8/4/25 Beyond the AI Hype: Real Talk on Future Careers + Real Estate/Mortgage Report with Allyn

The Moneywise Radio Show and Podcast Monday, August 4th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management LinkedIn: Moneywise_Wealth_Management Guest: Allyn Medeiros, Agape Mortgage website: https://allynmedeiros.com/

• 0:00Speaker 00

  From the Garo Ellis padded radio room off Stockdale Highway, here is Money Wise. Call or text into the show 24/7 at 396-1000.

• 0:39Speaker 00

  Here is Money Wise. Money, money, money, money.

• 0:43Speaker 01

  Welcome to the Money Wise Show. We are live from the Garo Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. Today, we're your hosts. I'm Sharad Wade and...

• 1:05Speaker 02

  Frank Lee.

• 1:05Speaker 01

  Frank Lee. Great seeing you, man.

• 1:08Speaker 02

  Great to be here.

• 1:09Speaker 01

  It's good doing the show with you.

• 1:11Speaker 02

  It is. Likewise.

• 1:12Speaker 01

  We have a few things that we want to talk about before our guest comes on, and that usually includes going over listener questions and comments. So I don't know if you have... Do you have it pulled up there?

• 1:22Speaker 02

  Yeah, yeah, I have it pulled up. So I can start with the first one.

• 1:25Speaker 01

  Yeah.

• 1:25Speaker 02

  All right. First question. With all of the job layoffs, I think it may be important for the next generation to know before... to start college on where they should get themselves prepared for, what they want to do for a profession. I'm a bit concerned, but what field could face more layoffs next?

• 1:44Speaker 01

  Okay. I really like this topic, Frank, and so you and I can kind of discuss this. And if anybody is out there, you know, wondering about this topic, go back and search in our podcast. We've talked about this a few times. There's been some headlines as of late. Microsoft just did one last week.

• 2:03Speaker 02

  Yep.

• 2:03Speaker 01

  A lot of the AI companies are trying to get ahead of this message that robots are going to take. Over the world and AI is going to take over the world and they're, I think they're trying to let the public know, well, you know, it's, it's a mixed bag. I've, I've mentioned before the studies, several studies that show that we will actually see a net gain in jobs due to AI. But that's a deceptive fact because a net gain is only good if you're part of that gain.

• 2:35Speaker 02

  Yes.

• 2:35Speaker 01

  There's.

• 2:36Speaker 02

  If you can transition and be a part of it, otherwise then no.

• 2:40Speaker 01

  Cause then it's going to be a net loss for a lot of people that, you know, don't, aren't sort of thinking ahead.

• 2:46Speaker 02

  Yep.

• 2:47Speaker 01

  And looking into the future. So the listener question is, okay, assume that you're going to start college this year. Cause college is getting ready to start here in the next week or two for, for most people. And assuming that you're just going into this, you haven't chosen a major, but you're looking ahead as to what kind of job you would want. Or let's maybe first start with jobs that you may want to reconsider due to the displacement from AI. So clerical and administrative roles like data entry clerks, word processors, ticket clerks, secretaries, bank tillers.

• 3:28Speaker 01

  These are all roles that clearly would be at high risk. And, you know, these are, you have to be thinking about roles that are easily automated or digitized. And for example, University of Rochester did a study about these clerical and administrative roles. And project them to shrink by 20 to 40% by 2033.

• 3:55Speaker 02

  Wow.

• 3:55Speaker 01

  I mean, so on the high end, almost 40% in the next seven, eight years of loss.

• 4:03Speaker 02

  Yeah.

• 4:04Speaker 01

  Not many people are going to college, I guess, to be an admin, you know, or secretary. But let's, maybe let's expand this discussion to not just college, but just career choice, which can involve certifications or other types of education that doesn't necessarily mean college. But I still like using this idea of where, where we'll be in four years. So somebody who is going to start their career, whether it's through college or some other technical training. If you're looking ahead four years, you may wanna reconsider a clerical or administrative role, because those are projected to shrink.

• 4:43Speaker 01

  You have, you know, kind of the next tier would be customer service roles, writers, translators, data analysis, analysts, web content professionals. These are also very vulnerable to generative AI disruption. You know, you take it even a step further, accounting clerks, lower level bookkeeping jobs, also predicted to see some decline significantly as, you know, AI becomes much more capable of doing this type of work. So, in short, if you're, you want to avoid careers that maybe are repetitive, rule-based,

• 5:23Speaker 01

  digitizable, white collar type roles, those are likely going to face a steep decline. And that's, I mean, every, every generation has faced some sort of technology that could make their career obsolete. Like, like when, when Henry Ford created the assembly line and the Model T, well, guess what? You have stagecoach manufacturers, you have blacksmiths that are making, you know, the parts of the, of the wagons, you have, you know, horse breeders, saddle makers, you know,

• 6:08Speaker 01

  obviously, they were all pretty nervous. But did you know, Frank, that there are actually more horses now in America than there ever have been in the history of America?

• 6:17Speaker 02

  That I did not know.

• 6:18Speaker 01

  And, you know, but, you know, you'd probably be second guess, if you're going into a career of horses, you're kind of going, today, in today's world, you're going in knowing what today's technology and sort of what, what those horse, what, what a career would be in, in horse, in something to do with horses. You're not gonna go into it thinking, oh, I'm gonna be a, you know, I'm gonna be a wag. Wagon manufacturer and this wagons are going to be the next big thing. No, you're going to go into a niche market. It's creating wagons for a very specific group or whatever. And and so you have to you have to learn to adapt and evolve and change as.

• 6:58Speaker 02

  Yeah.

• 6:58Speaker 01

  As the markets change.

• 6:59Speaker 02

  Yeah. And then you brought up something there with the example of the Henry Ford and the assembly line. I don't think these jobs are going to go obsolete in the next few years, but it's definitely put a strain on it. And you do see a reduced number of of people within those particular jobs.

• 7:19Speaker 02

  I I think a lot of entry level positions are really what's at stake here. Because, like you said, we with AI, there's these tools now that can help us just. You know, print up status reports or prep meetings or go through an Excel spreadsheet and just.

