WEBVTT

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move and adapt with the market. Ultimately we're

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under built. I still believe that. And I cannot

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stop now just because spring hurt my feelings.

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Which you did. It hurt a lot of people's feelings.

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It did. Yeah. This has not been, I'm used to,

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you know, wind at my sails and this has been

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wind at my sails, right? And it's just been,

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it's been gratifying to know that I can adapt

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in this market. The company can be solvent and

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company can be thriving. even in a year where

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almost every housing headline was negative. Yeah.

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And we can still do it. And just zig and zag.

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Ever wonder what really happens behind the scenes

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in construction, real estate and development?

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We pull back the curtain on the new home construction

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industry, the real estate market and the trends

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shaping it all. Discover the stories, insights

00:00:54.359 --> 00:00:56.500
and expertise behind the process of building

00:00:56.500 --> 00:00:59.920
a new home. Join us for Trust the Process podcast

00:00:59.920 --> 00:01:02.700
and let's build something great together. Welcome

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back to Trust the Process, a podcast where we

00:01:05.599 --> 00:01:08.659
talk about new home construction, the new home

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industry. real estate and everything in between.

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We're gonna do a little wrap up today. It's been

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a while since we did a market climate. Just kind

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of check the pulse of what's happening out in

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the industry, the real estate market, the new

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home market, Las Vegas nationally, kind of looking

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at everything. And then we did the Q1 wrap up,

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but we didn't do anything mid -year. So kind

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of have a little moment and we'll jump back in

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and see how things are ending up for us as we

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wrap up Q3. entering into the fourth quarter

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of 2025. What's it look like? Where have we been?

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Kind of fun to look back to our Q1 and see some

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of those things that we were anticipating for

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the year and have we hit them? Did we hit them?

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Are we on track for those? Obviously, we have

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a whole nother quarter and who knows what could

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happen because things do change quickly. But

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I think we have a pretty good pulse on what's

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happening in the market and where the trends

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are headed. You want to jump in on that, Michael?

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I know we've got some good stats and there's

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a lot of information available to us, which is

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nice because you can really have the facts to

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lean into and then you and I can look at how

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and why and how it's affecting our clients and

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our industry or our business specifically. So

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I'll let you know. All right. Well, when you

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said we missed the Q2, there probably wasn't

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much to talk about. It was just a whole lot of

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nothing. I mean, don't get me wrong, we had come

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off of, I would say, probably four years worth

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of atrocious inventory levels, unsustainable

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price depreciation. So I guess the news would

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have been modulation in that. But I feel like

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that's probably more in line with what was happening

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in 2024 already. And I just think that Uh, you

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know when you're in cruising altitude and then

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you hear the engine cut and then you know, okay,

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we're gonna start to descend. I feel like we

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were at 35 ,000 feet. Something's happening.

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Okay. Yep. But fasten your seatbelt and I can't

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get any more wine. So, uh, you can if you apply

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yourself. You hear the engine cut. I felt like,

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you know, midway through last year, Q3, Q4 last

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year, I felt the engine cut, right? And there

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was only so much low inventory could do to help

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us out of that. And then what happened was low

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inventory started to not become an issue by January,

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February, March, and by spring. So quarter two,

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which we should have done a quarter two wrap

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up, maybe end of, you know, end of June, early

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July. Uh, it was, it was bad. I mean, it's in

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terms of, it just corrected way too quickly.

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And then once people smelled blood in the water,

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investors had tenants leave and people saw more

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homes. It kind of became this, at least in Las

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Vegas, but you look at our, we were a great microcosm

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for most of the sunbelt. It happened almost everywhere.

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We were not affected by insurance issues like

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wildfires, floods, things like that. But we still

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saw an overall pullback from the sunbelt. So.

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you know, we were a great microcosm for that

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in Las Vegas. And I look at what happened here.

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Obviously we're fine and we still had a pretty

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healthy first two quarters, but it's not been

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for want of hard work. We've definitely had to

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work for those numbers. I feel like buyers are

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apprehensive and then inventory breeds inventory.

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People started to feel like, oh, can we really

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sustain these sales prices? Maybe we should sell

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now, my tenant's leaving, whatever. We got relocated

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and we moved somewhere and decided not to buy

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because the market is challenged. So they become

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a renter. So that's now a person that left a

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house in another market and is now renting a

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house. Couple that gets divorced, they both just

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decide to rent because the market's kind of unstable.

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So I felt like we had a net loss of buyers. putting

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their moves on, or purchases on hold, but maybe

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not putting their moves on hold. So you'd have

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all this inventory. Then as inventory picks up,

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the lock -in effect has started to wear thin.

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So that lock -in effect, you know, are people

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with sub four and a half mortgage rates, where

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they're just kind of locked into their houses.

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That can only last for so long for everybody.

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I mean, in numbers, I'm not, you know, not everybody's

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going to move, but the average person moves about

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every five and a half years. So let's say that

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pushes out to seven or eight. That's not gonna

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be 10. That's not gonna be 12 years. Eventually

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people have to move away and even if it's locally

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and then they get tempted by these Beautiful

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homes that are not hitting the market builders

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finally caught up with demand So there's a lot

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of sexy looking new home inventory that may have

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rate by downs and it's okay Well, I don't even

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have to give up my rate, you know I'm going from

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a three to a four and a half, but at least I'm

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going to six and a half or seven So, okay. We'll

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buy that new luxury home Unfortunately, it's

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not been one of ours, but I'll buy that new luxury

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home with a rate buy down. But now they have

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their home to sell. And we have a situation on

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one of our inventory homes in Lake Las Vegas

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where they have a home in Seattle to sell that

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has been on the market for 120 something days

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with four showings. That's a good market. Seattle

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is a pretty, you know, generally speaking is

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a pretty robust real estate market. They're kind

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of an excerpt, but still it's a new construction

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home from four or five years ago. I mean, it

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was growing enough at that point. five years

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ago for Lennar to do a thousand home subdivision.

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So, you know, it just shows you how much of their

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market's cooled, which is now having knock -on

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effects into our market, because I would have

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sold one of my homes, had their home on the contract,

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and we would have probably done some sort of

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rate buy down or whatever to get the deal done.

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But it just shows you that... Inventory breeds

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inventory, right? If they have a home to buy

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in Las Vegas, now there's a home to sell in Seattle.

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Now that home that would have been locked up,

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it just shows you that the market is not as static

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as you think, and it can change pretty quickly.

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That being said, it can change in the opposite

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too. When it feels static that we're kind of

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frozen and buyers and sellers are at a stalemate,

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we're already seeing that kind of start to thaw.

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Sellers market pushes people out who don't absolutely

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have to buy. Buyers market pushes sellers out.

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who don't absolutely have to sell. And therefore

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real estate markets equilibrate. They just naturally

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do like all markets because homes do not expire

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the way produce expires. Homes do not need to

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be thrown out like yesterday's steak at a restaurant

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to say, well, we can't serve this now. They're

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non -fungible. They can be recreated. They can't

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be moved generally. So that's the staticness.

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And then all it takes in growing Sunbelt markets

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is for builders to say, eh, let's just pull back

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on our housing starts and see what happens in

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90 days. The tonnage builders can create inventory

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so quickly because they have a pipeline of lots

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that they're working on. Some divisions we're

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working on today are 26 and 27, maybe even 28

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deliveries. It shows you that if you had 20 years

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of pipeline and the capital behind you to keep

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pushing new lots into that pipeline, you get

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to a point where, let's just pretend we're a

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year down the road and our Westridge subdivision

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is fully approved, ready to go. The carrying

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costs for me are so minuscule compared to just

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building up the neighborhood and it not being

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successful. I could just stall three months and

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then reevaluate the market and say, okay, or

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instead of doing all five, I'll do two of them.

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And then I'll do the other two. I'll kind of

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stagger it out a little more. If someone's trying

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to call the bluff, the builders will call your

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bluff. They'll just say, oh, if you don't want

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to buy our houses, we're not going to give them

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away. Yeah, we have all these starts, like some

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of our stuff in Las Vegas. Yeah, I have the starts.

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And those that are nearly done, I'm going to

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have to wheel and deal if I want to move that

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inventory. I'm not going to have to wheel and

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deal on all of them because maybe out of the

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four, I only have to sell two of them. I can

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be a little bit more discerning with the other

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two, buy myself some time and some runway. That

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being said, we purchased two more lots out there,

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so then I'll slow roll the development process.

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I won't slow roll the HOA approval, the building

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department, all the engineering, architectural.

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I want that done, but those approvals are good

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for months. HOA approval is good for years, I

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think two years. city building, I just have to

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call in one inspection in six months and my permit's

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still valid. So I can really slow roll houses

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and I'm a tiny little builder, right? We're small.

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Imagine if you're a DR Horton who's putting in,

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I would imagine probably 2000 units into the

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ground a year. One R another 1800 to 2000. So

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imagine they pull back just 10 % or 20%. It's

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a lot. It will really affect the inventory situation

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down the road. They're in some neighborhoods

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now that they can't I don't want to say they

00:10:07.419 --> 00:10:08.659
can't give them away, but, you know, they're

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really having a wheel and deal and otherwise

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great zip codes. And every builder has inventory

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right now. I mean, every builder, Valleywide

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is carrying some sort of inventory that they

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had probably anticipated selling by now, including

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us, I would say. We're there. We're with them.

