San Antonio Housing: Rates, Reality, And The Builder Trap

Everyone’s sharing hot takes on the 50-year mortgage, but most people miss the real question: does it help you buy smarter, or just slower? We sit down with San Antonio experts Robert Elder and Stephanie Paxton to unpack affordability beyond the headline rate, run the equity math on 30-year vs 50-year scenarios, and reveal why taxes, insurance, and maintenance now drive the monthly payment more than anything else.

We get brutally honest about new construction. Builder buy-downs and flashy incentives can be seductive, but the true cost is often buried in the price—and appreciation can lag for years in areas with abundant land and endless new phases. We contrast that with landlocked neighborhoods where limited supply supports stronger resale dynamics. We also break down buyer expectations that hold people back: choosing staging over structure, refusing longer commutes that transplants accept, and chasing “move-in ready” at the expense of long-term value. If you’re weighing a first home, a move-up purchase, or a possible rental conversion, this conversation will sharpen your strategy.

We close with where the deals actually are. Year-end inventory homes can be negotiated hard across all price tiers, while select resale properties offer meaningful price cuts. The playbook: model your total payment with taxes and insurance, stress-test your five- to ten-year plan, and consider the 50-year loan as a tactical bridge with a refinance path—not a forever decision. Local data beats national headlines every time. If you’re ready to run your numbers and build a plan that fits your life, tap follow, share this with a friend who’s shopping, and leave a quick review to tell us what you want covered next.

Chapters

• 0:00 Mindset: Small Steps To Improve
• 0:38 Welcome And Today’s Agenda
• 1:27 Meet The Guests And Their Approach
• 3:20 The Past Year: Tough Deals And Reality Checks
• 7:30 Why Buyers Avoid Lenders And Payment Shock
• 12:22 Who’s Moving To San Antonio And Why
• 14:50 Introducing The 50-Year Mortgage
• 18:30 Pros, Cons, And Refi Pathways
• 23:05 Equity Math: 30-Year vs 50-Year
• 28:10 From 15 To 30 To 50 Years: New Norms
• 31:20 Affordability: Taxes, Insurance, And Maintenance
• 36:10 Compromise: Location, Commute, And Expectations
• 41:15 New Construction Risks And Builder Incentives
• 47:20 Appreciation Dynamics: Landlocked vs Sprawl

Transcript

SPEAKER_00: 0:04

Monday, get better, Tuesday, get better, Tuesday, get better for five years, ten years, fifteen years. How much better you are getting better every single day? That's the question why you is just taking small steps. And then you don't try to get it all done.

SPEAKER_04: 0:38

And welcome back to another episode of Key Factors Podcast Real Estate AF, where the AF stands for and finance. And I'm your host, Mark Jones, and we are powered by Lone Bot, Smarter Mortgage Matching, where you can find this on Apple or Google Play. And today we want to talk about some real questions, some real topics that we've discussed nuances the last couple of discussions, but I brought some experts in the San Antonio market to have this discussion with. And we're going to be talking about the 50-year mortgage. We're going to be talking about affordability in San Antonio and is it really affordable? And lastly, we're going to go over the idea of new construction homeowners starting off underwater. But without further ado, let me introduce my guest for today. I've got Robert Elder. Robert, how are you doing? I'm doing great. Thanks for having us. Absolutely. And then I've got Stephanie Paxton. Stephanie, how are you doing?

SPEAKER_06: 1:37

Great. Yes. Thanks for having us.

SPEAKER_04: 1:39

Absolutely. Guys, you've been on the show before. We've had great discussions, um, intellectual, industrial, far-fetched. Sometimes we bring it back. But the idea is you guys are the experts of our industry, in my opinion, and many others. So if you can, before we get started in our first topic, tell us a little bit about yourselves separately and then kind of together how you do what you do.

SPEAKER_06: 2:03

Well, I've been in real estate for 15 years now, but I'm a data nerd. I love data. I'm a big fan of Resi Club. I love Lance Lambert and what he brings to the table. And so I feel like working with some investors in my past, being an investor, and then also working with home buyers and sellers, like we need to know our market. So that's where I come in.

SPEAKER_02: 2:28

That's where she comes in. No, she's definitely more the data nerd. Me, I'm the one that I go back into, you know, 34 years of being in the business and the experience that I have in my head. But what I've learned from her is definitely diving into the data and the analytics to get a clearer road ahead of, you know, kind of what's going on and seeing trends, perhaps before they become obvious. That's that's where she's great at. And so I've I've I've learned to incorporate that into my day-to-day business as well. Absolutely.

SPEAKER_04: 2:54

And you guys have created a juggernaut of a combo with what you guys do on the real estate side of things, listings, sellings. You guys are working international. You're now doing a little bit of investing and starting your own kind of things. Tell us about the most recent, let's call it last 12 months of business, if you don't mind. The last two guests I asked the same question, and I want to see if it's similar to what they experienced over the last, let's call it 12 months.

SPEAKER_02: 3:23

I'll I'll let her, I'm gonna answer and then I'm gonna give her answer. Can you, if you can imagine like a little cartoon character dragging someone across the finish line, kicking and screaming?

SPEAKER_05: 3:34

Yes.

SPEAKER_02: 3:35

That's what it that's kind of what it feels like right now.

SPEAKER_06: 3:40

Yeah, it's been it's been a year. Most of our sales have been death, divorce, relocation. No want-to moves, golden handcuffs are real. I'm talking to some buyers right now and they want to see houses, they're super excited. I'm like, we need to talk to a lender. You need to see the reality of this, yeah, and if it makes sense, because there's no sense in looking at these houses if, you know, it it's one thing in your head, but it's a lot different when you're looking at it on paper, the reality of the that's exactly right.

SPEAKER_02: 4:12

Yeah, then the numbers are like, oh goodness, you know, they had this pie in the sky illusion, and you see the pretty houses, which there's of course there's beautiful homes out there, but then it's like, like she says, the reality. What is it gonna cost you?