• 7:45Speaker 02

  Formulate the data for us. It makes it a lot easier. Software engineers, it doesn't take a group of 10 to to code something. It could take maybe two, you know?

• 7:55Speaker 01

  Right.

• 7:55Speaker 02

  So I I think the ones really, and this is where I would want to know more about those layoffs is what type of positions are they in? Are they entry level? Are they middle management? Are they like, what are they? I think that might have a better perspective and we might be able to gauge exactly, okay. Maybe this isn't the right fit, or I should be focusing on a different profession.

• 8:19Speaker 01

  Yeah.

• 8:20Speaker 02

  It is harder entry level wise.

• 8:23Speaker 01

  Yeah, I mean, I don't, you're a little younger than me, but I don't envy young people, you know, coming out of high school. Or, you know, towards the end of their high school years and they're, you know, asking themselves, what am I going to be? What am I going to do? You know, and how how are these markets going to react? There's the benefit of of new technologies and disruptive technologies is I've seen it creates all creates all these efficiencies. But the downside is it is get it gets rid of a lot of other jobs. And other other positions. So on the positive side, though, there are some clear jobs that make a lot of sense that they would be increasing at least over the next four years.

• 9:04Speaker 01

  So looking at some of the research that has happened here recently, healthcare, social assistance in the care economy. The demand for home health aides, for example, or personal care aides is off the charts. It's it's projected to be one of the single largest net growth occupations that we've seen in in over a generation. Adding hundreds of thousands of jobs over the next five to 10 years. And this would be, think of nurse practitioners, physician's assistants, registered nurses, medical and health service managers. All of these jobs are showing anywhere between a 20 and a 46% increase

• 9:46Speaker 01

  due to the aging population and the

• 9:52Speaker 01

  mostly the demographics and aging population is and and the fact that the technologies aren't quite there yet for they're getting close, but the home health, for example. You know, we're we're still a few years away from a robot being able to help you in and out of the shower.

• 10:08Speaker 02

  Yeah, yeah, unless Tesla comes out with something that's like, hey, you know, we got our new AI robot that can just do everything.

• 10:14Speaker 01

  Your home assistant, like your home butler. Which they're all testing these technologies. I just this this morning did a little research as I was curious, you know, whether what are the commercial robots that are currently available? Like you could go on right now, go online and buy the robot that can come in and and do some of these things. And there's really, I couldn't find anything that's really widely available. They're all they all seem to be in testing modes or beta modes or not quite there to the level where you can have this, you know, this this autonomous robot that can do these things for us.

• 10:54Speaker 01

  And so, but I mean, the scary thing is that that that technology can can evolve very quickly.

• 11:02Speaker 01

  You know, you four years is a long ways, but we go two years into it and all of a sudden Tesla has a breakthrough on their Optimus robot. And all of a sudden now they can just, you know, with over the air programming, change that Optimus bot into your, your, your chauffeur. Your laundry person, picking your kids up from school, you know, whatever.

• 11:23Speaker 02

  Exactly. Yeah, who knows? We, we're not even sure. Like in the next five years, healthcare might not be the booming industry because of AI and robots being able to go and, you know, assist and everything. It's just like, we never know. At that point, I guess we just need a universal base income, you know?

• 11:39Speaker 01

  I mean, there's some people that are, are, are already kind of thinking about those, these issues. What, what happens when you have a huge global population that is unnecessary?

• 11:54Speaker 02

  Yeah.

• 11:54Speaker 01

  You know, and unneeded and, you know, technology is great, frees up our time, right? We have these technologies that can, that can do all these things. So we have more time to do things that are fulfilling and, and, but, uh, but, you know, it's, it's a little bit scary to know what's going to happen to society. If we do get to that point, how quickly we get to that point, I don't see any job that's not at risk. I mean, surgeons.

• 12:19Speaker 02

  Exactly.

• 12:20Speaker 01

  Are, that, that's a technology that's rapidly progressing where you can, you have some human involvement, but essentially you have a robot that's doing the surgery. It's unbelievable. You know, these are, these are exciting, both exciting and scary times. Physical and occupational and speech therapists, I think you and I have talked about this on the show. How much therapists are need, all different types of, of physical occupational, you name it, speech therapists. High demand, expected to grow 10 to 20% according to the Bureau of Labor Statistics over the next few years. Technology and cybersecurity is also a fast growing role. So you, it's been a lot in the headlines the last couple of weeks.

• 13:04Speaker 01

  The amount of money that companies like Meta and.

• 13:07Speaker 02

  Oh my gosh.

• 13:08Speaker 01

  Are paying for these AI developers. Yeah, like 200 million.

• 13:11Speaker 02

  Yeah. Well, the base salary for, for AI.

• 13:17Speaker 02

  What did he say? He was, they're hiring AI experts to lead their AI division. And I think the base salary was a million or something.

• 13:25Speaker 01

  Yeah.

• 13:25Speaker 02

  With three hun- with three million of bonuses.

• 13:28Speaker 01

  Right.

• 13:28Speaker 02

  I was like, dang, I should.

• 13:30Speaker 01

  I know, right? I mean, do that job for a little while and then just like.

• 13:35Speaker 02

  Exactly. It's absurd. And he's just like, Meta is throwing out so much.

• 13:40Speaker 01

  Yeah.

• 13:40Speaker 02

  I saw all this.

• 13:41Speaker 01

  Hundreds of millions of dollars to recruit or retain talent for AI and machine learning specialists, data scientists, big data engineers, information security analysts. This is, uh, these are areas that are projected to grow more than thirty or forty percent. Again, this is, there's, there was a University of Rochester study that was done that, that's referenced quite a bit. The impact of jobs, if anybody's interested. Cybersecurity roles are especially urgent because, you know, cyber threats and understaffed defense systems are, are becoming more and more an issue because now a robot can do it. I mean, before you had software that could do it, but now you have agents, AI,

• 14:24Speaker 01

  agency that you can, you can create these, these, these like software robots. Everybody can. If you've got that paid subscription to ChatGPT, or, you know, name your, name your, your LLM, then you can, you can create little, a little army of software bots.

