1 00:00:10,800 --> 00:00:14,960 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:15,040 --> 00:00:19,320 Speaker 1: I'm Joe wisen't Thal and I'm Tracy Halloway. So, Tracy, 3 00:00:19,600 --> 00:00:22,639 Speaker 1: it's been a long time since I've visited you in 4 00:00:22,760 --> 00:00:25,800 Speaker 1: Hong Kong. But one thing I remember, I know it's 5 00:00:25,840 --> 00:00:28,120 Speaker 1: too long, and as soon as I can, whether like 6 00:00:28,160 --> 00:00:31,479 Speaker 1: after the virus or whatever, I gotta make that happen. Yeah, 7 00:00:31,600 --> 00:00:34,360 Speaker 1: I I totally agree. I just I'm thinking, like I 8 00:00:34,400 --> 00:00:38,199 Speaker 1: haven't left this relatively small area for a year and 9 00:00:38,200 --> 00:00:41,640 Speaker 1: a half now, and I am you're getting stir crazy. Yeah. 10 00:00:41,720 --> 00:00:44,080 Speaker 1: But one thing that I remember like about Hong Kong 11 00:00:44,240 --> 00:00:47,360 Speaker 1: is like people they're like are just obsessed with like 12 00:00:47,440 --> 00:00:49,800 Speaker 1: real estate, right, Like I just remember it just sort 13 00:00:49,840 --> 00:00:53,000 Speaker 1: of like real estate buying, home buying speculation. It just 14 00:00:53,000 --> 00:00:56,680 Speaker 1: seemed to be in the air in Hong Kong. Absolutely, 15 00:00:56,880 --> 00:00:59,600 Speaker 1: it's sort of almost a way of life here. I 16 00:00:59,600 --> 00:01:03,160 Speaker 1: guess the thing everyone aspires to is eventually owning a house. 17 00:01:03,600 --> 00:01:08,240 Speaker 1: House prices are absolutely insane. There's a perpetual shortage of housing, 18 00:01:08,280 --> 00:01:11,480 Speaker 1: although there's a big debate about whether that's in fact 19 00:01:11,560 --> 00:01:15,440 Speaker 1: true or whether it's because of um ill considered government 20 00:01:15,480 --> 00:01:18,560 Speaker 1: policy and things like that. But yes, if you walk 21 00:01:18,640 --> 00:01:23,640 Speaker 1: down the street, almost every other building probably has some 22 00:01:23,680 --> 00:01:26,800 Speaker 1: sort of real estate office in it, and everyone just 23 00:01:26,959 --> 00:01:31,640 Speaker 1: loves to talk about home buying, home prices, speculation. So 24 00:01:31,720 --> 00:01:35,200 Speaker 1: I think in the US it more like goes in waves, 25 00:01:35,240 --> 00:01:39,760 Speaker 1: like obviously two thousand five, two thousand six, that was crazy, 26 00:01:39,800 --> 00:01:41,840 Speaker 1: and then it's sort of crashed for a while. But 27 00:01:42,360 --> 00:01:45,160 Speaker 1: right now I don't think there's any doubt that sort 28 00:01:45,160 --> 00:01:47,840 Speaker 1: of like home buying mania, the desire to own a 29 00:01:47,880 --> 00:01:52,320 Speaker 1: home is absolutely in a full swing in the United States. Yeah. 30 00:01:52,520 --> 00:01:55,440 Speaker 1: So even me over here in Hong Kong, I have 31 00:01:55,600 --> 00:01:59,240 Speaker 1: seen some of these crazy news stories about house prices. 32 00:01:59,320 --> 00:02:02,360 Speaker 1: I saw that about um, someone put in an offer 33 00:02:02,400 --> 00:02:05,200 Speaker 1: for a house and then said they would name their 34 00:02:05,360 --> 00:02:10,160 Speaker 1: child after the seller if they got the house. Um. 35 00:02:10,160 --> 00:02:12,480 Speaker 1: Crazy things like that. Like these are things that you 36 00:02:12,480 --> 00:02:15,800 Speaker 1: would normally or maybe not normally, but you would find 37 00:02:15,960 --> 00:02:17,960 Speaker 1: in the Hong Kong market. They seem to have been 38 00:02:18,000 --> 00:02:22,360 Speaker 1: transferred over to the US, where everyone is clamoring for 39 00:02:22,800 --> 00:02:26,560 Speaker 1: it seems like limited supply. Yeah, very much. So every 40 00:02:26,639 --> 00:02:29,080 Speaker 1: day there's like stories about like someone putting up a 41 00:02:29,120 --> 00:02:32,200 Speaker 1: home for sale and within five minutes they get like 42 00:02:32,280 --> 00:02:35,280 Speaker 1: five offers that are half a million dollars over their ask. 43 00:02:36,440 --> 00:02:38,720 Speaker 1: We are in housing mania here, but we are also, 44 00:02:39,040 --> 00:02:42,200 Speaker 1: you know, basically running out of homes and uh, you know, 45 00:02:42,320 --> 00:02:44,760 Speaker 1: in theory, you just build a lot more, but putting 46 00:02:44,800 --> 00:02:47,240 Speaker 1: that into practice is a lot harder, especially with the 47 00:02:47,320 --> 00:02:49,760 Speaker 1: lumber shortage and the labor shortage and all the other 48 00:02:49,800 --> 00:02:54,280 Speaker 1: shortages that we've talked about several times on this show before. Yeah, 49 00:02:54,400 --> 00:02:56,120 Speaker 1: so I feel like this is going to be another 50 00:02:56,120 --> 00:03:00,000 Speaker 1: episode where we talk a lot about expectations and how 51 00:03:00,120 --> 00:03:04,160 Speaker 1: those sort of feed into our existing reality. So and 52 00:03:04,200 --> 00:03:07,040 Speaker 1: obviously there's the lumber angle to lumber being an important 53 00:03:07,080 --> 00:03:10,080 Speaker 1: component into house prices. So I am looking forward to 54 00:03:10,080 --> 00:03:13,720 Speaker 1: this one. I am very excited about this episode. So 55 00:03:13,760 --> 00:03:16,679 Speaker 1: we're going to be speaking with Allie Wolf. She is 56 00:03:16,720 --> 00:03:19,959 Speaker 1: the chief economist ed Zonda, which is a housing data 57 00:03:20,000 --> 00:03:23,080 Speaker 1: and consultancy firm. I've talked to her on TV a 58 00:03:23,120 --> 00:03:26,840 Speaker 1: few times. She has a fantastic perspective on the sort 59 00:03:26,880 --> 00:03:29,920 Speaker 1: of nitty gritty level of what's really going on in 60 00:03:29,919 --> 00:03:31,680 Speaker 1: the housing market, and we're going to ask her how 61 00:03:31,720 --> 00:03:34,600 Speaker 1: the US ran out of home. So Allie, thank you 62 00:03:34,680 --> 00:03:37,880 Speaker 1: so much for joining us. Hi Joe, Hi Tracy, thanks 63 00:03:37,880 --> 00:03:41,720 Speaker 1: for having me absolutely excited you're here. So before we 64 00:03:41,840 --> 00:03:43,880 Speaker 1: talk about I mean, you know, obviously we're going to 65 00:03:43,960 --> 00:03:46,760 Speaker 1: get into the details of what's going on now and 66 00:03:46,800 --> 00:03:49,880 Speaker 1: how this sort of housing market has gone nuts over 67 00:03:49,920 --> 00:03:52,360 Speaker 1: the last year post COVID, but I'd love for you 68 00:03:52,400 --> 00:03:55,080 Speaker 1: to accept the scene a little bit, the housing market 69 00:03:55,160 --> 00:03:58,480 Speaker 1: pre COVID, because even before all this, there was a 70 00:03:58,520 --> 00:04:00,480 Speaker 1: lot of talk about hell in the wake of the 71 00:04:00,520 --> 00:04:04,320 Speaker 1: Great Financial Crisis, the US was already just under house 72 00:04:04,560 --> 00:04:06,800 Speaker 1: that you could just see in the demographics and the 73 00:04:06,920 --> 00:04:09,680 Speaker 1: volume of houses out there that if people wanted to 74 00:04:09,680 --> 00:04:12,640 Speaker 1: own a home, there wasn't enough housing stock out there 75 00:04:12,640 --> 00:04:15,520 Speaker 1: to absorb it well. And that's a great place to 76 00:04:15,560 --> 00:04:18,680 Speaker 1: pick it up, is because when we think about the 77 00:04:18,680 --> 00:04:22,280 Speaker 1: Great Financial Crisis, there are so many people that are 78 00:04:22,320 --> 00:04:25,720 Speaker 1: scarred from what happened. They remember maybe they lost their home, 79 00:04:25,800 --> 00:04:28,400 Speaker 1: maybe they lost their job, maybe they saw friends or family. 80 00:04:28,880 --> 00:04:31,800 Speaker 1: And I think that's often when we think back to 81 00:04:31,839 --> 00:04:34,479 Speaker 1: the Great Financial Crisis, it's so much about Okay, how 82 00:04:34,480 --> 00:04:36,560 Speaker 1: are the individuals dealing with it? Have they been able 83 00:04:36,600 --> 00:04:38,920 Speaker 1: to get their wealth back after you know, however long 84 00:04:38,960 --> 00:04:41,559 Speaker 1: it's been since then. What we have to remember too, 85 00:04:41,600 --> 00:04:45,520 Speaker 1: is the builders were really at the forefront of that 86 00:04:45,640 --> 00:04:51,760 Speaker 1: crisis and their scarred as well. And they were scarred basically, 87 00:04:51,800 --> 00:04:56,200 Speaker 1: I would say, until there was a lot of fear 88 00:04:56,400 --> 00:04:59,039 Speaker 1: on the builders side. I would hear stories of teams 89 00:04:59,040 --> 00:05:01,920 Speaker 1: that would go from five hundred to five during the 90 00:05:01,960 --> 00:05:04,840 Speaker 1: Great Financial Crisis, and there are division presidents that are 91 00:05:04,839 --> 00:05:07,719 Speaker 1: still around and they would say it was so hard 92 00:05:07,839 --> 00:05:12,120 Speaker 1: to live through those periods. And what that did is 93 00:05:12,520 --> 00:05:15,600 Speaker 1: really change the mindset for a lot of the legacy builders, 94 00:05:15,640 --> 00:05:17,599 Speaker 1: for a lot of the legacy leaders that are in 95 00:05:17,600 --> 00:05:21,160 Speaker 1: the home building industry, where when they were going to 96 00:05:21,200 --> 00:05:25,400 Speaker 1: buy land over the past ten fifteen years, that deal 97 00:05:25,520 --> 00:05:28,480 Speaker 1: had to pencil. You are not going to fudge the numbers. 98 00:05:28,640 --> 00:05:31,200 Speaker 1: You're going to be realistic about I'm going to buy 99 00:05:31,200 --> 00:05:34,480 Speaker 1: this land and I think home price appreciation will be x, 100 00:05:34,800 --> 00:05:38,280 Speaker 1: I think my sales rate will be why, and we're 101 00:05:38,320 --> 00:05:40,680 Speaker 1: going to build this on it, and it had to 102 00:05:40,720 --> 00:05:44,440 Speaker 1: be what would match the market. And the problem with 103 00:05:44,520 --> 00:05:48,760 Speaker 1: that is if you're a land seller and you know 104 00:05:49,200 --> 00:05:52,039 Speaker 1: that during the heyday of last cycle, you could have 105 00:05:52,120 --> 00:05:55,920 Speaker 1: gotten a huge dollar amount. Yes, it's come down. During 106 00:05:55,960 --> 00:05:58,920 Speaker 1: the slowdown, the land sellers were a lot more sticky 107 00:05:58,920 --> 00:06:01,680 Speaker 1: on their prices. Builders weren't going to pay for it. 108 00:06:01,920 --> 00:06:04,760 Speaker 1: Land sellers didn't want to budge. Wait where was that 109 00:06:05,960 --> 00:06:08,200 Speaker 1: When you think about land And this is going to 110 00:06:08,240 --> 00:06:10,640 Speaker 1: be an obvious statement, but when you're thinking about land, 111 00:06:10,760 --> 00:06:13,720 Speaker 1: you can't replace it. And so the land seller says, well, 112 00:06:13,720 --> 00:06:15,159 Speaker 1: I can just sit on this land because I know 113 00:06:15,200 --> 00:06:17,839 Speaker 1: prices are going to come back, and so the land 114 00:06:17,920 --> 00:06:20,799 Speaker 1: seller is going to say, I want this price. And 115 00:06:21,000 --> 00:06:23,000 Speaker 1: there were some builders that were able to make it work, 116 00:06:23,279 --> 00:06:25,680 Speaker 1: some land sellers that were willing to budge their price. 