Recession, Tariffs, and Real Estate: Control the Narrative | Tom Ferry Podcast Experience

So here's the thing. Entrepreneurs, leaders, salespeople, we all want to create consistent, repeatable, and scalable ways to grow our business and our income. And we want to do it better, faster, and more seamlessly. Why? So we can actually enjoy our lives, take vacations, and spend the quality time we want with the people that we love. How do we do all this without spending a fortune or running ourselves ragged? That's the big question. And this show is dedicated to the answer.

All right, David, we are live today on Facebook, Instagram, and YouTube. Is that right, Brian? Right on. Right on. So. So, David, first of all, as we're watching people jump into their favorite platform, there is so much to talk about, and I appreciate you reaching out and saying we should do a live for the people that don't know David Childers. He's the CEO of Keeping Current Matters. David Bill, who's the former CEO, and of course, the great Steve Harney, who many of us know passed away just about a year and a month ago. So I already know how he would respond to what's going on in the world today, David. But today we want to focus on tariffs, we want to focus on interest rates, we want to focus on the craze of the stock market, and most importantly, we want to focus on controlling the narrative. Controlling the narrative. So, David, for the person maybe that's watching this, and they. They haven't been introduced, you give them kind of a quick little. Who is David Childers? And let's get right into helping everybody create more confidence and the right narrative with about 10 slides you put together to make our friends watching the best agents in their marketplace. So, David, talk to us.

I'm excited to be with you, Tom, and thank you for. For, you know, putting this on. I'll say a couple things. Go. 17 years ago, listen to this. Steve sold his real estate company and said, I want to help agents answer questions that are hard to answer. And guess what? There are some questions that are hard to answer right now. And, you know, we have. If you were here with me in Richmond, Virginia, we have a wall that says, we believe every family should feel confident whether buying or selling a home. And that's what drives the work that we do. And here's what Steve would say. I want to remind you of this, Tom. You're going to know it. He'd say, come, calm down, sit down. Think, plan, and act. And that is exactly where we're at right now. Bingo. That is where we're at. And so I'm excited to be on Share a couple of things about perspective right now that I think will be confidence building. You nailed it right there when you said it. It'll be confidence building for folks in everything going on.

Yes. Well, to level set us before you jump into the slides and for my friends watching, whether you're watching later on or you're watching with us live, we'll be 15, 20min tops. And again, the whole game today is to get you more confidence. So you, your sales team, everyone that's involved in the real estate transaction has maybe a different arc of perspective in terms of what's going on now. With that said, David, you know, just in our text over the last few days, as we're sort of watching all these things happen, the note that I was reminded of and I don't know who gets the credit, if you will, for this quote, I always think of Mike Vance is one of my mentors who would share things like this. He would say, just a reminder, in business, the government sets the policy and we as business owners, we do our best to adjust to the new policies.

Right?

Like that's business. And when I think about my friend watching you right now, wherever you are in the world, watching, can I remind you that you've made adjustments before, that this is not a crisis, this is a shift. It's not a crisis, this is a shift. And David's going to impact all that. And most importantly, I want to lean into your confidence. How you were able to act during the pandemic, how you were able to act when rates went up to eight or you know, an all time high for many of you inside real estate, that this is just another one of those moments, as David said, that we need to calm down, we need to focus, we need to remember the things that we are in control of. You are in control of your mindset, you are in control of the message you put out. And a lot of what we're going to share today, we're going to encourage you to be sharing, to control the narrative, at least with your database of customers, which means the things we're going to talk about today, I'm expecting you to write a blog post, ChatGPT or Grok or someone will help you with that and maybe include a video and then email that to your entire database, post it on LinkedIn, post it inside of Reddit if you really want to get some traction. You're going to be in control of controlling the narrative because you can control that. That's a lot of control words I've just thrown in There Multiple times. The other thing I wrote down is you can also control, just like during the pandemic, do you choose to market more or market less? And the ultimate point that I want to remain remind you of, and then, David, we'll turn it over to you, is can I remind everybody that the spring market is here and buyers are out shopping right now and the rates are lower regardless of everything else happening. Rates are lower, buyers are shopping. We don't want to get in the way of the market. So with that said, David, you got a bunch of great slides. I was reviewing them before we jumped on here. Take control of this and let's, let's educate people. Let's get them feeling confident about communicating more and more about what's actually going on here.