• 14:44Speaker 02

  Yeah.

• 14:44Speaker 01

  To make calls for you, set up your, your travel plans, make reservations. I mean, it's, can do quite a bit.

• 14:52Speaker 02

  Yeah. There's, there's always been a need of cybersecurity jobs. And I think with the boom in AI just highlights the vast importance of it. And so if that is a career you're looking into, I would definitely recommend. I know there's a, there's another tech company out of Silicon Valley that's focused on,

• 15:13Speaker 02

  well, cybersecurity, but also, uh,

• 15:17Speaker 02

  was it defense or defensive, uh, measures?

• 15:21Speaker 01

  Yeah.

• 15:21Speaker 02

  So there's Palantir.

• 15:23Speaker 01

  Palantir, yeah.

• 15:23Speaker 02

  But there's also Androl. So they, they specialize in weapons and manufacturing.

• 15:30Speaker 01

  Yeah.

• 15:30Speaker 02

  So it's using drones to help with, uh, whether that's the, the Navy, the Air Force, or the Army. And then setting up, uh, I forget what was. Anyways, it's fascinating. I think it's very controversial because of the fact that as a Silicon Valley guy, you don't really get into the whole

• 15:55Speaker 01

  Geopolitical.

• 15:56Speaker 02

  Geopolitical, but also the the war side of things.

• 16:01Speaker 01

  Yeah.

• 16:01Speaker 02

  But this guy's just, no, like, we need this. And actually, to a point, it kind of makes sense.

• 16:06Speaker 01

  Yeah, because if, if, if, you know, he's not doing it, or we're not doing it, then someone else is doing it. And it's created like this arms race, a different kinds of arms race that's much more specialized, right?

• 16:17Speaker 02

  Exactly. Because then people say, it's like, oh, you know, China can manufacture 100, I don't know, battleships or whatever, but if we can manufacture drones or other defense mechanisms that could just wipe that out, it's like, then we're ahead.

• 16:34Speaker 01

  Yeah. And, you know, we can also speak for our listeners. Again, we're talking about the disruption of jobs due to technology and AI and, you know, where's the future lie? It's not just in the tech jobs. It's not just in some of these really highly skilled technical areas, but there's also a huge need today and in the near future for skilled trades.

• 16:59Speaker 02

  Yeah.

• 17:00Speaker 01

  Skilled trades like electricians, plumbers, HVAC technicians, welders. Construction trades are, are, are super resistant to AI automation, at least right now, again, for some of these reasons we just mentioned. There's a growing demand and, you know, to, to maintain infrastructure like data centers, renewable energy installations, and construction labor overall is expected to grow about 7% over the next 10 years with a strong need and openings in specialized trades. And I think we do our kids a disservice by perpetuating this idea that plumbing or like electrical work or HVAC work is, is beneath us somehow.

• 17:44Speaker 01

  And when it's an incredibly rewarding career, there's a lot of people that have those skills that are just incredibly talented and they can Use their hands, they can, they can, and you don't have to be manual labor. It can be, you can get into this field and you can scale up owning your own business as big or as small as you want. And just by providing a good service and doing a good job. So you don't have to like, you know, be the one that's always unclogging the toilets, but you, somewhere to start. And those jobs are really, really good, really good jobs and in need.

• 18:17Speaker 02

  Yeah, yeah. We talked about this a little bit off air because the, the topic of that was. You see a lot of Gen Z's not going to college specifically for the cost of tuition and, and school and education itself. So you, you're seeing an exodus and you're seeing Gen Z's going for these type of labor or skilled focused professions. Rather than going for a college degree because it makes sense. Why, why go to school for four years and come out with huge amount of debt only to, you know, be paid. Slightly above minimum wage.

• 18:54Speaker 01

  Right.

• 18:55Speaker 02

  So it doesn't make sense to them.

• 18:56Speaker 01

  Yeah, we were talking just before the show, you mentioned, yeah, you, you can envision a world where there's, college is less and less important. And it's more about having critical thinking skills, being able to problem solve. Those are the, those are the skills that are going to be in much higher demand. And now somebody can almost get a college degree. I, I would venture to say I could probably learn more now with my, with chat G P T over a six month period than I did the four years I went to college.

• 19:26Speaker 02

  Yeah.

• 19:26Speaker 01

  There's just so much right there at my fingertips. It can quiz me. It can, you know, it's, it can, it can.

• 19:31Speaker 00

  Probably a little cheaper.

• 19:32Speaker 01

  Yeah, a lot cheaper. Yeah.

• 19:35Speaker 02

  Well, I, I also think it matters on how you use chat G P T because there's that report of how chat G P T is making us dumber.

• 19:44Speaker 01

  I read that report. Yeah.

• 19:46Speaker 02

  And I believe that in a sense, because if you're in college and you're like, oh, write this essay for me, then where's the work?

• 19:52Speaker 01

  Yeah.

• 19:52Speaker 02

  You're not doing anything.

• 19:53Speaker 01

  Yeah, you're not using your brain and that part of your brain that is needed to problem solve.

• 19:59Speaker 02

  Right.

• 19:59Speaker 01

  I've given this example probably with you on this show, which is when calculators first came out, like, like digital calculators, it was like, oh, my gosh, our kids' brains are gonna rot. You know, when I was a kid, I used a, you know, a blackboard and that's how I did my, my algebra and, you know, whatever, and then go on. And it's like, well, it turns out that the calculator did make us dumber. It, it made some people dumber, maybe, those who don't understand conceptually what's going on, but it made those who knew how to use the calculator properly much more, much more smarter.

• 20:33Speaker 02

  Yep.

• 20:33Speaker 01

  Even though they weren't doing all of that, you know, technical work. And I, the same thing is gonna happen with AI.

• 20:39Speaker 02

  Oh, a hundred percent.

• 20:40Speaker 01

  I would guess.

