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- [00:00]
Daniel Fosh
Welcome back to Real Estate Without Borders. My name is Daniel Fosh. I'm joined here by the wonderful Dave Hutchinson. How's it going, man?
- [00:09]
Dave Hutchinson
Everything's good, man. I accept this.
- [00:12]
Daniel Fosh
Except the stock market. Did you, did you lose any money?
- [00:15]
Dave Hutchinson
You know what? I didn't. Look, I'm not one of those. I can't, I can't. It can.
- [00:20]
Daniel Fosh
That's good. Yeah. No, I mean, to be honest, if you're investing properly, like, you shouldn't be looking because, like it's an investment, it's not a job. If you're looking and you're trying to plan your ins and outs and it's, you know, you're a trader and, and that's, that's more of a job.
- [00:37]
Dave Hutchinson
I have some good, some good amount, a good amount in a lira from the fire department, a locked in retirement account, that is.
- [00:44]
Unknown Speaker
Yeah.
- [00:45]
Dave Hutchinson
So I have a financial advisor monitoring that. He sends me emails from time to time. I scan it, I'll glance at it, give it a look and see what's going on. But I think I, I mean, for today's episode, I honestly see it affecting the real estate market globally because I can give you real examples of clients that are affected not only in Canada, but in Tulum, Mexico as well. I've had two clients in Tulum back out of transactions over the last week or so because they were actually planning on using funds from the stock market to purchase. So the uncertainty and their money has gone down. And then I've noticed a huge, huge drop in active buyers when it comes to the listings that I have up right now in Toronto. Three, four weeks ago, it was freehold properties. Any well marketed, well priced freehold property was doing really well. And now it's, it's tough to even get showings, to be honest.
- [01:36]
Daniel Fosh
Yeah, 100%. And I think that that's. You're hearing that in the US as well. I was just, I just did an article in Bloomberg about it. In Canada's market, tariffs are definitely weighing on, on housing markets around the world. I mean, we're seeing news of it in the uk. Basically, most, most economies are saying that the biggest risk to their housing market right now, their real estate markets and their economies in general, is this trade war. And a lot of it is because, you know, it's creating a degree of unpredictability around. Do you know, are we going to have jobs?
- [02:07]
Unknown Speaker
Right.
- [02:08]
Daniel Fosh
Like people aren't going to buy a, they're not going to commit to a major financial decision if they don't think that they're going to have stable employment for the next 12 months, much less the next five years.
- [02:19]
Dave Hutchinson
True.
- [02:19]
Daniel Fosh
So, yeah. So let's talk a little bit about the trade war. Let's just kind of like give a rundown of where we are. So Today is Wednesday, April 9th. This is when the episode is going to be going out. Basically, China has retaliated to the US with an 84 tariff on US goods. Amid the trade war, the US responded with 104 tariffs on Chinese goods.
- [02:39]
Dave Hutchinson
I think today or last night.
- [02:42]
Daniel Fosh
Yeah, I think it was like midnight. So what does China actually buy from the U.S. right, because they don't consume a lot of U.S. goods. They do consume a lot of U.S. agriculture.
- [02:50]
Unknown Speaker
Right.
- [02:50]
Daniel Fosh
So the U.S. is like a huge agricultural producer. Hurt farmers in the U.S. probably, from.
- [02:55]
Dave Hutchinson
What I saw something with Kevin, I sent it to you last night, the Kevin O'Leary explanation of what's happening. And I think it's interesting because his take on what's happening with the tariffs and in China and the US Is a lot of, it's backed by or a lot of the underlying issues that maybe most people aren't aware of are like the impractical or maybe not so liked business procedures that the Chinese government has in place for US Companies. So I think this is, is a lot deeper than what most of us are, are aware of. Like, I think these tariffs are. So there's, there's so many different factors that go into these tariffs that when I see people arguing online, it's like, I think it's, it's very deep rooted into many different issues. And one of those with China being like, you know, business procedures and all that stuff, that that's kind of maybe an unfair practice and Trump's trying to set them straight, maybe bully him around a bit.
- [03:46]
Daniel Fosh
Yeah, I've heard that that's sort of a big part of it. And also like, the reason why they put those tariffs on all the surrounding areas is because, you know, China would basically just send goods through like somewhere nearby.
- [03:58]
Unknown Speaker
Right.
- [03:58]
Daniel Fosh
Another Asian country that wasn't subject to tariffs because China has been subject to tariffs for a long time, since Trump's first presidency. And then they added or, and then. And Biden never got rid of them because why would he? Right, so am I correct?
- [04:14]
Dave Hutchinson
Is it. Is there only two countries that have retaliated? Canada and China.
- [04:18]
Unknown Speaker
Yeah.
- [04:19]
Daniel Fosh
Yeah, it's hilarious. Yeah, there was that, that, that. I guess you saw that image from like, is it Fox or something?
- [04:26]
Dave Hutchinson
Yeah, I was gonna send it to you. But you know what it was on my phone to send to you and then I refreshed my page and never found it again. So. Awesome.