SPEAKER_04: 4:22

Absolutely. And and shameless plug, but true. I was just showing you before we got started the idea that we founded, launched Lone Bot. Now, question for you both why do you think that these buyers are not getting with a lender? It's a good question. Because there is, you're on the money, data research shows that the buyer, the home buyer, the home shopper, they'll look at pretty houses all day long. They'll formulate the idea of what it looks like and and to have it as their own, but then maybe an idea of a payment, not knowing what insurance can do.

SPEAKER_02: 5:00

She's experienced recently on one of her investment homes, you know, what what the insurance number went up to. And even when we were looking personally for ourselves, like, oh my gosh, insurance like three times the number. I I think they go in with the innocence of like, I want to look at pretty homes, but not with the reality of what is the financial impact. Correct.

SPEAKER_06: 5:19

That's and it's it's more local. Yeah, it's our local folks. People moving into our city, they're not afraid to spend the money.

SPEAKER_05: 5:26

Totally agree.

SPEAKER_06: 5:27

It's the people that are in a home right now, they don't know how to trade up or down. It's crazy. They'll sit in a home that's way too big.

SPEAKER_05: 5:34

Yeah.

SPEAKER_06: 5:35

And it's smarter move to downsize, but they won't because of sticker shock.

SPEAKER_04: 5:38

Yeah. So that actually leads me to another question regarding the folks moving into our market from others. What markets are they moving from that you're seeing predominantly? I mean, obviously there's tons, so there's no way you can scale to seeing all of them. But the idea is where are these people coming from that allows them or enables them to go, oh wow, that payment makes perfect sense.

SPEAKER_06: 6:07

East Coast. I'm not seeing much from the West Coast. Okay. Everyone's California. I'm like, no, they're not coming.

SPEAKER_02: 6:13

I think I've had one California this year.

SPEAKER_06: 6:15

Believe it or not, Houston.

SPEAKER_04: 6:17

Yeah. I've seen it. I've seen it. And and what do you think the reason for that? I mean, these folks, more than in my opinion, they're probably cashing out of a property, sitting pretty good, already know the concept of owning a home and what value it brings, and what the disadvantages are. And the advantages outweigh the disadvantages. So that's why they continue to do it. And then the idea of, well, I'm going to get this rate, but I've got X amount of money. Let me go do something with this money and put the minimum down. And that payment is now tolerable as opposed to what I was paying wherever I was, New York. I mean, all different types of places that, yeah, maybe their property taxes aren't as high, but definitely their property values are.

SPEAKER_02: 7:03

Right. Or just the cost of living. Sure. Perhaps coming from whether it's restaurants, gas. I mean, you know, gas in California is how much these days?$8 a gallon or something like that. You're right.

SPEAKER_04: 7:13

That's ridiculous. And that concept for the local folks is why you see tons of social media posts about this 50-year mortgage. Yeah. And we'll lead into that as the next topic of if you could, either one of you, explain the idea of a 50-year mortgage like I'm five. Me being the lender. But I want to hear what you guys' perception of this is as if if I'm five. You want to take a stab at that?

SPEAKER_06: 7:46

Yikes. Okay. Well, it's just basically stretching out affordability over a longer period of time.

SPEAKER_05: 7:54

Yeah.

SPEAKER_06: 7:54

So it's like layaway.

SPEAKER_05: 7:57

Remember.

SPEAKER_06: 7:58

Yeah. Eventually you'll own it.

SPEAKER_04: 8:00

Correct.

SPEAKER_06: 8:00

But the cool thing is you'll get to live in it.

SPEAKER_04: 8:02

Yeah.

SPEAKER_06: 8:03

I don't think it's a bad thing. There's pros and cons. And I really think it's a good thing.

SPEAKER_02: 8:08

There you go. There's pros and cons. I I don't necessarily think it's a bad thing. You know, do I think it's a wise thing? Probably not, but the it's better than the alternative of renting.

SPEAKER_04: 8:18

I have to agree.

SPEAKER_02: 8:19

You know, and if that's if that's what it took for that first-time homeowner, I don't necessarily think it's going to be the savvy, you know, upper tier luxury buyer that's going to be doing something like that. Maybe the wannabes.

SPEAKER_04: 8:30

Yeah.

SPEAKER_02: 8:31

I'll I'll throw that out there. But if if it allows you to get into a home that you were not able to get into, then I don't think it's a bad thing. At least they'll start their journey of homeownership. And this is the funny thing that because of course all of that was trending last week. Absolutely. Everyone in their grandmother was posting that. And everyone's like, look at what you're going to pay for the life of the loan. Who in the hell lives in their house for 50 years? Nobody does. We're not our parents. Seven is the hour. Her parents did. My parents did, probably yours and yours, but we haven't. We've had four homes, I think, in the nine and a half years we've been together. Yeah. We were on it every three-year marriage until this past year. But but like you and I were talking before Stephanie got here, what did you do with your money? You were rolling over it to that next house, which was what we've done as well. Absolutely. So I personally think it's a good thing, you know, within reason.

SPEAKER_04: 9:23

I'm from a lender's perspective that can play devil's advocate of this. All we can do as professionals, number one, is provide them with the data. The second thing is, I don't believe it's a good or a bad thing. It's just another thing. Right. And that thing, if it allows folks to actually purchase a home, great, as long as they understand how it breaks down, how it shakes out in the end. But then there's this devil's advocate of me going, okay, so if we're saying that this is for home affordability, but yet you've got these first-time home buyers that are buying 400, 450 and using a 50-year mortgage, well, shouldn't they just knuckle up and buy a$300,000 home instead for their first one? That's where that tug and pull we're almost allowing them to get in over their head. But is it really because you're still building equity?

SPEAKER_02: 10:20

Yeah, you're still building equity, but it is it really because the$300,000 home that we know today is not the same$300,000 home that it was five years ago.

