September 27th, 2025 - What is Going On In Real Estate With Angela Walker

Angela Walker joins Steve Van Wie this weekend to discuss recent financial market trends and economic forecasts. They covered topics such as the potential for a recession, the impact of interest rates, and the significance of AI in current business operations. Additionally, they explored real estate tax implications and introduced trivia questions to engage the audience.

Transcript

STEVEN H VAN WIE 0:00

It's Saturday morning. It's 10 o'. Clock. This is the Van We Financial Hour. I'm Steve Van We.

Angela Walker 0:07

And I'm Angela Walker.

Angela Walker 0:11

I am not Adam Van Wee. No, no.

STEVEN H VAN WIE 0:14

Those of you who carried over from Angela's show know that we're sharing a couple hours today. And those of you who don't know, Adam is at a conference in Austin and Angela had already. I scheduled you first and then. You scheduled me. So it worked out that it was the perfect weekend for the two of us to just go right through the whole thing.

Angela Walker 0:32

You did.

Angela Walker 0:38

Yeah. I thought my broker was coming on today to talk about our new arrangement with Christie's International, but he wasn't available. And so that's when I called you and said, can you come on my show since I'm coming on yours? Like, this is perfect.

STEVEN H VAN WIE 0:52

I have. I have done Angela's show one other time. The one thing that we absolutely proved that time and validated this time is, man, does that hour go by in a hurry.

Angela Walker 0:55

Yes.

Angela Walker 1:02

Super fast, doesn't it? Always so fast and a lot of fun. And I'm going to leave a little bit early, too.

STEVEN H VAN WIE 1:04

Unbelievable.

STEVEN H VAN WIE 1:09

Yeah. So I'll tell everybody that as you know, if you're listening, Angela's got a couple of open houses that she's got to do. So she's got to get to the first one on time because you know what? People don't like to show up and.

Angela Walker 1:24

No realtor be there. Yeah.

STEVEN H VAN WIE 1:26

Tardy people. People who just don't show up. That's not acceptable. So I will give a brief market wrap because that's what we do in this segment. And we'll get back into it. And we will, after the first break have a trivia question

Angela Walker 1:28

Yes, yes. It's not good.

Angela Walker 1:37

Please do.

STEVEN H VAN WIE 1:44

as soon as I decide which one I want to do. So many good ones today. I don't really know. Anyway, this week, it was not a positive week. It was down a little. And here it is September. So everybody expects very little. But what I loved last week was a big push on Friday. I love going into the weekend with people buying. That shows a great sense of optimism. Friday was a big, big update. I think that portends a very good future. And we'll see. As you know, if you were holding over, I'm one of those contrarians that does not see a snowball's chance in Jacksonville, Florida of a recession coming anytime soon. It doesn't mean I'm right. It means that's my opinion. I just look at the facts and look at what's going on, and I don't know how you could possibly do anything to ruin this momentum.

Angela Walker 1:49

Can't wait.

Angela Walker 2:09

Okay.

Angela Walker 2:12

Yes.

Angela Walker 2:31

I don't either.

Angela Walker 2:48

Right.

STEVEN H VAN WIE 2:49

We're going to have groundbreaking ceremonies across this country. New homes for one. Factories for two. Automobile plants. Big things. They don't happen overnight. It takes a while, but they happen. And what we're going to witness now, unless there's some serious unforeseen problem, what we're going to witness is the rebirth of good jobs in America. We have spent decades creating hamburger flippers and we still are. You know where hamburger flip flippers come from now? Factories that make robotics. Oh, how about that? The people making the robotic equipment are paid a lot better than the people who used to be flipping the burgers. Now if we roll all that into education and so on, it's going to be a big deal coming. Anyway, that. That's my overall outlook on it for the month of September, notoriously the worst month in the calendar year so far. The dow is up 3.8. This is just for the month. The Nasdaq up 4.8. S P up 2.8. For the year so far, Dow up 8.7. Nasdaq up 16.4. S P up 13. Typical year in the S P, 510.9.

Angela Walker 2:55

Yes.

Angela Walker 2:57

Yes.

Angela Walker 2:59

Yes.

Angela Walker 3:02

No.

Angela Walker 3:05

They do.

Angela Walker 3:25

No.

Angela Walker 3:30

Interesting.

Angela Walker 3:38

Yes. Yes.