Yeah, for sure. I think, Tom, the thing I would say we were joking around about it earlier. This is the market. Keep your, your hands and your feet inside the vehicle because it's going to be bumpy. We have to understand that. And I think right now there are so many people trying to tell the story of real estate that if we don't get out there and tell it, it's not told in our favor. That's the bottom line. You know, and you and I have talked about this. I'm gonna, I'm gonna share my screen. I've got a couple of slides here and Tom, you, you, you know, kind of coach me on if you want to come back in. We'll kind of pull them down. Talk. But here's the bottom line. Headlines do more to terrify right now than to clarify what's going on. That is true for sure out in the world. You know, if you think about it right now, there's so many things that are being done to sort of twist the narrative. And I would encourage people to look at this from a non political view. And the fact that this is, you know, tariffs and all of that going on, I'm not going to say they're not real, because they are. But it's all political wrangling, in my opinion. And you can pretty much watch the narrative and tell where somebody sits politically right. And I think that's the first point, Tom, that you've always been masterful in saying is don't fall into the political trap of this. Watch what's happening, be wise, be measured in what you say. Because all of these headlines are that, hey, we're heading back into a recession. You know, this is going to destroy homeowners. Everything in our business is being twisted right now for attention. Yes, that's the bottom line.

The thing I want to remind everybody else is, and again, this, this line about, you know, headlines do more to terrify than to clarify. Think not too long ago, I think it was on Joe Rogan's show, but many people showed this where we literally had hundreds of new newscasters saying the same exact message over and over and over, all at the same time with the same exact script. I think this is one of those moments where if we can have you and all of our friends watching whenever you see this to create some content around. Remember, headlines do more to terrify than they do to clarify. And then share two or three of the talking points that David's going to share with you today. And then I'm just going to remind you of this. David, I know you'll back me up on this. When is the single best time to buy?

Well, the single best time to buy was yesterday, right?

Yes. I would argue the single best time to buy is when everybody else is in a panic.

Yeah, for sure.

When everybody else is nervous. Like I, I think about like the last 72 hours. I'd be curious in the comments how many of you have invested in the stock market since last Thursday. Yeah, I've been telling my wife non stop, the world's on sale. Your future self will be very grateful that you invested in some key stocks over this time period. Yeah, I think same with real estate.

The reminder, remember the old Warren Buffett quote. Yeah. Be greedy when others are fearful.

That's right.

Fearful when others are greedy.

Bingo.

That's it right there. And oh, by the way, there's a lot of fear in the market. Our, our buddy Patrick bet David, we've talked to you and I were on a podcast with him. What was that A couple years ago. And yeah, when he told us the.

World was falling apart and, and that all of housing was going to go down by 20% and he was dead wrong. We, by the way, we should link up that interview and let's make sure we tag I'm wrong or you're wrong. Patrick. Bet.

David, once again, listen, as a guy, I, I like him. I, I generally agree with most of what he says, but in real estate, he's been off, you know what I mean, for the last couple of years. So comes out and he says, hey, six and a half or 6.1 million Americans are behind their mortgage. This is multi family. This is misinformation at its best cost. Sort of confused folks. But let me give you the facts here real quick, Tom, and please, if we wanted to make that case that, all right, there's this impending doom coming in the housing market. Let me tell you why there's not really a factual case to be made. First point is this right here, 83% of mortgage holders have a rate under 6%. Now, that doesn't guarantee us things won't be challenging. But what I can tell you is anecdotally, the American homeowner will do everything in their power to preserve that asset. They'll do everything in their power to keep that mortgage rate. They can't go out and, you know, rent an apartment for that. So in their strong, they're positive in it. Okay, so that's the first point. Know your numbers in this 83. And just remember, just write that down. 83% of Americans have a mortgage under 6%. Second point, Americans are sitting on massive equity in the housing market. 39.3. Call that 40% own their home free and clear in this country. 29.3 are equity rich. So you'd have to and always say this. You and I have been across the country doing listing edge this year. I'll listen to a perspective on why you believe this market's going to crash, but it should include somewhere along the way, you know, kind of aliens coming down. And yes, because there's not a mathematical or sort of a, a logical piece. Now, I was with, like, you've been on the road for the last seven weeks and I did a couple of mortgage company events. Now there is a small sliver of the market that has experienced a little bit of challenge, and that is folks that have bought in the last couple years on an FHA or a, or a no money, maybe VA deal. But that's not the, it's not the overwhelming majority of the market. And the market still performs very, very strong right now, given the enormous number of people that have, you know, a great mortgage rate, the enormous number of people that are sitting on massive equity. But I'm telling you, you turn on the news and you will not hear that in what, what's being said.