SPEAKER_04: 10:28

You're on the money, yeah.

SPEAKER_02: 10:29

So you know, maybe they the family can't fit in a$300,000 home and they have no choice but to buy a four or four hundred and fifty thousand dollar home because they need five bedrooms or whatever.

SPEAKER_06: 10:39

So there's two points that I'd like to bring up. One is they need to keep this for an end user, not an investor, because an investor can use this. Oh, yeah. I mean, what a great tool. I'd just continue to refinance yourself out of the butt thing is refinancing. Everyone's talking about 50 years, even if you don't move, who stays everyone's refinanced. If you're correct. Look at how many people like we know over COVID that refinance. That's why we're in the situation we're in. Absolutely. So it's like you're not stuck to that 50-year mortgage. You can roll that into a 15, a 30. Yeah.

SPEAKER_02: 11:19

How many people do have we heard of years ago that did 30 and then he refinanced? You're on the five years into 15. Yeah. Yes.

SPEAKER_06: 11:25

So you can get in, establish equity, establish a home, yeah. And five years refi out of it after you saved, you have some consistency.

SPEAKER_05: 11:35

Correct.

SPEAKER_06: 11:36

You know, I think it looks good for a lender too. You refinance out of it, you have a better position, and then your your equity starts to grow. So, and you don't have to lose your position. No, I mean, I know, and I don't know how it looks like on the in not the insurance, the mortgage side?

SPEAKER_04: 11:54

Taxes.

SPEAKER_06: 11:54

No, the why can I think of it? Interest interest side. Yes, thank you. Interest side.

SPEAKER_04: 11:58

I'm getting ready to show you.

SPEAKER_06: 12:00

Okay. So, but I know you can refi and not lose that position necessarily.

SPEAKER_04: 12:05

And and I think the idea of losing the position, it's actually circumventing that because you're not losing your position where you purchased in the market. That price, let's say this past year we went down by 2%, 1%-ish. Next year, it's going to kick right back to where we normally are, about three, four percent year over year growth. Yeah. And you missed out on that opportunity to lock in, kind of like buying a stock. What was your strike price? What is your cost basis? My cost basis here is I bought in 2025 back when the market was kind of uh, but now rates are lower. So not only can I refinance, I can also capitalize on equity if I were to have the opportunity.

SPEAKER_05: 12:50

Right.

SPEAKER_04: 12:50

But yeah, that's good point on that. So I brought up, JC. If you can throw up the screen and make sure that we're seeing this. So what I did here, and I'm hoping that that looks big enough on screen. I don't okay. So we've got an eight-year equity comparison for a 30-year versus a 50-year mortgage. And I want everyone to first know that this is not financial advice that we're giving. Please consult your actual advisor. But when it comes to loans and stuff like that, I'm I'm licensed to do this. So if we're looking at the amortization that was used for this scenario, we've got a home purchase for$350,000, which we're using the the a little bit higher than what the average in San Antonio is. I think it's at 290 something at the moment. But we've got a 5% down situation, which gives a loan amount of 332,500, a 30-year interest rate at a 6.7%, and then we've got a 50-year at an 8.25. And the reason for that is currently a mortgage that is a 50-year is not going to be a qualified mortgage. So therefore, a non-QM lender or someone does not that's not trading this on the open market or secondary market after the fact has to originate it, meaning outside of the parameters of the current guidelines, which leads the idea of right now, we also already offer a 40-year mortgage.

SPEAKER_02: 14:22

It's it's already there, it's there, no one talks about it.

SPEAKER_04: 14:24

Nobody talks about it. And I've got another point, but I'll I'll let me run through this before we jump to that, my ADD brain. So zero appreciation. If there were zero appreciation in this concept, we have them side by side, a payment, just the principal and interest would be the 2156.59 for the 30-year mortgage, and then for the 50-year mortgage at the eight and a quarter, we're looking at a payment of 2324. So in this case scenario, they're not saving much. And this is more realistic to what we've been seeing online in social media and things of that nature because they've been keeping these two rates about the same. So then all of a sudden, we're seeing a, yeah, it's a$300 difference in payment. That's assuming that they're gonna get the same rate on a 30-year as a 50. There's no possible way that somebody would tie their money up investment-wise and only get the six and whatever percent. Right. So just being logical in that. So then it shows the equity position after eight years, if there was no appreciation, and that's about a$31,000 difference if you choose a 30-year mortgage versus a 50-year mortgage. Now, I'm not saying that is a good or a bad thing for anyone, as long as they know that going into it, right? And that's the house they want, and that's the payment that fits their budget at the time. Right. Who am I to say no?

SPEAKER_02: 15:49

You know, it'd be super interesting to do is run these numbers if they were renting. Ooh, just absolutely just showing what they spent during that same time on renting, but then also zero tax breaks, all of those.

SPEAKER_04: 16:02

All of those things accounted for on their taxes against their income. You're exactly right. And it's still any which of these scenarios, in my opinion, if you are a homeowner now, no problem. Yeah, just know that your lender should be telling you to throw as much as you can at the principal when you can. Right. Because this is what the outcome looks like.

SPEAKER_05: 16:24

Yeah.

SPEAKER_04: 16:24

The second point, and you can kill that, JC, that I had thought of while I was doing that, is at a certain point in time in our history of real estate and finance, the max you could do was a 15-year mortgage. Right.

SPEAKER_02: 16:40

I was literally about to say that. You know, this is probably the same conversation that people were having when the 30-year mortgage was starting to be talked about, which was what was that in the 50s? Probably something like that.

SPEAKER_04: 16:51

So and that idea, it was super like, well, are they getting in over their head?

SPEAKER_02: 16:57

Are they exactly okay?

SPEAKER_04: 16:58

But they're now homeowners.

SPEAKER_02: 17:00

Yeah.

