data driven.

Faramarz 1:10:15

There's feelings of excitement and hesitation and things like that, but the core feeling is trust, is that the reason you win is that they trust you more than the output that they're getting from AI. So when that shifts, that's what you're talking about. That's when it becomes difficult for the inexperienced real estate agent. When your client is getting better AI output than what you can offer, it erodes the trust in you. And that's where the problems lie. I get it all day.

Declan 1:10:47

Yeah.

Faramarz 1:10:48

I get emails from clients, yeah. I laugh because they're AI generated. Right. It's like, I'm I'm searching for a lender. Can you please answer the following six questions regarding the advantage of services that you provide versus other mortgage companies? Yes. And I just look at it, I'm like, You didn't write this. You didn't write this. Yeah. And that's okay. I would probably do the same thing as a consumer. It's not bad.

Declan 1:11:14

No, because you want to feel like you did the right thing, ask the question.

Faramarz 1:11:18

I go back and I say, these six questions are great. I made a PDF. It's called the 11 Questions You Should Ask Any Lender When You're Interviewing Them. Yeah. Use this. Yeah. And here's my 11 answers to these. This is what really matters. Right. Who orders your appraisals? How fast can you close? What's your offer process? Do you fully underwrite my pre-approval? The questions I get are: Are you a broker or a correspondent lender or non-delegated? Are you are you approved with Fannie Mae and Freddie Mack? Are you da da da da all this stuff? And can I have a loan estimate? Right. And I'm like, Well, I don't know you. We don't even we haven't talked about anything. I don't know what kind of loan estimate I would give you. And what are your interests? So it's very AI generated. And I say, look, what you're doing is good. I'll do you one better. Here's my PDF 11 questions to ask any lender when you're interviewing them as a buyer.

The Branding Gap And Ideal Clients

Declan 1:12:12

Yeah, yeah. So that's better, it's a better idea. And uh, but I I'm seeing, and I'm sure I in fact I know Are you over time? No, we're good. Every well, I will wrap it up, but uh every realtor I know is getting, you know, has an increased number of emails, you know, with with similarly written AI sort of, you know, these are the high-level questions you should be asking. And uh but you know, and we're being we're being reminded and taught by our brokerages nowadays to how to stand out in AI because you're not gonna be Google search, you're gonna be AI searched, right? And all of that. And I just said somebody reach out to me yesterday from I think Colorado, uh, a realtor looking for a realtor here, because the AI said I was a good match. ChatGPT said it would you be good. Yeah, said I was a good match.

Faramarz 1:12:57

So that is what we're talking about next Wednesday, is you're developing your personal brand. Yeah. Here's the core thing. I just want to say one thing about that. When your branding is in alignment with who you are, yeah, okay, if you love camping and the grateful dead, but your branding on your real estate website is that glossy, smiley picture of you in a suit.

Declan 1:13:23

Right.

Faramarz 1:13:24

And it talks about how you graduated from Yale and that you're a hard-nosed negotiator and all that. When you have a disconnect, we call that the branding gap.

Declan 1:13:32

Okay. Okay.

Faramarz 1:13:34

Closing the branding gap and being able to show people who you really are at your core. Your Colorado example is perfect.

Declan 1:13:43

Yeah.

Faramarz 1:13:43

Imagine if everything that you're describing about your services online was what you think people want to hear, but not really you.

Declan 1:13:50

Right.

Faramarz 1:13:50

Great. Here comes this client wanting those things because AI told them that Declan's perfect. Ends up being completely disappointed and you never connect with them. Right. When your branding is in alignment, you attract your ideal customer who loves you and your services so much that they can't help but tell 10 friends about their experience with you. Right. And your business just starts to roll and grow on steroids. Right. Okay.

Declan 1:14:19

Oh, yeah.

Faramarz 1:14:20

So what we're talking about is identifying that. How do we do it? How do we close the gap? And how do we work with our ideal client?

Declan 1:14:28

Okay.

Faramarz 1:14:28

Right? Yeah. And it's a really big thing. We started doing this about two months ago.

Declan 1:14:34

Uh huh.

Faramarz 1:14:34

I worked with a dozen agents on this.

Declan 1:14:36

Yeah.

Faramarz 1:14:37

One of them completely rewrote his bio.

Declan 1:14:40

Yes.

Faramarz 1:14:41

And um, with the output that we created for him.

Declan 1:14:44

Okay.

Faramarz 1:14:45

And so it's it's a great exercise to go through. And the truth is that you know the answers are all out there, be both within you and in your customers and all that stuff.

Declan 1:14:58

Right.

Faramarz 1:14:59

And m making that reflect who you are, once you once you find that, it changes the way you do everything. Your Instagram, it changes your voice.

Declan 1:15:11

Yeah.

Faramarz 1:15:12

It changes your presence online, it changes the way you engage with people. You all of a sudden have your antenna up for your ideal client once you've identified them.

Declan 1:15:21

Yeah.

Faramarz 1:15:22

And the ideal client could be um could be personality driven.

Declan 1:15:29

Yeah.

Faramarz 1:15:29

It could be, you know, uh situational. Yeah. Like I work best with people who are going through divorce, let's say, because I've been through it my this is not me, but I've been through it myself and I know what that feels like, and that's where I shine.