117 00:06:26,400 --> 00:06:30,359 Speaker 1: But ultimately, before COVID, I was doing presentations with builders 118 00:06:30,360 --> 00:06:33,840 Speaker 1: and developers and private equity and all we talked about 119 00:06:34,360 --> 00:06:38,039 Speaker 1: was land prices and labor shortages. That those were the 120 00:06:38,080 --> 00:06:41,240 Speaker 1: common themes, and it was all about what do you 121 00:06:41,320 --> 00:06:46,279 Speaker 1: build attainably? What do you build that someone can actually afford? 122 00:06:46,800 --> 00:06:49,400 Speaker 1: And I think starting in that was all of our 123 00:06:49,400 --> 00:06:52,560 Speaker 1: discussions and it's funny to talk about it now, but 124 00:06:52,960 --> 00:06:55,840 Speaker 1: we were just like, work on density, work on what 125 00:06:55,880 --> 00:06:59,200 Speaker 1: you can control, pay attention to the square footage. Those 126 00:06:59,240 --> 00:07:02,719 Speaker 1: were conversations that I'd say, over the past fourteen months 127 00:07:02,760 --> 00:07:06,240 Speaker 1: we haven't had. We are having again though today as 128 00:07:06,279 --> 00:07:08,640 Speaker 1: prices go up as quickly as they are. So this 129 00:07:08,720 --> 00:07:12,120 Speaker 1: is really interesting because you know, one of the themes, 130 00:07:12,280 --> 00:07:14,240 Speaker 1: I mean already you have like hit on like five 131 00:07:14,360 --> 00:07:16,520 Speaker 1: themes that Tracy and I talked about a lot. But 132 00:07:16,640 --> 00:07:18,880 Speaker 1: one of the themes that we sort of talked about 133 00:07:18,880 --> 00:07:20,840 Speaker 1: in the last year is the sort of like great 134 00:07:20,880 --> 00:07:25,280 Speaker 1: acceleration thesis, which is the idea that the post COVID 135 00:07:25,360 --> 00:07:29,760 Speaker 1: economic environment really in many ways has accelerated a lot 136 00:07:29,800 --> 00:07:32,680 Speaker 1: of pre existing trends. And so what you're saying is like, 137 00:07:33,240 --> 00:07:36,280 Speaker 1: you know, we everyone knows now about labor shortages and 138 00:07:36,360 --> 00:07:39,400 Speaker 1: land shortages and housing. Although we'll get more into the details, 139 00:07:39,440 --> 00:07:42,920 Speaker 1: but these were the conversations that was that we're already happening. 140 00:07:43,200 --> 00:07:46,640 Speaker 1: You're saying prior to the virus hitting Yeah, no doubt. 141 00:07:46,680 --> 00:07:49,640 Speaker 1: And basically what you're hitting on too fast forward today 142 00:07:49,680 --> 00:07:52,360 Speaker 1: is that housing is trendy again. Right, for the past 143 00:07:53,080 --> 00:07:55,960 Speaker 1: ten fifteen years, housing wasn't trendy. It was something that 144 00:07:56,040 --> 00:07:59,200 Speaker 1: you bought. But the common thing you would hear I 145 00:07:59,200 --> 00:08:01,120 Speaker 1: would hear among ends, I would hear among people in 146 00:08:01,120 --> 00:08:06,040 Speaker 1: the industry is don't buy your house as a investment tool, 147 00:08:06,160 --> 00:08:08,200 Speaker 1: and that you're wanting it to go up and value, 148 00:08:08,200 --> 00:08:10,400 Speaker 1: and this is a really good bet on where you 149 00:08:10,400 --> 00:08:13,000 Speaker 1: should place your money. You buy the home because that's 150 00:08:13,000 --> 00:08:14,920 Speaker 1: where you want to live, because that's where you want 151 00:08:14,920 --> 00:08:16,680 Speaker 1: to plant roots, and you want to lock in that 152 00:08:16,800 --> 00:08:20,560 Speaker 1: rate that I think that discussion has changed a lot 153 00:08:20,760 --> 00:08:23,840 Speaker 1: since COVID hit. Can we talk about that a little 154 00:08:23,880 --> 00:08:26,480 Speaker 1: bit more, because you know, as I mentioned earlier, I'm 155 00:08:26,520 --> 00:08:29,160 Speaker 1: outside of the States, and I'm kind of wondering, like, 156 00:08:29,320 --> 00:08:33,280 Speaker 1: where did this wave of demand suddenly come from? So 157 00:08:33,640 --> 00:08:35,920 Speaker 1: on the one hand, you have COVID, you have the 158 00:08:36,000 --> 00:08:38,920 Speaker 1: work from home situation, maybe some people moving out of 159 00:08:38,920 --> 00:08:42,320 Speaker 1: the cities. But speaking to that great acceleration theme, you 160 00:08:42,440 --> 00:08:47,120 Speaker 1: also have a wave of I guess elder millennials who 161 00:08:47,280 --> 00:08:49,160 Speaker 1: might be, you know, getting to the point in their 162 00:08:49,160 --> 00:08:51,160 Speaker 1: lives where they have enough money to buy a house. 163 00:08:51,480 --> 00:08:54,080 Speaker 1: Maybe they're looking to start families, things like that. So 164 00:08:54,840 --> 00:08:56,760 Speaker 1: I guess I'm just curious if you can sort of 165 00:08:56,880 --> 00:09:02,440 Speaker 1: disaggregate those different sources of demands. Yes, and there's a lot, 166 00:09:02,520 --> 00:09:04,600 Speaker 1: and you had so many there were so many questions 167 00:09:04,640 --> 00:09:06,880 Speaker 1: in that question that I've heard that you want to answer. 168 00:09:07,280 --> 00:09:09,400 Speaker 1: Um In the first direction I want to go is 169 00:09:09,440 --> 00:09:12,240 Speaker 1: just to to wrap up the before COVID time is 170 00:09:12,280 --> 00:09:15,200 Speaker 1: on the resale side, and this will make sense into 171 00:09:15,240 --> 00:09:17,160 Speaker 1: your question Tracy of why I'm answering it like this. 172 00:09:17,640 --> 00:09:19,560 Speaker 1: So what I want to give the example of is 173 00:09:20,000 --> 00:09:22,760 Speaker 1: I bought my home in sen and when I bought 174 00:09:22,760 --> 00:09:26,120 Speaker 1: my home, all we talked about was how we were 175 00:09:26,120 --> 00:09:30,640 Speaker 1: buying in a limited supply environment. And it's almost a 176 00:09:30,760 --> 00:09:34,280 Speaker 1: joke now because we were talking two or three months 177 00:09:34,280 --> 00:09:37,520 Speaker 1: of supply on the market when I bought equilibriums generally 178 00:09:37,520 --> 00:09:40,280 Speaker 1: four to six. Today in some markets you have point 179 00:09:40,360 --> 00:09:44,760 Speaker 1: five months of supply. So it was a tight inventory 180 00:09:44,840 --> 00:09:50,120 Speaker 1: market in eighteen nineteen twenty for a whole bunch of reasons. 181 00:09:50,600 --> 00:09:54,840 Speaker 1: Um investors actually getting active in the market. Prop thirteen 182 00:09:54,880 --> 00:09:57,600 Speaker 1: in California allows a lot of people to age in place, 183 00:09:58,160 --> 00:10:01,760 Speaker 1: not enough building. If there's no on a new construction, 184 00:10:02,320 --> 00:10:05,040 Speaker 1: then you don't entice people to move. So there were 185 00:10:05,080 --> 00:10:08,560 Speaker 1: all of these factors that were keeping inventory tight before COVID, 186 00:10:09,400 --> 00:10:14,600 Speaker 1: and then you really had the entire buyer spectrum wake up. 187 00:10:15,280 --> 00:10:17,280 Speaker 1: One more thing I want to say is housing did 188 00:10:17,440 --> 00:10:20,640 Speaker 1: slow for if you guys remember it was really four 189 00:10:20,760 --> 00:10:25,760 Speaker 1: to eight weeks March and April of last year, and 190 00:10:25,800 --> 00:10:29,120 Speaker 1: when we started to watch data. We were doing presentation 191 00:10:29,120 --> 00:10:31,520 Speaker 1: store clients on a weekly basis, and we were like 192 00:10:31,960 --> 00:10:34,680 Speaker 1: holding they were holding our hands, we were holding their hands. 193 00:10:34,720 --> 00:10:37,319 Speaker 1: We were just like, hang on, this is gonna be okay. 194 00:10:37,640 --> 00:10:40,240 Speaker 1: We hope this isn't like the Great Financial Crisis. And 195 00:10:40,280 --> 00:10:42,559 Speaker 1: then we started to see sales start to pick up, 196 00:10:43,200 --> 00:10:47,280 Speaker 1: and we've started to wonder, how is this even possible? 197 00:10:47,720 --> 00:10:50,040 Speaker 1: And so this is going now to to Tracy's question, 198 00:10:50,080 --> 00:10:54,400 Speaker 1: which is the first thing was work from home. And 199 00:10:55,000 --> 00:10:58,800 Speaker 1: the reason I say this over demographics is I have 200 00:10:58,880 --> 00:11:02,319 Speaker 1: been doing presentations in industry for years and what I've 201 00:11:02,360 --> 00:11:05,600 Speaker 1: said is, hey, you can continue to build. You can 202 00:11:05,640 --> 00:11:08,520 Speaker 1: feel confidence in the strength of the housing market because 203 00:11:08,960 --> 00:11:11,679 Speaker 1: we have such demographic tail winds and we have low 204 00:11:11,720 --> 00:11:14,560 Speaker 1: interest rates. Again, that was before COVID, So now you 205 00:11:14,640 --> 00:11:18,480 Speaker 1: only have exaggerated demographic tail winds and even lower interest 206 00:11:18,559 --> 00:11:24,720 Speaker 1: rates combined with work from home. And I'm gonna phrase 207 00:11:24,840 --> 00:11:28,880 Speaker 1: this the sleepy gen xers finally woke up. We didn't 208 00:11:28,920 --> 00:11:31,760 Speaker 1: talk about gen xers that much, and I'm saying this 209 00:11:31,800 --> 00:11:35,520 Speaker 1: is generally age sixty. They weren't as active in the 210 00:11:35,600 --> 00:11:38,880 Speaker 1: market as the millennials and as the baby boomers. And 211 00:11:38,920 --> 00:11:40,880 Speaker 1: now all of a sudden, you have your gen xers 212 00:11:41,120 --> 00:11:44,080 Speaker 1: who have saved money, who were scarred from the Great 213 00:11:44,080 --> 00:11:47,839 Speaker 1: Financial Crisis, but who are are feeling enabled to move, 214 00:11:48,559 --> 00:11:52,160 Speaker 1: partly because of their financial situation and partly because their 215 00:11:52,280 --> 00:11:56,240 Speaker 1: lifestyle changed so much over the past year. So we 216 00:11:56,320 --> 00:11:58,280 Speaker 1: have work from home, we have gen xers, we have 217 00:11:58,360 --> 00:12:00,840 Speaker 1: the relocation buyers, which we need to make sure we 218 00:12:00,920 --> 00:12:04,440 Speaker 1: hit on the equity in the house, the stock market, 219 00:12:04,679 --> 00:12:09,080 Speaker 1: the low interest rates, and then the FOMO, which is 220 00:12:09,120 --> 00:12:11,160 Speaker 1: the part that I think makes me the most anxious 221 00:12:11,160 --> 00:12:12,839 Speaker 1: about where the market is is how much of it 222 00:12:12,880 --> 00:12:16,360 Speaker 1: is frenzy. I'm I'm glad you said gen xers. No 223 00:12:16,360 --> 00:12:19,680 Speaker 1: one ever talks about gen xer. But I'm forty and 224 00:12:19,760 --> 00:12:21,440 Speaker 1: so I kind of cause I guess I'm like right 225 00:12:21,480 --> 00:12:25,160 Speaker 1: on the cusp. But I appreciate that our generation gets 226 00:12:25,200 --> 00:12:28,160 Speaker 1: a little gets a little bit of recognition. I just 227 00:12:28,160 --> 00:12:30,559 Speaker 1: want to go back to one last point you made 228 00:12:30,920 --> 00:12:33,520 Speaker 1: before we really get into what's going on now, because 229 00:12:33,559 --> 00:12:36,480 Speaker 1: I'm interested in this idea. I've heard this before. The 230 00:12:36,600 --> 00:12:39,959 Speaker 1: owners of land sort of view it as a bit 231 00:12:39,960 --> 00:12:42,439 Speaker 1: of a call option of sorts that they could sell 232 00:12:42,600 --> 00:12:46,240 Speaker 1: at any