STEVEN H VAN WIE 4:17

Can we just hang out? The fourth quarter is usually the good one, so gotta get through September and you never know with October, but then the last couple of months are generally very, very good in the market. It looks to me like we're going to end this year and start into the new year with a bit of a tailwind.

Angela Walker 4:18

Fantastic.

Angela Walker 4:36

Okay. So that sounds great.

STEVEN H VAN WIE 4:38

Well, I'll. I'll be the first one to sit here at this microphone and tell you I was wrong if it proves otherwise. I just don't.

Angela Walker 4:46

We don't want you to be wrong. We, we want you to be correct on this one.

STEVEN H VAN WIE 4:50

You know the, the other thing that's going on? What the. All the predictions for gloom and doom because of the tariffs. Inflation was supposed to be sky high. Now I can't say it's plummeting because it isn't. But I can't say it's escalating very much either. It's kind of stubbornly in the upper twos, and that's as measured by the government. So we all know that there are other ways to do it. You can feel it more. I don't. I just don't see Any of that becoming problematic. And I do, I sometimes wish for the good old days when I was young, studying economics. Full employment was when you had a 5% unemployment rate. And the inflation rate that was targeted to be pretty much Perfect is about 3%.

Angela Walker 4:57

Yes.

Angela Walker 5:06

Okay.

Angela Walker 5:17

Right.

Angela Walker 5:33

Right.

STEVEN H VAN WIE 5:43

Why the Fed now believes that only 2% should be happening, I do not really know. There is some, some explanation on the unemployment rate in that we used to measure it differently. So if you're not looking for a job now because you backed out, you're not counted as unemployed. So that one's a little different measure. But the, the 2% target for

Angela Walker 5:49

Right.

STEVEN H VAN WIE 6:13

inflation seems a little aggressive to me and I think even the Fed is backing off on that a little bit now. There's also a website we talk about pretty much every week lately called Truflation, and it publishes a daily inflation rate. Oh, my list of stuff is updated every day. That's crazy this morning. You might Love this number. 1.99.

Angela Walker 6:36

Yeah.

Angela Walker 6:39

Oh, wow. Okay.

STEVEN H VAN WIE 6:41

Okay. Hear that, Jerome? Let her rip. Yeah.

Angela Walker 6:45

99. Wow.

STEVEN H VAN WIE 6:47

People know I'm. I don't want interest rates to come crashing and burning, but what happened with the last quarter point reduction is that mortgage rates went up a quarter of a point.

Angela Walker 6:58

Well, you know, they actually do it based upon what they see is going to happen. They don't do it on what is actually going to happen. It's what they foresee. Beyond that, it was priced in. Yeah, it's always.

STEVEN H VAN WIE 7:11

I think it was priced in at a half a point cut. That's why it went up a quarter. We got half of it and didn't get half of it. So the next quarter point put us back down there and then the next one. All of which might well happen this year. We could have two more. I think it's fairly.

Angela Walker 7:13

Yeah.

Angela Walker 7:17

Yeah.

Angela Walker 7:26

I think it could happen this year.

STEVEN H VAN WIE 7:30

Probably the preponderance, maybe 50% plus will do that. That's fine. No problem. Precious metals are still good. That shows that people are still cautious about what's going to actually happen, that sort of thing. But all in all, what I see is it may not be the perfect Goldilocks economy. Not too hot, not too cold, but it sure is pretty acceptable to me. 100. I. I have of course, stuck my neck out further than I normally do on this one and I sure hope I'm right. I hate groveling. All right. We're going to get back into the economics of real estate and all kinds of good things like that right after A quick break. So do not go anywhere.

Angela Walker 7:55

Yeah, I agree.

Angela Walker 8:06

I hope you're right.

Angela Walker 8:21

Oh, and you're going to have the trivia question, too.

STEVEN H VAN WIE 8:23

I will have that right after the break. All right. Don't go anywhere. This is the Van WE Financial Hour. Welcome back to the Van WE Financial Hour. I'm Steve Van We.

Angela Walker 8:31

And I'm Angela Walker.

STEVEN H VAN WIE 8:33

And Angela is graciously accepted my invitation to fill in for Adam today. Well, he's down talking with. If you. If you have a real exposure to financial planning and have any interest in it. When I would say the name Michael Kitces, you would not even ask me who because he is the man in a lot of respects on financial planning. And Adam's down there with him right now. Said he had just walked past him. Michael was getting coffee. And I think Adam might even be listening at a break or something like that. Anyway, remind Everybody, lines are open. 904-222-8255.