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Yeah. Pull back the curtain. We're not too proud

00:10:27.759 --> 00:10:30.759
to say that. Right. They definitely have more

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than they want. And even in some of the poshest

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zip codes. I mean, those are the last ones that

00:10:36.340 --> 00:10:40.240
really have to worry about, but there are anecdotal

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stories where some of these gray zip codes have

00:10:43.419 --> 00:10:46.899
new homes sitting with no buyers, completely

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done. And that is something completely anathema

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to what we're used to. So we've had five to seven

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years of, oh, there's actually inventory. Wow.

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That's crazy. Right. Inventory's up 77 % year

00:11:00.440 --> 00:11:03.340
over year from 2024, this same ending out Q3.

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So we're 77 % over the inventory that was so

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tight last year. We've almost doubled. Right.

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That's crazy. Now that being said, we're still

00:11:12.820 --> 00:11:19.120
not even near our 17 or 18 or 19 levels. So it

00:11:19.120 --> 00:11:22.379
shows you how under -inventoried we were. But

00:11:22.379 --> 00:11:25.379
you just wonder, were those... really high price

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sales prices propped up by that chronically low

00:11:29.179 --> 00:11:31.539
inventory. So we are in that stalemate right

00:11:31.539 --> 00:11:34.299
now or we are in that period where the pendulum

00:11:34.299 --> 00:11:36.919
keeps swinging back and forth and we don't exactly

00:11:36.919 --> 00:11:39.600
know where we're going to land and markets hate

00:11:39.600 --> 00:11:42.299
uncertainty. So that's why the market feels a

00:11:42.299 --> 00:11:46.080
little frozen. I don't follow pending sales weekly

00:11:46.080 --> 00:11:49.320
in the US the way that I do locally, but we're

00:11:49.320 --> 00:11:52.759
generally still pending out about five to seven

00:11:52.759 --> 00:11:55.860
hundred. MLS sales. Now some new construction

00:11:55.860 --> 00:11:57.559
finds its way into the MLS. For instance, all

00:11:57.559 --> 00:11:59.240
of our new construction, all of our inventory

00:11:59.240 --> 00:12:02.620
homes do hit the MLS before they go into contract.

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Every single one of them has always been in the

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MLS. It's the broker in me that's like, let's

00:12:06.120 --> 00:12:08.519
just get it out to as many people. Depending

00:12:08.519 --> 00:12:11.000
on when that is, is of course contingent on what

00:12:11.000 --> 00:12:13.220
kind of home it is and what our strategy is with

00:12:13.220 --> 00:12:14.879
that property. But everything we have hits the

00:12:14.879 --> 00:12:18.039
MLS. That's not the case with every single. builder,

00:12:18.220 --> 00:12:20.019
many of them, if they sell one of their lots

00:12:20.019 --> 00:12:21.740
within the tracks, that will never hit the MLS.

00:12:21.940 --> 00:12:24.379
Some of the spec inventory sits on a backlog

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and they don't even broadcast it because they

00:12:26.139 --> 00:12:27.519
don't want to flood the market. They don't want

00:12:27.519 --> 00:12:29.340
to flood the zone and make it look like that

00:12:29.340 --> 00:12:31.440
neighborhood has so much available inventory.

00:12:31.940 --> 00:12:33.700
They'll just slow roll it and trickle it out.

00:12:33.899 --> 00:12:35.460
They'll release, you know, especially the big

00:12:35.460 --> 00:12:37.220
tonnage builders, all the NARS and the DR Hortons.

00:12:37.920 --> 00:12:40.299
They're, they have 15 of one model and there's

00:12:40.299 --> 00:12:41.539
only three models that, you know, if they have

00:12:41.539 --> 00:12:43.919
45 houses and 15 of each model, uh, they're not

00:12:43.919 --> 00:12:46.220
going to have all 15 available even on the agent's

00:12:46.220 --> 00:12:47.240
sheet. They're just going to say, oh, here's

00:12:47.240 --> 00:12:50.740
five. So that being said, we're still pending

00:12:50.740 --> 00:12:52.940
out about 700. When one of those backlog homes

00:12:52.940 --> 00:12:54.799
goes under contract, that doesn't get reflected

00:12:54.799 --> 00:12:58.240
on there at all. It gets reflected in the yearly

00:12:58.240 --> 00:13:03.049
numbers for the builder. So that's kind of. really

00:13:03.049 --> 00:13:05.470
hard to track weekly. But I can tell you that

00:13:05.470 --> 00:13:10.830
our weekly resell or MLS data is holding up.

00:13:10.990 --> 00:13:14.730
It just feels slow. And I think it's a function

00:13:14.730 --> 00:13:17.490
of the inventory situation. So we've kept our

00:13:17.490 --> 00:13:19.570
buyers pretty much static. A buyer activity is

00:13:19.570 --> 00:13:22.370
down a little bit, don't get me wrong. But we've

00:13:22.370 --> 00:13:24.669
kept our buyer, the buyer variable has pretty

00:13:24.669 --> 00:13:27.090
much stayed the same. And the inventory has gone

00:13:27.090 --> 00:13:30.309
up substantially. and I don't know which one

00:13:30.309 --> 00:13:33.750
is going to cave. Markets are constantly equilibrating.

00:13:34.190 --> 00:13:37.169
And growth markets, Sunbelt markets, builders

00:13:37.169 --> 00:13:41.690
have a really outsized influence in that kind

00:13:41.690 --> 00:13:44.629
of balancing. So if you look at a city like Las

00:13:44.629 --> 00:13:47.970
Vegas, D .R. Horton and Lennar, probably make

00:13:47.970 --> 00:13:51.570
up about 40 % between the two of them together.

00:13:52.029 --> 00:13:55.679
Probably 40 to 50 % of all new inventory that's,

00:13:55.679 --> 00:13:58.600
you know, for sale inventory comes from two builders

00:13:58.600 --> 00:14:01.559
and they're still toll and Pulti and KB and they're

00:14:01.559 --> 00:14:04.120
also juggernauts as well. But if you look at

00:14:04.120 --> 00:14:06.360
just those two tonnage builders that kind of

00:14:06.360 --> 00:14:08.639
just build addresses, that's kind of how I look

00:14:08.639 --> 00:14:11.059
at it. You know, nothing super special about

00:14:11.059 --> 00:14:12.620
their homes and a lot of customization. You're

00:14:12.620 --> 00:14:14.759
basically buying a resale that doesn't need anything

00:14:14.759 --> 00:14:17.840
except a backyard versus, you know, like a toll

00:14:17.840 --> 00:14:19.779
is kind of a lifestyle they're selling the KB

00:14:19.779 --> 00:14:24.269
is customization for the lower price points because

00:14:24.269 --> 00:14:26.870
they still built some expensive homes, but they're

00:14:26.870 --> 00:14:29.850
definitely closer to the median sales price.

00:14:31.029 --> 00:14:32.649
Pulti's kind of somewhere in between those two

00:14:32.649 --> 00:14:35.210
and definitely has a much wider product offering,

00:14:35.269 --> 00:14:38.190
at least in our market. So anyway, long story

00:14:38.190 --> 00:14:39.950
short, you look at those two builders, if they

00:14:39.950 --> 00:14:44.450
pull back just 10 % on their housing starts,

00:14:44.590 --> 00:14:48.659
that is a huge... huge impact, has a huge impact

00:14:48.659 --> 00:14:51.159
on our housing market and the balancing of that

00:14:51.159 --> 00:14:53.220
housing market. And then in some ways, builders

00:14:53.220 --> 00:14:56.480
have propped up our housing market because they

00:14:56.480 --> 00:14:59.179
are publicly traded entities. They're fiduciaries

00:14:59.179 --> 00:15:03.019
to the shareholder. I would say, minus us and

00:15:03.019 --> 00:15:06.059
a couple of other small companies, all the home

00:15:06.059 --> 00:15:08.500
builders in Las Vegas are publicly traded because

00:15:08.500 --> 00:15:11.259
the ones that weren't have been acquired. Storybooks

00:15:11.259 --> 00:15:14.639
and the... American West, they've been acquired,

00:15:15.019 --> 00:15:19.519
signature sold, quite a few. They're now all

00:15:19.519 --> 00:15:22.320
publicly traded. So they live quarter to quarter.

00:15:22.759 --> 00:15:24.659
If they don't have a good quarter in Las Vegas,

00:15:25.200 --> 00:15:26.919
they're not going to add inventory to Las Vegas.

00:15:27.200 --> 00:15:31.440
They don't think long -term and they want to

00:15:31.440 --> 00:15:33.559
return value to their shareholders more than

00:15:33.559 --> 00:15:35.700
they care about creating affordable housing.

00:15:36.980 --> 00:15:38.919
Yeah, and they have a national bandwidth that

00:15:38.919 --> 00:15:40.799
allows them to pick and choose which markets

00:15:40.799 --> 00:15:42.940
they want to amp up and which ones they need

00:15:42.940 --> 00:15:45.700
to, you know, pull back, rev up, whatever they

00:15:45.700 --> 00:15:50.460
need to do. You know, we basked in the glow post

00:15:50.460 --> 00:15:54.480
-pandemic. This whole Sunbell did for five years.