• 20:41Speaker 02

  So if you use it to where like, oh, like, you know, what, what is, what's this scenario look like? Or how does, how does this strategy work? If you're asking questions to better yourself, then yes, I think AI, ChatGPT will help you. But if you're just using it to write your essay or your report, then no.

• 20:58Speaker 01

  Here, here's a listener's comment talking about what we're talking right now. They say, so you're saying it'd be smartest to get into the tech world to work with the robots lol? Yeah, that's basically.

• 21:09Speaker 02

  And don't forget to say please and thank you.

• 21:11Speaker 01

  Yeah.

• 21:13Speaker 00

  I got into that Friday, because I, I was telling Justin, I always am real polite. I say thank you and I look forward to talking to you tomorrow.

• 21:21Speaker 02

  Yeah. Did you, did you name ChatGPT by the way?

• 21:24Speaker 00

  But it named me.

• 21:25Speaker 02

  No, oh, okay.

• 21:26Speaker 01

  But that's another interesting discussion about these, about these bots is that you,

• 21:34Speaker 01

  they're so human, they're so good with language, and they're so good with communicating and speaking to us on our level. They fool us into thinking that they are, they have emotions, that they're, that they're, you know, actually alive.

• 21:49Speaker 00

  They don't?

• 21:51Speaker 01

  No, but if, what if, is there a scenario where if we start treating some of these technologies as if they're just dispensable and we're just rude and we're, you know?

• 22:05Speaker 01

  Inconsiderate, does that translate over into the real world? Kind of how people are on social media. You know, like they'll say things on social media they would never dare say. I don't, some people would never dare say in real life.

• 22:20Speaker 02

  Yeah.

• 22:21Speaker 01

  But some do. I'm afraid they do. They're either so enclosed in their echo chamber of, of, of social media that they think that it's okay to say certain things or, you know, judge somebody a certain way.

• 22:35Speaker 02

  Yeah.

• 22:35Speaker 01

  That's, that's not, that's not good. We have one more message here, maybe before the break, we'll, we'll answer this one. Do you have that Frank about?

• 22:42Speaker 02

  Yeah.

• 22:42Speaker 01

  Let's go.

• 22:43Speaker 02

  I got it. Hey guys, drove by Woolworths over the weekend, made us so excited. My question, do you think tariffs are the answer to saving American jobs? CC.

• 22:53Speaker 01

  Hey, thank you. Yeah, thank you CC. And thank you for the Woolworths drive by. We should be, we're just a few weeks away from having our soft opening for the luncheonette, so stay tuned for that.

• 23:06Speaker 02

  So excited.

• 23:07Speaker 01

  We are too. And Money Wise offices will be going upstairs soon after that. The second part of this, of this comment or this question is, do you think tariffs are an answer to saving American jobs? I do not. I'm not a fan of tariffs and I haven't talked to an economist yet that is a fan of them or feels like tariffs are a sustainable way to create or save American jobs. In part, I think the biggest issue that I have with tariffs is the fact that it just, overall, it just increases the cost of goods. Whether it's for the, the buyer or the seller.

• 23:47Speaker 01

  You know, it, it reduces the overall spending power in the economy, which slows economic growth. And. US companies, for example, they rely on imported materials. Very few, especially very technical tools that we use, like iPhone is one of my favorite examples. There's not a single country in the world that has all of the raw materials, all the rare earth minerals, all of the software technology, all of the camera technology, all of the things, the chips and everything that goes into creating the iPhone. No single country in the world can create the iPhone on their own.

• 24:31Speaker 01

  And today, for example, we're seeing in the news, part of the tariff negotiation is with Switzerland. Well, Switzerland is really, really good at making watches. They've got a long history in making, they're a huge exporter for Switzerland. And I think they make watches probably better than we do here in America. I would guess that overall you have better quality, it's cheaper, it's more specialized watches in Switzerland than they are here. Let's let Switzerland make their watches. Let's, you know, let's let Americans make their hamburgers, or whatever it is that we make.

• 25:10Speaker 01

  And then let's reduce the cost barriers between us so that we can buy their watches and they can buy our hamburgers. And that's a free market, a more, a freer market. And of course, I'm not saying that that's a perfect scenario because the free market does, and capitalism does bring out other ugly sides, and we can deal with those. And sometimes I can see where tariffs is a way to deal with some of those inequities. But if you're looking at simply just creating jobs, and if the focus is create jobs,

• 25:48Speaker 01

  then we need to reduce the cost that it takes to, for there to be commerce. So I'm just not, I'm just not a fan.

• 25:59Speaker 02

  Yeah. I think in theory, that's when tariffs were invented, that was...

• 26:06Speaker 02

  The goal was to protect domestic companies and prop up domestic companies. But in reality, that's not what happens.

• 26:13Speaker 01

  Right.

• 26:14Speaker 02

  You know, you slap on a tariff, you'll get counter tariff. And even if it is to incentivize domestic growth, you just see them raise their own prices and you know, it's just a vicious cycle.

• 26:29Speaker 01

  Yeah, there are several studies that you can, you can kind of look into that show that for every job that is saved by a tariff, there's multiple jobs that are lost in other areas. There was a Peterson Institute in 2019 that estimated some of the tariffs at that time that were brought on cost consumers $900,000 for every job that was saved. And this was specifically in the steel industry. And so, you know, you have to, if you're going to, if you're going to save US steel mills, for example, well, they're probably going to come at a cost

• 27:08Speaker 01

  in the form of other jobs in industries that depend on those imports. And so you're, you might save the steel industry, but you might hurt other industries. Think of like the car manufacturing or construction or other, other areas. It's like, okay, great. We saved one, we saved a million steel jobs, but we eliminated nine millions other jobs that, that were, were cut out of the, the global market because we were charging so much to import steel.

• 27:38Speaker 02

  Yep.

• 27:38Speaker 01

  Like, you know, you just-

• 27:39Speaker 02

  And then eventually those steel workers are going to face the consequences as well. If no of the, if no, none of their clients are, are purchasing steel.

• 27:50Speaker 01

  Right.

• 27:50Speaker 02

  Because they're cutting back.

• 27:51Speaker 01

  Right.