- [04:32]
Daniel Fosh
Oh yeah, yeah. It is funny though. It's so China.
- [04:36]
Dave Hutchinson
So China what? China. In response to the tariff. So China has impovered a tariffs on 3 billion US goods, including a 25% tariff on pork, aluminum scrap. Let's see. China hit back with 60. Sorry, someone keeps calling me here. 60 billion of US products like soybeans, 25% cars, LNG targeting US agriculture, manufacturing sectors. And they hit back with a. What's the, what's the 104 part? Can you explain that?
- [05:03]
Daniel Fosh
You'll have to repeat that. You froze for a sec.
- [05:05]
Dave Hutchinson
Oh, sorry. Can you hear me?
- [05:07]
Daniel Fosh
Yep, no problem.
- [05:08]
Dave Hutchinson
What the, what happened with the 104 tariffs? What's, what's that about? Can you explain that?
- [05:15]
Daniel Fosh
Yeah, so China escalated and then Trump escalated back. Like he kept saying, like he's trying to, he's basically said to everybody, if you retaliate, I'm just going to increase it. And so I guess he had to be true with his word.
- [05:27]
Dave Hutchinson
Fair enough.
- [05:27]
Daniel Fosh
The crazy part is like, so China's chosen to participate in this trade war. I think that they maybe think that they can win and it seems to be like they're al. There's also some sort of, you know, capital war going on as well where basically China like you know, US Bonds. So, so you know we talked about this early on the show, right? Like before, before this was a mainstream. Thought you heard it here first folks, that, that Trump's team is trying to get the yield curve down on 30 year, on the 30 year to you know, three and a half percent so that they could refinance all of that government debt at a cheap rate or 10 or I don't know if there's a 10 year or 30 year curve, whatever it was, but China is dumping US bonds, which means that US bonds are getting cheaper. And, and so that means that the yield is going up.
- [06:20]
Unknown Speaker
Right.
- [06:21]
Dave Hutchinson
Okay, go ahead, let's do this for back to the, let's use crayons for this one. Okay. Because this is really important I think for the realtors to understand that. Follow us. Okay. The bond is directly, the bond yield is directly related to interest rates, related to mortgage interest that the consumer that's purchasing real estate would have to pay. Correct?
- [06:40]
Daniel Fosh
Yeah, correct.
- [06:42]
Dave Hutchinson
Okay. So what Trump is trying to do is to get bond yields down so that they can refinance USA's debt at a lower interest rate.
- [06:52]
Daniel Fosh
Correct.
- [06:52]
Dave Hutchinson
But that will also be I guess you could say, I don't know if it's beneficial or not in the real estate world. Beneficial because it's going to drop interest rates for consumers looking to purchase real estate. We think.
- [07:06]
Daniel Fosh
Yeah, it would, it would have that benefit. Yeah. I mean, I don't know if it'll be, I don't know now that we've, we're, we're seeing what it takes to get there. I don't know. I don't know if that will outweigh the negatives. But yeah, you, you would end up with lower mortgage rates as a, if the yield curve gets lower.
- [07:21]
Dave Hutchinson
Yeah, more sales. No, I'm kidding, I'm kidding.
- [07:25]
Daniel Fosh
But it would probably, it would probably result in more sales to begin with and that. Because, you know, more people can buy, you know, assuming that their, their confidence comes back. But lower rates would help people's confidence come back because now all of a sudden when they think about what they're paying monthly for a house, the economics improve for them. Right. So, you know, oh, if I'm worried about losing my job, I'm a little bit less worried and I'm, because, you know, my interest rate is a hundred basis points less. So, you know, I could maybe lose my job and still afford this house.
- [07:55]
Dave Hutchinson
Fair enough. When was the last interest rate change? I guess there hasn't, has there been an interest rate change in the US over the last couple years?
- [08:05]
Daniel Fosh
Like a cut from the, the, yeah, The Fed cut 50 bips right before like in September I think, which has been, it has been pretty politicized because they said, oh, you know, are they trying to make, make it easy for the Democrats to win?
- [08:18]
Dave Hutchinson
Right.
- [08:19]
Daniel Fosh
Which I don't know. I mean, I think the Fed's pretty independent personally, but yeah, so, so they did cut, but they haven't. That's about it. Right. So whereas you get, most other Western countries have cut, you know, 100, 200 basis points.
- [08:33]
Dave Hutchinson
Right. And we have another announcement coming up mid month April, which I think it's like back in every article I read is different. I see some articles mentioning they think a rate cuts coming. I see some that say no, what's flip flopping.
- [08:46]
Daniel Fosh
I would say it's a coin toss at this point. It's probably 50, 50 chance. Yeah, I think that, yeah, it's going to vary based on.