And I would just say to my friends, before he switches away from this slide, shooting a piece of content with that slide in the background and saying, if you bought a home in the last two years and you are nervous and you want to talk to an expert, send me a dm.

Yeah, absolutely. I'll throw it back up here in a second, grab a picture of it and say, hey, look, I was studying the market today. I'll even go back and grab the, the mortgage rate One, because I'm going to turn the, the perspective in just a second to recession. Right. Because that's what's being talked about right now is, oh, by the way, consumers are freaked, freaked out. Oh, by the way, tariffs are coming. You know, what's, what's going to come next. It's recession. And that doesn't sound good.

Yes.

So let me share this, let me go back, grab these, these pictures real quick. Let me pop that up there. If we can get that in the view, we'll be good to go. All right, first one back. I'll get this one. Go ahead and grab a picture of that. 83% of US mortgages have an interest rate under 6% that is phenomenal. Good for them. Causes challenges, we know in the market at times. The other truth, Americans are sitting on massive equity today. Even, even just snapping a picture of this and saying, hey, did you know this about what's, what's happening in American real estate? I've always made the case that under the surface, Tom, we probably live in the strongest real estate market of our lifetime.

I agree.

I agree. That's the truth. And, and you talked about confidence. That's the confidence we should have. Bingo.

I would say to all my friends watching, wherever you are on Social, tag a friend or two that maybe has been in a bit of a panic, maybe, you know, they have bought into some negative headlines. Maybe they didn't actually read the articles, they just read the headline and they got, you know, caught up in the noise. Tag a friend or two who you think might need to see this. So, David, being mindful of time, let's talk recession, because it's fascinating, even in my, my tower here in Dallas, I've got friends that are saying, what do you think? Are we going to a recession? That is that what's going to happen? So let's unpack that.

So here's the thing. I would say right now, Tom, we don't have enough time. And I'm not here today to say are we or are we not going into recession? But I'll guarantee you this, if we do, they'll let us know. Right? Our business, our lives need to keep trucking on. But what your consumer, what every buyer and seller right now is being told is we're heading into a recession. So that's what we have to be mindful of, is, okay, what is this? And some of you will remember this, that have followed keeping current matters. And you know, there's so much of this, Tom, Remember we were in Anaheim, however many years Ago when you did the summit there and Steve got on the stage, he said, hey, here's what happens to the real estate market in a recession. Now we've updated that study and if you go Back to the 80s, there have been six recessions in this country. And this is a look at them right here. Four of the times, actually, prices went up during the recession. One time prices went down marginally in the early 90s. But what everybody remembers is 2008 homes lost almost 20% value. Here are a couple of quick facts about that. You know, that is the only time in American real estate where that happened, had never happened before, hasn't happened since. Let's hope it never happens again. But every time somebody hears recession, they think, here we go again.

Right.

They think housing crisis. You going to say something?

I just said, no, absolutely. This is, you know, that that wound during the 2007, 8, 9, 10, 11 crisis dug deep for a lot of people. So anytime they hear recession, this is what they think. This is another example of a great piece of content that I would be putting out but not saying, hey, don't worry, you're going to be fine. You know, there's only two times in history. But instead, you know, if you look at the number, if you look at the equity for people right now in the United States, you look at the, the interest rates and this slide. What's your opinion? Let me know in the comments.

Yeah, Tom.

I will tell you this. If we do go into recession in this country in the next six to 12 months, there will not have been, I'm pretty sure I'm right on this. There will not have been a time period where we've been lower in inventory than we are right now. Correct session that'll keep upward pressure on prices. So the past doesn't always indicate what's going to happen. We can learn from it. You know, I, I think this point, the other, the other point I would make the flip side point to that what a recession is meant in the past in those same, you know, six time frames, right. Is falling mortgage rates. And oh, by the way, what are we seeing right now? First of all, we're seeing a lot of volatility. I looked up just before we got on six and three quarters on the average 30 year fixed, it dipped down to, you know, 6.6 maybe touches six and a half, 10 years down up stock markets all over the place. You just talked about the, the opportunity that presents. But we need to have an understanding of this is what happens. That's where confidence Comes from. Yes. Right. You know it better than, than anybody if you understand the questions. And you always say this, I love the statement knowledge is power in today's market. That is absolutely true. But let me, let me add one more thing that I think is factually.