SPEAKER_04: 17:00

I mean, most of the homes I've purchased have been with a 30-year mortgage, unless they were investment, which was 12-year note or 12 12-month note. A couple of them we had on 15-year notes, but that was back in the day when rates were lower, you were getting like a 3% on a 15-year note. I don't see. I mean, what are your thoughts on that? Truly, the idea of maybe this is a new norm. And is it something that having to go non-qualified mortgage right now, but at a certain point, if it's introduced, hey, it could then become something that is now just another option in the tool belt.

SPEAKER_02: 17:42

Right. It's funny. In the car world, there's long-term loans for higher end exotic cars. And I see people that can easily pay cash for these cars utilize those tools to get like a 10-year note on a$600,000 car. And sometimes they're hedging bets that that car is going to, because particular cars will appreciate in value. And so then it's one, those particular notes are not showing up on their credit. Correct. So they're business people saying, okay, well, now I don't have this showing up on my credit. I can go out and buy, you know, more real estate or more assets, whatever. My cash flow is lower because of this. And I and I know when I exit this vehicle, probably going to make another$50 or$100,000. So, well, hell, it makes sense. Yeah. You know, at the end of the day, I I feel that within reason, you know, I don't think we want to be doing a 50-year note to an 80-year-old couple or maybe a hundred-year-old home. I don't know.

SPEAKER_04: 18:38

I mean, I'm just saying, technically, we can't discriminate in that in that asset. That's true, that's true. You know what I mean? I've done a I've done a 30-year note for someone that was 70 years old. I'm like, There you go. Here we go.

SPEAKER_02: 18:48

Yeah, yeah, yeah. I mean, well, they'll just sell the asset. If they expire, they just sell the asset. So I I I think it's a better alternative for someone to get into a home that perhaps is just going to be locked into renting right now. Right. Right. It's my opinion.

SPEAKER_04: 19:03

And and as long as they know, yeah, like I said, the outcome of that choice, because the average time that people are staying in their homes has increased. I mean, it went from five years to now about eight years.

SPEAKER_02: 19:14

Yeah, right. Yeah, that's what we were talking about the other day. So it's inherent.

SPEAKER_04: 19:18

Is that wrong, right? No, it gives you a little bit more time to build some equity, in my opinion, truly. And knowing that more of your payment is going towards the interest because it's based on amortization. What's what's the issue here? You know, if it gets them into the home. But I just wanted to paint the real picture, kind of not apples to oranges, but apples to apples, because that program is definitely going to be a little bit higher interest rate. Count on about one and a half to two points higher.

SPEAKER_02: 19:47

Which is the same they do in the car world.

SPEAKER_04: 19:48

It's exactly right. And back to Stephanie's point is hopefully first-time buyers get that logic because guaranteed investors understand the idea of leveraging your capital. You know? Anything you guys want to add on that before we jump into the next topic?

SPEAKER_06: 20:06

The only con I see is just time in the house.

SPEAKER_05: 20:09

Okay.

SPEAKER_06: 20:10

Because if you don't have enough time in the house and there's not enough appreciation and there's not enough equity, you're bringing money to the table to get out of it. That leads into the new bill conversation.

SPEAKER_04: 20:20

Yeah, it's true. It's true. That is that is very true. But then at the same time, and and we can keep going with this because it's a it's a great topic. If they are advised properly by a good lender, by a good real estate partner to understand that this is your first home, not your last. Let's talk about your exit strategy at the time that you're even buying this. Right. Down the road, can you see yourself selling this? Can you see yourself converting in it to an investment property? Exactly. Now all of a sudden your cash flow is higher because you made that. Correct. True. And let someone else pay the 50 years. That's right. That's right. At that point, what do you care? Exactly. No, good point. Yeah. Okay. So the next topic here is more local than anything, because that's where we get our foundation from, where we are hitting the pavement, is the idea of home affordability and what it actually is costing these first-time home buyers, second-time homebuyers in let's call San Antonio or just in all of Texas, because you've got a mortgage that is made up of four pieces. And a lot of times people are only talking about the principal and the interest. We've had, and you mentioned it a bit ago, insurance that has risen substantially. We've had taxes that has risen substantially. I'm hoping that they put that ahead of all the other things on the docket of us relinquishing the uh need to pay property taxes. But yeah, one can hope. Yeah. One can hope. Yeah, one can hope. So that being said, what is you all's perspective of what is happening today with our first-time home buyers in our local market? Is it the idea that there isn't inventory out there for them? The inventory that is there, the payment is still unaffordable because of the tax and an insurance rising compiled with the higher interest rates. Or are the buyers just not realistic enough to go, you know what, it's my first house, not my last. Let me go to the 200, 250 price point and deal with this first home because when I bought my first home, it was$130 something, thousand dollars. That same house today, mind you, is$220. You know, expectations. Am I wrong for thinking that they should bring their expectations down?

SPEAKER_06: 22:43

I think it's the unknown.

SPEAKER_04: 22:45

Okay.

SPEAKER_06: 22:45

I don't home ownership is expensive.

SPEAKER_05: 22:48

It is.

SPEAKER_06: 22:49

I am not for everyone. I have a rental right now that's a pretty darn nice rental. And I just spent$12,000 in repairs for to make this buyer happy to get out of it. And it's a lot.

SPEAKER_05: 23:03

Yeah.

SPEAKER_06: 23:04

It's like you're right, taxes, insurance all have gone up, but so have the costs. Air conditioners are twice as expensive as if they were, refrigerators are twice as expensive as they as they were. So it's every kind of cost involved in a home is more expensive.

SPEAKER_05: 23:19

Sure.

SPEAKER_06: 23:19

And you know, you have your big ticket items like your roof, your AC, your hot water heaters, but then you've got those other nuances like a garbage disposal. So a fuse.

SPEAKER_04: 23:31

Yeah, a fuse that pops, you got to take the whole damn thing out and redo it.