00:15:54.500 --> 00:15:56.960
And it's not until this year that the Northeast

00:15:56.960 --> 00:16:00.759
really pulled ahead of the Sunbell in terms of

00:16:00.759 --> 00:16:04.059
sales. And you go to outside of Philly, you go

00:16:04.059 --> 00:16:06.919
to Long Island, you go to those areas. in the

00:16:06.919 --> 00:16:10.399
greater metro tri -state area, they're doing

00:16:10.399 --> 00:16:14.879
pretty well. Those markets have not seen the

00:16:14.879 --> 00:16:17.480
appraised appreciation that we see and that we've

00:16:17.480 --> 00:16:19.440
seen in the Sunbelt. And they're kind of having

00:16:19.440 --> 00:16:21.899
their little moment right now, especially the

00:16:21.899 --> 00:16:24.620
denser cities. They don't have as much new construction

00:16:24.620 --> 00:16:28.279
to begin with. So it's the return to work and

00:16:28.279 --> 00:16:31.399
kind of the, okay, cities are cool again. It's

00:16:31.399 --> 00:16:32.879
going to have that upward pressure. But even

00:16:32.879 --> 00:16:35.139
the whole corridor is doing much better than

00:16:35.139 --> 00:16:37.659
it had been. So we all have a little moments

00:16:37.659 --> 00:16:40.559
and that's a good point. Pulte builds in PA and

00:16:40.559 --> 00:16:44.059
New York and Delaware, they build all over. KB,

00:16:44.600 --> 00:16:47.600
not as much over there, but there's a lot of

00:16:47.600 --> 00:16:49.500
presence with those builders in those markets.

00:16:49.659 --> 00:16:51.620
They can say, you know what, Las Vegas, Phoenix,

00:16:52.299 --> 00:16:54.080
kind of overbuilt. Let's just get through that

00:16:54.080 --> 00:16:58.360
inventory, hold back on some of our lots and

00:16:58.360 --> 00:17:00.580
focus on the other markets that are doing well.

00:17:00.720 --> 00:17:03.830
And that's what forces us. to balance again.

00:17:04.470 --> 00:17:07.289
So I don't worry too much about it. And we definitely

00:17:07.289 --> 00:17:09.569
have a lot of exposure. We're in the kind of

00:17:09.569 --> 00:17:13.730
entry level luxury that maybe many people's first

00:17:13.730 --> 00:17:16.609
step up into luxury that 1 .8 to $2 .2 million

00:17:16.609 --> 00:17:19.910
buyer, 50 % of them, 60 % of them still need

00:17:19.910 --> 00:17:21.890
loans. So they're still a little rate sensitive.

00:17:23.639 --> 00:17:25.980
And we can't play as many games. We can't buy

00:17:25.980 --> 00:17:27.880
forward commitments the way that the big builders

00:17:27.880 --> 00:17:30.880
can and lock people into 30 year fixes at 5%.

00:17:30.880 --> 00:17:33.319
I can do temporary buy downs. I can buy their

00:17:33.319 --> 00:17:36.079
rate down, maybe a point. Um, but I can't get

00:17:36.079 --> 00:17:38.220
it from six and a half to four or four and a

00:17:38.220 --> 00:17:40.480
half or five. I can get it from six and a half

00:17:40.480 --> 00:17:42.660
to six. And that's going to cost me a ton of

00:17:42.660 --> 00:17:44.660
money on these sales prices. So there's not as

00:17:44.660 --> 00:17:46.559
many, there's not as many strings that I can

00:17:46.559 --> 00:17:48.039
pull, but I also don't have as much inventory

00:17:48.039 --> 00:17:50.940
to move. And our inventory is more unique and

00:17:50.940 --> 00:17:53.880
we don't have to. make apologies as much as maybe

00:17:53.880 --> 00:17:56.799
one hour does. They've got 15 homes at all back

00:17:56.799 --> 00:17:59.980
the busy street. The other 65 homes in the tract

00:17:59.980 --> 00:18:01.759
are going to be fine, but those 15, they got

00:18:01.759 --> 00:18:04.259
a lot to apologize for. And they got to get that

00:18:04.259 --> 00:18:06.119
inventory moving. So we don't really have anything

00:18:06.119 --> 00:18:08.140
like that, thankfully, and kind of can curate

00:18:08.140 --> 00:18:09.960
our lots and curate our inventory a little bit

00:18:09.960 --> 00:18:14.019
more carefully. So that, you know, gives me some,

00:18:14.019 --> 00:18:16.680
some solace. Beyond that, the raw numbers, we've

00:18:16.680 --> 00:18:19.099
seen a little bit of price moderation, a little

00:18:19.099 --> 00:18:22.809
bit of price. declines, but that's also very

00:18:22.809 --> 00:18:25.730
hard to track because homes are not movable,

00:18:25.809 --> 00:18:29.750
not fungible. No two homes are the same, especially

00:18:29.750 --> 00:18:32.150
as they get older. No two homes were maintained

00:18:32.150 --> 00:18:34.789
the same, upgraded the same, new construction

00:18:34.789 --> 00:18:36.549
in the same track. There's a little bit more

00:18:36.549 --> 00:18:38.470
apples to apples comparison there, but for the

00:18:38.470 --> 00:18:42.369
most part, homes are not easy to compare, right?

00:18:42.549 --> 00:18:46.829
So to say, not only year over year, market over

00:18:46.829 --> 00:18:49.829
market, nationwide over... There's so many variables.

00:18:49.829 --> 00:18:52.250
You could just have more entry -level homes hitting

00:18:52.250 --> 00:18:54.289
the market and then it'll cause median sales

00:18:54.289 --> 00:18:56.730
prices to go down. Conversely, you could have

00:18:56.730 --> 00:18:58.769
what's kind of happening in Las Vegas and a lot

00:18:58.769 --> 00:19:01.690
of the Sunbelt. The Gilded people are moving

00:19:01.690 --> 00:19:04.750
around. The entry -level people are not. They're

00:19:04.750 --> 00:19:06.309
putting off their purchases. They're staying

00:19:06.309 --> 00:19:08.549
in their rentals one more year. Like I said,

00:19:08.549 --> 00:19:09.869
if they're getting divorced and they're working

00:19:09.869 --> 00:19:12.069
class people, they're selling their asset and

00:19:12.069 --> 00:19:14.630
then both of them are going to rent. And I say

00:19:14.630 --> 00:19:18.859
that as an example, not to be jocular or or twee

00:19:18.859 --> 00:19:22.440
or anything. That's just how it is. It's the

00:19:22.440 --> 00:19:25.900
reality of it. Divorce is death. And what's the

00:19:25.900 --> 00:19:28.599
third D? Divorce is death. There are five. There

00:19:28.599 --> 00:19:31.160
are five. We looked them up once before. It's

00:19:31.160 --> 00:19:37.099
diapers, divorce, diamonds, death. Don't forget

00:19:37.099 --> 00:19:41.960
the fifth one. I know. Downsizing. Downsizing,

00:19:42.099 --> 00:19:45.400
yes. So divorce is a big deal. And how people

00:19:45.400 --> 00:19:47.700
handle divorce? You know, five years ago when

00:19:47.700 --> 00:19:49.920
rates were pretty low, I mean, still, actually,

00:19:50.039 --> 00:19:52.200
that's a bad, oh, five years ago when rates were

00:19:52.200 --> 00:19:55.059
in the threes and median sales price was $3 .50,

00:19:55.920 --> 00:19:58.740
a couple that was divorcing could each buy their

00:19:58.740 --> 00:20:00.880
own home. And now we're seeing that on our brokerage

00:20:00.880 --> 00:20:03.160
side is that maybe one's buying, the other one's

00:20:03.160 --> 00:20:06.880
renting. However - Or one stays. Or one stays

00:20:06.880 --> 00:20:10.039
and tries to refi. Exactly. That's a great example.

00:20:10.140 --> 00:20:13.119
The other one gets a small buyout and then rents.

00:20:13.230 --> 00:20:18.910
Um, so that all has those generate buyers and

00:20:18.910 --> 00:20:21.289
diapers. Okay. Uh, we can make our three bedroom

00:20:21.289 --> 00:20:23.089
homework. We don't need to upsize. We can make

00:20:23.089 --> 00:20:25.250
this apartment work. Let's wait one more year.

00:20:25.529 --> 00:20:27.509
And I think we finally kind of ran out of buyers.

00:20:27.630 --> 00:20:29.779
Now that being said. the builders have kind of

00:20:29.779 --> 00:20:32.500
propped up that real estate market, right? Because

00:20:32.500 --> 00:20:35.319
we have the kind of margins where we can buy

00:20:35.319 --> 00:20:36.980
down their rates. We can offer those two -one

00:20:36.980 --> 00:20:39.079
buy downs. If you're a big nationwide tonnage

00:20:39.079 --> 00:20:40.519
builder, you can do forward commitments where

00:20:40.519 --> 00:20:43.819
you're giving them 30 -year fixed rates at 5%.

00:20:43.819 --> 00:20:48.980
So, I mean, we help regulate the market. We give

00:20:48.980 --> 00:20:51.460
liquidity to the market when we need inventory.

00:20:51.779 --> 00:20:53.779
We shore up the market when we're worried about

00:20:53.779 --> 00:20:56.559
over -inventorying, especially with the way that

00:20:56.559 --> 00:21:02.059
the builder business model has changed into,

00:21:02.680 --> 00:21:05.720
they're one part financiers and one part home

00:21:05.720 --> 00:21:08.220
builders, right? I mean, they get a huge source

00:21:08.220 --> 00:21:10.859
of revenue by selling mortgages. They get all

00:21:10.859 --> 00:21:13.500
those ancillary services, they get rebates on

00:21:13.500 --> 00:21:17.480
appliances. Really, the home is secondary, right?