Angela Walker 9:05

Oh, cool.

STEVEN H VAN WIE 9:17

And thanks to all the regulars, but also all the new people. And if you want to listen to us talk, that's fine, but if you want to change the subject or try a shot of the trivia questions, just pick up the phone. 904-222-8255.

STEVEN H VAN WIE 9:33

Everybody's talking about it, especially in the stock market. AI is the thing right now. And it's been driving a lot of profits for people who are invested in companies like Nvidia. Well, a lot of companies are using it now, and there are some mixed results coming in. Companies this year will spend between 30 and 40 billion dollars on AI. Yes, it is. What percentage of those companies that are using AI have said that they have no economic return so far? Zero. It's a whole number. Percentage. Between 1 and 100, obviously. So you don't have to feel bad just guessing.

Angela Walker 9:39

Yes.

Angela Walker 9:58

It's a lot.

Angela Walker 10:21

There you go. Guess.

STEVEN H VAN WIE 10:22

Yeah, everybody knows. We'd like to make a bracket and see.

STEVEN H VAN WIE 10:28

Before we get off of the interest rate thing, I want to read you a sentence. You've heard us for years talking about Fed speak. How to talk and talk and talk and not say anything. I have a sentence here that I pulled up from this week that I think everybody will like. The bottom line we would put on this GDP report. Overall, it adds to the challenges that advocates of a significant cyclical economic weakening have on their side of the ledger.

Angela Walker 10:36

Yes.

Angela Walker 11:00

What does that mean? Right.

STEVEN H VAN WIE 11:01

I'm asleep already. Wake up, everybody.

Angela Walker 11:04

What does it mean?

STEVEN H VAN WIE 11:07

It means that the naysayers are wrong.

Angela Walker 11:11

Yes.

STEVEN H VAN WIE 11:11

I had to interpret it.

Angela Walker 11:13

We want the naysayers to be wrong. Yes.

STEVEN H VAN WIE 11:15

Yes, we do. Isn't that just the way it is? I'm looking at little things like durable goods orders, climb on aircraft and business investment. It's running the gamut of things. Long term durables. We were just talking about the appliances. And all the things that are going the longer term purchases, vehicles are doing well, that sort of thing. And the housing market is a gigantic catalyst for that kind of activity. And when you see a 20.5% jump in new home sales in August and you're still thinking there's a recession coming. Well, there are. There are some indicators out there. I'm trying to be fair. Now, there was some advanced purchasing because of the threat of tariffs. So there are some weaknesses in current buying. But when you're buying millions and billions of aircraft and when you got construction people going to work every day because of building factories, renovating factories and that kind of thing, this is not how you bring on a recession.

Angela Walker 11:19

Yes.

Angela Walker 11:32

Okay.

Angela Walker 11:36

Yes.

Angela Walker 11:49

Yeah.

Angela Walker 12:07

Okay.

Angela Walker 12:31

It is not. It is not.

STEVEN H VAN WIE 12:33

For those of you who are of a certain age and remember the 70s, Jimmy Carter spent four years talking us into a recession and it took him that long to succeed, but succeed he did. And it took Ronald Reagan a couple years to get us back out of it. I don't think anybody can talk us into a recession right now. Just my opinion shared by at least a few.

Angela Walker 12:51

The. Thank God.

Angela Walker 12:55

I don't think so either.

Angela Walker 12:59

Right. At least one.

STEVEN H VAN WIE 13:01

Angela and I were talking about the AI. I was discussing the trivia question with her on the break and all the, all the people who have said that it isn't working so well yet for them. There's a new term that has, I guess was new this week or new to me this week anyway. It's called work slop. What work slop means is that a lot of people are using AI and it's producing results that are less than optimal, shall we say. And angel even had an example using IT and having to leave out some things. Work slop is, let's see, it's mostly a peer to peer problem, 40% of it. And it's people having to redo, take a lot of time to redo things that they had done quickly because of AI. And I find it ironic. Ironic in many respects. And of course, as I said, AI itself is in its infancy right now. Right. We've been talking about it for decades, if you're involved in the IT at all. But now that it's available for people to actually use, it's like talking to a six month Old baby, Right. At this point, give it about another 20 years and then you're going to really see something. There are a lot of predictions about the long term ramifications of AI.