SPEAKER_06: 23:35

Exactly. Or God forbid, a leak or something real happens where you know it's it's it's costly.

SPEAKER_05: 23:40

Yeah.

SPEAKER_06: 23:40

And your even your deductibles are higher now. So I think that's what has everyone sticker shocked because it's everywhere they look, yeah, it's twice as much. And so I look at the rates and I think they're totally normal. Like, these aren't even high. Right. It's not the rate, it's all the other stuff.

SPEAKER_05: 23:58

Yeah.

SPEAKER_06: 23:58

And so it's a quandary because an older home, like you said, lower your expectation, get into an older home. Well, then you might have a maintenance nightmare.

SPEAKER_04: 24:08

You're on the money.

SPEAKER_06: 24:09

And so that's real hard money. Yeah. Like it's like I can roll everything into a brand new home, and at least I know it's pretty good for 10 years, and I don't have to worry about anything crazy coming up.

SPEAKER_05: 24:23

Yeah.

SPEAKER_06: 24:23

And I think that's what a lot of buyers have to weigh out right now.

SPEAKER_04: 24:26

That's a good point. That is a great point.

SPEAKER_02: 24:29

I think the challenge, because I agree wholeheartedly with her comment. And I think the challenge that some people have is builders right now, they're giving away the farm. Yes. You know, they're buying down rates, they're doing all of this stuff. But if their agent is not asking the right questions, like, what is your five-year plan family? What is your 10-year fan, you know, uh plan family? You know, if you if they're going to be moving very quickly, especially in San Antonio, because we're a big military city, they could get, you know, their orders to transfer. And let's just say they are the first ones into a brand new development, they're screwed. Absolutely. They're screwed.

unknown: 25:03

Yeah.

SPEAKER_02: 25:04

They are going, they're already upside down. They're not, they're not going to be able to sell successfully. And that's the part where I'm just going to say it so you feel it. You know, I see all these agents that are selling brand new entry-level homes and they're giving away all of these gifts, like barbecue pits and TV sets and all this other stuff. And it's like, if you were, you know, if I'm your agent, this is what you get. Well, yeah, because you probably got a six percent commission on that. Eight, ten, yeah, three hundred and fifty thousand dollar house. And that poor, that poor couple, they're going to be buried in that home. Yeah. So is that doing the right thing? I don't know. You have to have the conversation. Perhaps they did have. I hope to God they had the conversation. Yes. Because we've seen it more often than not, where someone calls us to list their home and it's like, oh wow, you're off a Petranko. Good luck. Good luck. I love you, but good luck.

SPEAKER_04: 25:52

Yeah. We got to be real with you. Yeah. And a lot of times they did not set them up for failure.

SPEAKER_02: 25:59

They set them up for failure.

SPEAKER_04: 26:01

Correct. Yeah. Yeah. And that's what I'm seeing quite a bit. Go ahead.

SPEAKER_06: 26:04

Well, back to your point about lowering your expectations. This is where I get frustrated with this generation of new home buyers or first-time home buyers, is that they want the new home look. Yes. They want the updates. Yes. I saw a house the other day and I'm like, this house's roof is brand new. They did the AC, they did all the things that matter, and you're not interested because it needs granite and flooring. Yep. Like, deal with it. That's right. You know, you could do this later.

SPEAKER_05: 26:33

That's exactly right.

SPEAKER_06: 26:33

But then you want to go buy the house the flipper did that's pretty, but it's a train wreck.

SPEAKER_04: 26:39

And you have no idea what's behind the walls.

SPEAKER_06: 26:41

Exactly. And so it's like, I I'm with you. If I were a first-time homebuyer, I'd be looking for grandma's house that somebody's taken care of. That's right. I wouldn't go out and buy a new house. I'd stay far away from them. But if that's people don't think that way. They want it all.

SPEAKER_04: 26:58

What about the idea? And I think this is also something that is plaguing our first-time homebuyers locally, is the level at which they are willing to compromise on location. If your work is here, you grew up over here, and now you're finding out that, oh shit, those houses are 500,000. That's not a first-time homebuyer type home. And you're just like, I'll just keep renting, versus being able to go over to the Petrenko area of town and get you something for 300 that could basically be the same home, to be honest. Right. But the idea of, oh, I want to associate with this area or this side of town, I have heard that quite often, especially in the last year. What are you guys' thoughts on that? I know you deal with a little bit different clientele and they get to pick where they're they're wanting to be, but what is your experience with that first-time, second-time home buyer and lack of compromise?

SPEAKER_06: 28:01

Well, it's funny. I just moved a family here from Houston. So imagine Houston drive time, commute. They bought their house 45 minutes away from where they work.

SPEAKER_05: 28:14

Okay.

SPEAKER_06: 28:15

Because of where they wanted to live, which is normal. Because she was like, we just want to be within an hour. I'm like, what? We want like five minutes.

SPEAKER_04: 28:22

That's kind of the point that I'm getting to is and and you almost made that better of a point because someone as close as Houston is totally used to that kind of commute. That's nothing. Whereas San Antonio, if it's not within 20 minutes, it's too far.

SPEAKER_05: 28:38

Right.

SPEAKER_02: 28:38

Is that very different mindset? Yeah. The San Antonians, I think, I think all of that would change over time because we are getting such an influx of people coming into this market that are expecting, you know, better food, better shopping experience, better housing, yada, yada. But the drive time, like when I used to live in Houston, yeah, it would take me an hour to get out of the galleria. That's right. And that was normal.

SPEAKER_03: 29:00

It took me 30 minutes to get to the office today, and I was pissed. Isn't that weird? Do you see what I'm saying? That was JC. Jay sizzle on the ones and twos. There you go.

SPEAKER_02: 29:11

So I mean, you know, I think each family just needs to figure out what they're willing to compromise on. At the end of the day, you're you're gonna compromise on something. You're you're never gonna get a house that checks off every single box. What is it that you can put up with and be okay with? Good point. You know, very good point.