00:21:17.559 --> 00:21:19.759
I mean, the home is the financial instrument.

00:21:20.779 --> 00:21:25.539
So, really has kind of helped. uh, to, to balance

00:21:25.539 --> 00:21:28.539
everything out. It's not a normal market where,

00:21:29.119 --> 00:21:31.680
meaning a marketplace, right? Where you have

00:21:31.680 --> 00:21:35.259
buyers and sellers with equal power, um, or equal,

00:21:35.299 --> 00:21:37.619
equal basis, right? You know, there's always,

00:21:37.819 --> 00:21:39.359
someone always has a little bit more power in

00:21:39.359 --> 00:21:42.279
the, in a market, but builders that can, can

00:21:42.279 --> 00:21:45.380
kind of work that market and kind of tweak, tweak

00:21:45.380 --> 00:21:47.740
it to fit their business models. And that being

00:21:47.740 --> 00:21:51.000
said, uh, that allows the market to be kind of

00:21:51.000 --> 00:21:54.450
a bystander. and the real estate market be kind

00:21:54.450 --> 00:21:57.750
of a secondary effect. So they worry about their

00:21:57.750 --> 00:22:00.849
quarter and their earnings. And if that means

00:22:00.849 --> 00:22:05.450
reducing starts, if that means we have no inventory

00:22:05.450 --> 00:22:07.670
in six months or a year, that's exactly what

00:22:07.670 --> 00:22:09.170
happened during COVID. They pulled all their

00:22:09.170 --> 00:22:11.089
starts. Even homes they had permits on, they

00:22:11.089 --> 00:22:14.009
weren't actually built. Seven months later, we

00:22:14.009 --> 00:22:16.450
had one of the biggest inventory crunches ever.

00:22:17.549 --> 00:22:19.690
Yeah, because you can't verbal it in a day. And

00:22:19.690 --> 00:22:21.650
you can't foresee what's coming, but you pull

00:22:21.650 --> 00:22:24.390
back on those starts and it's actually a repercussion

00:22:24.390 --> 00:22:26.369
that we're going to feel in six months and eight

00:22:26.369 --> 00:22:28.490
months. Exactly. And then on that scale, because

00:22:28.490 --> 00:22:31.230
it was nationwide, every builder ramped up at

00:22:31.230 --> 00:22:33.450
the same exact time. And now Whirlpool or GE's

00:22:33.450 --> 00:22:35.529
looking at you going, ah, I don't have dishwashers.

00:22:35.950 --> 00:22:38.029
We didn't make enough dishwashers for you to

00:22:38.029 --> 00:22:39.289
triple your housing starts. Well, at the time

00:22:39.289 --> 00:22:42.430
we were, yeah. And then they had issues making

00:22:42.430 --> 00:22:44.230
them, but they also had a spike in, it was just

00:22:44.230 --> 00:22:47.980
a perfect storm. So that being said. I do feel

00:22:47.980 --> 00:22:51.279
that we're, quarter three has definitely, the

00:22:51.279 --> 00:22:53.319
back half of quarter three has felt more normal

00:22:53.319 --> 00:22:57.180
than at any point this year. I definitely feel

00:22:57.180 --> 00:23:00.059
the balance coming in. I see homes coming off

00:23:00.059 --> 00:23:02.460
the market that maybe had been languishing. I

00:23:02.460 --> 00:23:05.259
see homes coming on and coming off quickly or

00:23:05.259 --> 00:23:08.779
more quickly. And I definitely see locally, and

00:23:08.779 --> 00:23:10.559
like I say, we're a good microcosm for the rest

00:23:10.559 --> 00:23:13.599
of the country. Locally, our pending sales are

00:23:13.599 --> 00:23:18.279
up. Inventory is down, new listings down. Because

00:23:18.279 --> 00:23:20.960
again, the news is out. The cat's out of the

00:23:20.960 --> 00:23:24.039
bag. It became headlines in March. This is nothing

00:23:24.039 --> 00:23:27.099
new. We're five or six months on and knowing

00:23:27.099 --> 00:23:30.680
that this is a buyer's market. So if your tenant

00:23:30.680 --> 00:23:33.740
wants to re -up for next year, let them re -up.

00:23:34.039 --> 00:23:36.759
Sell at 26 if you really want to sell it. Again,

00:23:36.980 --> 00:23:39.559
it forces people and I hate to say it. hey, we

00:23:39.559 --> 00:23:42.319
were going to get divorced. We can't sell our

00:23:42.319 --> 00:23:44.700
house. Let's get along for another year. You

00:23:44.700 --> 00:23:47.380
know what I mean? It happens. Because I've spoken.

00:23:47.519 --> 00:23:49.259
I can speak from experience. I've been in those

00:23:49.259 --> 00:23:52.680
situations. But so Days on the Market is up.

00:23:53.019 --> 00:23:56.579
We know that. But I know we keep talking about

00:23:56.579 --> 00:24:00.160
buyer's market versus seller's market. And I

00:24:00.160 --> 00:24:02.480
have clients that we work with who think that

00:24:02.480 --> 00:24:04.519
because we're in a buyer's market, they get this

00:24:04.519 --> 00:24:06.500
opportunity. I'm going to ask for concessions.

00:24:06.519 --> 00:24:08.599
I'm going to ask for this and that. And while

00:24:08.599 --> 00:24:10.900
yes, there is definitely an incline toward a

00:24:10.900 --> 00:24:13.680
buyer's market, I wouldn't say that we're solidly

00:24:13.680 --> 00:24:16.640
there yet. I still feel like, I mean, there's

00:24:16.640 --> 00:24:18.559
all signs are showing and yes, we know we're

00:24:18.559 --> 00:24:20.440
moving in that direction. But if you go into

00:24:20.440 --> 00:24:22.960
bullish on some of these deals, we see them blow

00:24:22.960 --> 00:24:25.119
up because people think they can own the market.

00:24:25.180 --> 00:24:27.480
I'm the buyer. I get to make the decisions now.

00:24:27.960 --> 00:24:30.839
But there's still, there's still a mindset that

00:24:30.839 --> 00:24:34.920
is slowly hanging onto the idea that, that sellers

00:24:34.920 --> 00:24:40.000
get to in some capacity control. So it almost

00:24:40.000 --> 00:24:43.619
feels like an awkward flush right now, because

00:24:43.619 --> 00:24:46.140
we know we're talking about the buyers as being

00:24:46.140 --> 00:24:49.220
in power positions, though there are still a

00:24:49.220 --> 00:24:54.319
lot of sellers that are setting the market. And

00:24:54.319 --> 00:24:56.079
builders, obviously, that are setting the market.

00:24:56.359 --> 00:25:00.779
So it's a limited buyer's market yet. I think

00:25:00.779 --> 00:25:03.809
it'll open up from that more. What do you think?

00:25:03.910 --> 00:25:06.950
What's your take? I agree. It's definitely location

00:25:06.950 --> 00:25:09.569
sensitive, product sensitive, and price point

00:25:09.569 --> 00:25:12.970
sensitive. So if you're looking in a drive to

00:25:12.970 --> 00:25:16.089
a qualify area, anywhere in the country, where

00:25:16.089 --> 00:25:18.490
there's a lot of new construction, and the median

00:25:18.490 --> 00:25:21.190
sales price in your county is $350 ,000, and

00:25:21.190 --> 00:25:23.269
these homes are $375 ,000, let's say they're

00:25:23.269 --> 00:25:25.589
just a touch over the median, and you're in a

00:25:25.589 --> 00:25:29.150
drive to a qualify zip code, looking at a lot

00:25:29.150 --> 00:25:32.789
of new construction or next to new homes, you

00:25:32.789 --> 00:25:34.750
probably have a lot of power there because the

00:25:34.750 --> 00:25:36.349
only people that are on the market are people

00:25:36.349 --> 00:25:39.130
that at this point probably really, really, really

00:25:39.130 --> 00:25:41.049
want to sell. And builders don't build homes

00:25:41.049 --> 00:25:43.789
to sit on them. So builders always want to sell,

00:25:43.809 --> 00:25:45.710
right? I want to sell every one of our homes.

00:25:46.630 --> 00:25:48.950
And that's representative in how I price them.

00:25:48.970 --> 00:25:50.730
That's representative in how I negotiate and

00:25:50.730 --> 00:25:53.849
how our sales team engages with buyers leading

00:25:53.849 --> 00:25:56.450
up now. How we start them when we start them,

00:25:56.490 --> 00:25:58.309
all of those things. Absolutely. Absolutely.

00:25:58.730 --> 00:26:01.619
And starting those conversations with Builders

00:26:01.619 --> 00:26:03.839
ready, builders motivated. Okay, so if you like

00:26:03.839 --> 00:26:05.559
the house, it's worth coming out and looking

00:26:05.559 --> 00:26:07.180
at it because you're probably gonna be pretty

00:26:07.180 --> 00:26:10.059
happy with the terms. Because I'm a seller, I

00:26:10.059 --> 00:26:11.839
have to sell these homes. I have no interest

00:26:11.839 --> 00:26:15.400
in setting the comps anymore. That was a 2021,

00:26:15.740 --> 00:26:19.900
2022, 2023 even. version of the company that

00:26:19.900 --> 00:26:21.759
doesn't exist, but we're doing more than ever.