STEVEN H VAN WIE 14:26

People used to say in the 70s, computers are going to take over jobs. And of course, what they did was actually invent jobs because managers wanted more information. I don't think this is necessarily a one to one comparison this time. This one's a little concerning. So if you got kids out there wondering what to study, tell them to learn everything there is to know about AI. Become an expert.

Angela Walker 14:35

Right.

Angela Walker 14:47

Absolutely. You know, I want to add, there's such a difference. Like, okay, so my daughter who just graduated from Harvard, she's brilliant, obviously. But as I try to use like ChatGPT, she's not just using ChatGPT, she's using ALL, all of them. Right. For different reasons. And what she's taught me that I didn't know was that the output. And of course it makes perfect sense, the output that you get from any of the AI models is directly dependent on your input. Right. So if you don't ask the right questions, you don't get the right response and all of that matters. And it's so funny because even sometimes I will write something for real estate and I'll say, here's all the features of the house. Da, da, da, da, da. Write me a story. And so when I look at it, I think, well, they didn't say everything I wanted it to say. And then I have to stop and go, wait, what were my prompts? Did I give it all the prompts? You know, and so you got to kind of look at it like that. So I think you have a caller.

STEVEN H VAN WIE 15:58

Yep. Yeah, Marshall.

Angela Walker 16:00

We love Marshall.

STEVEN H VAN WIE 16:01

Quick note, When I started in the computer business in 1972, the first thing I learned was the word geigo. Garbage in, garbage out.

Angela Walker 16:09

Geigo.

Angela Walker 16:12

Yeah.

STEVEN H VAN WIE 16:14

Good morning, Marshall.

Marshall 16:16

Quick guess, 50%.

STEVEN H VAN WIE 16:19

Quick answer. Too low.

Marshall 16:21

Okay. At least I've set a spot for somebody, you know.

STEVEN H VAN WIE 16:25

All right, the first person should be grateful.

Marshall 16:29

I have something that the two of y' all might want to talk about during the break up with an answer. I so respect the priorities that someone selling real estate must have.

Angela Walker 16:44

Okay.

Marshall 16:45

And yet I would say for those 50 and over who are buying a house, if they don't have some serious financial planning thought in what they're getting ready to do,

Marshall 17:00

they could very well make a mistake that costs them long term.

Angela Walker 17:04

Oh, yes, absolutely.

Marshall 17:06

Is there such a thing? Angela, nothing personal, but you're not a financial Planner Steve is. You're a real estate salesperson. Okay. So you have to be careful not to get into that. But Steve, is there something that could be shared with Realtors that they could use to say, think about these things and the impact on your retirement plan. Of what you're doing. I'm not saying that for them, the particular mortgage that they get, but just for the process of thinking through this, like y' all do with someone who's coming in, sitting down and saying, okay, here's what I've done so far to date as a 50 year old, saving up for retirement. Here's how much I've been plugging into housing, you know, and what's a good direction.

STEVEN H VAN WIE 17:34

Yes.

Marshall 18:04

I just don't think it exists. I don't, I don't think people in my industry, in the traditional mortgage world even think about it, you know, think you're the most somebody can qualify for, then you give them that as the tool.

STEVEN H VAN WIE 18:16

Yeah. Sell up. I've got a couple topics on that that relate directly to what you're saying that we'll get into after the, the next break and you'll, you'll understand as soon as we get into it exactly why I'm bringing.

Marshall 18:33

Okay, well, that's why I wanted to throw out a general question, give you all a chance to holler and also. Absolutely salute. Would make sure to catch Angela's point before she heads out.

STEVEN H VAN WIE 18:44

Catch her. See if.

Angela Walker 18:48

I'm not sure what point he meant.

STEVEN H VAN WIE 18:50

No, I'm not sure, but we'll, we'll hit it. Okay,

STEVEN H VAN WIE 18:55

I've only got a minute left on this side of the break. I'm going to bring this one up. Time is running out to get tax breaks for home improvements. This is important. There are a lot of, in particular residential energy credits that under the one big beautiful bill act, are going away on December 31st. And if you want to take advantage of them, it has to be done this year and the work has to be completed and paid for this year. It includes, but it is not limited to new doors and windows, solar systems,

Angela Walker 19:02

Okay. It is important.