• 27:52Speaker 02

  Yeah.

• 27:52Speaker 01

  Yeah. And then you lose market share and it's just this downward spiral. Good stuff. Thank you so much, listeners, for your questions and comments. Keep them coming our way, 661-396-1000. We're going to take a break. We'll come back. Alan Maderos is joining us. We're going to talk about mortgage, housing market and all that stuff. We'll be right back.

• 28:10Speaker 00

  Don't forget, Money Wise is more than a radio show. We're an independently owned, local wealth management firm with 60-plus years of collective experience. Our financial advisors are here to help you, Kern County. Together, let's be smart, be safe, be money wise.

• 28:31Speaker 01

  Thanks for tuning in to MoneyWise. We're your hosts today. I'm Sharad here with Frank. We have our guest, Alan Maderos. Alan, welcome to the show.

• 28:39Speaker 03

  Hello, gentlemen.

• 28:40Speaker 01

  Have you seen the Billy Joel documentary yet on HBO?

• 28:43Speaker 03

  I've not seen the documentary.

• 28:45Speaker 01

  It's a two-part series. I think it's a two-part series. I'd highly recommend it. If you're not a Billy Joel fan, it'll probably turn you into a Billy Joel fan. Incredible piece of Americana that we have in Billy Joel. Hit after hit after hit. Incredible musician, and I'll leave it at that.

• 29:08Speaker 03

  I was in love with that. It's good. The video of Uptown Girl.

• 29:15Speaker 01

  Uh huh. Oh, yeah. When he was married to Christie Brinkley.

• 29:17Speaker 03

  That was such a great video. I'm like, she's beautiful.

• 29:20Speaker 01

  Yeah. Yeah. Super, super interesting. Hey, Alan, we appreciate you coming on the show. We love getting regular updates from you about what's going on in the real estate mortgage world. There's just been, just on Friday, the Bureau of Labor Statistics gave their jobs revision numbers, and the numbers weren't quite as good as was expected. We saw the markets pull down. Last week was one of the worst weeks in the market this year. It was a pretty, pretty nasty week for the stock market. But what's interesting,

• 29:59Speaker 01

  markets opened up this morning here on Monday, much higher, I think, enjoying the bad news that they received on Friday, because the hope is that come September, the Fed might now lower their rates. They might make money cheaper. They might make homes cheaper for us. So what do you say about the mortgage markets after the jobs numbers?

• 30:23Speaker 03

  Optimism. That's the big thing that you can say. So one of the things that's interesting is, is that when you have an announcement like that, the markets took off. For mortgages, not necessarily stock. We had a big loss on Friday. And I made this mention in an email I send out to real estate professionals. And I said, "Just don't look at your 401K, but rates are better today."

• 30:47Speaker 01

  Yes. Yeah, it's a good reminder, the inverse relationship between interest rates and, and bonds. And then also, the general inverse relationship between fixed income or bonds and the stock market.

• 31:00Speaker 03

  Yes.

• 31:01Speaker 01

  You've got this money flowing in and out, depending on fear and rates. Interest rates are just so incredibly powerful.

• 31:09Speaker 03

  They are. Well, they drive activity, and that's the reason why lowering the Fed funds rate is supposed to stimulate spending. The premise is, if we make the rates too high, meaning the Fed funds rate, you're going to slow your spending because you're going to think about paying more for things.

• 31:24Speaker 01

  Right.

• 31:25Speaker 03

  But here's the problem, these credit cards that you use all the time, how many really look at their interest rate?

• 31:31Speaker 01

  Nobody wants to look at their interest.

• 31:32Speaker 03

  What they look at is, "How much do I have available this month?"

• 31:35Speaker 01

  Yeah.

• 31:35Speaker 03

  "How much have I used so far?"

• 31:37Speaker 01

  Right.

• 31:37Speaker 03

  Right? So, that is not the same thing as going to buy a car. And now you're straddled with, "Well, do I really want to buy a car for this amount of time at this interest rate?" But if you have an open credit card, you're not looking at those things. So it's business as usual. And that's where the trap is. By reducing the Fed funds rate, we are making things more affordable. Normally, large ticket items, this includes home equity lines of credit, personal loans, credit cards, auto loans, student loans.

• 32:12Speaker 01

  Yeah.

• 32:13Speaker 03

  But it's not a mortgage.

• 32:15Speaker 01

  Right.

• 32:15Speaker 03

  So, they are different. And because of that, I think they get confused. They're like, "Hey, why did the rates go up? They lowered the Fed funds rate."

• 32:23Speaker 01

  Right.

• 32:24Speaker 03

  "The feds lowered the rates." I said, "Yeah, they did, but that's when you go buy a car."

• 32:29Speaker 01

  Right.

• 32:29Speaker 03

  "That's when you're going to borrow money against home equity. That's when you're going to get that credit card statement and your personal loan." So, yeah, they're not the same.

• 32:38Speaker 01

  The interest rates I saw earlier, I think you had sent where rates are right now. It looks like there's some 30-year fixed rates now below 6%.

• 32:50Speaker 03

  Correct, we've got some in the 5s. So you can actually see that the government insured loans include VA, FHA, and USDA have dropped below 6%. That's a huge benefit for many people. It doesn't need to be first-time home buyers. However, if you have a conventional loan, that also dropped roughly 0.25 to 0.375%, which is significant when you look at overall. So I think a huge market mover will be if we see conventional conforming 30-year rates drop below 6% and we hit that 5.5, 5625 target. I think the markets will take off.

• 33:29Speaker 01

  There's some sort of consumer psychological, gosh, what's the word?

• 33:34Speaker 03

  It's a barrier.

• 33:35Speaker 01

  Barrier, yeah.

• 33:36Speaker 03

  And when they think below 6, even if it's a 599, which some lenders actually market because there's a psychology to it.

• 33:45Speaker 01

  Yeah.

• 33:45Speaker 03

  You're getting a great deal, you're in the 5s.

• 33:47Speaker 01

  And you're one...

• 33:48Speaker 03

  Just barely.