00:26:21.859 --> 00:26:23.380
We're building more rooftops than ever. So I

00:26:23.380 --> 00:26:25.640
really don't care. I don't care what market we're

00:26:25.640 --> 00:26:27.799
in as long as I know what I'm in. And then I

00:26:27.799 --> 00:26:30.599
know how to make decisions and kind of strategize.

00:26:31.420 --> 00:26:35.059
It's as a builder to be able to make the decisions

00:26:35.059 --> 00:26:37.579
about starts and sells and prices and all of

00:26:37.579 --> 00:26:39.160
those things. Obviously that's informing, but

00:26:39.160 --> 00:26:41.259
also to be able to advise. I mean, a lot of people

00:26:41.259 --> 00:26:44.359
look to you as an expert and look to our experience

00:26:44.359 --> 00:26:49.190
in the industry as an advice platform. So being

00:26:49.190 --> 00:26:51.349
able to have our thumb on the pulse in a way

00:26:51.349 --> 00:26:55.509
that lets us offer productive and qualified advice.

00:26:56.289 --> 00:26:58.170
As good as we can, right? I mean, we've been

00:26:58.170 --> 00:26:59.930
in situations where you're giving advice and

00:26:59.930 --> 00:27:01.569
then they pull the trigger a month later and

00:27:01.569 --> 00:27:03.410
your advice is completely outdated. I know. I'm

00:27:03.410 --> 00:27:06.289
thinking in terms of like a seller. And that's

00:27:06.289 --> 00:27:08.809
the thing, yeah. It does change quickly in something

00:27:08.809 --> 00:27:12.650
you told them in the situations. And it did this

00:27:12.650 --> 00:27:17.079
spring change quickly. the sands shift right

00:27:17.079 --> 00:27:19.619
under our feet as we stood there. Wait a minute,

00:27:19.619 --> 00:27:21.640
what is happening? And so advice that we had

00:27:21.640 --> 00:27:25.200
given to our clients at that point, we had to

00:27:25.200 --> 00:27:28.200
really, wait a minute, this isn't what we thought

00:27:28.200 --> 00:27:30.720
was cool. How many conversations that we had

00:27:30.720 --> 00:27:33.680
to have like that, where we had to re -explain

00:27:33.680 --> 00:27:36.480
where we're at and why we are here and how we

00:27:36.480 --> 00:27:39.440
need to now reprice their home or whatever it

00:27:39.440 --> 00:27:43.339
is. Or reset their expectations at minimum. So

00:27:43.339 --> 00:27:47.430
I think that that's So to answer your question,

00:27:47.430 --> 00:27:50.829
are we in a buyer's market? It certainly feels

00:27:50.829 --> 00:27:54.609
like one, but ultimately, this is going to go

00:27:54.609 --> 00:27:56.250
against every economist because they would say

00:27:56.250 --> 00:27:58.309
buyers set the market. I think in real estate,

00:27:58.529 --> 00:28:00.869
tell ourselves at the market, because for all

00:28:00.869 --> 00:28:02.930
the reasons I mentioned before, they're static,

00:28:03.589 --> 00:28:05.990
the inventory is relatively fixed. If you look

00:28:05.990 --> 00:28:08.509
at how many households there are, hundreds of

00:28:08.509 --> 00:28:10.349
thousands of households in Las Vegas, and we

00:28:10.349 --> 00:28:14.059
build about 12 ,000 houses a year. That is a

00:28:14.059 --> 00:28:18.180
tiny fraction of the amount of housing stock.

00:28:18.279 --> 00:28:20.140
Now, the amount of housing that changes hands,

00:28:20.819 --> 00:28:23.440
currently nationwide, about 30 % of available

00:28:23.440 --> 00:28:26.339
homes are new construction. So we are really

00:28:26.339 --> 00:28:29.400
overrepresented. We're overrepresented in new

00:28:29.400 --> 00:28:31.720
construction. When you say sellers, I think to

00:28:31.720 --> 00:28:36.980
be specific, builders are the selling standard

00:28:36.980 --> 00:28:41.640
that sets the market, right? Right. Exactly.

00:28:43.489 --> 00:28:46.170
especially as in markets that are even more fixed,

00:28:46.789 --> 00:28:49.450
like the Northeastern seaboard, certain zip codes,

00:28:49.589 --> 00:28:51.190
there are certain areas of Las Vegas that have

00:28:51.190 --> 00:28:53.289
not seen growth for 10 years in terms of new

00:28:53.289 --> 00:28:55.549
rooftops. There are certain areas that people

00:28:55.549 --> 00:28:57.490
have to live in for family, for work, for whatever.

00:28:57.910 --> 00:29:00.210
We're already seeing that in our cities. Denver

00:29:00.210 --> 00:29:02.289
has been seeing that for about 15 years, certain

00:29:02.289 --> 00:29:04.470
areas that there's no more growth there. You

00:29:04.470 --> 00:29:07.750
got to drive to qualify and hope you can negotiate

00:29:07.750 --> 00:29:11.079
a great deal there. Most of the East Coast those

00:29:11.079 --> 00:29:12.880
are more fragmented markets. So it's really hard

00:29:12.880 --> 00:29:15.559
to say where one ends and the other begins but

00:29:15.559 --> 00:29:19.599
The sellers meaning the individual sellers set

00:29:19.599 --> 00:29:22.519
the price and I would tell when I was really

00:29:22.519 --> 00:29:25.240
heavy in my brokerage business tell a buyer,

00:29:25.500 --> 00:29:27.059
look, you can either get the house you want or

00:29:27.059 --> 00:29:29.819
the deal you want. There's just very unlikely

00:29:29.819 --> 00:29:32.099
that those two things are going to line up perfectly.

00:29:32.859 --> 00:29:36.900
So if you're ready to make concessions on that

00:29:36.900 --> 00:29:39.539
noisy street, on the fact that the school bus

00:29:39.539 --> 00:29:41.779
stops there or the crosswalk, you can't leave

00:29:41.779 --> 00:29:44.779
your house from 245 to three because there's

00:29:44.779 --> 00:29:47.319
so much school traffic. If you're okay to make

00:29:47.319 --> 00:29:48.920
those concessions, but there's a reason this

00:29:48.920 --> 00:29:51.240
house has been passed over. And that's a great

00:29:51.240 --> 00:29:53.339
point to your, you know, the great, great call

00:29:53.339 --> 00:29:55.789
back to your other point is just because you

00:29:55.789 --> 00:29:58.289
see it 58 days in the market, we're in the first

00:29:58.289 --> 00:30:00.750
time in five years, perfectly fine homes are

00:30:00.750 --> 00:30:03.509
sitting for 50 to 60 days. We have some new builds

00:30:03.509 --> 00:30:06.549
of our own that are on the market that I don't

00:30:06.549 --> 00:30:08.410
think have any reason to be sitting except the

00:30:08.410 --> 00:30:10.690
market is soft and there's more competition.

00:30:11.069 --> 00:30:13.309
And that's average days on market. Exactly. So

00:30:13.309 --> 00:30:16.470
we have, I have a particular home that I am worried

00:30:16.470 --> 00:30:18.490
about, but I have to remember we're barely at

00:30:18.490 --> 00:30:20.329
the average days on market. And if you look at

00:30:20.329 --> 00:30:22.250
the price point the house is at and the high

00:30:22.250 --> 00:30:25.509
one millions. We're certainly not anywhere near

00:30:25.509 --> 00:30:27.210
the average days on market, so they've been making

00:30:27.210 --> 00:30:28.910
major price decisions. That's why I'm done with

00:30:28.910 --> 00:30:31.109
my price adjustments on that house forever. I'll

00:30:31.109 --> 00:30:33.670
sit on the house. I will sell every other piece

00:30:33.670 --> 00:30:36.549
of inventory before I sell that house. I cannot

00:30:36.549 --> 00:30:39.170
go any lower and I will not go any lower. Doesn't

00:30:39.170 --> 00:30:40.710
mean that someone came in and wrote something.

00:30:40.849 --> 00:30:42.910
Yeah, of course, if the deal makes sense, but

00:30:42.910 --> 00:30:45.109
advertising marketed price, that's where it's

00:30:45.109 --> 00:30:48.970
at. 1679 is where that house is staying. Forever

00:30:48.970 --> 00:30:52.170
which kind of goes back to my point. So it's

00:30:52.170 --> 00:30:55.519
that yes homes are sitting for longer. So somebody

00:30:55.519 --> 00:30:57.619
who comes in as a buyer, now they walk in and

00:30:57.619 --> 00:30:59.259
go, oh, this house has been sitting for so long.

00:30:59.259 --> 00:31:00.900
I'm going to come in and ask for this and ask

00:31:00.900 --> 00:31:02.680
for that and chunk the price and take this off.

00:31:02.799 --> 00:31:06.200
And it must be, no, no, you don't have that kind

00:31:06.200 --> 00:31:09.180
of leverage yet. We're in a slower market. So

00:31:09.180 --> 00:31:11.960
that doesn't necessarily give a buyer the leverage

00:31:11.960 --> 00:31:13.660
to walk in and think they own the deal or that

00:31:13.660 --> 00:31:17.099
they can sweep the rug out from underneath our

00:31:17.099 --> 00:31:21.220
sellers. Builders have the inventory and so they're

00:31:21.220 --> 00:31:23.859
willing to negotiate a little bit more though.