STEVEN H VAN WIE 19:33

skylights, air conditioners, water heaters. Ever heard of a heat pump? Water heater? Have you? Yes, I have. I've got a. That happened recently, apparently. Well, those, those are really, really popular with the feds, apparently, because they're supposed. Big rebate. Yeah, exactly. Insulation, electric power panels, heat pumps in general. And I've got a, a wonderful little example that I don't have time for. I, I think this is the break. Yeah. We've got 10 seconds. I'll grab it right after. Right after. Yes. Okay. Don't go anywhere. This is the Van we Financial Hour. Welcome back to the Van we Financial Hour. I'm Steve Van We.

Angela Walker 19:40

Yes.

Angela Walker 19:52

To be more efficient.

Angela Walker 20:12

Okay. When we come back. Okay.

Angela Walker 20:20

And I'm Angela Walker.

STEVEN H VAN WIE 20:22

And. And we do have a trivia guest on the line and we're going to take it because that's what we do. Good morning, Mike.

Mike 20:31

Hey, good morning, Angela. And good morning, Steve. Hi.

Angela Walker 20:34

Hi, Mike.

STEVEN H VAN WIE 20:36

What do you think?

Mike 20:38

Well, I'm going to start off with a summer note.

David 20:42

I was just very, very sad to.

Mike 20:45

See that the only one democracy in the Mid east and people walked out when the president made his speech yesterday. I'm talking about Benjamin, not Nayu. Very sad.

STEVEN H VAN WIE 20:59

Totally expected and totally disgusting.

Mike 21:02

You're right. You're right. The so called leaders of the world, too many of them have jellies for spines, in my opinion.

STEVEN H VAN WIE 21:11

Shared by many. Yeah.

Mike 21:14

Okay. Getting that over with. You know that someone would say, oh, what are you bringing up politics for? But you know, Israel is a leading country when it comes to things like artificial intelligence and technology and a lot of people are abandoning them. I was very surprised at a company that I hold some shares of, Microsoft, for some reason was won't work with the IDF in Israel. Something about the cloud and I just don't understand it.

Marshall 21:49

Nor do I. Yeah.

Mike 21:51

All right. Anyhow, little shot at the trivia. Well, if I'm correct, I find that alarming that it was as high and I saw this in Forbes, 95%.

STEVEN H VAN WIE 21:55

Yep.

STEVEN H VAN WIE 22:06

You are exactly right. 95% of companies currently using it are saying there's been zero or negative economic return thus far. It's amazing. And, and it's largely because of that term work slop because they're having to redo a lot of things which takes longer than just doing them. The first place.

Angela Walker 22:17

Isn't that incredible? Yeah, I think it is too.

Angela Walker 22:29

The first place. Yeah. But you do have to give all the right prompts. For it to get.

STEVEN H VAN WIE 22:32

Yeah. You have to learn. Got to learn to use it or it'll use you.

Mike 22:39

Can I bring up a quick question? In the same magazine where I saw that there was an article next to it about the fact that President Trump, and he's not the first one to do this, we have now the government taking shares in companies and I was reading the article saying how this particular gentleman didn't think that was a good idea. For instance, the government is now taking

STEVEN H VAN WIE 22:41

Of course.

Mike 23:10

some interest in intel or MP Materials I just wanted to get your guys thoughts on that real quick.

STEVEN H VAN WIE 23:17

Mine are very simple. Stay out of it.

Marshall 23:20

I kind of agree that I have.

STEVEN H VAN WIE 23:24

No explanation requirement on that one. Just stay out of it. Public is public, private is private. And I don't like the crossover.

Angela Walker 23:28

Yeah, me too.

Mike 23:34

I remember Solyndra and I'm sure you do too.

STEVEN H VAN WIE 23:36

Oh yeah. Oh yeah. $400 billion. Bye. Bye.

Mike 23:42

Yeah, exactly.

Angela Walker 23:43

Yeah.

STEVEN H VAN WIE 23:44

All right. All right. Thank you. We've got your address.

Mike 23:45

That's all I got.

Mike 23:49

All right, have a great show. Thank you.

STEVEN H VAN WIE 23:51

Thank you.

STEVEN H VAN WIE 23:55

Good morning, David.