- [08:54]
Dave Hutchinson
I don't think that's gonna happen. Yeah, I don't think that's gonna have any like immediate effect on the, at least on the Canadian real estate market. I can specify Toronto. I think consumer Sentiment right now is still very low. And I think it's actually interesting because a lot of people probably aren't really aware of what's happening. They just, you know, they get the surface level information and base their entire decision based off of what they're seeing. Very surface level, without any like in depth analysis. Like the real estate is so heavily influenced by the media. It's crazy. There's so many factors. But I think honestly the media has a huge, huge factor in terms of what buyers are doing, especially in Canada, 100%.
- [09:33]
Daniel Fosh
And I would say that the stock market is very much tied to that. Right. So it's interesting because there's, there's, there's a, that article I was mentioning, I just, it just came out. It says, Toronto home sales plunge as trade war hits consumer confidence. And, and that's really the story, right? I mean like again, you can empathize with buyers. In Canada we have the trade war, which has completely overshadowed the fact that we also have another layer of uncertainty which is a federal election. Right. I mean like nobody's even paying attention to the election anymore the last couple of days, which is probably, you know, for the benefit of both of the candidates because neither of them campaigning well, neither of them.
- [10:08]
Dave Hutchinson
Okay, so, okay, what's, Give me, give me the simple answer of what's happening in the stock market and how that would affect a consumer other than the obvious of if they have funds in that, like actually in the stock market. Like I, I know it's sentiment, but you know, can you give us a quick rundown on, on what you're seeing, what's happening in the stock market and why, why you think that's happening so.
- [10:32]
Daniel Fosh
Well, I think it's happening because. Okay, so what's happening in the, in the, in the stock market is volatility. I mean, it's down generally on a downward trend, you know, but today, again, April 9th, if I look at the S and P right now, what's it doing? It's up. But it's been very, it's been bouncy, right? It was down. Like when we started this episode at like 11am it was down and now it's. And retail is basically buying that up is up 1% since that bottom. Let me just, I'm going to screen share this. This is funny.
- [11:00]
Dave Hutchinson
Yeah, pull it up.
- [11:01]
Daniel Fosh
Do some, some big Google technical analysis here. Yeah. So you can see. I mean, look, it started the day down and then it basically jumped up. I don't know, like one and a half percent dropped almost one percent went back up one percent and then dropped one and a half percent and now it's up again, one percent. So that's what you would call volatility. I mean, if you were a good trader and you're sitting there watching at your desk, you could probably make some pretty good, some pretty good moves on that.
- [11:36]
Dave Hutchinson
And then, okay, now this is, this is all like, again, like we just talked about, this is affecting the real estate market. How are you seeing this affect the real estate market? Like from your, from your side? Because the cool thing about this podcast is we're obviously both super tied in with real estate, but we both have like a different perspectives on, on everything. So it's kind of cool, like, to get your perspective on what you're seeing.
- [11:58]
Daniel Fosh
Yeah. So the way I see that this impact real estate is, I mean, typically you get what you mentioned, the negative wealth effect. Right. So if I was planning to buy a house in Tulum or Toronto or, you know, London or Dubai, but I, you know, had my entire down payment or, or maybe all of the cash that I was going to spend on that property, period, sitting in stocks, I'm not, I don't have as much money anymore. Hence my buying power just got eroded.
- [12:29]
Unknown Speaker
Right.
- [12:29]
Daniel Fosh
And so, you know, maybe my buying power got eroded by 10 or 20%. And so I can pay 10 or 20% less than the, than I could five days ago. And that will, that reduces the actual capital of the buying pool by 10 or 20%, assuming everyone is invested in stocks, but not everyone is invested in stocks. Right?
- [12:50]
Dave Hutchinson
Right.
- [12:50]
Daniel Fosh
And so some people are invested in other things and, or they just have it sitting in ca and those buyers kind of offset that risk a little bit, but their confidence matters. Right. And what the other piece of what happens when the market starts getting volatile like this is people are like, nah, screw that. I'm just gonna chill until things look like normal because, you know, this seems scary. It seems like we could see a recession, maybe a market crash, you know, more job losses, trade war between China and the US Continues. None of these are, you know, give you the warm and fuzzies about the economic picture for the next 12 months. And so you're just like, I'm just not going to buy. Right. I'm fine. I'd rather just pay rent for a year and lose whatever. You know, if you're paying three grand a month in rent, I'd rather just lose 36,000 in rent than potentially lose hundreds of thousands buying a property that later gets smoked by whatever happens in the economy. In the next 12 to 24 months. So that's where that sentiment shift is happening and is very apparent.
- [14:00]
Dave Hutchinson
And then we also. Okay, so, so we have obviously money in stock market which is affecting people. We have the consumer sentiment which is people not being overly confident in the entire economy, not looking to buy. And then the last thing I want to just say, I know the, like the U.S. treasury yield and the bond yields, we talked about this and I think it can, I want to like make it like so clear for the realtors to understand. Especially because it's, it's similar in the US And Canada. No, same thing.
- [14:28]
Daniel Fosh
Yeah. So which part? The bond side.
- [14:31]
Dave Hutchinson
Right?