00:31:23.980 --> 00:31:27.660
It's still not quite It doesn't allow for you

00:31:27.660 --> 00:31:29.480
to run in with a bullish attitude and expect

00:31:29.480 --> 00:31:31.259
that you're gonna get you know Served up with

00:31:31.259 --> 00:31:34.500
the best deals out there. So it's kind of a kind

00:31:34.500 --> 00:31:36.539
of a strange thing. It's just slower. It's slower

00:31:36.539 --> 00:31:40.519
and just and it's Market sensitive right entry

00:31:40.519 --> 00:31:43.880
-level luxury. I mean our our luxury market.

00:31:43.880 --> 00:31:46.750
We know is even longer than that 60 -day And

00:31:46.750 --> 00:31:49.109
there's, there's more inventory in it because

00:31:49.109 --> 00:31:52.890
people like myself, you know, our company, um,

00:31:53.430 --> 00:31:56.569
operates in that space. And there's some other

00:31:56.569 --> 00:31:59.210
competitors that we have that do not maybe the

00:31:59.210 --> 00:32:01.049
number of rooftops that we do, but definitely

00:32:01.049 --> 00:32:03.509
are adding to that. It's happening in our South

00:32:03.509 --> 00:32:05.589
Shore country club with that product. There's

00:32:05.589 --> 00:32:08.190
another spec builder that has two in there and

00:32:08.190 --> 00:32:11.410
one guy has one. He's a one off more of a construction

00:32:11.410 --> 00:32:13.529
company than a home builder. And I think there's

00:32:13.529 --> 00:32:15.640
a distinction. You know, we're really the only

00:32:15.640 --> 00:32:17.960
true home builder in that country club. Uh, but

00:32:17.960 --> 00:32:20.339
there are, there are construction companies building

00:32:20.339 --> 00:32:22.859
spec homes. So, cause that's, their margins are

00:32:22.859 --> 00:32:25.880
there. It's easier when you're a smaller outfit

00:32:25.880 --> 00:32:28.940
to build in a luxury space versus doing subdivisions

00:32:28.940 --> 00:32:31.839
with a hundred houses. Uh, those are, those are

00:32:31.839 --> 00:32:33.980
big ticket items on utilities and infrastructure

00:32:33.980 --> 00:32:36.119
and the land costs. Everything's just a lot,

00:32:36.200 --> 00:32:41.539
you know, big boy, big boy numbers. So we cut

00:32:41.539 --> 00:32:44.990
two fold. We have competition. The resale homes

00:32:44.990 --> 00:32:48.430
generally in that 1 .9 to 2 .9 are also very

00:32:48.430 --> 00:32:50.970
nice. Some of them are relics, depending on where

00:32:50.970 --> 00:32:53.670
you're building. Some of them were really nice

00:32:53.670 --> 00:32:56.650
in 2004. Maybe not so much now. And then you

00:32:56.650 --> 00:32:59.509
work. So you go in at 1 .9 and have to do a teardown.

00:32:59.690 --> 00:33:01.130
I mean, we're in the middle of one right now.

00:33:01.569 --> 00:33:04.650
It's a lot. It's a lot. That's the value that

00:33:04.650 --> 00:33:06.609
we bring and that's a space I like to play in.

00:33:06.609 --> 00:33:10.390
But that is also a flooded space right now, honestly.

00:33:11.889 --> 00:33:14.630
Middle to high ones, low twos, is there's track

00:33:14.630 --> 00:33:16.490
builders that play in that space. Some of your

00:33:16.490 --> 00:33:19.009
Toll Brothers and maybe even your Pulties, depending

00:33:19.009 --> 00:33:22.730
on your area. Pulties, TriPoint. TriPoint, great.

00:33:22.930 --> 00:33:24.730
Yeah, good one. Completely forgot about that.

00:33:24.869 --> 00:33:26.549
Yeah, TriPoint loves playing in that space. Taylor

00:33:26.549 --> 00:33:28.490
Morrison, I mean, there are lots of them playing

00:33:28.490 --> 00:33:32.049
in those numbers. So yeah, it's not as, you know,

00:33:32.170 --> 00:33:36.049
a million dollar home now is not as... crazy

00:33:36.049 --> 00:33:38.529
move up as it once was, unfortunately, with prices

00:33:38.529 --> 00:33:40.410
the way that they've been, median home prices

00:33:40.410 --> 00:33:43.829
already in the 460s. So now our million dollar

00:33:43.829 --> 00:33:47.430
home is beautiful. And I mean, I don't take anything

00:33:47.430 --> 00:33:50.710
away from it. But most of those tonnage builders

00:33:50.710 --> 00:33:54.009
are finding their way in that direction. Some

00:33:54.009 --> 00:33:59.240
of those luxury. Enough. Enough are, right? to

00:33:59.240 --> 00:34:00.940
move the market a little bit. And that's where

00:34:00.940 --> 00:34:02.460
the margins are, too. It's kind of like how they

00:34:02.460 --> 00:34:05.720
say, why do car builders build all SUVs now?

00:34:06.140 --> 00:34:08.159
Because they're high margins. And why do builders

00:34:08.159 --> 00:34:10.440
build big houses with high sales prices, with

00:34:10.440 --> 00:34:12.679
over -upgraded? Because I'm already here. I'm

00:34:12.679 --> 00:34:14.340
already doing all the site work. I already have

00:34:14.340 --> 00:34:16.000
all the liability. I already have all the risk.

00:34:16.579 --> 00:34:18.940
Why not shoot for the higher end of the market?

00:34:19.599 --> 00:34:22.019
And we could have another episode. We outfitted

00:34:22.019 --> 00:34:25.610
our serene spec levels. And I had to... make

00:34:25.610 --> 00:34:27.550
a lot of little in the moment decisions, stuff

00:34:27.550 --> 00:34:29.389
that needed to be decided now. There's certain

00:34:29.389 --> 00:34:31.309
things like appliances and cabinet specs I might

00:34:31.309 --> 00:34:33.170
tweak as the market changes or if the market

00:34:33.170 --> 00:34:35.630
changes or if demand is not where I hope it is.

00:34:35.630 --> 00:34:37.969
We may have to kind of entice buyers with higher

00:34:37.969 --> 00:34:41.989
trim levels, basically. But that being said,

00:34:42.630 --> 00:34:49.090
it's an evolving market and I feel a change this

00:34:49.090 --> 00:34:53.269
month or end of August. I certainly have seen

00:34:53.269 --> 00:34:56.909
the traffic pick up. I think inventory, like

00:34:56.909 --> 00:35:00.829
I said, will kind of naturally equilibrate. And

00:35:00.829 --> 00:35:03.269
by this time next year, I think we'll see better,

00:35:03.269 --> 00:35:04.929
better rate environment. We're already seeing

00:35:04.929 --> 00:35:07.349
it as a time of recording. We're at about six

00:35:07.349 --> 00:35:10.050
and a half right now. We got as high as eight

00:35:10.050 --> 00:35:13.309
in 2023. We've spent a lot of times in the sevens

00:35:13.309 --> 00:35:15.070
in the last, you know, in the two years since

00:35:15.070 --> 00:35:17.570
we spiked, I think it was September or October

00:35:17.570 --> 00:35:21.340
23 at eight per 8 .1%. an average 30 -year fix.

00:35:21.920 --> 00:35:23.320
So we had to come all the way down from there.

00:35:23.320 --> 00:35:25.239
We do see change in the horizon. I mean, there's

00:35:25.239 --> 00:35:29.519
some things that are happening politically that

00:35:29.519 --> 00:35:33.039
are anticipated to make a big shift in that world.

00:35:33.679 --> 00:35:36.280
Yeah. I think monetary policy, I think the Fed

00:35:36.280 --> 00:35:38.460
knows they're at least... probably 100 basis

00:35:38.460 --> 00:35:41.460
points off of neutral, and that obviously won't

00:35:41.460 --> 00:35:43.539
have a direct effect on the long end of the curve

00:35:43.539 --> 00:35:45.840
and the 30 -year fix, but it will certainly not

00:35:45.840 --> 00:35:49.019
hurt it. Generally, we had some rate drops last

00:35:49.019 --> 00:35:52.800
year, November, October, November 2024, and the

00:35:52.800 --> 00:35:55.079
30 -year fix actually went up because the market

00:35:55.079 --> 00:35:56.940
said, oh, we shouldn't be cutting right now.

00:35:57.059 --> 00:35:58.780
The inflation was still too high, like 3 .2.

00:35:58.780 --> 00:36:00.199
Right. And then they panic. Exactly. They panic.

00:36:01.219 --> 00:36:03.099
Be correct. Over -correct. Be over -corrected,

00:36:03.199 --> 00:36:04.739
like markets always tend to do. And then it confuses.

00:36:05.159 --> 00:36:07.840
But it confuses, you know, the industry as a

00:36:07.840 --> 00:36:09.199
whole gets a little confused and then buyers

00:36:09.199 --> 00:36:11.539
get fearful. And then they take a step back and

00:36:11.539 --> 00:36:15.400
they, you know, it all creates a shift in mental

00:36:15.400 --> 00:36:18.079
fear. Correct. That's right. Buyers, like I said,

00:36:18.480 --> 00:36:21.860
markets hate uncertainty. I hate it as a builder.