David 23:57

Oh, hey, morning. Hey, I wanted to ask you about bonds and I might even be able to fit it. With that last caller, I, I'm calling you from out in California, San francisco. And about 110 years ago there was a dam built. It's in the Yosemite Valley, it's called Hetch Hetchy. And they put a big, big hydroelectric system on it and it's got enough power to take care of Northern California. And so when the federal government chipped in the money to build that 110 years ago, they did what's called the Raker Act. And it said that since the public already paid for it, electricity ongoing should be basically free. And so the state of California built the wires almost down to it, but they had a couple of blocks left and then all of a sudden they ran out of money. And so PG&E came in to save the day just to do those last couple of blocks. But they decided to charge for it as a service fee. So the public never got that free electricity. There's always been a service fee just for those last couple of blocks. Apparently the same scam is going on in Iowa and Nebraska right now where they've got these great big wind farms, solar farms, and the power company won't hook it up to the grid without some kind of piece of the action. And so, you know, the, if you know about North Dakota, for example, they have so much wind up there that they could power the entire United States just on a regular basis. And it's, you know, that we're stuck with something like nuclear, which is going to be quarter million years to clean up. And you know, there's no budget for anything for 10 or 20 years. In fact, aren't they about to do a government shutdown in a couple of days and they'll probably end up firing the nuclear inspectors and you know, the idea that our property is not being managed and then they're get, they're trapping us in bad budgets. So with bonds you know, we the people invest in ourselves. We have a school district bond issue, sewer bond issues, library bond issues, all sorts of stuff. And they used to be the most steady conservative, invested in them. And you would, you might get a low rate of return, but basically what you put into the bonds you didn't have to pay income tax on. So the idea is like you were already investing in the county, so you know, your income tax was reduced by how much you had parked in bonds. And so it used to be like patriotic to be a bond holder. But you start listening to financial shows nowadays and they say, oh, bonds are terrible. They don't get the rate of return that these fast buck boys in Wall street get. So nobody wants to invest in ourselves. And so, you know, they're about to do this government shutdown. And it's based on that same stupid logic that the rich boys don't want to pay into the taxes and they don't want to buy bonds. And so they're not investing in America, not investing in our infrastructure or locally. They're hogging all the money up in their penthouses and leaving it at that. Yeah, just wondering what's going on a bit too long in the bonds.

STEVEN H VAN WIE 27:41

I, I need to move along. We've got some things to handle. I'm not big in that arena, don't know much about it. And anybody who's interested can look it up. Thank you.

Angela Walker 27:54

Yes.

STEVEN H VAN WIE 27:56

Back to. I wanted to talk a little bit about the energy credits because these things are leaving and Roger pointed out in the break that the electric car subsidy is going away at the end of the year. So if you're thinking about an electric car, you have about three months to get one and you'll still get the credit. Yeah. But you got to make darn sure that your car is. The car you're looking at is covered because some of them have hit their quotas already. So be, just be careful. And you Tesla.

Angela Walker 28:16

$7,500, right? Yeah.

Angela Walker 28:30

One of them is Tesla one.

STEVEN H VAN WIE 28:33

Yes, Tesla can be. Some of those models might be affected. They have been in the past. I don't keep up with it right now. The. I did a little study myself about the residential energy credits. And I never got anything on the credits. But we, we've been in our house 25 years and we have changed a lot. A lot of different things. So I went back this morning knowing that this topic was going to come up and I took a look at what we've done in our own house. So I took the electric bills from July, August, September for the year 2010, and. And then for the year 2025. Okay, you're going to like this, I think. July 2010, $1,009. July 2025, 381.

Mike 28:37

I don't know.

Angela Walker 28:40

Okay.

Angela Walker 28:46

Yes.

Angela Walker 28:54

Okay.

STEVEN H VAN WIE 29:24

August 2010, 943.

STEVEN H VAN WIE 29:29

August 2025, 426.

STEVEN H VAN WIE 29:33

September 10, 877.