- [14:32]
Daniel Fosh
Yeah. Yes and no. So like it's a little bit different in such that in Canada like we don't have a demand for 30 year bonds. Like the US is really the only country that can sell 30 year bonds because they have such a stable economy and the reserve currency of the world. Some other countries have close, but not, not like the U.S. so that's why the, the U.S. has 30 year mortgages basically in Canada. Well also banks in, in Canada are prohibited from doing it. But the way it works is like a government can lend money to two parties, right? They can either lend money to you, Dave, the, the guy who wants to go buy a condo or they can lend money to the US Government. Right. And the, the likelihood of the US Government, I mean the US government can just print money to pay the, pay the mortgage so that you know, they're, they're, I'm probably going to give them a better rate than I'm going to give you because you don't have that ability to print money to. And most sovereign states can also print money to bail out the loan. The banks or financial institutions, hedge funds, other governments that are lending Canada or the US money do so by buying their bonds. A bond. I give you $1,000, you give me a piece of paper that says you're going to pay it back and you're going to pay me x amount of interest on, on it between now and then.
- [15:48]
Dave Hutchinson
Okay, understood. The 10 year treasury yield, okay. Yields have risen. 30 year mortgage rates are hovering around 6.5 to 7% right now in the U.S. so let's see, for example on a $400,000 loan a jump from 6 to 7% is about 150 to $200 on monthly costs. Okay, understood. Are you seeing this have any effect on the rental market? I wonder. I know in Toronto specifically we're kind of seeing a down rental market, but I think Long term, maybe in the next little bit here we might see the opposite. As buyer confidence and buyer sentiment maybe drops, we might see maybe that rental market pickup. I know it has a lot to do with immigration, but I think just in terms of sentiment, in terms of actually purchasing a property, do you think maybe it's fair to say that the rental market might start to heat up again as buyers are more nervous?
- [16:47]
Daniel Fosh
It could a little bit, yeah. Like I would say that none of the factors that we just discussed are really positive contributors to the rental market.
- [16:59]
Dave Hutchinson
Right.
- [16:59]
Daniel Fosh
So you know, I mean there's those negative factors, but then yeah, I mean if you saw, if you see a significant enough drawdown, then people start selling their houses to rent, right. Or you know, people are losing money and they, they go to rent because they. So I think the rental market's relatively insulated, probably more so than, than house prices. It's also already seen a big drop. Like rents have been dropping for like two years now.
- [17:25]
Unknown Speaker
Right.
- [17:26]
Daniel Fosh
According to like in Toronto, at least according to rentals ca report. So I mean like are you going to see that much more drawdown than that than has already happened as a result of the Canadian population falling by like 400 over the last couple of years? Probably not.
- [17:41]
Unknown Speaker
Right.
- [17:41]
Daniel Fosh
Like the chances of you really getting much more than that. You'll get some, I think, but, but maybe not much more.
- [17:49]
Dave Hutchinson
I wonder, I wonder if the effect of this stock market volatility is obviously due to the tariffs, a push investors that would maybe, maybe more consider stocks as safe asset. Maybe this, this whole uncertainty and the volatility of the stock market may push investors to real estate, you know, because they're seeing, especially with where the real estate market is in certain spots. Maybe this could prop up demand for investors, especially for like multi family or even vacation homes to an extent the people that maybe are, are doing okay with their stocks. What do you think about that? Like, do you think that this volatility could maybe exit some people from the stock market? Get the investors maybe more interested in real estate? Maybe.
- [18:36]
Daniel Fosh
Yes. Yeah, that's, that's a, that's like a decent, that's like a pretty decent thesis. Like there's a phenomenon called flight to capital. Sorry, flight to quality to happen. So people.
- [18:47]
Dave Hutchinson
Flight to quality.
- [18:48]
Daniel Fosh
Yeah, flight to quality or flight to safety. So people like will, will rush into safer asset classes when stocks and equities are becoming risky, which they are. So usually they would go into bonds, but bonds are also risky right now.
- [19:01]
Dave Hutchinson
Right.
- [19:01]
Daniel Fosh
And so you know, I mean, and I'm Talking about like large, like hedge funds and stuff that. So I'm not really talking about the marginal investor but like, you know, the regular investor would probably do the same thing. I mean we've noticed an uptick in people interested in real estate as the stock market starts to get scary. Right. Because they're going back to like, let's think about what makes sense again. So that, I think that that's a big piece of the puzzle right now. Is, is, are people, are we going to start to see people saying, screw this, I'm getting off this roller coaster for a bit. I'm going to go back to real estate because you know, prices are down and it seems to be. And if mortgage rates start to improve as a result of the whole thing, you know, it could be a good.
- [19:37]
Dave Hutchinson
Yes, but I think, I know there's a lot of pressure. What's his name? Jerome Powell. He's. Is he our Tiff? Macklin. Macklin, whatever. Essentially.
- [19:45]
Daniel Fosh
Yeah, exactly.