00:36:22.119 --> 00:36:25.159
I hated to buy two more lots, but I knew I might

00:36:25.159 --> 00:36:27.480
as well lean in. By the way, I got great deals

00:36:27.480 --> 00:36:30.780
on those lots because there's a lot of people

00:36:30.780 --> 00:36:33.440
who have... Said let's just go ahead and try

00:36:33.440 --> 00:36:35.980
to get rid of our our custom lot in Sasha. Let's

00:36:35.980 --> 00:36:37.880
go ahead and get rid of it And because of that

00:36:37.880 --> 00:36:42.239
I saw an opportunity and that is the second cheapest

00:36:42.239 --> 00:36:46.139
third cheap third cheapest Parcel I've bought

00:36:46.139 --> 00:36:48.079
in there. Well, I bought two next to each other

00:36:48.079 --> 00:36:50.699
but and they're beautiful. They're great parcels

00:36:50.699 --> 00:36:54.539
They're flat the quarter acre they have a hundred

00:36:54.539 --> 00:36:56.960
feet of gold 120 feet of golf course frontage

00:36:56.960 --> 00:37:01.179
Good views. I'm gonna put two One of our tried

00:37:01.179 --> 00:37:03.139
and true single stories on there and then a new

00:37:03.139 --> 00:37:05.679
plan that we created for it For the other lot

00:37:05.679 --> 00:37:08.280
and that'll add her into our kind of our repertoire

00:37:08.280 --> 00:37:13.920
So yeah, it's pretty exciting. I move and adapt

00:37:13.920 --> 00:37:16.639
with the market ultimately We're under built.

00:37:16.679 --> 00:37:21.179
I still believe that and I cannot stop now Just

00:37:21.179 --> 00:37:30.840
because spring hurt my feelings I'm used to,

00:37:30.840 --> 00:37:33.000
you know, wind at my sails and this has been

00:37:33.000 --> 00:37:35.800
wind at my sails, right? And it's just been,

00:37:35.800 --> 00:37:38.539
it's been gratifying to know that I can adapt

00:37:38.539 --> 00:37:41.059
in this market. The company can be solvent and

00:37:41.059 --> 00:37:45.900
company can be thriving even in a year where

00:37:45.900 --> 00:37:49.920
almost every housing headline was negative. And

00:37:49.920 --> 00:37:53.300
we can still do it. Um, and just zig and zag.

00:37:55.029 --> 00:37:59.050
So that could be the theme for our Q3, a zig

00:37:59.050 --> 00:38:02.030
and zag, right? Yeah, exactly. Change your spec

00:38:02.030 --> 00:38:05.389
level, change your pricing strategy, not changing

00:38:05.389 --> 00:38:07.329
the overall vision of the company in terms of

00:38:07.329 --> 00:38:09.489
growth, very growth, you know, growth minded.

00:38:10.469 --> 00:38:13.369
And growth sometimes doesn't mean growth and

00:38:13.369 --> 00:38:15.130
profit. Sometimes it might mean other metrics.

00:38:15.849 --> 00:38:17.510
Do we own more lots? Do we have more finished

00:38:17.510 --> 00:38:20.010
lots? Are we getting faster? That's growth. Are

00:38:20.010 --> 00:38:22.929
we getting fewer warranty calls? Are we getting

00:38:22.929 --> 00:38:26.369
shorter punch lists at the end? Yes, have we

00:38:26.369 --> 00:38:28.969
tightened our process? Yeah. In a lot of ways,

00:38:29.070 --> 00:38:32.949
yeah. Right, are we seeing an uptick in traffic?

00:38:33.030 --> 00:38:35.630
Before we brought you on director of marketing,

00:38:36.369 --> 00:38:38.989
and we've just put them in the MLS, we would

00:38:38.989 --> 00:38:42.590
maybe show those homes once a month. And now,

00:38:42.769 --> 00:38:45.190
ourselves, people are showing them two or three

00:38:45.190 --> 00:38:47.630
times a week often. Now, we have more of them

00:38:47.630 --> 00:38:49.289
to show. Maybe that's part of it, but I have

00:38:49.289 --> 00:38:51.550
to think. You check out our website, our marketing

00:38:51.550 --> 00:38:54.670
collateral and all that. That's growth too. And

00:38:54.670 --> 00:38:57.650
that's an important way to look at it. Not every

00:38:57.650 --> 00:39:00.130
night when you close out the till at the restaurant

00:39:00.130 --> 00:39:02.789
is going to be a record breaker, but maybe you

00:39:02.789 --> 00:39:04.889
got a good review. Maybe you had a food critic

00:39:04.889 --> 00:39:07.369
come in. I love restaurant examples because the

00:39:07.369 --> 00:39:11.099
market, you know, that business is so... unforgiving

00:39:11.099 --> 00:39:15.579
and quick. You might go two years without knowing

00:39:15.579 --> 00:39:18.219
you're doing something wrong when you're a home

00:39:18.219 --> 00:39:21.239
builder. It's going to take you a while. There's

00:39:21.239 --> 00:39:22.880
some doubt that I even have on some of our floor

00:39:22.880 --> 00:39:24.920
plans. Did I do that right? Because I haven't

00:39:24.920 --> 00:39:27.320
actually seen this model successfully sell yet

00:39:27.320 --> 00:39:29.860
because I haven't built it yet. I don't know.

00:39:29.940 --> 00:39:31.199
Whereas I feel like restaurants, you kind of

00:39:31.199 --> 00:39:33.739
get that real in -the -moment feedback. So I

00:39:33.739 --> 00:39:36.170
love to use those as an example. Yeah. I love

00:39:36.170 --> 00:39:38.250
that perspective because we have done, I mean,

00:39:38.250 --> 00:39:40.309
in the last six months, the amount of growth

00:39:40.309 --> 00:39:43.030
that the company has had internal growth in our

00:39:43.030 --> 00:39:45.110
processes, in our policies, in our just tightening

00:39:45.110 --> 00:39:47.110
things up, in our collateral, in our webs, all

00:39:47.110 --> 00:39:49.809
of those things would not have been possible

00:39:49.809 --> 00:39:51.969
had we been slamming through sales and pushing

00:39:51.969 --> 00:39:54.489
in other areas. So it kind of gave us that moment

00:39:54.489 --> 00:39:57.949
of pause to redirect and focus and continue to

00:39:57.949 --> 00:40:00.550
grow. I mean, it isn't that we all took a map.

00:40:00.849 --> 00:40:02.550
I mean, we're all continuing to work. Yeah, we're

00:40:02.550 --> 00:40:05.800
all busy. Yeah. Yeah, we're very busy, but a

00:40:05.800 --> 00:40:07.760
lot of that it's a just it's a different focus

00:40:07.760 --> 00:40:10.260
on the busy Which I love that perspective because

00:40:10.260 --> 00:40:13.519
you don't really think about how much has actually

00:40:13.519 --> 00:40:16.920
been accomplished right in What was otherwise

00:40:16.920 --> 00:40:20.679
not a huge selling spring? No, it hasn't honestly

00:40:20.679 --> 00:40:23.659
been a great year overall for the company I mean

00:40:23.659 --> 00:40:26.380
in terms of if you looked at us if we were publicly

00:40:26.380 --> 00:40:28.980
traded company, they don't care about your new

00:40:28.980 --> 00:40:30.960
website. They don't care about The fact that

00:40:30.960 --> 00:40:33.639
what we're building today will carry us through

00:40:33.639 --> 00:40:37.260
26, 27 sellers markets, right? We're going to

00:40:37.260 --> 00:40:40.699
have that infrastructure built up. Exactly. So

00:40:40.699 --> 00:40:43.000
when I look at that, and also Necessity is the

00:40:43.000 --> 00:40:48.139
mother of invention, we had to be better at marketing.

00:40:48.420 --> 00:40:50.739
It didn't have the luxury of throwing the MLS

00:40:50.739 --> 00:40:54.000
with some renderings. They call either me or

00:40:54.000 --> 00:40:56.360
someone on my team and we go out and show it.

00:40:56.360 --> 00:40:59.409
If they like it, great. Put a contract together.

00:40:59.469 --> 00:41:01.889
Perfect. I never had one sit done. And now we

00:41:01.889 --> 00:41:04.869
have had, we have had two this year sit done.

00:41:04.869 --> 00:41:06.829
One for about 30 days and the other one is not

00:41:06.829 --> 00:41:10.090
even sold yet. It's running in about 50, 55 days.

00:41:11.210 --> 00:41:15.710
So I don't know. That's, I'm encouraged by the

00:41:15.710 --> 00:41:17.349
fact that we took the year and said, all right,

00:41:17.469 --> 00:41:20.809
this has not been great. We still built. We finished.

00:41:20.989 --> 00:41:23.610
We're finishing homes. We'll have three new rooftops

00:41:23.610 --> 00:41:25.969
hitting the market. That's good or bad. I don't

00:41:25.969 --> 00:41:28.860
know. think of how much time and effort you've

00:41:28.860 --> 00:41:31.039
been able to apply to the other projects, to

00:41:31.039 --> 00:41:33.079
the Serene backend, to the Westridge backend.