• 33:49Speaker 01

  One thousandth of a percent below.

• 33:53Speaker 03

  So you're saying there's a chance, right?

• 33:56Speaker 01

  Yeah, but it does, you know, we're not that bright. You know, as humans, we'll fall for it. But it's, yeah. You mentioned auto loans. It's an interesting world because you can still find certain manufacturers that have these very low, almost zero-interest loans when, you know, when we were in an inflated interest rate period.

• 34:20Speaker 03

  It's subsidies and they're short-term financing. If you're going to take out most... So let's be perfectly honest, the average consumer purchasing a new vehicle, let's just call it a sedan, you're in excess of $30,000 now, right? So your Honda Accord for many, many years, the base price for it was around $16,900, $17,000. Then it went up to around $22,000, $24,000. And the fully-equipped model was $28,000. Well, now you're looking $36,000, $37,000 for just a four-door sedan. Don't get me started on a truck, my goodness. Try to walk onto a GMC lot right now and buy a GMC Sierra.

• 35:02Speaker 02

  Yeah.

• 35:02Speaker 03

  They're not cheap.

• 35:04Speaker 02

  All of our advisors have trucks.

• 35:05Speaker 03

  Well, some of them, I mean, I'm being very, very direct here. They are in excess of ninety to a hundred thousand dollars for a fully equipped.

• 35:15Speaker 02

  Ford.

• 35:15Speaker 03

  I mean, a truck.

• 35:17Speaker 01

  The average car, I just looked it up, the average car, new car price in the United States last year in twenty twenty four was forty seven, about forty seven thousand dollars.

• 35:28Speaker 03

  See what I mean?

• 35:29Speaker 01

  I mean, that's the average.

• 35:30Speaker 03

  But see, if they're offering an incentive, that typically is a very short term financing. It's like thirty six months.

• 35:35Speaker 01

  Yeah.

• 35:36Speaker 03

  Sixty months would be the longest, and that's promotional advertising.

• 35:40Speaker 01

  Right.

• 35:41Speaker 03

  But then when you get in there, and they're like, oh, my gosh, I can't take the payment on that. That's six hundred and twenty dollars. Like, we offer seventy two and eighty four months, but it's gonna jump by three percent.

• 35:52Speaker 01

  Uh, yeah, I was gonna ask you about the cost of cars. The average, so the average price for a new car last year was almost fifty thousand dollars. But the total annual car expense for ownership in the United States in twenty twenty four, this is according to AAA, is just over a thousand dollars a month. So, that's, that's, you know, twelve thousand one hundred and eighty two dollars a year, just over a thousand dollars a month that the average person is spending on their car. That would include, you know, the car itself, gas, maintenance, insurance. Thousand dollars a month. That's what my mortgage payment was on my first house.

• 36:36Speaker 01

  You know, like, do you see this?

• 36:38Speaker 03

  But also, but, but you remember, minimum wage is three dollars and fifty cents.

• 36:42Speaker 01

  Yeah, yeah, it was probably closer to four bucks, but, but do you see this being a problem for home? People not being able to qualify for homes because of how much they're paying for cars?

• 36:54Speaker 03

  Yes, but I only see what's being reported on the credit report. So let's just say the car payment is five hundred and ten dollars. That does not. You know, include your fuel, maintenance, registration. So when you have to include those items, it would change the ballgame.

• 37:13Speaker 01

  But even just don't exclude those items and you're just looking at the debt.

• 37:17Speaker 03

  Oh, yeah, it is a huge impact.

• 37:19Speaker 01

  Right.

• 37:19Speaker 03

  You figure $500 a month in relation to what it would buy is roughly $60,000 in buying power.

• 37:28Speaker 01

  Right, right.

• 37:29Speaker 03

  Significant.

• 37:30Speaker 01

  Significant, yeah. You know, it's the difference between a $350,000 house or a $410,000 house.

• 37:37Speaker 03

  That's right, absolutely.

• 37:38Speaker 01

  It could difference. And it's, you know, a car depreciates. It loses value every day that you own that car. It's going down in value. Homes are a different thing. There are periods of time in America where home prices do go down, but those periods of time generally are short-lived. And over time, we see that home values gradually increase over time. It's not spectacular. You know, we're talking below 4%. It's around between 3% and 4% annualized average increased value of residential homes. But that's a lot better than whatever it is for average depreciation of a car.

• 38:19Speaker 03

  Absolutely.

• 38:19Speaker 01

  You know?

• 38:20Speaker 03

  That's one of the benefits of real estate. And this is actually a topic of, well, it's a major debate, but it's been brought up. So HUD, Housing Urban Development, had done these research case studies and found that the access to home ownership is what drives future generational wealth.

• 38:39Speaker 01

  Yeah, that would make sense. In terms of, I'm guessing a big part of that, we see this, Frank, with our clients and our beneficiary, you know, beneficiaries of our clients. Many times it's the home that they're inheriting. That's the largest asset.

• 38:55Speaker 03

  Yes.

• 38:56Speaker 01

  Probably more of the case is the home versus, you know, a savings account that they have somewhere. And you know what? Your kids or your family inherits.

• 39:06Speaker 01

  Three, five hundred thousand dollars, that's a game changer, you know, in home value. It's a complete, it can change and disrupt that generational poverty. It can get that family out of that, out of that cycle. And so, you know, the homeownership is one of the most important aspects, I think, of getting to financial independence.

• 39:31Speaker 03

  Yeah, net worth is, is really enhanced by homeownership. Long term, it's just one of those things that as long as it's maintained, will always retain some form of value.

• 39:43Speaker 01

  Yes, yeah, and, yeah, you know, let's, let's kind of talk about, again, interest rates. If, well, let's talk about the Crabtree Report.

• 39:52Speaker 03

  Sure.

• 39:52Speaker 01

  Which is our local, our local appraisal report. I, I love it. I love how it's, I still love how it's formatted the same way. I love the graphics and it's like, this is, thank you Gary Crabtree for your service to our community and putting these reports together. But what, if you look at, I mean, the first thing that my eyes go to is the median price of existing homes. We did see a modest increase year over year of about 5.3% from June of 2024. The existing median sale price was 380,000. It's now 400,000 as of June of 2025.