- [19:46]
Dave Hutchinson
So there's a lot of pressure on him to drop rates. And I even see E. Trump like tweeting about him or messages, you know, putting direct messages out there basically.
- [19:56]
Daniel Fosh
Yeah.
- [19:57]
Dave Hutchinson
And I, and I think there's a lot of like the difference that a lot of people maybe if you're in Canadian real estate, looking into American real estate, it's like I think most people aren't aware of the, the fact that the reason they're seeing such, well, not the reason one of the reasons they're seeing such low amount of transactions because no one's moving, because no one can afford to move. It's kind of similar in Canada. But you have to understand that with 30 year mortgage rates like people are, why would they, if they're locked into the low rate, they, they can't sell, which is driving down prices. But if those, if those mortgage rates come down, it may well it will be a good thing for the real estate market because they can allow people to move up, put their property in the market, maybe sell it for a decent price because buyer demand will pick up. So it's like tying this all back into, to real estate and the tear and the trade war, it's hard to keep up but it's honestly a full time job keeping up on. I'm on Twitter more than I'd like to admit, just trying to keep up with all the different tweets and what's happening and the rise and the fall, the stock market every single day. But I mean to wrap up my point it all, it's all, it's all. It's all tied in together, and I think it's. It's. It might be a little bit of a rough point here for someone from US People, I might be, and Canadians as well, globally. I think it might be in for a little bit of a. A rough go over the next little bit. But I think there's light at the end of the tunnel, maybe. I think there's a plan bigger than.
- [21:14]
Daniel Fosh
Us, so you would certainly hope so. I mean, there's this thing. There's this statement from a guy named Alan Moore. He wrote the book Watchmen. I don't know if you're, like, getting the graphic novels, comics, all that stuff. It's a.
- [21:30]
Dave Hutchinson
It's a part of it, though.
- [21:31]
Daniel Fosh
Yeah, Watchmen's like, yeah, they did a movie on it. There's a great TV series on it as well right now. Anyway, he has this quote about, like, how, you know, people. People want to believe in conspiracy theories because it's comforting to imagine that somebody is in control of the whole thing.
- [21:45]
Dave Hutchinson
Right. You know, fair.
- [21:47]
Daniel Fosh
And. And the truth is far more scary that we actually are completely out of control and that, you know, the world is fully rudderless and nobody is. Nobody is steering the ship. And that's.
- [22:00]
Unknown Speaker
I don't know.
- [22:00]
Daniel Fosh
So. So there's that, like, that. There's that. That take as well.
- [22:04]
Dave Hutchinson
There's one thing you said on, like a few episodes ago, I think we were on the topic of immigration, to be honest, but it was. It was. I think we would all be. We would all feel a lot better if someone just told us, like, look, this is what's happening. This is the plan. We're going to go through this, but the outcome is going to be this likely. You know, we're doing this because of this, but I feel like there's just no clear message. And the no clear message just stresses everybody out and puts everybody against each other. But. Yeah, what about, I'm curious, your take with this whole stock market and the trade war, I think a huge challenge is going to be on. On the supply side with raising, like, rising construction costs, tariffs, you know, up with aluminum and all that kind of stuff. Are we going to see a slow. Like, I know in. In Toronto specifically, we haven't seen many condos be built in the last. Well, new starts anyways. You're gonna see this trend continue into this 20, 25 year?
- [22:56]
Daniel Fosh
Yeah, it's. I don't like. I think there's a lot. There's just. There's so many competing factors at play in. In the market. I don't know, man. It's. It's so hard like to, to imagine what anything looks like even like a couple of months from now. You know what I mean?
- [23:12]
Dave Hutchinson
Like, yeah, of course. I, I mean look at the. I think what's going to. I mean everything is a gamble. I mean, I think, I think that if, if no one's building right now, we're going to have a. We're going to go through a couple years of some, some tough times. I think, I think we're in for a little bit of a rough ride for the next couple of years. Nothing too crazy. I hope I knock on wood. Nothing too crazy. But I think eventually we'll get through this. And if there's no new construction being built, it's like it's. It's really just a waiting game for the people that own property right now that are maybe struggling. It's like just hang in there if you can because I think there is light in the tunnel once we get around this, maybe in like three to five years, hopefully.
- [23:50]
Daniel Fosh
Yeah, look, I, I think.
- [23:52]
Dave Hutchinson
Go ahead.
- [23:53]
Daniel Fosh
When I look at like the whole global financial system and like countries like Canada or like the US and stuff like that, we have a lot of debt, we have a broken financial system that's not working for people. I think that like, you know, the worst outcome here is actually the best outcome for the long term. And that's kind of like the way that I think about it without being too like negative about it, you know, is that like there's a decent chance right now that like the whole thing just burns to the ground. Like that actually seems like it's like greater than 50% chance or like close to 50% chance that that ends up being the outcome like that These folks just can't figure out a way out of, out of this.
- [24:32]
Unknown Speaker
Right.
- [24:33]
Dave Hutchinson
Yeah.