STEVEN H VAN WIE 29:38

September of 25, 395. Now, that little procession goes on annually. And I have not done any extraordinary things. We did not do solar or any of that. What we have done is we swapped out a lot of light bulbs to LEDs. Okay, that helps. But the big thing is, in that time, we've had to replace three air conditioners. And those new air conditioners are so. Well, they're expensive, but they're so cheap to run. And that's not even the whole bottom line on these things. The bottom line is the house is way more comfortable than it ever was before. They got them matched up to all the. The ducting. And the biggest thing was they have these very quiet, variable speed fans on now. So remember the old days, if you turn the temperature down 3 degrees, you'd hear this whoosh. You're standing in front of one of. One of the. The outlets. It could practically blow you over. But now you. You almost never feel that the air conditioning is running. And then you get your bill in the wintertime with, like, 200 bucks. It's a big house. It's 5,000 square feet, two stories. And looking at this, it's hard to lay out $8,000 or $10,000 on an air conditioner. And it's even hard to justify economically, which I'll get into when I address Marshall's question after the break. It's hard to justify that outlay sometimes times, but it's not hard when it starts paying you back all the time. It gets a lot easier. And you're getting it in a degree of comfort inside that I have never seen before.

Angela Walker 30:03

That does help.

Angela Walker 30:08

Okay.

Angela Walker 30:24

Right.

Angela Walker 30:54

Yes.

Angela Walker 31:35

It's fantastic, isn't it? It's worth it. So whether you get money back or not, you should do the updating. Look how much money you saved. Yeah. I mean, that's crazy, because. Yeah, over 50, electricity should cost more today than it did then.

STEVEN H VAN WIE 31:36

It really is.

STEVEN H VAN WIE 31:42

But the value.

STEVEN H VAN WIE 31:51

Right? So think about all of that. These are our nominal dollars. It's unbelievable, people.

Angela Walker 31:56

Yeah.

Angela Walker 31:58

Hey, I gotta go. I'm headed out to my open house. Thank you for allowing me to be here today. Okay.

STEVEN H VAN WIE 32:04

All right, I'll See you after the break. Welcome back to the Van We Financial Hour. I'm Steve Van we, and I'm going solo for the rest of the day. Thanks again to Angela Walker. When we get together, it the time flies. Just always has, always will. You know, I go back to the first day we did the show, pushing 12. Pushing 12 years ago, I guess.

STEVEN H VAN WIE 32:28

Yeah, 11, 12. I don't know. I lose track of that. But anyway, it came in and the power was out in the building. Angela was here. So instead of doing a show the first day, we got to know Angela. And in the long run, that has really been a godsend because it made this whole thing so much easier to slide into. Then, of course, the last seven or eight minutes story, I tell all the time that power went back on and they didn't think it was going to, and we were left hustling. But that's for the February show, when I get to tell that whole story every year. All right, let's talk about Marshall's question. I don't know much about selling houses, and most realtors don't know a heck of a lot about overall financial planning. The specialties

STEVEN H VAN WIE 33:21

of life are quite necessary because people can't know a whole bunch about everything. And of my approximately 1 million old sayings, one of them is interesting. People know a lot about a little and a little about a lot. In other words, you should be able to be conversant in many, many subjects if you want to be an interesting person. But nobody would expect you to know everything about anything that isn't in your. In your bailiwick. And the process of financial planning has come a long way, and there's been a lot of changes in it. And I'm sure there are a lot of changes in the real estate business too. But getting them together is not always real simple. And I don't expect realtors to know all that much. But the biggest one that I have found, and this applies to real estate people, it applies to some CPAs, it applies to some financial planners. Back in 1997,

STEVEN H VAN WIE 34:28

the law was passed that excluded a certain amount of the sale on your primary residence. And those numbers came in. I'm gonna. I gotta stop back up just a little bit. Prior to that, Americans had a one time in your life ability to shelter the gain on their homes. If they didn't take it on that particular time, they had to reinvest that money in a more expensive home or they'd have to pay taxes on it. That whole system was thrown out in favor of the new system whereby every five years

STEVEN H VAN WIE 35:06

you can exclude the gain on your home up to the limits of 250,000 for a single person and 500,000 for a couple, well, that was many, many years ago now. And over that amount of time, inflation has eaten away numbers and nothing's been done. So today, just to keep even with that, those numbers would have to be altered to 500,000 for a single and a million for a couple, almost to the dollar. Those numbers would be like that when, when making laws, especially in the tax arena. Numbers that are stated like that are statutory, meaning they will not change until Congress changes them. Other numbers are indexed for inflation. I have argued for many years, written blogs, complained quite loudly that if you're going to have a tax code that's fair, it has to be inflation indexed investors, most of you will know that you can offset capital gains with your capital losses in any given year. But if you have extra losses, you can only