time, and so you mentioned that, Okay, the prices, 233 00:12:46,600 --> 00:12:49,760 Speaker 1: maybe the market clearing price of land came down, but 234 00:12:49,920 --> 00:12:53,679 Speaker 1: that didn't induce landowners to sell. Is this like a 235 00:12:53,720 --> 00:12:57,800 Speaker 1: permanent feature of the market that basically people who own 236 00:12:57,920 --> 00:13:00,680 Speaker 1: land just wait. If they can't get the price they want, 237 00:13:00,679 --> 00:13:02,920 Speaker 1: they don't sell at the lower price. They just sort 238 00:13:02,920 --> 00:13:06,560 Speaker 1: of they know that eventually real estate always comes back around, 239 00:13:06,800 --> 00:13:09,040 Speaker 1: and U that allows them to just hold out. Like, 240 00:13:09,080 --> 00:13:11,920 Speaker 1: what is the general mentality of people who are on land? 241 00:13:12,760 --> 00:13:15,600 Speaker 1: I would say, you know that that's what it is, 242 00:13:16,080 --> 00:13:19,280 Speaker 1: unless you have to sell the land, and then you 243 00:13:19,440 --> 00:13:21,040 Speaker 1: you're gonna take what the market is. And they're going 244 00:13:21,080 --> 00:13:22,920 Speaker 1: to be different reasons why someone needs to sell the 245 00:13:23,000 --> 00:13:25,800 Speaker 1: land and not wait for top dollar. But I was 246 00:13:25,840 --> 00:13:28,720 Speaker 1: talking to a builder the other day and he was saying, 247 00:13:28,920 --> 00:13:31,959 Speaker 1: they're dealing a lot with farmers, and the farmers would 248 00:13:32,000 --> 00:13:34,760 Speaker 1: love the money, but they also would like top dollar, 249 00:13:35,000 --> 00:13:37,080 Speaker 1: and so they're going to wait until they're able to 250 00:13:37,120 --> 00:13:40,400 Speaker 1: get that. It goes back to you can't recreate it. 251 00:13:40,520 --> 00:13:44,880 Speaker 1: And if you own land within forty miles of a 252 00:13:44,920 --> 00:13:47,680 Speaker 1: central business district, don't give that up for a lower 253 00:13:47,720 --> 00:14:07,160 Speaker 1: price because there's no reason you should. So why don't 254 00:14:07,160 --> 00:14:10,000 Speaker 1: we talk a little bit about how crazy it is 255 00:14:10,320 --> 00:14:12,800 Speaker 1: right now. Then I guess my first question is how 256 00:14:12,840 --> 00:14:17,800 Speaker 1: do you measure the deviation from what the normal increase 257 00:14:17,960 --> 00:14:21,600 Speaker 1: in house prices might look like? And how far away 258 00:14:21,600 --> 00:14:25,320 Speaker 1: from that are we right now? Yeah. So, what our 259 00:14:25,360 --> 00:14:29,280 Speaker 1: company does is we track actively selling communities across the 260 00:14:29,320 --> 00:14:33,160 Speaker 1: country and we have what we call the New Homepending 261 00:14:33,160 --> 00:14:37,120 Speaker 1: Sales Index, which is looking at transactions in the housing 262 00:14:37,160 --> 00:14:40,480 Speaker 1: market by two different lenses. Lens one is just how 263 00:14:40,520 --> 00:14:43,080 Speaker 1: many homes have sold. To think of this as a 264 00:14:43,120 --> 00:14:46,320 Speaker 1: census equivalent, So just count the number of home sales. Okay, 265 00:14:47,080 --> 00:14:49,640 Speaker 1: you know we've sold x many. Then we also look 266 00:14:49,640 --> 00:14:53,040 Speaker 1: at the average sales rate per month per community, which 267 00:14:53,120 --> 00:14:56,160 Speaker 1: is a measure of demand on the builder side. And 268 00:14:56,520 --> 00:14:59,840 Speaker 1: historically these two components, the total number of homes so 269 00:15:00,000 --> 00:15:02,440 Speaker 1: old in an index and then the ever sales rate 270 00:15:02,440 --> 00:15:05,680 Speaker 1: per community in an index, have just moved in lockstep 271 00:15:05,800 --> 00:15:08,120 Speaker 1: that you basically can't see the two lines separated from 272 00:15:08,120 --> 00:15:13,000 Speaker 1: each other. We've now seen that completely diverge. So one 273 00:15:13,000 --> 00:15:15,160 Speaker 1: line is going up, one line is going down. You 274 00:15:15,160 --> 00:15:17,440 Speaker 1: can imagine it's the demand component continues to go up, 275 00:15:17,440 --> 00:15:21,840 Speaker 1: the supply is going down. And when we're looking at 276 00:15:21,920 --> 00:15:23,960 Speaker 1: the different deals and we're saying, Okay, you know you 277 00:15:24,040 --> 00:15:27,560 Speaker 1: bought the land for this price, expecting um your homes 278 00:15:27,640 --> 00:15:32,840 Speaker 1: to go up x appreciation. We're having builders say, at minimum, 279 00:15:32,920 --> 00:15:36,960 Speaker 1: the raising prices twenty dollars every month, or we're having 280 00:15:36,960 --> 00:15:40,560 Speaker 1: builders say we're raising prices Joe had talked about like 281 00:15:40,760 --> 00:15:43,680 Speaker 1: five over. We're having builders say, like within a couple 282 00:15:43,720 --> 00:15:47,840 Speaker 1: of months, you're raising prices two. The l A's and 283 00:15:47,920 --> 00:15:52,280 Speaker 1: the San Francisco's and the DCS in Miami's are basically 284 00:15:52,320 --> 00:15:54,960 Speaker 1: going up. I would say, at a level that's on 285 00:15:55,000 --> 00:15:58,040 Speaker 1: the high end of their healthy clip. You're definitely seeing 286 00:15:58,040 --> 00:16:01,800 Speaker 1: prices going above asking. But those are not markets that 287 00:16:01,880 --> 00:16:08,320 Speaker 1: are fundamentally transforming because of our relocation buyers. It's the 288 00:16:08,360 --> 00:16:14,320 Speaker 1: markets that are becoming the hardest to understand become Austin, Dallas, Jacksonville, 289 00:16:14,520 --> 00:16:18,000 Speaker 1: Las Vegas, Phoenix, Salt Lake City, Denver. These are the 290 00:16:18,040 --> 00:16:22,440 Speaker 1: markets where you would expect historically, let's say four to 291 00:16:22,960 --> 00:16:27,560 Speaker 1: six percent home price appreciation, and now you're seeing numbers 292 00:16:27,560 --> 00:16:31,320 Speaker 1: that don't even register. It's going to be Austin your year. 293 00:16:31,680 --> 00:16:37,120 Speaker 1: Home prices are up, So those numbers to us don't 294 00:16:37,160 --> 00:16:40,560 Speaker 1: really match what we're seeing on local incomes. But those 295 00:16:40,640 --> 00:16:43,360 Speaker 1: numbers completely make sense when you have a California income 296 00:16:43,360 --> 00:16:47,080 Speaker 1: moving into Austin. A So, so this is really the 297 00:16:47,160 --> 00:16:51,440 Speaker 1: key thing is the rise of the relocation home buyer. 298 00:16:51,760 --> 00:16:55,000 Speaker 1: How big you know, in a typical year, how much 299 00:16:55,160 --> 00:16:59,160 Speaker 1: would a sort of like relocation from California or New 300 00:16:59,240 --> 00:17:03,800 Speaker 1: York to a Austin or to a Denver or to Montana, Like, 301 00:17:03,880 --> 00:17:06,399 Speaker 1: how much is that typically part of the market? And 302 00:17:06,440 --> 00:17:10,160 Speaker 1: then how much is that part of the market these days? Yeah, 303 00:17:10,200 --> 00:17:12,080 Speaker 1: and I'll have to give it in percents. But what 304 00:17:12,359 --> 00:17:15,840 Speaker 1: we and this comes from a division president survey that 305 00:17:15,880 --> 00:17:19,479 Speaker 1: we do, and we ask the division presidents what are 306 00:17:19,480 --> 00:17:23,320 Speaker 1: your most active buyers and how has that changed? You say, sorry, 307 00:17:23,400 --> 00:17:27,360 Speaker 1: would you say division presidents? These are presidents of homebuilders. Yeah, 308 00:17:27,400 --> 00:17:31,000 Speaker 1: presidents of homebuilders where they're active in Las Vegas. They 309 00:17:31,000 --> 00:17:33,280 Speaker 1: don't just look at one community. They're looking at their 310 00:17:33,400 --> 00:17:37,200 Speaker 1: entire Las Vegas portfolio or their entire Southern California portfolio. 311 00:17:37,320 --> 00:17:39,320 Speaker 1: So they have a good sense of a lot of 312 00:17:39,320 --> 00:17:41,480 Speaker 1: the different communities at a lot of different prices. It's 313 00:17:41,480 --> 00:17:46,000 Speaker 1: not just something very specific. YEA. So the first thing 314 00:17:46,000 --> 00:17:48,360 Speaker 1: I would say to answer your question directly, is that 315 00:17:48,840 --> 00:17:53,520 Speaker 1: the percent in some markets it would be the smile states. 316 00:17:53,560 --> 00:17:55,480 Speaker 1: A lot of the ones I just mentioned, we are 317 00:17:55,520 --> 00:18:00,280 Speaker 1: having division presidents say it can be up to fifty 318 00:18:00,760 --> 00:18:02,760 Speaker 1: of all of their sales right now are coming from 319 00:18:02,760 --> 00:18:08,240 Speaker 1: relow buyers. That's not normal. I don't have the exact 320 00:18:08,320 --> 00:18:10,760 Speaker 1: like for like, I know that the majority of them 321 00:18:10,800 --> 00:18:13,359 Speaker 1: are saying that's increasing. I would say from what we 322 00:18:13,480 --> 00:18:17,040 Speaker 1: heard before pandemic, it was probably closer to ten to 323 00:18:17,119 --> 00:18:20,240 Speaker 1: twenty because you did have people moving before the pandemic, 324 00:18:20,320 --> 00:18:23,440 Speaker 1: just not to the same extent that you're seeing today. 325 00:18:23,560 --> 00:18:28,119 Speaker 1: So that's a huge shift in some markets. But second 326 00:18:28,160 --> 00:18:30,879 Speaker 1: to that, going back to our sleepy gen xers, we 327 00:18:30,960 --> 00:18:33,520 Speaker 1: now have from the division presidents that the move up 328 00:18:33,520 --> 00:18:37,240 Speaker 1: buyers are the most active and they've overtaken the entry level, 329 00:18:37,640 --> 00:18:39,960 Speaker 1: and then the third most active of all the different 330 00:18:39,960 --> 00:18:43,600 Speaker 1: buyer groups relocation. So to me, that's really saying that's 331 00:18:43,640 --> 00:18:46,400 Speaker 1: within well, it's obviously within the top three, but those 332 00:18:46,440 --> 00:18:50,760 Speaker 1: are the buyers that again have transformed the housing market. 333 00:18:52,040 --> 00:18:54,359 Speaker 1: So I have a dumb question, and you just touched 334 00:18:54,359 --> 00:18:57,800 Speaker 1: on it a tiny bit there, but I'm curious what 335 00:18:57,800 --> 00:19:01,560 Speaker 1: what is happening to the people who are actually selling 336 00:19:01,600 --> 00:19:04,920 Speaker 1: their houses. So are they buying new ones and trading 337 00:19:05,000 --> 00:19:08,000 Speaker 1: up to something bigger and better or in a different location, 338 00:19:08,240 --> 00:19:12,080 Speaker 1: or are they all deciding to rent and you know, 339 00:19:12,280 --> 00:19:15,680 Speaker 1: just take advantage of high prices and try to monetize 340 00:19:15,840 --> 00:19:18,639 Speaker 1: their house and then hope for the prices to come down, 341 00:19:18,920 --> 00:19:23,480 Speaker 1: Like where are they all going? Great question, and the 342 00:19:23,520 --> 00:19:27,720 Speaker 1: answer is all of the above. And it's also one 343 00:19:27,760 --> 00:19:30,240 Speaker 1: of the reasons inventory is so low, Tracy, because a 344 00:19:30,240 --> 00:19:32,280 Speaker 1: lot of people are asking the same question. So, Okay, 345 00:19:32,320 --> 00:19:35,280 Speaker 1: I'm gonna sell my home. Everything else has become more expensive. 