- [24:34]
Daniel Fosh
And that might be a good thing, you know, like that might.
- [24:39]
Unknown Speaker
That.
- [24:39]
Daniel Fosh
That would hopefully allow us to rebuild a better system that isn't bad that.
- [24:46]
Unknown Speaker
That would be it.
- [24:46]
Daniel Fosh
Like I think that that would be a really nice outcome to see, to be honest.
- [24:49]
Dave Hutchinson
The big reset of 2025.
- [24:53]
Unknown Speaker
Yeah, something.
- [24:53]
Daniel Fosh
Whatever the. Whatever the wef things say build back better. Is that what it was?
- [24:57]
Dave Hutchinson
I don't know. I just like, I just need a break. I feel like we've been. I feel like we've been through it in the last five years since, since the, the pandemic. It's just been non stop emotional and physical roller coaster of emotions and it's just. We're just trying to sell real estate, you know, and we just keep getting thrown these crazy hurdles. You know, I actually saw for the realtors out there listening, since I'm the positive one, I'm the silver lining guy. People have to still move. Okay? There's still people that gotta move. And I think a lot of people get so caught up in like what's happening and trying to like, come up with solutions. It's like you just, I think you just gotta focus on what you can control and keep, keep helping people sell real estate and buy real estate. And it's like, what can you do? You know, what are we going to do?
- [25:46]
Unknown Speaker
I agree.
- [25:47]
Daniel Fosh
Like, I think that that's, I mean, the one thing about this industry and this asset class is that people still need a place to live, no matter how bad the economy is. You know, if you're thinking residential real estate investment businesses still need a place to operate out of robots, still need a place to operate out of AI servers, need a place to exist in like physical space until we've completely transcended the physical world, which I think won' in our lifetime could happen like, you know, in another, like my kids lifetime, like, you know, the Matrix or whatever. Until that happens, real estate is still very much a, you know, it's, it's a, there's a, there's a play there, right? People need places to work, they need places to buy, buy goods, house goods, live, et cetera. And so the industry will keep, will keep moving. It's, it's, it is going to be impacted by sentiment, by the animal spirits of the market, by, you know, what happens with stocks and all that stuff. But it's, it's still like, like you said, like we still have to do our jobs. We still have to help people find houses. People still need to, you know, they have changes in their life, their kids, they have more kids, or they have to upsize or downsize or whatever. I mean, downsizing is still going to happen. Boomers are still going to, if anything, maybe boomers are probably going to downsize. They're more likely to downsize now because they're all, they all just lost a bunch of money in stocks that they were relying on for their retirement. Now they need to pull some equity out of their house and go move into a smaller house. You know what I mean? Like all of these things still happen because people need to consume property.
- [27:09]
Dave Hutchinson
I agree. Look, I've always been, I think realtors, you need to, you need to tie this into like the stock market and everything in real estate. Like Realtors, you need to be up to date and aware of what's happening in the economy and what's happening globally. It's super, super important. But what you also need to keep in mind is that you can't control everything. And my advice to you is that, you know, we don't know where the market's going. We don't know if it's going to be really good or really bad or we don't know what's going to happen next. We don't even know. We don't know what elections. You know, there's so many different factors that. That lead up to this, and it's like, all you can do as a real estate professional is just listen to this podcast, obviously. Listen to Fosh. Listen to me. You know, you gotta analyze every single little piece of everything just so you stay educated as a. As an educator, because that's what we are at the end of the day, as real estate professionals is educators. So you have to be up to date on what's going on so you can help make your. With your client, get the best results possible. And you do that by being educated. Because it's not always a good time for everybody to buy. It might be a really bad time for someone to buy.
- [28:10]
Daniel Fosh
What? I thought it was always a good time to buy and sell.
- [28:12]
Dave Hutchinson
Yeah, for most Realtors, it is. It really is. But that's the thing. It's like, you have to just be like, we do this podcast and Fosh does all his stuff because it's like, it helps you become a better Realtor. And it's just with that being with a grain of salt, you have to just keep doing what you're doing. You know, a lot of Realtors get. I get messages all the time of people being like, oh, it's just so bad. This is what. This is why I'm not. I can't do this. Like, if you stick to the things that you're doing, even if it's crappy for the next little bit, this, it's gonna get eventually a little bit better at some point. You know, there's only up from here. So if you keep doing the right things, it's going to come back around, and you're going to be prepared to. To be really wealthy and. And very successful if you just stick to doing the things that you're supposed to be doing. Things that you can control.
- [28:55]
Daniel Fosh
Yeah, yeah. And that's the thing, right? Like what? You know, even as an investor, if you're, you know, if you're Somebody who wants to invest in property around the world. What do you, you know, what, what can we control?
- [29:05]
Unknown Speaker
Right.
- [29:05]
Daniel Fosh
We can't control the stock market, can't control what China and the US Policymakers are going to do to each other. Right, Right. Can, what can we control? We can control the price that we pay for a property.