SPEAKER_04: 29:28

And and that point in itself, how difficult is it to get a buyer to understand what you just said?

SPEAKER_02: 29:38

I I think that comes with conversations more than you know, examples, conversations, experience, experience, definitely. Our own experience.

SPEAKER_04: 29:46

Now, let me ask you in your experience, and this is something that I can speak to from a lending side, the way that you speak to that buyer, I would go as far as to say a little bit more firm, a little bit more. More as a matter of fact versus the touchy feely, what do you want? No, no, no, no. Your goal was to buy a home, and this is this, this, this is what you wanted in that home. So this is what we found type concept of shit or get off the pot because this is what you're asking for. Exactly.

SPEAKER_02: 30:16

And this is what you can afford.

SPEAKER_04: 30:18

And then on the lending side, I'm going, This is what you can afford. Right. So it's kind of a one and two. But in the experience of that, do you feel like you would have to have a different type of conversation with that type of buyer?

SPEAKER_06: 30:33

It's hard, Mark, because I have overstepped my bounds. Sure. And then I feel like I am steering. And so I have to hear them, guide them, but they're only going to hear what they want to hear.

SPEAKER_02: 30:50

Yeah. They have what are they called? Happy ears is a good idea. Happy ears.

SPEAKER_04: 30:53

Yeah, they got those, what is it called? Rose colored uh earphones. So the idea of them believing, because it's definitely not steering. In my opinion, it's advising because they told you something. Now you're giving the advice. In this market, in this day and age, would someone see that as steering versus giving some straight up old school advice? Is is that the fear?

SPEAKER_06: 31:23

No. Because of the type of buyers? I always tell people this is talking to like a sister, brother, mother, daughter, you know, if if you were my family member, I I can't sleep at night unless I'm a thousand percent honest. Sure. And and and and have them see it from all views.

SPEAKER_05: 31:42

Yeah.

SPEAKER_06: 31:43

But being in this situation recently ourself, emotion drives logic, it does flags. And it's crazy. Emotion wins over logic every time.

SPEAKER_04: 31:55

It's very true. That's very true. And we could transition now because the idea of what Robert and I were talking about beforehand is me and Kristen would love to sell our property. I mean, we we planned on being there three years, and here we are, year five, six, going, okay, well, I guess we're just gonna stay here for a little bit longer, knowing that we have tons of equity, knowing that the opportunity we could use that for and leveraging, et cetera. But the idea of, okay, we got to sell this, find another one. What is that other one gonna look like? Are we gonna have to throw half this money at that to get to back to where we want to be comfortable? All of those things. And the only solution would be new construction, but then you're building custom, you pay for custom.

SPEAKER_02: 32:46

Yeah, pay to play.

SPEAKER_04: 32:47

Absolutely. What are your thoughts on today's homeowner on the second market? I I know you mentioned earlier the type of buyers you're dealing with or debt, divorce. I mean, we we know that. The must sells, the must moves. We know that's coming from the same logic that I'm going over right now, basically, in addition to the fact that we got a 3% interest rate.

SPEAKER_05: 33:11

Yeah.

SPEAKER_04: 33:12

What why?

SPEAKER_05: 33:13

Right.

SPEAKER_04: 33:13

You know how has the homeowner or the I'm sorry, the home shopper these days been swayed and almost steered to new construction, to be honest.

SPEAKER_06: 33:28

1,000. Thank you for saying that. I have felt that so deeply, and I'm like, how is that fair? You know, they get away with that. Gosh, where do I start? I think we have to break this up into three sectors. You've got the first time home buyer, the move up buyer, and then you've got the semi-custom or yeah, semi-custom and the custom. Okay. So four four segments.

SPEAKER_05: 33:51

Okay.

SPEAKER_06: 33:52

So the first time home buyer is almost always going to be geared toward rate.

SPEAKER_02: 33:56

Yes. Rate and payment. Rate and payment.

SPEAKER_06: 33:58

That's right. And and honestly, naive. Naivette.

SPEAKER_04: 34:02

Absolutely. Well, it that time in their life cycle, they're looking at I'm choosing between continuing renting, staying on my mom's couch, or finally owning my own home. So the only thing they have financially to compare it to is what is rent and what is the payment over here.

SPEAKER_06: 34:17

Right. And what they don't understand, I love it when these new home sales counselors say, yeah, the builder is buying your rate down. No, you're paying for that rate down. It's just rolled in the price. Right. Because you're obscenely overpaying for this house. When I walk in some of these homes that are$400,000, I'm like, this thing is a$200,000 house wrapped in a$400,000 bow because it is not a$400,000 house. And when you go to sell this against homes that are older, that are actually nicer, you are screwed. Yeah.

unknown: 34:48

Yeah.

SPEAKER_06: 34:49

Because you're now paying and playing in the same sandbox as a pre-owned seller. And guess what? Your house doesn't look so sexy anymore.

SPEAKER_04: 34:55

That's right.

SPEAKER_06: 34:56

So I my heart goes out to these first-time home buyers because a lot of them are going in there without agents, thinking they're saving money. They're paying this ridiculous amount of money up front for their loan buy down.

SPEAKER_05: 35:11

Yep.

SPEAKER_06: 35:12

And they're stuck. They're going to be in those houses for, I think I did the numbers. I think it's almost seven years before they see any kind of equity.

unknown: 35:20

Wow.

SPEAKER_06: 35:20

And that's sad.

SPEAKER_04: 35:21

Yeah, because the idea is these, these we could run appreciation, let's say, at an eight-year mark, but it's not the same level of appreciation because they're not in the same comparable pool. Right.

SPEAKER_06: 35:36

1000%. Does that make sense? Absolutely. Absolutely.

SPEAKER_04: 35:39

Can either of you explain that a little bit better?