346 00:19:35,960 --> 00:19:38,520 Speaker 1: Where am I going to move to? So you do 347 00:19:38,640 --> 00:19:42,280 Speaker 1: have some people, and it's kind of increasingly common that 348 00:19:42,720 --> 00:19:45,000 Speaker 1: some people are just worried about the market and they're saying, 349 00:19:45,080 --> 00:19:46,840 Speaker 1: I am going to sell just like what you said. 350 00:19:46,840 --> 00:19:49,800 Speaker 1: I'm going to enjoy my equity and I'm going to 351 00:19:49,880 --> 00:19:51,560 Speaker 1: go into a rental community and I'm going to wait 352 00:19:51,600 --> 00:19:54,760 Speaker 1: for this market to cool down. There are some buyers 353 00:19:54,800 --> 00:19:58,919 Speaker 1: that are going into the new home space, and the 354 00:19:58,960 --> 00:20:01,800 Speaker 1: issue with that is you can't really in a lot 355 00:20:01,840 --> 00:20:04,960 Speaker 1: of markets walk into a new home community and buy 356 00:20:04,960 --> 00:20:08,320 Speaker 1: a home today. A little bit of an exaggeration, but 357 00:20:08,359 --> 00:20:11,560 Speaker 1: there are some communities that have just completely stopped entirely. 358 00:20:12,160 --> 00:20:15,280 Speaker 1: You could also be a seller who's going to try 359 00:20:15,280 --> 00:20:18,040 Speaker 1: to compete in the resale market. The biggest thing that 360 00:20:18,080 --> 00:20:21,920 Speaker 1: I'm hearing though, is don't have a sale contingency so 361 00:20:22,119 --> 00:20:25,520 Speaker 1: you can buy another home. And the theories that are 362 00:20:25,560 --> 00:20:28,840 Speaker 1: I guess the commonly accepted ideas that you're gonna sell 363 00:20:28,920 --> 00:20:30,560 Speaker 1: your home so quickly that you're not going to have 364 00:20:30,640 --> 00:20:32,600 Speaker 1: to worry about whether or not you sell your home 365 00:20:32,640 --> 00:20:35,680 Speaker 1: to move into the other home. But the answer is 366 00:20:35,720 --> 00:20:38,520 Speaker 1: all of the above. Can you explain it? It? Just 367 00:20:38,520 --> 00:20:40,280 Speaker 1: explain that last part real quickly. What do you mean 368 00:20:40,800 --> 00:20:44,800 Speaker 1: don't have a sale contingency? So if you're going into 369 00:20:44,800 --> 00:20:48,359 Speaker 1: the market today and into the resale market, so this 370 00:20:48,400 --> 00:20:50,360 Speaker 1: is not the home market now, but if you're going 371 00:20:50,400 --> 00:20:52,320 Speaker 1: into the resale market and you want to buy a home, 372 00:20:52,640 --> 00:20:55,800 Speaker 1: you basically want to have as few contingencies as possible. 373 00:20:55,880 --> 00:20:58,800 Speaker 1: So obviously, if you're a cash buyer, you're the pre 374 00:20:58,800 --> 00:21:01,600 Speaker 1: the preferred buyer. If you can remove a loone contingency, 375 00:21:01,640 --> 00:21:05,280 Speaker 1: that's important. But if you say, I want to buy 376 00:21:05,280 --> 00:21:08,640 Speaker 1: your house, but for me to close on the transaction, 377 00:21:08,800 --> 00:21:12,680 Speaker 1: I have to sell my house. Historically that was totally acceptable. 378 00:21:12,720 --> 00:21:14,440 Speaker 1: That was yeah, of course, was to buy the house 379 00:21:14,440 --> 00:21:17,000 Speaker 1: if you haven't sold your house yet. But now you 380 00:21:17,040 --> 00:21:19,520 Speaker 1: can't go into the deal and say I need to 381 00:21:19,560 --> 00:21:21,439 Speaker 1: sell my house to buy your house. It needs to 382 00:21:21,440 --> 00:21:23,920 Speaker 1: be I'm ready to buy your house and nothing's gonna 383 00:21:23,960 --> 00:21:28,640 Speaker 1: hold me back. So at what point do buyers start 384 00:21:28,720 --> 00:21:32,040 Speaker 1: to protest the high prices and just say, you know what, 385 00:21:32,200 --> 00:21:35,600 Speaker 1: this is getting too crazy for me and I'm going 386 00:21:35,640 --> 00:21:38,159 Speaker 1: to sit this one out and wait for prices to 387 00:21:38,200 --> 00:21:43,000 Speaker 1: come down. Perfect question, because the answer is we're seeing 388 00:21:43,040 --> 00:21:46,959 Speaker 1: it right now, and I would say May is the 389 00:21:47,040 --> 00:21:52,240 Speaker 1: first time that we've even heard of a big bump 390 00:21:52,240 --> 00:21:55,359 Speaker 1: and buyer hesitancy. What we're hearing is things like the 391 00:21:55,359 --> 00:21:57,280 Speaker 1: buyers are coming in and they're worried about buying at 392 00:21:57,280 --> 00:22:01,240 Speaker 1: the top, or buyers are coming in and they're saying, 393 00:22:01,440 --> 00:22:03,400 Speaker 1: you know, I was looking at this house last month 394 00:22:03,440 --> 00:22:06,240 Speaker 1: and it was thirty dollars below where it was today. 395 00:22:06,359 --> 00:22:08,960 Speaker 1: I don't want to jump in today. Or you guys 396 00:22:08,960 --> 00:22:11,520 Speaker 1: may have seen if you sign a contract with the builder. 397 00:22:12,080 --> 00:22:14,760 Speaker 1: Sometimes if if the builder has written their contract right, 398 00:22:15,160 --> 00:22:19,600 Speaker 1: the builder can come back to you and say our 399 00:22:19,680 --> 00:22:22,480 Speaker 1: prices have gone up and we're not going to cover 400 00:22:22,560 --> 00:22:25,119 Speaker 1: that entire cost, so we're going to split that with you. 401 00:22:25,200 --> 00:22:26,720 Speaker 1: So I know you thought you bought this home for 402 00:22:26,760 --> 00:22:29,760 Speaker 1: three thousand, but I need you to bring thirty or 403 00:22:29,760 --> 00:22:34,000 Speaker 1: forty thousand extra dollars to the table. So that's we're 404 00:22:34,000 --> 00:22:37,000 Speaker 1: seeing a lot of headlines on that, and they're true, 405 00:22:37,119 --> 00:22:39,320 Speaker 1: like this is truly happening. But I think there are 406 00:22:39,359 --> 00:22:40,960 Speaker 1: some people that are saying, oh, I'm not sure I 407 00:22:40,960 --> 00:22:42,560 Speaker 1: want to commit to one price and then have my 408 00:22:42,600 --> 00:22:46,040 Speaker 1: price go up. So we are seeing, and you use 409 00:22:46,119 --> 00:22:48,160 Speaker 1: the right phrase, what we're calling is the buyer's protest. 410 00:22:48,480 --> 00:22:51,679 Speaker 1: We are seeing the start of a buyer's protest for 411 00:22:51,680 --> 00:22:55,720 Speaker 1: the first time. I wouldn't say it's that demand has 412 00:22:55,960 --> 00:23:00,280 Speaker 1: fallen off because we haven't truly seen that impact sales yet. 413 00:23:00,840 --> 00:23:03,440 Speaker 1: It's just when builders are planning forward, they'll say, wow, 414 00:23:03,480 --> 00:23:06,920 Speaker 1: our interest list is one example we heard in the 415 00:23:06,960 --> 00:23:09,880 Speaker 1: Mountain region is two years long. So that two years 416 00:23:09,880 --> 00:23:13,640 Speaker 1: long interest list could become six months long if prices 417 00:23:13,680 --> 00:23:15,520 Speaker 1: go up too much and people are saying no, no, no, 418 00:23:15,640 --> 00:23:18,680 Speaker 1: like the home is not worth it, I'm not gonna buy. 419 00:23:18,920 --> 00:23:21,200 Speaker 1: It's like the first derivative of this or the second 420 00:23:21,200 --> 00:23:25,200 Speaker 1: derivative of demand is starting to slow down. Yeah, yeah, 421 00:23:25,359 --> 00:23:27,440 Speaker 1: you are starting to see that. And I think what 422 00:23:27,480 --> 00:23:29,480 Speaker 1: I'm trying to make sense of, and I don't have 423 00:23:29,600 --> 00:23:32,840 Speaker 1: the full answer, is if you do have so many 424 00:23:32,840 --> 00:23:36,480 Speaker 1: people sitting on the sidelines waiting for prices to come down, 425 00:23:37,400 --> 00:23:41,080 Speaker 1: if prices reset, does it start the frenzy all over again? 426 00:23:41,880 --> 00:23:44,920 Speaker 1: And I guess it depends on where mortgage rates are. 427 00:23:44,960 --> 00:23:46,760 Speaker 1: But again using myself as an example, we want to 428 00:23:46,760 --> 00:23:48,359 Speaker 1: buy a move up house, but I'm not going to 429 00:23:48,400 --> 00:23:50,720 Speaker 1: go into the market right now. But if the market 430 00:23:50,760 --> 00:23:52,920 Speaker 1: slows or softens, I'm going to be the first person 431 00:23:52,960 --> 00:23:56,800 Speaker 1: knocking at that door. So does that make the market 432 00:23:57,240 --> 00:24:01,359 Speaker 1: kind of maybe not permanently higher, but higher longer because 433 00:24:01,359 --> 00:24:05,439 Speaker 1: it is kind of a longer stretched out demand cycle. Well, 434 00:24:05,800 --> 00:24:07,800 Speaker 1: this is something that I wanted to ask you, actually, 435 00:24:07,920 --> 00:24:12,080 Speaker 1: So when we think about the supply demand mismatched, does 436 00:24:12,160 --> 00:24:15,600 Speaker 1: that mean that we have to start thinking differently about 437 00:24:16,320 --> 00:24:20,960 Speaker 1: what constitutes weak or strong housing data? So, for instance, 438 00:24:21,000 --> 00:24:24,960 Speaker 1: if we start to see housing data soften um in May, 439 00:24:25,160 --> 00:24:29,760 Speaker 1: like you just mentioned, because people are sitting out the 440 00:24:29,840 --> 00:24:33,120 Speaker 1: high prices, that doesn't actually mean that the housing market 441 00:24:33,160 --> 00:24:39,840 Speaker 1: is necessarily getting fundamentally weaker. Like I'm not sure how 442 00:24:39,880 --> 00:24:42,000 Speaker 1: to phrase this question, but basically, are you sort of 443 00:24:42,040 --> 00:24:47,000 Speaker 1: rethinking the way you interpret housing data in the current conditions. 444 00:24:48,080 --> 00:24:51,000 Speaker 1: It's one of the hardest things I would say to 445 00:24:51,600 --> 00:24:56,639 Speaker 1: grasp is this idea that we know the demand is 446 00:24:56,680 --> 00:24:58,680 Speaker 1: out there. And I know, Joe, you've seen some things 447 00:24:58,720 --> 00:25:02,359 Speaker 1: on Twitter about this where we see phrases like the 448 00:25:02,440 --> 00:25:04,800 Speaker 1: entry level buyer is left in the dust, the entry 449 00:25:04,880 --> 00:25:07,399 Speaker 1: level buyer has no chance to buy a home in 450 00:25:07,400 --> 00:25:11,640 Speaker 1: today's market. And what we've tried to do every year 451 00:25:11,680 --> 00:25:14,560 Speaker 1: for the past five years, I've done millennial surveys, and 452 00:25:14,720 --> 00:25:18,840 Speaker 1: I don't try to survey an active new home shopper 453 00:25:18,880 --> 00:25:21,840 Speaker 1: and active resale shopper in this survey, I try to 454 00:25:22,880 --> 00:25:24,320 Speaker 1: the way I phrase it is I want to find 455 00:25:24,320 --> 00:25:27,200 Speaker 1: the millennial on the couch who's just scrolling through Facebook 456 00:25:27,200 --> 00:25:30,000 Speaker 1: and who sees the survey and takes the survey to 457 00:25:30,040 --> 00:25:32,720 Speaker 1: get a sense of where their mind is. And what 458 00:25:32,760 --> 00:25:35,600 Speaker 1: we see in that is there're still so many buyers 459 00:25:35,640 --> 00:25:39,280 Speaker 1: that are looking to purchase a home. But um to 460 00:25:39,320 --> 00:25:42,119 Speaker 1: the point earlier about the buyer's protest or just getting 461 00:25:42,160 --> 00:25:44,439 Speaker 1: frustrated in the process they can't find anything in their 462 00:25:44,480 --> 00:25:49,240 Speaker 1: price point. We're trying to think that through, and as 463 00:25:49,280 --> 00:25:51,600 Speaker 1: we work with the builders and as the builders are 464 00:25:51,640 --> 00:25:55,200 Speaker 1: just looking at what land they have, what I keep 465 00:25:55,240 --> 00:25:58,719 Speaker 1: hearing is we cannot assume this is going to last forever. 