Declan 1:15:44

Right.

Faramarz 1:15:45

And that's where I sell the house and I find two people new houses or whatever, right? Right. Or I work with people whose kids have just gone to college and want to downsize because of whatever. Right. It could be that, it could be um a group of people. I know you, you know, we gotta be real careful with classes and genders and this and that, but it's true. It's like you just get in where you fit in. Right. Because when you're with these people, you are happy.

Declan 1:16:12

Yeah, yeah. I love this, the the branding gap. I really like it. And so this is see, this is the beautiful thing about AI. On the one hand, yeah, it can really stimulate your thinking and really get you closer to your own self-reflection. That's right.

Faramarz 1:16:30

Right.

Declan 1:16:30

Right? So there's an irony there, but it can allow for you to do that and maybe even have a better life and a more cohesive branding and feel better.

Faramarz 1:16:39

Feel better about what you're doing. You don't get because when you're out of sequence, when you have a big gap and you're working with everyone, I want who do you want to work with, Dek Lennon? Everybody. Yeah. You want to buy a house? Call me. Right. Some of those people will drain you.

Declan 1:16:52

Yeah.

Faramarz 1:16:53

Because they're not your people. Yeah. They they will make someone else feel great, but this jigsaw puzzle piece isn't right. Yeah. Yeah. And they will drain you. And and there's plenty. The beauty about real estate is that I looked up the numbers. If you're doing two deals a month, you're one of the top agents in the area. Right. Right. You don't need to work with everyone. You need to find the two people a month. A month. That don't drain you. That don't drain you.

Declan 1:17:23

And actually maybe excite you and you feel comfortable with you.

Faramarz 1:17:25

And then and then you're happy, they're happy, you're attracting more of them, and the business folds in on itself.

Declan 1:17:30

I love it. I love it. So so I do thank you for your time. I I know it's like the middle of the day here, and you've got a lot to do.

Faramarz 1:17:36

It's all good. I love this. It flies by.

Declan 1:17:39

It does. So I do want I think I want to wrap it up on that because uh there couldn't be a more compelling argument in favor of people attending your class to understand.

Faramarz 1:17:52

If you're listening to this podcast and it's after the date, still reach out because we can do set up a one-to-one. Sorry to interrupt you.

Declan 1:17:59

I mean, I just think this this is the bit, the branding gap, because it's an exciting moment. Am I missing anything in our conversation that you would regret later? I know you have AI systems that you're you know bringing to bear in your in your workplace environment. I I don't want you to uh you know reveal any.

Using AI For Service Plus Closing

Faramarz 1:18:18

No, there's no there's no secrets or anything. We're we're using it because I've always been very tech. I was I was in technology before I got into mortgage, so I've always been very tech forward. We're we're using it aggressively on our team to improve our customer service to our clients.

Declan 1:18:35

Okay.

Faramarz 1:18:36

We're using it basically to take care of all the busy work, yeah, try to remove human error, yes, to open up more time to have conversations on the phone, face to face with we want we want to leverage AI to create more of a human contact experience. Right. That's the overarching goal on my team. Right. Not put AI in answering our phone and put AI in here and put AI in there and you know, have have people just come to some FMZ chat bot and get their answers and all that stuff. We want to have a backstop where yes, all of that will be available.

Declan 1:19:09

Yeah.

Faramarz 1:19:10

If you're a real estate agent and you're wondering a guideline question and you can't get a hold of me and it's 11 o'clock at night, and you have a listing coming, and do I need a handrail on this stairway? You can come to my website and go into Ask FMZ and type it in, and it's got all the guidelines, and I'll give you an answer. Great.

Declan 1:19:24

Right.

Faramarz 1:19:25

But we really want to have that human connection because everything is there's nuance, there's all that, there's the emotion and all that stuff. It's just it's just not there yet.

Declan 1:19:33

Okay. Thank you so much for your time. I I look forward to you know, maybe another year from now. Or well, you're one of my favorite people to speak to when whenever there's anything dramatic going on, you know, with the administration, which is constant, yes, um, and all of that. And I really I appreciate your uh ability and fearlessness to just have those conversations anyway. I genuinely admire that in you, and I and I really enjoy our conversation. So I I love it, Declan.

Faramarz 1:20:00

And that's yeah, like a year from now, between AI and the administration, yeah, it's anybody's guest.

Declan 1:20:07

It really is.

Faramarz 1:20:08

Let's leave it at that. All right, so yeah, and if anybody has any questions, uh website fmzeloans.com or shoot me an email, fmzteam at fmzeloans.com. Loans with an S.

Declan 1:20:22

All right. Thank you. This episode was edited by me with original music by Chuck Lindo and graphics by Lisa Mazer. The podcast is brought to you by the Home Factor Realtors, thehomefactor.com. Catch up on the latest news from the East Bay market in their weekly substack published every Sunday. Go to thehomefactor.com to subscribe. If you'd like to reach out to me with suggestions for the show, which I would really love, that kind of thing, please text me at 415446-8591. It's that simple. Catch you on the next podcast, everybody.