• 40:35Speaker 01

  That's a, that's above, that's hitting a, you know, above its, its weight.

• 40:40Speaker 03

  That's true, and that number in and of itself isn't reflective of the whole market. So this is something that you need to take with specific, I guess, exclusions. And what I mean by that is different parts of Bakersfield appreciate at different rates based off of desirability.

• 40:56Speaker 01

  Yeah.

• 40:56Speaker 03

  But as an average, yes, we have seen a net increase in overall value. But that's not to say that this is an annualized, you know, number. This is a just month over month, year over year, same comparison the previous year's month. So, but all in all, if you continue down the report, you will see that the net appreciation, okay, is, is slightly down. Okay, it's not by much, uh, less than point seven. But if you look at that in the big scheme of things, we are still moving inventory even though it's built. We're seeing this shifting to be more of a balanced market and potentially moving to more of a buyer's market.

• 41:39Speaker 01

  Yeah, the buyer's market, if you look at the supply, there are in unsold inventory, about 2.67 months' worth of inventory. That's pretty low.

• 41:58Speaker 03

  Well, the balanced market is actually at three. So that means where you have equality between buyers and sellers.

• 42:05Speaker 01

  Yeah, you want about three months' supply.

• 42:08Speaker 03

  Correct. But here's where we have become impatient. I guess that's the best way to state it. Have you guys ever been waiting for something in the microwave to finish? And you're watching it. You're like at 15 seconds, 12 seconds, 10, and then you pop it at two because you're like, I just want to get.

• 42:28Speaker 01

  Get that hot pocket.

• 42:29Speaker 03

  Okay, so we have sellers out there that have been conditioned to believe this house needs to sell in 15 days. I've done two open houses. Why isn't it selling? And it's like, you guys, that's not normal. It really isn't.

• 42:44Speaker 01

  Right.

• 42:44Speaker 03

  So typical marketing time is between 30 to 40 days. But we're still sitting in this range of approximately, what does it say, 23 days?

• 42:56Speaker 01

  Yeah.

• 42:56Speaker 03

  Right? So the overall inventory, and again, this report is dated a bit. This was from June of 2025. It showed 1,025 units versus 614 last year. So that is almost double. But the balanced market's going to be around 1,200 units. So we're getting there, but all that really means is that there's more negotiation that needs to happen for certain homes.

• 43:27Speaker 01

  So you mentioned the buyer's market or the shift towards buyer's market in Bakersfield. Part of that is because we do have more listings, as you said, there's. Just over a thousand in June of this year compared to June of last year is about just over 600. So really significant.

• 43:41Speaker 03

  It's a big increase.

• 43:43Speaker 01

  And that's what you want. If you're a buyer, you want a lot of them out there to choose from.

• 43:47Speaker 03

  It offers selection, but it also offers competitive pricing, right? Now, one thing that a lot of people forget is that when you sell, if you have to do a price reduction versus a price concession, there is a difference. So a price reduction, let's say listed for 400,000, but you reduce your price by 10,000 to 390,000.

• 44:11Speaker 01

  Your listing price, which you were set for, yeah.

• 44:14Speaker 03

  Then a buyer comes to you and says, listen, I'll pay you your 400,000, but I need $10,000 to help with closing costs. Will you still sell the house for 400,000? Well, the seller says, well, I was gonna sell it to you for 390. Well, from a buyer's standpoint, that price difference in 10,000 is $8 a month in their mortgage. But $10,000 cash is a significant savings out of pocket to purchase that house.

• 44:39Speaker 01

  Right.

• 44:39Speaker 03

  So that is the negotiation that helps the buyer obtain the need. The seller is still gonna net the same as that price reduction. And you have some price integrity in the market because the house sold for 400,000 with concessions, but it's still sold for that and it was marked and noted as being sold at that. So these are things that savvy real estate agents will really have a good conversation and try to negotiate on behalf of the buyer. Now, it doesn't always work because there's some homes that are just, they're model homes, they are priced effectively, they're gonna get bid up, which I've seen. They are just moving ready and they're priced competitively and they list it and they wind up selling for 15,000 or 20,000 over list price.

• 45:22Speaker 03

  And it's because of the demand for that house, that area, schools, all the things that make homes desirable.

• 45:29Speaker 01

  Some people really like that new home smell. You have new construction, medium price, which is actually down year over year. It's not a huge difference, but it's a decrease from 467,000 to 453,000. So why would new homes be down in price year over year?

• 45:50Speaker 03

  Well, I believe they built with anticipation of completion. And when they got to market to sell those homes, inventory started to sit. It's actually something that we've seen more often recently in the last, I'd say, five months, where new home builders, not every builder out there, but new home builders actually have spec homes completed and ready for sale. So what they do is they incentivize buyers by giving them closing cost credit and/or rate buy downs, paying their closing costs in general. And that incentivizes them to do it, or potential upgrades. A lot of these homes are done, but they have new phases too. So if you think about this, pre-sale of construction tracks is an important piece to moving to the next phase.

• 46:34Speaker 03

  The catch 22 with that is, is that if you pre-sale and the buyer cancels, you still have already started that property. And that happens, buyer's remorse, interest rates have changed, there's something that didn't sit well with them and they now canceled that contract. Now you have a house that you're building, you have to finish it, and you now have to take an inventory home. So in order to sell it, you incentivize through price reduction and/or additional credits.

• 46:57Speaker 01

  Yeah, this is a, you know, they, I've always been curious about the fact that new home construction is generally more expensive than existing home.

• 47:10Speaker 03

  Generally, yes.

• 47:11Speaker 01

  Right now, median existing home price is about 400,000 versus 453,000 for a new construction. And I'm thinking, wow, that's, you know, that's interesting. An extra, you know, you're going to pay an extra 50 grand for essentially this, well, I guess it wouldn't be necessarily the same size of home.

• 47:32Speaker 03

  I mean.

• 47:33Speaker 01

  Probably close.