466 00:25:59,040 --> 00:26:00,639 Speaker 1: We've got to sue whim. It's going to be a 467 00:26:00,720 --> 00:26:03,840 Speaker 1: less frenzied And what we as the building community need 468 00:26:03,920 --> 00:26:07,200 Speaker 1: to do is make sure that we're successful even if 469 00:26:07,240 --> 00:26:10,200 Speaker 1: things slow down. And the only way you can control 470 00:26:10,280 --> 00:26:12,639 Speaker 1: that is by controlling what you bring to the market. 471 00:26:13,000 --> 00:26:15,440 Speaker 1: Maybe it's a more dense product. Maybe it's a what 472 00:26:15,480 --> 00:26:17,840 Speaker 1: we call right size, So right sizes you have a 473 00:26:17,880 --> 00:26:21,280 Speaker 1: slightly smaller square foot but the home is so functional 474 00:26:21,320 --> 00:26:23,520 Speaker 1: it's not that big of a deal and you're able 475 00:26:23,560 --> 00:26:26,880 Speaker 1: to adjust your price. Maybe it's a higher density community. 476 00:26:26,920 --> 00:26:30,879 Speaker 1: Maybe it's a duplex community, you know, or three story. 477 00:26:31,280 --> 00:26:33,280 Speaker 1: So builders are trying to think through all of that 478 00:26:33,320 --> 00:26:36,639 Speaker 1: because I think ultimately they know the answer to your question, 479 00:26:36,680 --> 00:26:38,680 Speaker 1: which is the data is not going to really tell 480 00:26:38,720 --> 00:26:43,200 Speaker 1: us the story about how strong demand is. The conversations 481 00:26:43,240 --> 00:26:45,240 Speaker 1: we're having with people on the ground on a regular 482 00:26:45,280 --> 00:26:48,240 Speaker 1: basis that's telling us that there's so much hunger and 483 00:26:48,320 --> 00:26:51,560 Speaker 1: so much demand, but also so much frustration and frankly 484 00:26:51,920 --> 00:26:54,359 Speaker 1: a price ceiling for some buyers, and you have to 485 00:26:54,359 --> 00:26:56,879 Speaker 1: be able to adjust for that if possible. So this, 486 00:26:57,080 --> 00:26:59,840 Speaker 1: I mean, it's it's just incredible how many like assistant 487 00:27:00,080 --> 00:27:03,359 Speaker 1: themes this discussion hits on. But one of the questions, 488 00:27:03,359 --> 00:27:05,399 Speaker 1: I mean, one of the issues is, obviously is you 489 00:27:05,520 --> 00:27:09,880 Speaker 1: just stated, is the question of whether the boom continues, 490 00:27:10,400 --> 00:27:14,560 Speaker 1: let's say, and and that that dictates or that informs 491 00:27:14,880 --> 00:27:16,800 Speaker 1: builder behavior right now. So if they knew that there 492 00:27:16,800 --> 00:27:18,920 Speaker 1: would be strong demand for the next five years, that's 493 00:27:18,920 --> 00:27:20,639 Speaker 1: a very different picture that if it's going to like 494 00:27:21,040 --> 00:27:25,439 Speaker 1: fade in, is things get normalized, what would they be doing, Like, 495 00:27:25,520 --> 00:27:28,360 Speaker 1: let's say your data was um saying, you know what, 496 00:27:28,600 --> 00:27:30,840 Speaker 1: this is gonna last. There's a lot of people that 497 00:27:30,880 --> 00:27:33,280 Speaker 1: are going to keep buying homes. It's gonna keep coming. 498 00:27:33,359 --> 00:27:37,480 Speaker 1: This is not just phenomenon, It's not this is a 499 00:27:37,520 --> 00:27:40,560 Speaker 1: sustainable boom. What would we see, like would the dealers 500 00:27:40,600 --> 00:27:43,720 Speaker 1: be or the builders be going out and acquiring more 501 00:27:43,760 --> 00:27:47,200 Speaker 1: expensive land, Like what are some of the things that 502 00:27:47,200 --> 00:27:50,040 Speaker 1: that would unlock if the boom continued In terms of 503 00:27:50,320 --> 00:27:54,720 Speaker 1: homebuilder behavior. So I love the question because we don't 504 00:27:54,760 --> 00:27:58,000 Speaker 1: even have to guess, because we just have to look 505 00:27:58,000 --> 00:28:01,280 Speaker 1: at what's happening. Because there is so much enthusiasm around 506 00:28:01,320 --> 00:28:06,120 Speaker 1: the demographic charts that builders are saying it is going 507 00:28:06,200 --> 00:28:09,440 Speaker 1: to continue because we have been under building and there 508 00:28:09,480 --> 00:28:12,320 Speaker 1: aren't enough homes on the market and we are losing 509 00:28:12,400 --> 00:28:16,200 Speaker 1: buyers that are waiting on the sidelines. So to answer 510 00:28:16,240 --> 00:28:18,560 Speaker 1: your question, and and honestly, it's going to be a 511 00:28:18,560 --> 00:28:20,960 Speaker 1: little bit I'm alarmed by the way I'm going to 512 00:28:21,000 --> 00:28:25,560 Speaker 1: answer this question is exactly what you said, and that 513 00:28:25,600 --> 00:28:28,960 Speaker 1: they are paying more money for land. I know this 514 00:28:29,080 --> 00:28:30,919 Speaker 1: is not eloquent, but the way that I hearing it 515 00:28:31,000 --> 00:28:35,119 Speaker 1: is builders are paying stupid prices for land. And I 516 00:28:35,320 --> 00:28:37,440 Speaker 1: have a friend who works in the homebuilding industry and 517 00:28:37,560 --> 00:28:40,240 Speaker 1: he called and said he felt a little bit uncomfortable 518 00:28:40,280 --> 00:28:42,280 Speaker 1: about a land deal he just pushed through. And I said, well, 519 00:28:42,280 --> 00:28:44,800 Speaker 1: why did you do it? And he said, well, you 520 00:28:44,800 --> 00:28:47,600 Speaker 1: can lose your job today by not making the deal happen, 521 00:28:48,040 --> 00:28:49,719 Speaker 1: or you can lose your job in two years by 522 00:28:49,760 --> 00:28:54,000 Speaker 1: making a bad deal happen. And there's conversations like that 523 00:28:54,120 --> 00:28:56,680 Speaker 1: where a builder needs to make a deal. Look profitable 524 00:28:56,760 --> 00:29:02,200 Speaker 1: right now, and you may have to assume today's level 525 00:29:02,240 --> 00:29:05,760 Speaker 1: of appreciation, today's level of heightened demand is going to 526 00:29:05,800 --> 00:29:09,840 Speaker 1: continue for that to make sense. And one thing I 527 00:29:09,880 --> 00:29:12,720 Speaker 1: heard is if you're being realistic when trying to buy land, 528 00:29:12,920 --> 00:29:16,160 Speaker 1: good luck. I think that is probably what makes me 529 00:29:16,160 --> 00:29:19,120 Speaker 1: a little bit anxious. Is there is this idea that, yes, 530 00:29:19,160 --> 00:29:20,920 Speaker 1: this is going to go on forever, and you need 531 00:29:21,000 --> 00:29:24,200 Speaker 1: to tie up the land. And I guess you hope 532 00:29:24,240 --> 00:29:27,280 Speaker 1: that they're able to adjust their price, but we know 533 00:29:27,360 --> 00:29:29,360 Speaker 1: all the other costs are going up. I think there 534 00:29:29,440 --> 00:29:32,480 Speaker 1: is a little bit of a mindset that lumber prices 535 00:29:32,800 --> 00:29:34,880 Speaker 1: aren't going to stay this high for that long. So 536 00:29:34,920 --> 00:29:36,320 Speaker 1: if you pay a little bit more for the dirt, 537 00:29:36,360 --> 00:29:38,160 Speaker 1: but then you have your lumber prices come down, maybe 538 00:29:38,200 --> 00:29:41,600 Speaker 1: you can continue to hit the right price point. But 539 00:29:42,120 --> 00:29:45,600 Speaker 1: the land grab is very, very real. Land development is 540 00:29:45,640 --> 00:29:48,320 Speaker 1: going on across the country. Um, Like I said, I 541 00:29:48,320 --> 00:29:49,959 Speaker 1: don't think that's a hypothetical. I think that's what we're 542 00:29:49,960 --> 00:29:53,320 Speaker 1: seeing right now. So I have another dumb question, or 543 00:29:53,360 --> 00:29:56,760 Speaker 1: maybe this one is more provocative than dumb. But we 544 00:29:56,880 --> 00:30:00,200 Speaker 1: haven't spoken that much about the role of interest rates 545 00:30:00,240 --> 00:30:03,040 Speaker 1: in the market, so obviously interest rates very very low 546 00:30:03,160 --> 00:30:07,200 Speaker 1: at the moment. Is that a lever that could be 547 00:30:07,320 --> 00:30:11,560 Speaker 1: pull pulled to potentially cool down the market? Like, does 548 00:30:11,640 --> 00:30:15,320 Speaker 1: the FED need to keep on buying mortgage backed securities 549 00:30:15,440 --> 00:30:18,720 Speaker 1: if we know that the housing market is going nuts 550 00:30:19,000 --> 00:30:22,880 Speaker 1: in this way? Uh? And I'll have a controversial answer 551 00:30:23,040 --> 00:30:24,960 Speaker 1: is that I don't think they need to continue to 552 00:30:25,000 --> 00:30:27,959 Speaker 1: support the housing market. I think what we're finding is 553 00:30:28,320 --> 00:30:30,760 Speaker 1: if you're pricing out entry level buyers because so many 554 00:30:30,760 --> 00:30:32,960 Speaker 1: investors see that there's a good return and there's a 555 00:30:32,960 --> 00:30:35,320 Speaker 1: reason to jump into the market. I don't know why 556 00:30:35,320 --> 00:30:38,280 Speaker 1: we're incentivizing investors to get in and making it harder 557 00:30:38,320 --> 00:30:41,680 Speaker 1: for actual buyers to purchase their home. So I do 558 00:30:41,800 --> 00:30:45,160 Speaker 1: struggle with that a lot um What builders can do 559 00:30:46,720 --> 00:30:51,560 Speaker 1: back in we would have been probably nineteen, builders would 560 00:30:51,600 --> 00:30:55,640 Speaker 1: have started to do rate buy downs. So if interest 561 00:30:55,760 --> 00:30:59,920 Speaker 1: rates started to go up and a buyer couldn't afford 562 00:31:00,040 --> 00:31:02,600 Speaker 1: the home right, then a builder could step in and say, 563 00:31:02,920 --> 00:31:04,560 Speaker 1: you know, you can't afford it at four percent, but 564 00:31:04,640 --> 00:31:06,920 Speaker 1: could you afford at three point five? And so the 565 00:31:06,960 --> 00:31:10,240 Speaker 1: builder has some tools that they can use via incentives 566 00:31:10,440 --> 00:31:12,800 Speaker 1: where they don't actually lower the average sales price, but 567 00:31:12,840 --> 00:31:15,520 Speaker 1: they're able to give a little bit of assistance on 568 00:31:15,520 --> 00:31:20,560 Speaker 1: the mortgage rate front. Um. The issue will be interest 569 00:31:20,640 --> 00:31:23,440 Speaker 1: rates have been so low for so long, and home 570 00:31:23,520 --> 00:31:27,040 Speaker 1: prices are based on where the monthly payment is and 571 00:31:27,080 --> 00:31:30,480 Speaker 1: where the interest rates are. And the concern is if 572 00:31:30,480 --> 00:31:34,760 Speaker 1: interest rates go up too much, can those home prices 573 00:31:35,040 --> 00:31:41,000 Speaker 1: hold and that that poses some some risks to the 574 00:31:41,080 --> 00:31:44,200 Speaker 1: prices go forever, to prices actually come down the interest 575 00:31:44,280 --> 00:31:48,160 Speaker 1: rates really are, I think should be everyone's concern when 576 00:31:48,160 --> 00:31:50,360 Speaker 1: you're trying to look at the sustainability of the housing market. 