- [29:16]
Unknown Speaker
Right.
- [29:16]
Daniel Fosh
We can control what, you know, whether or not we start looking or stop looking for a property. We can control to our, to a certain degree, you know, who our investors are, where are we getting money from, you know, are we borrowing money from a. We can control our leverage point when we buy or sell. Like, there are so many variables that you can control to still make good real estate investments in a bad market. And I think when you start to see significant drawdown events like this where the, the global economy is really shaky and you say, and you know, in 10%, it's like, look, people were piling into U.S. real estate and Canadian real estate and whatever when prices were 10 or 20% higher than they are right now. And now we're 20, prices are 20% lower and nobody's buying. Why is that? Well, you could say mortgage rates are low or are higher than they were then. Okay, cool. So people weren't really actually buying the price.
- [30:02]
Unknown Speaker
They didn't care about the price.
- [30:03]
Daniel Fosh
They only cared about the mortgage payment. Okay, maybe that's the case, is that if that's the case, couldn't we buy stuff at relative discounts right now, understanding that in some future period of time, if rates are back to where they were or whatever, we know that the market is willing to pay that price. We've seen it.
- [30:20]
Unknown Speaker
Right?
- [30:21]
Dave Hutchinson
Right.
- [30:22]
Daniel Fosh
So I think that there's always a good opportunity to be created. But good deals don't just sit there on the market, you know, and you can't just, there's not just going to be some period of time when the market's at like a bottom, you might say, and everything on the market is a good deal. Right. There's still going to be shit deals and they're still going to be good, really great, really great deals, just like there would be today. And if you, if you, if you're of the opinion that the whole thing is going to collapse and prices are all going to come down 10, 15, 20%, then you should go and be lowballing people, 10, 15, 20%, because, you know, if you get it now, real estate's a yielding asset. If you own it sooner, you're better.
- [30:59]
Unknown Speaker
Right?
- [30:59]
Daniel Fosh
So that's my, that's my 2 cents on the whole thing.
- [31:02]
Dave Hutchinson
No, you're right, it's true. And you can get away with some of these low ball offers right now. Like it's, it's common. It's so true. There's always going to be good and bad deals. You know, there's always certain properties that are better than other properties. So it's like it's. Yeah. I can talk about Realtor sentiment forever, but I think, I think understanding. I'm glad we had this talk today because I think one of the things a lot of Realtors are unaware of is especially understanding bond yields and mortgage interest rates and all that kind of stuff and how that ties into the stock market. I think we can all at a very high level, talk about how the stock market obviously is affecting us and how it's affecting our clients from a super high level. Just from those three things we talked about. Having money in the stock market, obviously stock market not doing good, they have less money, they can't buy. Consumer sentiment, which, you know, is just, is a huge thing, especially with the media because a lot of buyers, especially maybe not seasoned investors, but maybe new investors or first time home buyers, they're, they're getting their media just very high level, you know, headlines is what they're reading and that's it. So buyer sentiment is down and just, yeah, be being cognizant of what's happening so you can be a step ahead. And I think it's cool that we're doing this if you got to check out our episodes because I really think where like you just said, FOSH is like, opportunities can be created right now. And where an opportunity may lay with real estate is providing above and beyond value to your, your clients and customers. And it's like you do that by, I can't say customers anymore with Tressa. I don't even know.
- [32:32]
Daniel Fosh
Depends if you have a, depends what type of service agreement do you have a fiduciary duty with said individual.
- [32:38]
Dave Hutchinson
Actually just I'm in the middle of doing my education update right now and it is horrendous. But it's good to do every two years because I'm a broker. So because I'm a broker, I have to do like more educational updates. Good times. But there's a lot of, there's a lot of opportunities right now to be created and maybe that opportunity is understanding international real estate and maybe getting into it, diving into understanding what's happening globally, understanding what's happening in certain markets and maybe presenting those opportunities to your clients. And that's why we made this podcast in the first place, I think, and to help investors. But I think a lot of our following is Realtors, realistically.
- [33:12]
Daniel Fosh
Yeah, I think so. For now, at least. I mean, this probably. Probably a big piece of that is just, like. It doesn't really feel like a lot of people are out, like, looking to make real estate investments right now. So, you know, I mean, we've got a couple of, like, reviews from people who are, like, looking to, you know, buy real estate, and there is a record number of, like, Americans actually searching for citizenship or, like, extra citizenships in other places. And real estate's a big way that people actually do that. So. So we are. I think we're starting to see that. But, yeah, I think, like, probably, you know, you and I have a pretty big Realtor following, and also Realtors, like, have a lot of time on their hands right now, so that's probably a big piece of why. I'm trying to think of how I can say that diplomatically.
- [33:47]
Unknown Speaker
Right?
- [33:47]
Daniel Fosh
But.
- [33:48]
Dave Hutchinson
Nailed it, dude.
- [33:49]
Daniel Fosh
Yeah, but. Yeah, but, I mean, look, they're all busy making AI Memes and stuff like that. Starter packs, whatever.