• 47:34Speaker 03

  It depends.

• 47:35Speaker 01

  Yeah.

• 47:35Speaker 03

  There are some developments. So ones that wind up becoming exclusive, and again, for listeners that are not listening, Kern County.

• 47:44Speaker 01

  Yeah.

• 47:45Speaker 03

  You buy an $800,000 house, you're buying a very nice house in Huron County.

• 47:49Speaker 01

  Yeah.

• 47:49Speaker 03

  Right?

• 47:49Speaker 01

  Yeah, you're double the median price.

• 47:51Speaker 03

  Yes. And you might be in an HOA.

• 47:54Speaker 01

  Yeah.

• 47:54Speaker 03

  Right, that has some, let's call it affluence.

• 47:57Speaker 01

  Yeah.

• 47:59Speaker 03

  You take that house that's $800,000 with all the specs and you move it basically 67 miles south.

• 48:07Speaker 01

  Yeah.

• 48:07Speaker 03

  And it goes up to 1.3 million.

• 48:09Speaker 01

  Right, right. Yeah, it's nuts.

• 48:12Speaker 03

  Yeah, it's, it, it, the sense of value is significantly different, right? So what we are seeing though, is those that can't afford to purchase in those communities are doing so by personal choice. So they're not, they're not needing to move, so they may think about it for a while.

• 48:31Speaker 01

  Right.

• 48:31Speaker 03

  You know?

• 48:32Speaker 01

  Right. We've got a listener question here asking about what the Crabtree report is, and they also add, enjoying your guest, he speaks well and shares a ton of insights. Thank you. So well, well done, Alan. Again, we're joined by Alan Madens.

• 48:45Speaker 03

  It's AI.

• 48:47Speaker 01

  Alan's our AI.

• 48:48Speaker 02

  We were just testing it out.

• 48:50Speaker 03

  It sounds like me.

• 48:51Speaker 01

  Totally do that. Oh my gosh. Uh, do you understand the Crabtree report? Do you know any history behind it?

• 48:57Speaker 03

  I don't know the history. I started using it and receiving it about three to four years ago. And Gary Crabtree has been a certified residential appraiser for 50 years.

• 49:09Speaker 01

  Yeah.

• 49:09Speaker 03

  So part of this is that he has enough industry knowledge, boots on the ground, to be able to give you some feedback based off of experiences. His compilation of this report is very time consuming. And he's actually made mention in his emails is he's not financially supported by anybody. So if you want to make a donation to help his cause, he'd be willing to take it because he's slowed down considerably in the residential appraisal side. He really does things for like estates and, you know, maybe probate type of evaluations.

• 49:37Speaker 02

  I wonder if, if we can help him utilize AI to.

• 49:41Speaker 01

  You know, I'd love to get him some help. There needs to be somebody that can step in and take over if Gary is ever gonna be walking away from it.

• 49:49Speaker 03

  That might be a great, you should have him on the show if you can get him on the show.

• 49:52Speaker 01

  100%. We've not had Gary on the show before, Stephen?

• 49:57Speaker 00

  I think we did back in the day.

• 49:59Speaker 01

  I think we may have, yeah, years and years ago.

• 50:01Speaker 03

  Just say we reference your report all the time. There's this guy named Alan, this crazy Asian dude that asks you, you know, uses it and it's a very, it's a valuable report. And his insight, like I said, it's, it's something that he has unique experiences with. Now, is everything going to be spot on as far as opinion? But no, that's why you have an opinion.

• 50:24Speaker 01

  Yeah, I, I get the feeling that this isn't necessarily like a, a, an audited or double audited report, you know, it's just, it's...

• 50:32Speaker 03

  But he has to comb over a lot of data, more to come with percentages, changes. There may be some calls, inquiries need to be made with certain builders to get, I mean, there's, there's more data than meets the eye here in order to make this look clean and polished for us to use.

• 50:45Speaker 01

  Yeah. Alright, so Alan, before we let you go, here's the Magic 8 Ball. Uh, where do you see the real estate market going here locally over the next year?

• 50:54Speaker 03

  Improving?

• 50:56Speaker 01

  Okay. I mean, it's always improving. That's a safe, that is a very safe answer. Uh, Magic 8 Ball says cannot predict now, so you are...

• 51:05Speaker 03

  Wow, off the hook!

• 51:06Speaker 01

  You've got, you've got it down. I, I, I mean, you say improving, the right time to, for anybody to buy a house is when you can afford it.

• 51:17Speaker 03

  Yeah, so the reason why I say improving and I have a little inflection is because if interest rates drop, you're going to see a lot of activity in the real estate market and it's not necessarily just purchases. It's going to refinance activity as well. One truth that I cannot just overlook is people have added a lot of debt. And because they've added a lot of debt, they're going to look for solutions that are cost-effective to bring their finances back under control and real estate is one of those methods. So, the second part is, is if we do see interest rate drop, you're going to see a sopping up of this inventory and we're going to be competitive again and prices should stay stable or go up.

• 51:55Speaker 01

  Yeah, and you could see more refis.

• 51:57Speaker 03

  Correct, but, but the thing that I'm really concerned about and I've always been this way, at the cost of jobs... If we enter a recession, you will see interest rates improve for mortgages.

• 52:08Speaker 01

  Right.

• 52:08Speaker 03

  But people will have a harder time paying their mortgages when they don't have income.

• 52:11Speaker 01

  Yeah, yeah, exactly.

• 52:12Speaker 03

  That's the worst part of all of this.

• 52:14Speaker 01

  Right, yeah.

• 52:15Speaker 03

  And that's what breaks my heart.

• 52:16Speaker 01

  There's no, I mean, very rarely are we in this Goldilocks zone, economically speaking, where we have low interest rates, low unemployment, and everybody's just, you know, going through. Very rare times does that happen. Well, Alan, thank you so much for taking the time to come on the show. Really appreciate it. Tomorrow, we got Taxman Tuesday with John Duffield, Stump the Duff, and myself will be on tomorrow. And remember these three things as we leave: be smart, be safe, and always be money wise.