577 00:31:50,640 --> 00:31:52,920 Speaker 1: So I kind of said both answers, is like, you 578 00:31:52,920 --> 00:31:54,880 Speaker 1: don't want to continue to support the housing market, but 579 00:31:54,920 --> 00:31:57,120 Speaker 1: you also need to be careful because if if interest 580 00:31:57,160 --> 00:31:59,479 Speaker 1: rates scope too much, that really will put a wet 581 00:31:59,480 --> 00:32:20,280 Speaker 1: blanket on on demand. That makes sense, So let's talk 582 00:32:20,320 --> 00:32:24,680 Speaker 1: a little bit more about constraints on supply. And so 583 00:32:24,720 --> 00:32:27,560 Speaker 1: obviously we've talked a lot about land costs, and as 584 00:32:27,560 --> 00:32:29,560 Speaker 1: you said, some home builders have decided to bite the 585 00:32:29,560 --> 00:32:34,040 Speaker 1: bullet and pay quote stupid amounts for land. But there's 586 00:32:34,080 --> 00:32:37,720 Speaker 1: also the materials that you need, and you know, the 587 00:32:37,840 --> 00:32:41,040 Speaker 1: lumber conversation is well known, and but also you know 588 00:32:41,160 --> 00:32:43,760 Speaker 1: you hear about like windows shortages and gutter shortages and 589 00:32:43,800 --> 00:32:46,080 Speaker 1: all that stuff, and then of course labor. And as 590 00:32:46,120 --> 00:32:48,360 Speaker 1: you mentioned, a lot of these home building companies, they 591 00:32:48,400 --> 00:32:51,040 Speaker 1: saw their workforces get obliterated and people went on to 592 00:32:51,280 --> 00:32:54,719 Speaker 1: other things after the Great Financial Crisis, and maybe they 593 00:32:54,720 --> 00:32:56,880 Speaker 1: haven't come back into the home building trade yet. So 594 00:32:57,280 --> 00:32:58,960 Speaker 1: can you talk a little bit more about these other 595 00:32:59,200 --> 00:33:03,520 Speaker 1: constraints on creating new homes besides land and how much 596 00:33:03,520 --> 00:33:07,480 Speaker 1: of a factor that is on limiting supply. Yeah, And 597 00:33:07,680 --> 00:33:09,560 Speaker 1: I think the best stat I can give you on 598 00:33:09,600 --> 00:33:12,520 Speaker 1: this comes from the National Association of Homebuilders and they 599 00:33:12,520 --> 00:33:14,680 Speaker 1: have a team of economists that have run this stat 600 00:33:14,720 --> 00:33:17,400 Speaker 1: and to me, this is the the wow stat of 601 00:33:17,840 --> 00:33:20,680 Speaker 1: how far can housing go and how fast can it go? 602 00:33:21,320 --> 00:33:26,680 Speaker 1: So we finished with one point four million total housing starts, 603 00:33:27,120 --> 00:33:28,920 Speaker 1: and there are some forecasts that this year we're going 604 00:33:28,960 --> 00:33:31,320 Speaker 1: to get to one point seven million total housing starts. 605 00:33:32,440 --> 00:33:34,600 Speaker 1: For us to get from one point four to one 606 00:33:34,600 --> 00:33:38,360 Speaker 1: point seven we would need four hundred thousand more workers. 607 00:33:39,520 --> 00:33:43,800 Speaker 1: And right now residential construction is up forty three thousand, 608 00:33:44,000 --> 00:33:47,400 Speaker 1: not four hundred thousand, and builders are trying to hire 609 00:33:47,600 --> 00:33:51,760 Speaker 1: and what we just keep hearing is that, um, there's 610 00:33:51,800 --> 00:33:54,760 Speaker 1: not enough cruise to keep up with building. And so 611 00:33:54,840 --> 00:33:57,560 Speaker 1: I do think the labor issue, which has been on 612 00:33:57,600 --> 00:33:59,680 Speaker 1: the back burner because of all of the different supply 613 00:33:59,720 --> 00:34:02,360 Speaker 1: issues we can talk about in a moment, you're finally 614 00:34:02,360 --> 00:34:04,360 Speaker 1: starting to hear that all of a sudden, the workers 615 00:34:04,400 --> 00:34:08,040 Speaker 1: are becoming a bigger frustration and harder to get on 616 00:34:08,080 --> 00:34:11,359 Speaker 1: the site than some of even the building materials. So 617 00:34:11,440 --> 00:34:14,480 Speaker 1: it is pushing prices up. Um. We've heard a lot 618 00:34:14,480 --> 00:34:17,200 Speaker 1: of stories about how builders are willing to pay over 619 00:34:17,239 --> 00:34:18,920 Speaker 1: time if you're going to come on the weekend so 620 00:34:18,960 --> 00:34:22,879 Speaker 1: that you can continue to build the homes and try 621 00:34:22,920 --> 00:34:26,160 Speaker 1: to catch up, but you ultimately just don't have enough. 622 00:34:26,200 --> 00:34:29,720 Speaker 1: And and frankly, from both sides, on the construction side 623 00:34:29,719 --> 00:34:32,920 Speaker 1: and on the office side, workers are getting burnt out. 624 00:34:33,280 --> 00:34:36,600 Speaker 1: We are working so hard at all hours because we're 625 00:34:36,640 --> 00:34:39,280 Speaker 1: trying to make sense of the market, trying to forecast 626 00:34:39,320 --> 00:34:41,920 Speaker 1: the market, trying to build for the market, trying to 627 00:34:42,760 --> 00:34:45,279 Speaker 1: handle the whack a mole on the supply chain. And 628 00:34:45,280 --> 00:34:48,280 Speaker 1: that's really what it is. It's when when one issue 629 00:34:48,480 --> 00:34:52,160 Speaker 1: become solved. Now tubs are a problem. When tubs get better, 630 00:34:52,200 --> 00:34:55,160 Speaker 1: then it's steel studs. When steel studs get better. Now 631 00:34:55,200 --> 00:34:58,120 Speaker 1: you have nail problems, and you've got to hope that 632 00:34:58,160 --> 00:35:00,200 Speaker 1: they're not all hitting at the same time. But right 633 00:35:00,200 --> 00:35:03,360 Speaker 1: now it does feel like there's enough components that go 634 00:35:03,400 --> 00:35:06,440 Speaker 1: into building a home that are becoming increasingly harder to 635 00:35:06,480 --> 00:35:08,680 Speaker 1: get builders for them to get their hands on, and 636 00:35:08,760 --> 00:35:14,040 Speaker 1: more expensive, which is just making it an absolute headache. Finally, 637 00:35:14,040 --> 00:35:15,920 Speaker 1: I would say too that just on the government side, 638 00:35:16,239 --> 00:35:20,440 Speaker 1: is we're looking at the time from a contract sale 639 00:35:20,560 --> 00:35:24,400 Speaker 1: to a start, and historically that'd be sixty days, and 640 00:35:24,440 --> 00:35:28,600 Speaker 1: now it's closer to ninety days for a bunch of 641 00:35:28,600 --> 00:35:30,520 Speaker 1: different reasons. But one of them will be just a 642 00:35:30,560 --> 00:35:33,239 Speaker 1: slow permitting process as the cities are in a data 643 00:35:33,239 --> 00:35:36,839 Speaker 1: with requests as well. Arthur, you mentioned a bunch of 644 00:35:37,239 --> 00:35:42,040 Speaker 1: potential supply shortages in components that you need to build 645 00:35:42,080 --> 00:35:47,319 Speaker 1: a house. Are there idiosyncratic reasons for those supply shortages? 646 00:35:47,400 --> 00:35:50,760 Speaker 1: Like would the reason that you can't get enough tubs 647 00:35:50,880 --> 00:35:54,960 Speaker 1: be different to the reason that you can't get enough windows, 648 00:35:55,080 --> 00:35:56,920 Speaker 1: or is it all being driven by the sort of 649 00:35:57,000 --> 00:36:02,040 Speaker 1: same COVID related chaos. A lot of it is related 650 00:36:02,120 --> 00:36:07,520 Speaker 1: to going back before the pandemic, builders and suppliers would 651 00:36:07,520 --> 00:36:10,920 Speaker 1: have created their forecast for the next few years, and 652 00:36:11,520 --> 00:36:13,319 Speaker 1: we were part of the forecasting process, and we know 653 00:36:13,400 --> 00:36:16,000 Speaker 1: that it was not for thirty percent jump. It would 654 00:36:16,040 --> 00:36:20,000 Speaker 1: have been for maybe a five percent jump and starts, 655 00:36:20,440 --> 00:36:24,120 Speaker 1: and so everyone would have communicated that down the line, Hey, 656 00:36:24,160 --> 00:36:26,439 Speaker 1: we're gonna need five percent more windows, and we're gonna 657 00:36:26,440 --> 00:36:28,920 Speaker 1: need this, and we're you need that, And it seems 658 00:36:28,920 --> 00:36:31,280 Speaker 1: like a lot of it just comes down to everyone 659 00:36:31,400 --> 00:36:33,360 Speaker 1: was caught flat footed. No one knew this was going 660 00:36:33,400 --> 00:36:36,640 Speaker 1: to happen, and now you are running into just COVID 661 00:36:36,680 --> 00:36:40,560 Speaker 1: issues with um oh and Wells, COVID issues with getting 662 00:36:40,600 --> 00:36:43,640 Speaker 1: items in and out of the states, with different issues. 663 00:36:43,719 --> 00:36:47,080 Speaker 1: We saw for sure on the production line that this 664 00:36:47,200 --> 00:36:49,040 Speaker 1: is not as big of an issue now, but if 665 00:36:49,080 --> 00:36:50,960 Speaker 1: if one person gets COVID and you're in a factory, 666 00:36:51,000 --> 00:36:54,520 Speaker 1: they shut it down for two weeks. But also, the 667 00:36:54,560 --> 00:36:57,680 Speaker 1: truckers are in short supply, and I don't I don't 668 00:36:57,719 --> 00:37:00,080 Speaker 1: think they were in as short of supply before or 669 00:37:00,160 --> 00:37:03,120 Speaker 1: demand got so heightened. But what we're hearing is that 670 00:37:03,120 --> 00:37:05,920 Speaker 1: that impacts two different directions. It impacts getting your raw 671 00:37:06,000 --> 00:37:08,319 Speaker 1: materials to the factory, but then getting it out of 672 00:37:08,320 --> 00:37:10,960 Speaker 1: the factory. You need the truckers on both ends, and 673 00:37:11,000 --> 00:37:14,120 Speaker 1: so that's impacting it. So I think it becomes more 674 00:37:14,160 --> 00:37:17,200 Speaker 1: of a common story. I'm sure there are more idiosyncratic 675 00:37:17,280 --> 00:37:19,680 Speaker 1: things as you look at the specifics, but it is 676 00:37:19,719 --> 00:37:23,319 Speaker 1: really this common theme that no one knew what to 677 00:37:23,360 --> 00:37:26,560 Speaker 1: plan for. Do you see any signs of these things 678 00:37:26,600 --> 00:37:28,160 Speaker 1: easy yet? I mean we're always sort of like on 679 00:37:28,200 --> 00:37:31,040 Speaker 1: the lookout across all areas whether some of these bottlenecks 680 00:37:31,040 --> 00:37:34,560 Speaker 1: and shortages are starting to ease. Is there any evidence 681 00:37:34,560 --> 00:37:38,600 Speaker 1: of that yet? I would not say, Actually no, from 682 00:37:38,600 --> 00:37:41,640 Speaker 1: our most recent survey, which was conducted last week, it 683 00:37:41,680 --> 00:37:44,120 Speaker 1: actually has gotten worse. When we ask builders, are you 684 00:37:44,120 --> 00:37:47,080 Speaker 1: having any supply shortages? It's actually that's become I think 685 00:37:47,080 --> 00:37:49,759 Speaker 1: it's like nine percent of builders are now saying that's 686 00:37:49,760 --> 00:37:53,439 Speaker 1: a huge issue compared to the slight made up number. 