STEVEN H VAN WIE 36:30

deduct 3,000 of those extra losses on any given year and the rest is carried forward. That number is so old, it's got gray hair. Why hasn't it ever been changed? Because Congress is greedy and they want their money real simple. And the same thing goes on these home selling numbers. It's leading to a very strange and perhaps unforeseen problem. There are a lot of older people who would like to downsize to their forever homes and they won't or can't do it because they don't understand or they do understand. I guess I should say the implication of selling a home. We were talking earlier that over the recent period, homes have doubled. Well, all of a sudden if an older person or couple thinks about selling their house at the new market value, they might be saddled with a very, very large capital gain. So they don't do it. Most people unfortunately are very

STEVEN H VAN WIE 37:43

subject to postponing doing things because there might be some taxes involved. You see it in the market all the time. I don't want to sell this stock because it's appreciated. Oh, you don't want to take the profit, Right. You don't want to pay taxes? Well, it's a common thing in any financial planning office. But the, the problem has made,

STEVEN H VAN WIE 38:07

that problem has made the whole housing problem worse. It has limited the supply and in many cases that supply might be right in the ballpark of what people really want to spend or can spend. And it, it's not happening. And, and I would like to have all realtors understand exactly, first off, exactly how the sales exclusion works. Exactly how things are taxed and they would at least be able to talk sense to people who they might be dealing with people of any age, actually. I just really don't want to pay the taxes. Well, they should. They should have in their arsenal the knowledge that says whatever gain you have that is not tax free. And by the way, you may not have any idea how big your gain is that's tax free, especially for a couple 500,000. They, they need the arguments to get people off of their dead center zero. And they need to make people understand that a capital gain at 15 or even 20% is not necessarily something that they should avoid at all costs. First off, if you downsize, you're probably going to have a lot less expenses and maintenance along the way. But they're still hung up on this. I've got this profit in the house. So if I could educate every real estate professional in the world just a little bit more about the tax code, it would be great. But of course I can't. And it's similar for investors. There's a lot of investors who don't have a clue how the actual tax code affects their own investments. So the number one thing I would address in what Marshall was asking about is that we all need to know more about the tax code, in my opinion. And I know because my wife was a realtor long time ago and she told me all about the school they go to. And in that school you don't sit around and hypothesize and ask questions. You sit, you listen, you learn and you take the test, period. They, they discuss taxes on a superficial, more or less level during that time, but they don't keep up with things and they don't have any, I guess, continuing education on it that I'm aware of. There might be some optional ces. We, we have a lot of CES in our business that are required, but we get to choose the courses. I assume Realtors, being professionals and licensed also can take a lot of ces. I would like to see people offer very good tax related courses for real estate people to take every year and, and maybe even mandate one or two courses. I think the whole world would be better off if they just had a little better understanding of the tax code. Another one that I would really like to see. Speaking of Marshall, I would like to see people have some education on the reverse mortgage. We've been talking about this for years too. Reverse mortgages came on the scene with a gigantic thud. It was probably the worst product introduction in the history of mortgages and they got celebrities to tell you how wonderful they were and that all the rumors were left unanswered as just a way for the bank to take your house and on and on. And none of that was true. There was also a rumor that was fact. They were very expensive. What people need to know is those costs have been being cut and have been cut and are being cut way, way, way back. And it's not any longer just out of reach for most people. Plus they've added products to it, including the reverse mortgage to purchase whereby you only have to pay about half of your house and never make a payment again. That one, to me that's kind of the answer for older people who want to downsize. You can buy in a. You can pay half and buy into a much nicer neighborhood than you could if you wanted to spend your own money. I think they also need to learn a lot about the concept of opportunity cost. If you put all of your available cash out of the sale of your house into a new house, because houses are expensive, you don't have anything extra in your investment account to try to supplement your income. That's called an opportunity cost. That and the reverse mortgage and the overall impact of taxes and the method of taxation would be a really good start on having realtors be able to serve their customers better than they do now, in my opinion. So you got it. Now, I firmly believe that this country is in pretty good conditions condition right now financially and improving bit by bit. The tax code having been frozen in place now by the one big beautiful act is it's given us some planning tools. We used to count on increasing taxes over time. We can now say with some certainty it's not a problem, at least for now. Everybody needs to know all these things to do the best they can when they're advising other people, whether they're customers or clients. My opinion. We'll see you next week at the same time. Adam will be back. Thanks for listening. This is the van we financial hour.