Being twisted right now, and that is the number of new construction homes on the ground built is approaching.08 levels. So let's, let's kind of run the tape. We got all this political wrangling. We've got tariffs. The economy is going to slow down and you're telling me inventory is growing in that segment. We have to really, really kind of hunker down on this. This is a look at new inventory as of February, 119,000 units on the ground. Very similar to, if you kind of trace this line up. If I use my, I don't know if you can see this right here, kind of 06, 07 levels, 10 levels. Now, a couple of things about that. One thing I will guarantee you builders will not let inventory get to the levels they were in 08. Right. They won't do it. They're, they're, if anything, they're using incentives to move this product and all of that. But the truth is right now we have to understand that narrative because it'll be, if you haven't seen it yet, it's coming for you. That headline is coming, right? The new home. Matter of fact, 31.4% of all the homes in inventory right now are new construction. It's, it's, it's, it's crazy to think about, but that number has grown. We have to have a command. I'm going to pull these down for just a second. Having a command of this, this information right now, I believe is the difference maker.

I agree. So if you were David, if an agent watching right now and they're like, I'd like to do something about new construction because it's relevant to my marketplace, not always relevant to everyone's marketplace. What is the insight that you would be sharing if they were going to write a blog post, create some content, do a live, etc.

Well, there's a couple of things. One, let me back up and kind of, kind of tell you what the number one question I've got in the last couple of weeks. What's the impact of tariffs? The quick answer to the impact of tariffs is it's going to cost more. What's your next question? Right now I happen to believe this is all political wrangling. We'll see if they stick around. But let's play out that tariffs stick around. They're like, what about building, construction? What about product? What about all that? It's going to cost more. What would I do? I'd buy something on the ground right now. Builders want to move it.

I would do that all day long. So I think there's an opportunity to tell that story, you know, in that way and say, hey, look, inventory is growing. All that means is a builder is more motivated to move that product, to move that, that house, and that's, that's a great thing.

Yeah, I agree. And, and again, you could probably go into grok or your favorite large language model and do a historical look back at tariffs in the U.S. your country, wherever you're watching, and its impact on housing. And there's no doubt, yes, it could cause an increase over time, though, with all that happening, we see rates coming down. So it's, it's this dance between, is it the cost or is it my payment? Which one's going to matter most? And again, you know, you know, it is, David. I, I always go back to the same thing. I just trust my community that they are going to put their clients best interest first. They're going to ask a lot of questions. They're not going to get political. You know, if someone needs to move, they need to move.

Right.

The great Steve Harney would say all the time, hey, you know what? If tragically, a couple's getting divorced, they don't look at each other and say, you know, we can't sell our mortgage interest rate is that, you know, 3%? No, they're getting a divorce, they're moving on. People are going to continue to buy houses regardless. I think the most important thing for all of us is to keep our emotions in check, make sure that we're looking at the facts, making sure that we're reading the complete articles or at least putting into our favorite chatgpt or whatever, and say, synthesize this for me without any political bias, please, and make sure that's what we're talking about. All right, David, I thought you had one more set of slides. And again, I want to be very mindful of time. We've been, we've been going for a little bit here. I thought there was also something about overall inventory level.

I knew you have that. If you give me five minutes, I'll explain this market cycle in a couple of graphics.

I love it.

Please, kind of, kind of blow your mind. Let me pull these up real quick and, and watch this. Our team does a phenomenal job pulling this information.

All right.

Can you see this graphic right here, Tom?

I can now.

Yes.

This is exactly what I was hoping for. This. Everyone watching right now pay really close attention because this, when you and I started talking about this like a week and a half ago, this, this is mind blowing. Go ahead.