687 00:37:53,480 --> 00:37:56,439 Speaker 1: But it's something like seven percent last month, So that's 688 00:37:56,480 --> 00:38:00,640 Speaker 1: gotten worse. What I would say on the lay birth side, 689 00:38:01,200 --> 00:38:03,520 Speaker 1: this is not every market, so don't take it as that, 690 00:38:03,560 --> 00:38:08,280 Speaker 1: but it's definitely happening in that you have some suppliers 691 00:38:08,680 --> 00:38:11,239 Speaker 1: labor and let's say like a plumbing crew or a 692 00:38:11,239 --> 00:38:15,319 Speaker 1: painting crew where their owner had been through the last 693 00:38:15,360 --> 00:38:17,360 Speaker 1: cycle and knew what it was like to enjoy the 694 00:38:17,360 --> 00:38:19,719 Speaker 1: boom and what was like to do the bust. You know, 695 00:38:19,719 --> 00:38:23,600 Speaker 1: they're getting a little bit older and they're saying, I'm 696 00:38:23,640 --> 00:38:26,000 Speaker 1: gonna retire, I'm gonna sit this one out, I'm gonna 697 00:38:26,040 --> 00:38:28,800 Speaker 1: I'm gonna get out of the industry. And that's causing 698 00:38:28,880 --> 00:38:31,959 Speaker 1: issues where people are like, well, you can't retire because 699 00:38:31,960 --> 00:38:33,880 Speaker 1: we don't even have enough crew as it is, and 700 00:38:33,920 --> 00:38:36,320 Speaker 1: then you have people leaving. So I don't think that's 701 00:38:36,440 --> 00:38:40,680 Speaker 1: going away anytime soon either. So one of the things 702 00:38:40,719 --> 00:38:43,720 Speaker 1: that keeps coming up in the discussion of the housing 703 00:38:43,760 --> 00:38:46,920 Speaker 1: market and also lumber and Allie you touched on this before, 704 00:38:47,080 --> 00:38:51,400 Speaker 1: but this idea of the scarring from the Great Financial Crisis. 705 00:38:52,000 --> 00:38:54,279 Speaker 1: Things were so bad that you know, people pulled back 706 00:38:54,320 --> 00:38:56,719 Speaker 1: on supply for years and years and years, and we're 707 00:38:56,719 --> 00:39:00,680 Speaker 1: more cautious if we get a hot market now, which 708 00:39:00,880 --> 00:39:03,359 Speaker 1: clearly we have. Do you think that results in a 709 00:39:03,400 --> 00:39:08,440 Speaker 1: permanent change in behavior by the housing industry or is 710 00:39:08,480 --> 00:39:11,680 Speaker 1: it just a case of you know, bad things tend 711 00:39:11,719 --> 00:39:14,279 Speaker 1: to lead you to be more cautious, and it takes 712 00:39:14,280 --> 00:39:18,200 Speaker 1: like you're not as incentivized by a positive thing happening 713 00:39:20,040 --> 00:39:24,960 Speaker 1: that one's interesting. What I would share is you basically 714 00:39:25,080 --> 00:39:27,080 Speaker 1: can't be on a call with a bunch of people 715 00:39:27,080 --> 00:39:30,040 Speaker 1: in the industry without them looking for the boogeyman and 716 00:39:30,360 --> 00:39:32,479 Speaker 1: they think he's coming, and they think he's right behind them, 717 00:39:32,560 --> 00:39:37,520 Speaker 1: And you definitely hear this constant angst of is this 718 00:39:37,560 --> 00:39:39,640 Speaker 1: is sugar high? Is this too good to be true? Jeez, 719 00:39:39,680 --> 00:39:41,720 Speaker 1: we're all competing for the same land. Land is getting 720 00:39:41,719 --> 00:39:45,239 Speaker 1: so expensive. Um And I should say the publics are 721 00:39:45,440 --> 00:39:48,840 Speaker 1: way better positioned than anyone else than any of the privates. 722 00:39:49,400 --> 00:39:51,439 Speaker 1: But what we're hearing from the privates is it's grow 723 00:39:51,520 --> 00:39:54,120 Speaker 1: or die if you want to compete with the publics, 724 00:39:54,120 --> 00:39:58,120 Speaker 1: who are getting stronger, more powerful, who are able to 725 00:39:58,200 --> 00:40:02,120 Speaker 1: get the laborers easier than anyone else. Because if you're 726 00:40:02,120 --> 00:40:04,440 Speaker 1: you know, a framer, you're going to support Lenar over 727 00:40:04,520 --> 00:40:06,360 Speaker 1: one of the smaller guys because he's gonna give you 728 00:40:06,360 --> 00:40:10,440 Speaker 1: more consistent work. We're definitely hearing there's this you gotta 729 00:40:10,480 --> 00:40:13,080 Speaker 1: do it, you gotta grow, you gotta figure out a 730 00:40:13,120 --> 00:40:16,360 Speaker 1: way to make it happen. But I would say almost 731 00:40:16,520 --> 00:40:21,520 Speaker 1: everyone is very spooked out about Oh we are we 732 00:40:21,520 --> 00:40:24,560 Speaker 1: setting ourselves up for last cycle to look like last cycle, 733 00:40:24,680 --> 00:40:28,359 Speaker 1: though the lending standards look nothing like that. I want 734 00:40:28,360 --> 00:40:31,120 Speaker 1: to ask sort of like a one really big, sort 735 00:40:31,160 --> 00:40:33,720 Speaker 1: of big picture questions. So like you're in the data 736 00:40:33,760 --> 00:40:36,080 Speaker 1: business or a big part of what you're you do 737 00:40:36,120 --> 00:40:38,360 Speaker 1: is collect data and present data to your clients. And 738 00:40:38,360 --> 00:40:41,520 Speaker 1: you mentioned that when COVID hit, we had this like 739 00:40:42,000 --> 00:40:45,399 Speaker 1: four to six week collapse in the housing market and 740 00:40:45,440 --> 00:40:48,160 Speaker 1: then it was really the entire economy. Everything kind of 741 00:40:48,160 --> 00:40:50,480 Speaker 1: went to zero in a way, and then things started 742 00:40:50,560 --> 00:40:52,440 Speaker 1: picking up. And I remember like at the time, like 743 00:40:52,480 --> 00:40:55,719 Speaker 1: things started picking up, and I was kind of into 744 00:40:55,760 --> 00:40:58,640 Speaker 1: disbelief about the data. Like it's one thing to say like, oh, 745 00:40:58,640 --> 00:41:01,560 Speaker 1: we're gonna I'm gonna be cool and data dependent, but 746 00:41:01,840 --> 00:41:03,880 Speaker 1: it's like I didn't really believe it because like everyone 747 00:41:03,960 --> 00:41:06,240 Speaker 1: seemed to be like in their homes and everyone seemed 748 00:41:06,239 --> 00:41:08,520 Speaker 1: to be terrified, and the stock market had crashed and 749 00:41:08,560 --> 00:41:11,560 Speaker 1: so forth. They just felt like deja vu all over again. 750 00:41:11,640 --> 00:41:14,600 Speaker 1: And I'm curious, like, you know, like thinking back to 751 00:41:14,880 --> 00:41:17,760 Speaker 1: last spring, when you saw how quickly the housing market 752 00:41:17,800 --> 00:41:21,320 Speaker 1: started to rebound, how long it took, Like you know, 753 00:41:21,360 --> 00:41:23,319 Speaker 1: you mentioned people always think, oh the booge mads right 754 00:41:23,360 --> 00:41:26,480 Speaker 1: around the quarter, Like did people believe the data, Like, 755 00:41:26,719 --> 00:41:28,960 Speaker 1: did you believe the data at first or did it 756 00:41:29,120 --> 00:41:32,080 Speaker 1: take a while before people started to accept that the 757 00:41:32,200 --> 00:41:34,760 Speaker 1: numbers they were seeing on their screen or other places 758 00:41:35,120 --> 00:41:41,640 Speaker 1: actually reflected this improved reality. It's an important question for 759 00:41:41,680 --> 00:41:44,959 Speaker 1: a whole bunch of different reasons. So the first reason 760 00:41:45,040 --> 00:41:47,520 Speaker 1: it's important is if you're going to pause on land deals. 761 00:41:47,560 --> 00:41:50,000 Speaker 1: From a builder's point of view, the market was slow 762 00:41:50,400 --> 00:41:52,440 Speaker 1: in March, the second half of March and then through 763 00:41:52,520 --> 00:41:54,279 Speaker 1: the end of April, but there were a lot of 764 00:41:54,360 --> 00:41:57,320 Speaker 1: land deals that were still on pause going into May 765 00:41:57,360 --> 00:42:01,880 Speaker 1: because there was this disbelief and I hate to see it. 766 00:42:01,920 --> 00:42:04,200 Speaker 1: But like I said, we were doing presentations weekly. The 767 00:42:04,280 --> 00:42:08,479 Speaker 1: data was turning, and we we were cautioning this could 768 00:42:08,480 --> 00:42:13,800 Speaker 1: be not true. Like I remember so vividly. I remember 769 00:42:13,800 --> 00:42:16,759 Speaker 1: showing a chart that one of the questions we asked 770 00:42:16,760 --> 00:42:18,560 Speaker 1: is have your sales increase? In that case, it was 771 00:42:18,600 --> 00:42:21,520 Speaker 1: have your sales increased month over months, sorry, week over week, 772 00:42:21,800 --> 00:42:24,520 Speaker 1: And we were showing it and we were like, well, yeah, 773 00:42:24,520 --> 00:42:26,440 Speaker 1: they're saying an increased week over week, but it was 774 00:42:26,480 --> 00:42:28,960 Speaker 1: from this really low level, So like, don't take this 775 00:42:29,040 --> 00:42:31,920 Speaker 1: as this huge shift in the market. It's just that 776 00:42:31,960 --> 00:42:34,800 Speaker 1: you're not at rock bottom anymore. And I'm embarrassed to 777 00:42:34,840 --> 00:42:37,160 Speaker 1: say it, but we did, like we were like, this 778 00:42:37,239 --> 00:42:39,319 Speaker 1: is not happening, Like there are twenty million people out 779 00:42:39,320 --> 00:42:43,000 Speaker 1: of work, the unemployment is crazy. How you no. One 780 00:42:43,040 --> 00:42:45,920 Speaker 1: of my biggest regrets in looking back is if you 781 00:42:46,040 --> 00:42:49,960 Speaker 1: think about Seattle. Seattle had the COVID cases earlier than 782 00:42:50,320 --> 00:42:52,279 Speaker 1: the rest of the country, and I think had shut down, 783 00:42:52,320 --> 00:42:56,120 Speaker 1: like Amazon sent people home before the rest of the country. 784 00:42:56,560 --> 00:42:59,520 Speaker 1: And I remember Wall Street Journal they posted a story 785 00:42:59,560 --> 00:43:02,680 Speaker 1: about how how Seattle had come back and how the 786 00:43:02,719 --> 00:43:04,840 Speaker 1: housing market was really strong, and I remember sending it 787 00:43:04,880 --> 00:43:06,960 Speaker 1: to my team, going, what are they talking about? Like 788 00:43:07,000 --> 00:43:09,840 Speaker 1: the market is crushed. But our early warning sign was 789 00:43:09,920 --> 00:43:13,239 Speaker 1: Seattle that said you put people in your home, and 790 00:43:13,320 --> 00:43:16,279 Speaker 1: people want bigger space because now they're stuck in their 791 00:43:16,280 --> 00:43:18,759 Speaker 1: home and because interest rates are rock bottom. So there 792 00:43:18,760 --> 00:43:21,399 Speaker 1: were some writing on the wall that I think not 793 00:43:21,440 --> 00:43:23,719 Speaker 1: just we ignored, but I think the industry ignored because 794 00:43:23,760 --> 00:43:27,279 Speaker 1: we just didn't believe it was true. What would make 795 00:43:27,360 --> 00:43:31,319 Speaker 1: you think that the housing market was turning now? Like, 796 00:43:31,360 --> 00:43:35,239 Speaker 1: what would you be watching out for? Will depend it 797 00:43:35,239 --> 00:43:38,920 Speaker 1: will depend on the market. I'm not we are starting 798 00:43:38,960 --> 00:43:43,160 Speaker 1: to see that depending on where the seller had priced 799 00:43:43,160 --> 00:43:45,560 Speaker 1: the home, we're sometimes seeing that the seller isn't getting 800 00:43:45,600 --> 00:43:49,200 Speaker 1: full ask. This is the minority versus the norm. But 801 00:43:49,200 --> 00:43:51,160 Speaker 1: this is the first time we've really seen that start 802 00:43:51,200 --> 00:43:53,239 Speaker 1: to shift where it's not, of course it's going to 803 00:43:53,320 --> 00:43:55,879 Speaker 1: go fifty over. You're starting to see a little bit 804 00:43:56,719 --> 00:43:58,600 Speaker 1: of that bump. So I would say that's for a 805 00:43:58,760 --> 00:44:03,840 Speaker 1: normal market, for relocation market. Some of those relocation buyers 806 00:44:03,880 --> 00:44:06,160 Speaker 1: were able to push