SPEAKER_02: 35:42

We'll we'll go super simple. Everyone, at least people around here, know they know Alamo Heights. Alamo Heights is landlocked. Alamo Heights, you can get a million dollar teardown, but it's location. You're paying for location. And we talked about Petrenko, using that as an example. There's an abundance of land on Petrenko. So how could anyone, this is just using simple logic, say it's going to be the same appreciation? No, a developer can go buy some more land off of Petrenko, and now they're making more new houses that are going to compete against yours for the next 20 years. That's right. That doesn't exist in Alamo Heights. That's why their appreciation from a percentage basis has always been so much more higher than other areas like that. So and they each serve their purpose. Absolutely. I'm not dissing you know Petranko by any stretch of the imagination. If that's what you can afford, if that's the area you can be in, then giddy up. It's it's better than renting. It's always better than renting.

SPEAKER_04: 36:35

Yeah.

SPEAKER_02: 36:36

But the reality is, like she's saying, it I I I think it's longer. I think it's probably in this market and the way things have played out, I think it's probably going to be closer to 10 years before they ever start seeing any type of relative appreciation.

SPEAKER_04: 36:51

Only because, like you mentioned, let if we're talking about an area like Penko, if we were to have said that, let's say 10 years ago when they started that first couple of establishments going out, even Calibra going out that way, they're still building that. They're still building. So I drove down there the other day and I'm just like, oh my gosh. Yeah. At a certain point, you finally get an opportunity to go, okay, the neighborhood's finally built out. We get to see what our values are. So you list their home and another subdivision open. Another subdivision opens up. It's like, dang it.

SPEAKER_02: 37:23

Now you're competing against them. Yeah.

SPEAKER_04: 37:25

Yeah. And that being the case, because honestly, what is it that we could do other than lobby that's not going to work, where they've got way better lobbyists.

SPEAKER_06: 37:36

Way better.

SPEAKER_04: 37:37

And they own plenty of land, is realistically to continue to play the game. Yeah. You know, and it's affecting lenders, it's affecting the the realtor that doesn't focus on that type of thing. It's affecting the realtor that is super honest with their customer, scaring them away or not doing what they want. And realistically, I don't think that that's the case because what realtor is going to want to go, no, let's not do new construction. That six percent looks good. But in many cases, you're also not seeing realtors go, okay, I'm getting six percent on this deal. Let me throw three percent at the sales price to help these customers understand what's going on. Because I'm not realistically in the norm of getting more than three percent. You know what I'm saying? I mean, I don't want to be that guy that gives away stuff, but at the end of the day, could that help? Would it help? It could. Why is the builder doing it that way instead of doing it the other way?

SPEAKER_06: 38:37

Well, we know that sells. It sells, and so many agents aren't selling, they need that money. So if there's if DR Horton's offering eight percent, heck, that's that's gonna feed my family for several months.

SPEAKER_02: 38:49

That's right.

SPEAKER_06: 38:50

Thank goodness we're not in that situation, but a lot of agents are a lot of agents are.

SPEAKER_02: 38:53

So many of these social media agents I just see they're posting, and I noticed it the other day new construction sales, new construction sales, and like always new construction. And I thought to myself, I wonder if they even attempt to sell a resale home. Right. I mean, they're they're trying, they're chasing that paycheck. You could've I can't I can't live with myself with that. That's just not how I operate.

SPEAKER_04: 39:15

But then you go, okay, well, who is monitoring all this stuff? We we have we have people that we have to abide by. We've got our CFPB, but on you guys' side, you realistically only have the consumer. The consumer's the one that's gonna make their choice based on that social media content of the new construction home versus a video of Stephanie telling the truth like it is. Yeah, you see what I'm saying? It's like damned if you do, damned if you don't. Yeah.

SPEAKER_06: 39:43

Well, and they're so good, those builders are so good at creating an emotional attachment with the model homes. I laugh. I walked in a house the other day, and this house was such a piece of crap. But the furniture and stuff they used to stage it was what you would see in a luxury home. Yeah. And you're not looking at the house, you're looking at the furniture, and I'm like, these poor kids are buying these. Wait till they walk in to see their home.

SPEAKER_02: 40:06

And they're like, Wow.

SPEAKER_06: 40:09

Exactly correct. Yeah.

SPEAKER_03: 40:10

And it's I remember I had milk crates in the first place. Carbor with the table. Like, let's go get some stain. We'll make it look better.

SPEAKER_06: 40:19

And I'm not trying to diss the the new home sellers or the new home sales, because I know there are some good ones out there. But it's just seems like these really massive companies that are are building so many, yeah, just just to put more sticks in the ground and people in them that are and then you've got your devil's advocate that if you don't go along to get along, yeah.

SPEAKER_04: 40:41

I mean, where do you sit now? As that new home sales counselor that is being pushed to push this. True. Yeah, you're gonna say, Well, I'm not standing for that. Well, I don't have my real estate license. No, I'm gonna shut up and do what I need to do to make this money.

SPEAKER_06: 40:55

Right, right, right, yeah, yeah. Right, right.

SPEAKER_04: 40:59

I mean, I'm not a diss on sales counselors or anything of that nature, but I don't know of any of them that research market data and that are talking about economics of uh things.

SPEAKER_02: 41:10

They're just trying to sell their product, correct. Yeah, correct.

SPEAKER_06: 41:13

But to your point about the west side and the growth out there versus a niche neighborhood, I I was at actually yesterday with some some young clients, and I was looking at this going, yeah, this is a good deal. There's nowhere else to build.

SPEAKER_05: 41:26

Right.

SPEAKER_06: 41:26

They have sure. Yeah, where you were showing yesterday, 100%. That's what I'm saying. This is the first time home bar, they were giving a four and a half percent rate. I was like, this is a win.