Yeah, so this is a look at inventory in the cyclical nature as we go throughout a year, going all the way back to 2017. Okay, so stay with me in this sort of story here. We start off in January, homes coming on the market. We peak sometime over the summer, call it July, June, July area. And then we kind of taper off into the year. Where we're at right now is March right here, up 17% year over year. Now, let me, let me break a couple things down. There's the yellow line right there. That's 20, 25. Now, the dividing line in this graphic as we look at these years that are stacked is right here in the middle in the red line there, Tom. That's 2020, the COVID year. Let's hope that doesn't come back. But it really shows the picture of inventory in this country. So if you take the red line, the years below it are 21, 22, 23, and 24. And you see the yellow line being 25. The years above it are 17, 18, 19. Okay, and so what happens is, you know, we go through Covid, mortgage rates fall, everybody jumps in and says, we'll buy and we've depleted inventory. That's been the story of real estate across the country. Everybody you know on here today knows that. Well, we fast forward to right where we are today. Most estimates, you take Adam Data and altos and realtor.com they say about 10 to 15% inventory growth, growth this year in residential real estate. So our team went and did a conservative modeling and said, all right, if inventory were to grow 10% this year, and it probably grows a little bit more than that, where do we end up the year? Well, this sort of that dotted line right there shows exactly where we end up the year. Now, now, stay with me. It puts us in the neighborhood right here where I've kind of drawn that green circle of right where we ended 17, 18 and 19, the last three. Oh, by the way, normal years in real estate. Now, Tom, here's what's important. This is causing price moderation across the country. That's a good thing. This is a more healthy market. That's a good thing. And we need to be vocal about this. We need to prepare sellers and buyers. This is the reality in the market and grabbing a couple of visuals like this for, for a buyer presentation, for a listing presentation, I think are going to be key. But it shows the five year cycle and I'm going to pull these down real quick that we've just gone through in residential real estate relative to inventory, inventory being depleted, mortgage rates rise, and now we're, we're sort of coming back to where, where we were.

So, David, what goes through my mind is let's put the slide back up one more time.

Yep, I'll, I'll have to pop it up. Hang on a second.

Thank you. Thank you. So for, for my friend, if I was, if I was your guide, if I was your Sherpa, if I was your coach, I would say can you go back in time to a YouTube video you shot during 2017, 2018, 2019 about buyer sentiment, what was on the mind of buyers and what were agents saying? And then I would try and fast forward to that to today and literally do a side by side because here's what I know. I looked back at my videos in 17, 18, 19 and you know what the constant complaint I heard was? There's not enough inventory, there's too much buyer demand. There's not enough inventory and there's too much buyer demand. And yet here we are today. And of course, listen, if you do the blended average of 17, 18, 19, it looks like the rates are about 4.2, 4.3.

Right.

A blended average. And I'm sure if you did a five year arm, you can get it for less. Right. All the same things we know. But what I know to be true is if 17, 18, 19, we were complaining that there's no inventory and now today, David, we're complaining that there's too much inventory.

Right? Right.

What it tells me is, is the constant reminder I have for my friend out there watching. Just listen to me. There is zero growth in comparison, criticism and complaint. There is no joy in criticism and complaint in comparison. There is definitely no growth in it. We have to see things as they are. And it would be a very cool video for you to post talking about 17, 18, 19 during that time. And today to show that slide is a side by side comparison. Of course home prices have gone up. I'm not naive to that. I'm still pointing out the obvious. We still don't have enough properties to sell in comparison to the buyers that want to buy a house. So David, thoughts on that? As I say, they should shoot that video or go a different direction. You tell me.

Absolutely. The words that I would use. There are two things that are happening right now in real estate and you to want to get these words down. Price is moderating. Yeah, use that word. Price is moderating. And we're returning to a more healthy market. Yes. Right. 21 and 22. You and I have been on the road many weeks. I've heard you say champagne and cocaine. Right? That was the deal.

It's crazy.

If you didn't make any money back then, I'm sorry, that's the. That's the bottom line. But we're returning to a more healthy market and that is a good thing for us. It's a good thing for buyers and sellers. We have to keep. Keep that in mind.

100. Well, I've got 16 of the best team leaders in North America literally sitting in Studio B, so I've got to run over there. I want to say to all my friends out there watching, remember, headlines do more to terrify than they do to clarify. It's up to you to control the narrative. Right? Don't be political. Talk about the facts. Ask for engagement. Find out what's on the minds of your customers. And remember, at the end of the day, our job is to be the educator, to be the Sherpa, to be the guide, right? Not to put our political beliefs in front of all this. Not to Fear monger in any way, shape or form, and also not to oversell to someone that is not ready to move forward today. Our job is to listen, to ask great questions, to find out where they are and then help them in their journey. So we hope that today, this quick little live show and all these great slides from Keeping Current Matters gave you just a little more confidence to do it even, even better today. So, David, thank you always. I have to say, if they haven't gone to try kcm.com Tom Ferry, I'm assuming, David, all those slides will be there and more. And for my friend watching, thank you so much for being a part of our community. Go help some people today. Go do it with confidence. We got faith in you. You got this. All right, David, thank you so much.

See you.

Seeing you on the road soon, my friend. Take care.

Good see you, buddy.

If you want more information about this episode, including my show, notes, mentions, links and everything else, make sure you visit tomferry.com podcast. That's tomferry.com podcast. Thanks again and talk to you soon.