- [33:55]
Dave Hutchinson
I'm waiting for mine, dude.
- [33:57]
Daniel Fosh
Talk to the marketing department. I sent, like, so many good thoughts, but now they're just. They're all. They've all decided they're in. They're in the cloud right now.
- [34:05]
Dave Hutchinson
It's processing, you know, actually. And I'm going to give Valerie a shout out. Our. The first AI Canadian real estate brokerage. I don't think we've talked about on the show, but I want to give it a shout out because I was in the. I was having a conversation, actually. It was pretty funny. I should send it to you first. So this Realtor reached out to me. He's probably watching this episode. He reached out to me and said, look, I'm following. I've been following you and Fosh for a long time. Anything that you guys are putting your. Your names on, I think, obviously is something that would be really, you know, good for Realtors. And he said, but what is. What can. What can this do for you? What. What does. What can Valerie do to make me a better agent? And I rattled off a few things, and he said, give me. Okay, give me an example of. Of how the CMA works. Okay. So Valerie has this. I don't even have access to it yet. I've only seen it when Shem sends it to me. One of the founders. Okay, this. The CMA that Valerie is producing is pretty bang on, dude. Like, yeah, it's good and it's so in depth that not only would the CMA help you on the listing side, but with buyers as well. But on the listing side, it's like, it comes across as. It's just so unbiased because obviously that's something. That's an uphill battle for Realtors is gaining trust. And, you know, you wanna. How. How amazing would that be to walk into a listing appointment and be like, this is what a computer says. Like, it's not. And a smart computer, you know, like, not me. I don't think your house is worth this. This is a computer. Sorry. It's not worth 7 million. It says it's actually only worth one. But anyways, this guy was like, I don't believe the CMA is good. Can you send me the cma? And I said, yeah, sure. Tell me a property and I'll send you the CMA right now. And I said, if I send you the CMA and it's exactly how good it is, I'm going to send you a contract to sign on with Valerie also at the same time. And so it takes the CMA takes, like, 10 minutes to make ish. Right. Because it's so in depth. I didn't know that. So this guy's like. He's like, why aren't you sending it to me? He's like, is actually his actual message to me was his Fosh just pulling comps in the background.
- [35:55]
Daniel Fosh
So funny.
- [35:56]
Dave Hutchinson
Trust me, me and Fosh got a.
- [35:58]
Daniel Fosh
Lot of things going on, like, 10 years, dude.
- [36:01]
Dave Hutchinson
So I was like, yeah, Fosh is just putting together this beautiful CMA just for you. You can come and check out what Valerie has to offer. But he was serious. It was good stuff. But anyways, we got some cool stuff coming in, but I think we. I think we crush this episode about what the stock market's doing, how that's affecting you, what you should need to know as a real estate professional to provide value to your clients and just to be a person, especially on social media. We all want to be educated on social media, so you don't have to just copy and paste Fosh's videos.
- [36:31]
Daniel Fosh
Yeah, everybody just shares my. On their stories now.
- [36:35]
Dave Hutchinson
That's my favorite thing, man.
- [36:37]
Daniel Fosh
Yeah, I know. It is funny.
- [36:39]
Dave Hutchinson
It is funny for sure, but awesome. Cool.
- [36:42]
Daniel Fosh
Yeah, I just got to figure out a way to charge for that.
- [36:44]
Dave Hutchinson
There's got to be an Instagram feature per. Per Reshare. You should be getting paid, like, a couple pennies, something like that.
- [36:50]
Daniel Fosh
Yeah, they should have. I Am I could. Yeah, I guess I could start a subscription where I just give people exclusive beats, right? Like, oh, yeah, pump this piece of content. That's good news.
- [37:00]
Dave Hutchinson
We're on to something here, folks.
- [37:01]
Daniel Fosh
We'll figure it out for sure. I think Valerie's the way, man. We're building a sick brokerage. Get everybody to join it.
- [37:09]
Dave Hutchinson
Good stuff. Yeah. Cool.
- [37:12]
Daniel Fosh
Okay, let's wrap it up. Thanks for listening. Leave us a review. Share this with your mom. You know, maybe press the play button for the whole playlist on, like, 2x speed.
- [37:23]
Unknown Speaker
Mute your phone, fall asleep for a.
- [37:25]
Daniel Fosh
Bit, you know, so we got a bunch of. Bunch of listens. No, just kidding. Share it. Leave us a review. Let us know an episode that you want us to do. Recommend a guest. You know, if you're, if you're an expert in any, any market around the. Around the world in real estate, in that market, we'd love to hear from you. We want to learn about, like, this is. Our goal is like, literally to learn about every single real estate market around the world in depth, to advise people with money now that apparently we're having a trade war as well as a bunch of other stuff that's going on. People want to move their capital around. They want to get exposure to new economies, and real estate's a really amazing way to do that. So help us, Help us share the knowledge and, and give us a shout if you want to come. Come on and talk about your cool.