up those prices, and that group 807 00:44:06,280 --> 00:44:08,719 Speaker 1: is finite. And at the end of the day, if 808 00:44:08,719 --> 00:44:11,960 Speaker 1: you're in Las Vegas, Las Vegas incomes have not increased 809 00:44:11,960 --> 00:44:15,160 Speaker 1: in the same way home prices have increased. So to me, 810 00:44:15,280 --> 00:44:19,840 Speaker 1: it's when you strip away some of the COVID additional demand, 811 00:44:20,800 --> 00:44:25,360 Speaker 1: how well suited are the local buyers to continue to 812 00:44:25,480 --> 00:44:28,200 Speaker 1: purchase those homes. And so we're going to keep a 813 00:44:28,200 --> 00:44:31,440 Speaker 1: close eye on well we're seeing because we obviously just 814 00:44:31,440 --> 00:44:34,239 Speaker 1: ask builders about demand and their model traffic. We're going 815 00:44:34,280 --> 00:44:36,480 Speaker 1: to check what's happening with model traffic. We're going to 816 00:44:36,600 --> 00:44:40,919 Speaker 1: check clicks on a new home builder websites, will check 817 00:44:40,960 --> 00:44:43,520 Speaker 1: what's happening with inventory, which inventory going up is not 818 00:44:43,640 --> 00:44:46,120 Speaker 1: necessarily assigned the market slowing. It could just mean that 819 00:44:46,440 --> 00:44:49,160 Speaker 1: more people are able to move now, but it would 820 00:44:49,160 --> 00:44:52,440 Speaker 1: be some combination. To me, it's the early indications. We 821 00:44:52,600 --> 00:44:55,239 Speaker 1: own a company that I guess we partner with a 822 00:44:55,280 --> 00:45:01,080 Speaker 1: company that is able to track new home clicks online, 823 00:45:01,160 --> 00:45:03,040 Speaker 1: and I think that's that was a good indicator because 824 00:45:03,080 --> 00:45:05,759 Speaker 1: that was actually showing an increase. Back to Joe's question, 825 00:45:05,840 --> 00:45:08,279 Speaker 1: that was showing an increase early on earlier than what 826 00:45:08,320 --> 00:45:13,400 Speaker 1: we saw in contract sales. Ellie, that was that was amazing. 827 00:45:13,680 --> 00:45:16,239 Speaker 1: I learned so much talking to you, and I really 828 00:45:16,239 --> 00:45:19,440 Speaker 1: appreciate you coming on out lot. Thanks so much for 829 00:45:19,480 --> 00:45:38,520 Speaker 1: having means and that was fantastic. Take care Ale. So Tracy, 830 00:45:38,600 --> 00:45:41,040 Speaker 1: I guess, don't come back to the US. Huh Yeah, 831 00:45:41,080 --> 00:45:43,880 Speaker 1: well I'm now. Well it's not like I was ever 832 00:45:43,920 --> 00:45:46,719 Speaker 1: going to buy property in New York City, but I 833 00:45:46,760 --> 00:45:49,680 Speaker 1: am worried that I'll never be able to afford anything. 834 00:45:50,040 --> 00:45:52,960 Speaker 1: But I gotta say so. We spoke about this a 835 00:45:53,000 --> 00:45:57,160 Speaker 1: lot already. But clearly this whole discussion fits into our 836 00:45:57,360 --> 00:46:01,879 Speaker 1: wider supply shortage themes, this idea that everything comes back 837 00:46:01,920 --> 00:46:05,720 Speaker 1: to expectations and we seem to be not that great 838 00:46:05,960 --> 00:46:10,000 Speaker 1: at making forecasts. So at the beginning of COVID, everyone 839 00:46:10,080 --> 00:46:13,520 Speaker 1: was freaking out. Everyone thought the housing market was going 840 00:46:13,600 --> 00:46:17,239 Speaker 1: to just crash, and instead we saw it surge, and 841 00:46:17,280 --> 00:46:20,760 Speaker 1: now we're dealing with the consequences of getting that be wrong. 842 00:46:21,360 --> 00:46:23,520 Speaker 1: The other thing that I was thinking a lot about 843 00:46:23,600 --> 00:46:27,399 Speaker 1: is just that data question and this idea that even 844 00:46:27,400 --> 00:46:32,000 Speaker 1: if we start to see housing data soften, is that 845 00:46:32,120 --> 00:46:35,160 Speaker 1: or slow, is that actually a sign of weakness or 846 00:46:35,239 --> 00:46:38,480 Speaker 1: is that just a sign of you know, price out 847 00:46:38,600 --> 00:46:42,759 Speaker 1: stripping supply in the short term. Yeah. Yeah, Like this 848 00:46:42,840 --> 00:46:46,360 Speaker 1: idea that essentially like and and Ellie described herself in 849 00:46:46,440 --> 00:46:49,360 Speaker 1: this boat, which is like, Okay, she's not really she 850 00:46:49,440 --> 00:46:51,439 Speaker 1: doesn't want to buy a step up house right now 851 00:46:51,520 --> 00:46:53,880 Speaker 1: because the market is crazy, but if there's some softening, 852 00:46:53,920 --> 00:46:57,200 Speaker 1: she'll be back in kind of reminded me of like 853 00:46:57,280 --> 00:46:59,719 Speaker 1: what Stinson was telling us in the lumber episode, which 854 00:46:59,800 --> 00:47:03,000 Speaker 1: is like, we're probably at some sort of like new 855 00:47:03,120 --> 00:47:08,560 Speaker 1: pire equilibrium such that okay, like maybe you know, the 856 00:47:08,600 --> 00:47:11,640 Speaker 1: prices come down a little bit lately, but such that 857 00:47:12,040 --> 00:47:14,600 Speaker 1: there is this sort of like new baseline level of 858 00:47:14,640 --> 00:47:18,799 Speaker 1: demand for lumber that's going to keep prices just like 859 00:47:19,320 --> 00:47:21,440 Speaker 1: to keep the market at a higher state than it 860 00:47:21,520 --> 00:47:25,719 Speaker 1: was prior to all this. Yeah, that feels right to me. No, 861 00:47:25,840 --> 00:47:27,799 Speaker 1: it really just feels like to your point though, like 862 00:47:28,239 --> 00:47:31,000 Speaker 1: the housing story is like the some of all stories, 863 00:47:31,080 --> 00:47:35,359 Speaker 1: isn't it. Like every macro thing and even microw thing 864 00:47:35,560 --> 00:47:38,839 Speaker 1: that we talked about kind of was brought up in 865 00:47:38,880 --> 00:47:42,600 Speaker 1: that episode in some way, whether it's the scarring, whether 866 00:47:42,640 --> 00:47:46,680 Speaker 1: it's the supply chain issues, whether it's FED policy and 867 00:47:46,760 --> 00:47:51,400 Speaker 1: the impact of interest rates demographics, Like that's that episode 868 00:47:51,440 --> 00:47:55,279 Speaker 1: feels like the error episode everything all in one. You know, 869 00:47:55,320 --> 00:47:57,000 Speaker 1: it would be fun to do, and we should ask 870 00:47:57,040 --> 00:47:59,840 Speaker 1: someone at Bloomberg to do this, but do a graphic 871 00:48:00,160 --> 00:48:03,720 Speaker 1: explainer where you have like a picture of a house 872 00:48:03,800 --> 00:48:05,600 Speaker 1: and here are all the things that go in it, 873 00:48:05,840 --> 00:48:09,880 Speaker 1: from the land to the labor of building it to 874 00:48:10,200 --> 00:48:15,359 Speaker 1: individual components like lumber or bathtubs or windows and things 875 00:48:15,400 --> 00:48:18,960 Speaker 1: like that, and just talk about the supply challenges or 876 00:48:18,960 --> 00:48:22,320 Speaker 1: shortages for each one of those components and how they're affecting. 877 00:48:23,560 --> 00:48:25,920 Speaker 1: So the next yes, I love it, Like let's get 878 00:48:25,920 --> 00:48:31,440 Speaker 1: a bathtub maker on Okay, I'm serious, Like our listener, 879 00:48:31,560 --> 00:48:33,200 Speaker 1: we'll love it, like we just gotta like we'll just 880 00:48:33,200 --> 00:48:35,200 Speaker 1: go super micro and we'll just like let's talk about 881 00:48:35,200 --> 00:48:37,359 Speaker 1: the economics of bathtubs for an hour and it will 882 00:48:37,360 --> 00:48:39,400 Speaker 1: be a huge hit. I would love to do that. 883 00:48:39,480 --> 00:48:41,200 Speaker 1: But this is the other thing we're sort of figuring 884 00:48:41,200 --> 00:48:44,920 Speaker 1: out this year is everyone is sort of grappling with 885 00:48:44,960 --> 00:48:48,880 Speaker 1: the same issues, but within that, it feels like every 886 00:48:48,920 --> 00:48:54,560 Speaker 1: market is incredibly uh individual and distinct. So like, you know, 887 00:48:54,800 --> 00:48:59,800 Speaker 1: sawmills are grappling with things like restrictions on Canadian lumber 888 00:49:00,400 --> 00:49:04,920 Speaker 1: um and maybe semiconductors are grappling with you know, water 889 00:49:05,040 --> 00:49:09,680 Speaker 1: restrictions and all these idiosyncratic things as well. Yeah. No, absolutely, 890 00:49:09,680 --> 00:49:13,200 Speaker 1: it's all like it's like this, it's like compounding everything compounds. 891 00:49:13,800 --> 00:49:15,920 Speaker 1: I think two episodes we need to do, So we 892 00:49:15,960 --> 00:49:18,000 Speaker 1: need to do a bathtub macer episode. Just get like 893 00:49:18,040 --> 00:49:20,319 Speaker 1: super micros, like let's talk about the economics of making 894 00:49:20,360 --> 00:49:23,439 Speaker 1: bathtubs on an industrial scale. But actually, one other really 895 00:49:23,480 --> 00:49:25,400 Speaker 1: big part of this that I don't think we've really 896 00:49:25,760 --> 00:49:29,439 Speaker 1: done is we should do a truck driver episode. Oh 897 00:49:29,680 --> 00:49:32,839 Speaker 1: I would love that because I think that like that's 898 00:49:32,880 --> 00:49:35,480 Speaker 1: such a big, huge part of the labor market, a 899 00:49:35,560 --> 00:49:37,919 Speaker 1: huge part of the economy, huge part of the supply chain. 900 00:49:38,640 --> 00:49:41,040 Speaker 1: It's being disrupted by all kinds of like tech, all 901 00:49:41,120 --> 00:49:43,600 Speaker 1: kinds of interesting things are There were booms and busts 902 00:49:43,640 --> 00:49:46,319 Speaker 1: even on the few years leading up to COVID. So 903 00:49:46,440 --> 00:49:49,320 Speaker 1: let's let's do a big trucking episode soon. Yeah, let's 904 00:49:49,320 --> 00:49:51,360 Speaker 1: do that. I will confess when I was young, I 905 00:49:51,400 --> 00:49:54,040 Speaker 1: always wanted to be a truck driver. So yes, I'm 906 00:49:54,080 --> 00:49:58,000 Speaker 1: totally into that. Okay, cool, we'll do that. Okay, shall 907 00:49:58,000 --> 00:50:00,680 Speaker 1: we leave it there? Let's leave it there? Okay. This 908 00:50:00,760 --> 00:50:03,759 Speaker 1: has been another episode of the All Thoughts podcast. I'm 909 00:50:03,800 --> 00:50:08,279 Speaker 1: Tracy Alloway. You can follow me on Twitter at Tracy Alloway, 910 00:50:08,400 --> 00:50:10,560 Speaker 1: and I'm Joe wi Isn't All. You can follow me 911 00:50:10,719 --> 00:50:13,600 Speaker 1: on Twitter at the Stalwart. And you should follow our 912 00:50:13,680 --> 00:50:17,160 Speaker 1: guest on Twitter, Allie wolf She's great. She's at Ellie 913 00:50:17,160 --> 00:50:21,480 Speaker 1: wolf E con Follow our producer on Twitter, Laura M. Carlson. 914 00:50:21,840 --> 00:50:25,800 Speaker 1: Follow the Bloomberg head of podcast Francesco Levi at Francesca Today, 915 00:50:25,880 --> 00:50:28,839 Speaker 1: and check out all of our podcasts at Bloomberg under 916 00:50:28,880 --> 00:50:32,319 Speaker 1: the handle at podcasts and Alright. Be sure to check 917 00:50:32,360 --> 00:50:35,239 Speaker 1: out the Odd Lots blog for Tracy. I have been 918 00:50:35,280 --> 00:50:38,200 Speaker 1: writing about all this stuff, supply chain shortages, all these 919 00:50:38,239 --> 00:50:41,840 Speaker 1: different kinds of things. Bloomberg dot Com slash odd lots. 920 00:50:42,120 --> 00:51:00,560 Speaker 1: Thanks for listening to