SPEAKER_04: 41:34

Y'all are good. Yep. And if the math makes sense, correct, they know what goes into it. Right. Who who are we to say no? Yeah. That you're meeting their desires, their goals, all of the you check in the boxes. Right. You know, but I think it is it is a shame on those that are not going through the checks and balances to be able to check those boxes. They're pretty much just putting them where their boxes are checked. Right.

SPEAKER_02: 42:01

That makes sense. Yeah, totally makes total sense.

SPEAKER_06: 42:03

But I think where the absolute deals right now at the end of the year are those homes that are on the ground right now that builders want to get rid of.

SPEAKER_02: 42:11

Oh, absolutely. There's no doubt it's at all price points.

SPEAKER_06: 42:13

All price points.

SPEAKER_04: 42:14

So let's wrap up with that, if you don't mind. Tell us about that concept of how that works for the folks out there that may not know. You've got realtors out there, you've got home buyers out there that listen into the show. What is the difference between going and buying a pre-owned home, a brand new home that I build from the ground up, or one that is currently just sitting on the market?

SPEAKER_06: 42:39

Ooh, this is my favorite. I convinced him, I was like, Robert, this is the time to buy. We need to go now. No, this, if there is a speck on the ground, these builders do not want to carry it into 2026. They will make you a deal, a deal of a lifetime.

SPEAKER_05: 42:55

Yeah.

SPEAKER_06: 42:56

I mean, this honestly, if if there's a deal to be had in the next decade, that's it.

SPEAKER_02: 43:02

Yeah, it's it's there, there's definitely a window of opportunity right now if you're a buyer, right? And and you can make a good financial smart decision on you know, location, what you're what you're gonna be up against, you know, years down the road, et cetera, et cetera. It it it is the time to buy. It really is the time to buy. There are deals to be had in all price points, good points, multi-million dollar and below. Yeah, you know, entry level all the way to the top. Yeah, builders are willing to make deals right now. So if you are uh a a buyer, now's time to buy.

SPEAKER_06: 43:35

Yeah, absolutely. And then even new or pre-owned. Yeah, I mean, I the price drops that we have seen in this last quarter are significant. They're not ten thousand dollars, they're 20, they're 50. Yeah, there are some incredible deals right now. And I know there's a lot of people out there that are afraid because of all the uncertainty, but when is life certain? That's what I get so confused. I'm like, when has it ever been? So it's like if you're a savvy buyer, I'd be talking to a lender right now. Yeah, I'd be buying because this is the this is gonna be a short window.

SPEAKER_04: 44:08

I have to agree with that. I truly do. And I think the those that strike while this iron is hot will not only reg not regret their decision, but they may encourage others to do the same and therefore kind of breed some type of movement of okay, enough is enough. It's time to start doing this thing again. Get out of the idea of we're gonna buy a house and two years later flip it mindset because everything is supposed to be about making money on your first home. I think that's what 2020, 2021, 2022 misshaped a lot of first-time home buyers and renters.

SPEAKER_02: 44:50

It's supposed to be what it's supposed to be, exactly. Yeah. This is the funny thing. It's like when you look at, and I know if I start saying this, she's gonna have the data for it. The amount of value percentage-wise, that properties increased during COVID, now that we're seeing adjustments, I would venture to say that if you were to go back and find a property that someone did a deep discount on to get it sold in today's market is still selling it at more money than they would have right before COVID. So did they really lose? No, not really. You know, they didn't get the the massive the top peak, the top peak for sure, but they're still doing okay.

SPEAKER_04: 45:29

And you know what? You're accurate on that. I I I did pull the data for that, and it you're absolutely correct. All prices of homes in Texas technically are still higher than what absolute it is. Yeah, you didn't hit, like you said, the peak of it, but you absolutely are making equity more than you normally would.

SPEAKER_02: 45:47

Right. You're still you're still doing good. And I think that's that's the pill, including ourselves, that it you struggle with. Yeah, like gosh, I mean, I really, I'd really like to get this number. Yeah. Okay. Well, you're not. That's right. Or maybe you're you're gonna have to hold on to it for another five years or something. I don't know, but you're still doing good. You're still you're still ahead of the game. I agree. I agree.

SPEAKER_04: 46:06

Well, you guys have anything else to add? That was a damn good discussion. We we hit a lot of I love getting out of paint with you, man.

SPEAKER_02: 46:13

We have some good talks.

SPEAKER_04: 46:14

Um, well, it it it comes from a place of we are students to our own game. We continue to learn as well. We do the research, we find out, and then we are able to apply it to what we're doing in our everyday life because it's that we eat, breathe, and sleep and shit. Real estate. That's what we do.

SPEAKER_06: 46:32

Unfortunately, unfortunately, yeah. If I could just say one last thing to your listeners, it's like if you're if you're thinking about buying or selling a house, stop listening to the headlines, stop reading. It is such a local thing, and everything that they put out there is national and it are it is crazy. What's happening in Austin? It's like a different country compared to what's happening here.

SPEAKER_05: 46:56

So true.

SPEAKER_06: 46:57

Versus the East Coast and the West Coast. It's like, stop, stop looking at that. Talk to you right here. Talk to your local people. They know what's going on, they can advise you.

SPEAKER_04: 47:06

Yeah. No, that was great. Guys, as always, our conversations are top-notch. I appreciate you guys taking the time and spending with me to have this discussion for those out there that need to hear it. And for you guys out there listening, I'm hoping that you are getting some of this and stuff that can stick and that you can then apply to what you do, whether you're a home buyer, home shopper, you're a homeowner, or a real estate professional. Maybe these are conversations you guys should continue to have. And if you're not having them, start. Um, and for those out there, just kind of like Stephanie said, but in a uh less unorthodox way, shit or get off the pot. Till then, we'll catch you on the next one.

SPEAKER_00: 47:51

And it's just taking small steps, meaning you don't try to get it.

SPEAKER_04: 47:54

If you're still sending out pre-approval letters and praying your realtors send you the next lead, you're already behind.

SPEAKER_01: 48:01

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