00:41:33.460 --> 00:41:35.519
I mean, it's giving you really projects that

00:41:35.519 --> 00:41:39.559
you are, you know, we're loading up for next

00:41:39.559 --> 00:41:42.360
year, but would you have the bandwidth to be

00:41:42.360 --> 00:41:44.239
everywhere? Probably not. I mean, I don't know,

00:41:44.900 --> 00:41:48.019
you manage a lot, but sometimes I'm like, where

00:41:48.019 --> 00:41:50.019
are you? Are you like cloned? How do you get

00:41:50.019 --> 00:41:52.880
this all done? Got it. God, I hope there's only

00:41:52.880 --> 00:41:58.000
one of me. I can't imagine. You're right. We

00:41:58.000 --> 00:42:02.519
pulled a parcel out of the master plan and rezoned

00:42:02.519 --> 00:42:06.559
it from public space to residential and pushed

00:42:06.559 --> 00:42:08.599
the density. Which was time consuming and required

00:42:08.599 --> 00:42:13.460
so much of your mental bandwidth and time and

00:42:13.460 --> 00:42:15.219
energy. Totally. And meetings with the landowner

00:42:15.219 --> 00:42:17.340
and then we did a JV with the landowner and we

00:42:17.340 --> 00:42:20.480
had all this. We did all that in six months.

00:42:20.900 --> 00:42:23.460
Engineers. Engineers, city council, planning

00:42:23.460 --> 00:42:26.340
commission, all these things. We could have easily,

00:42:26.500 --> 00:42:29.019
easily had that drag on for nine months to a

00:42:29.019 --> 00:42:32.480
year. They did it in six. And I have to believe

00:42:32.480 --> 00:42:34.699
it's because I was able to focus on it and it

00:42:34.699 --> 00:42:36.519
wasn't pulled in a hundred different directions.

00:42:37.440 --> 00:42:40.309
And those dividends, you won't get. For a year,

00:42:40.530 --> 00:42:43.610
you know, we won't feel that for end of 26 on

00:42:43.610 --> 00:42:46.170
some of them early 27 on others I mean, it's

00:42:46.170 --> 00:42:47.929
something that's not instant gratification That's

00:42:47.929 --> 00:42:50.070
why I said you can go be going you can be doing

00:42:50.070 --> 00:42:52.090
the wrong thing for two years as a homebuilder

00:42:52.090 --> 00:42:54.469
before you even realize Oh, that wasn't a good

00:42:54.469 --> 00:42:57.269
direction to take the product line in that wasn't

00:42:57.269 --> 00:43:00.949
a good You know policy to have with buyers, you

00:43:00.949 --> 00:43:03.570
know, whatever it is. You don't necessarily know

00:43:03.570 --> 00:43:05.469
it doesn't you don't get that kind of instant

00:43:05.469 --> 00:43:13.099
feedback So in summary q3 has been Cute okay.

00:43:13.099 --> 00:43:16.780
So in summary q2 I would say was the worst because

00:43:16.780 --> 00:43:19.679
it was new the feelings were new. Oh, this is

00:43:19.679 --> 00:43:24.440
not just a weird winter Yeah, very just confused

00:43:24.440 --> 00:43:28.820
and unsure and it's the sky falling. Yeah, exactly

00:43:28.820 --> 00:43:32.719
and We got through that fear in q2 and I feel

00:43:32.719 --> 00:43:36.539
like q3 has kind of thought a little bit We still

00:43:36.539 --> 00:43:38.599
have enough inventory. I feel like the average

00:43:38.599 --> 00:43:41.639
seller is going to have 90 to 180 days before

00:43:41.639 --> 00:43:44.079
they'll give up, whether they're overpriced,

00:43:44.099 --> 00:43:46.260
whether they're hard to negotiate with, whether

00:43:46.260 --> 00:43:49.440
their house is inferior in some way. I think

00:43:49.440 --> 00:43:51.400
that we've kind of weeded through some of those

00:43:51.400 --> 00:43:55.960
people that maybe were April 15th listing. Now

00:43:55.960 --> 00:43:58.119
we're four and a half months on and you've had

00:43:58.119 --> 00:44:00.420
no activity, no traffic, no offers, no anything.

00:44:01.799 --> 00:44:03.840
Eventually that seller says, you know what, maybe

00:44:03.840 --> 00:44:05.380
we really don't need to sell. Maybe we'll put

00:44:05.380 --> 00:44:07.880
our move on hold. Maybe we'll put a tenant in

00:44:07.880 --> 00:44:11.119
there again or whatever. So I think that Q3,

00:44:11.219 --> 00:44:18.579
the theme for Q3 is equilibrium. Q4, I think

00:44:18.579 --> 00:44:20.769
we'll see. The 10 -year treasury has been doing

00:44:20.769 --> 00:44:24.849
really well, meaning going down. So I think we'll

00:44:24.849 --> 00:44:27.849
continue to see rates fall. Like I said, we're

00:44:27.849 --> 00:44:30.349
below 6 .5 right now, which sounds like a lot,

00:44:30.550 --> 00:44:32.650
but considering we spent a lot of last year in

00:44:32.650 --> 00:44:35.809
the sevens, it's a lot. I mean, 1%. Think about

00:44:35.809 --> 00:44:39.909
if we were at 5 .5, how we'd be dancing in the

00:44:39.909 --> 00:44:44.269
street. So we don't celebrate 7 .5 to 6 .5, we

00:44:44.269 --> 00:44:47.130
should be. That's a huge difference. I mean,

00:44:47.210 --> 00:44:50.329
you look at a $700 ,000 loan amount, 1 % of that's

00:44:50.329 --> 00:44:55.590
$7 ,000 a year. It's an extra $600 a month. Just

00:44:55.590 --> 00:44:58.889
from seven and a half to six and a half. Of course,

00:44:59.010 --> 00:45:00.510
that same logic applies from six and a half to

00:45:00.510 --> 00:45:02.889
five and a half. So I get it. Where do you stop

00:45:02.889 --> 00:45:04.690
it? I just think we should maybe count our victories.

00:45:04.949 --> 00:45:07.510
And I get it. I think part of the problem is

00:45:07.510 --> 00:45:10.329
that when buyer's fuel rates are going down or

00:45:10.329 --> 00:45:13.579
trending down, they actually... freezes the market

00:45:13.579 --> 00:45:15.559
a little bit more, even though rates are better

00:45:15.559 --> 00:45:17.340
than they were six months ago or three months

00:45:17.340 --> 00:45:19.300
ago. But they feel like, well, if they've done

00:45:19.300 --> 00:45:20.559
a six and a half, I really want to go through

00:45:20.559 --> 00:45:22.099
all that and then have to refi again in a year

00:45:22.099 --> 00:45:26.519
anyway. So it's, we're just sorting through it.

00:45:26.659 --> 00:45:28.679
I just think I don't have money. I don't have

00:45:28.679 --> 00:45:32.280
high expectations for 2025. I don't, I don't,

00:45:32.539 --> 00:45:35.139
we have a lot, even not a lot as a company, we

00:45:35.139 --> 00:45:37.719
have, we're going to go from one to four active,

00:45:38.139 --> 00:45:40.639
completely done, ready to go. Assuming none of

00:45:40.639 --> 00:45:42.360
them sell. I mean, we could end the year with

00:45:42.480 --> 00:45:45.500
four or $2 million homes, you know, it's not

00:45:45.500 --> 00:45:48.139
great feeling, but I've mentally I've grappled

00:45:48.139 --> 00:45:51.300
with it already. I mean, it's, you know, especially

00:45:51.300 --> 00:45:55.639
given how uncertain things have been, I think

00:45:55.639 --> 00:45:58.739
just kind of a wrap up and what is it? What has

00:45:58.739 --> 00:46:00.539
it been? What does it look like? I think a lot

00:46:00.539 --> 00:46:02.929
of people are sort of still. figuring it out

00:46:02.929 --> 00:46:04.750
and threading their way through this without

00:46:04.750 --> 00:46:07.250
a lot of understanding about actually what has

00:46:07.250 --> 00:46:10.170
transpired and what's sort of in the mix of where

00:46:10.170 --> 00:46:13.230
we're going. So big terms, you know, and I know

00:46:13.230 --> 00:46:15.849
we talk about it a lot, but the news and social

00:46:15.849 --> 00:46:18.150
media and the fear and the, you know, I mean,

00:46:18.349 --> 00:46:21.469
you just, to cut through all of that and hear

00:46:21.469 --> 00:46:23.949
a real perspective of boots on the ground, what's

00:46:23.949 --> 00:46:27.090
really happening out here is helpful. Right,

00:46:27.210 --> 00:46:30.750
right. I, you know, people are busy and they

00:46:30.750 --> 00:46:32.309
got their own lives. They have soccer practice,

00:46:32.349 --> 00:46:35.730
they have work, they have family, friends. They're,

00:46:35.730 --> 00:46:37.530
they're doing a temperature check. They're dipping

00:46:37.530 --> 00:46:39.510
the toe in and then not thinking about it again

00:46:39.510 --> 00:46:41.769
for a couple of months. So they're, that's why

00:46:41.769 --> 00:46:44.369
it just takes time. Once the news goes sour,

00:46:44.949 --> 00:46:47.050
it takes a long time for that faith to come back

00:46:47.050 --> 00:46:48.449
and the confidence to come back. A lot of times

00:46:48.449 --> 00:46:51.590
people have to feel it because as a broker, I've

00:46:51.590 --> 00:46:54.090
been through a couple of these cycles in 11 years

00:46:54.090 --> 00:46:57.599
and It takes a minute, right, for people to get

00:46:57.599 --> 00:46:59.940
that out of their head that, oh, the market's

00:46:59.940 --> 00:47:01.960
not going to crash because the strip is closed

00:47:01.960 --> 00:47:04.619
down and people are wearing masks. It just took

00:47:04.619 --> 00:47:06.539
a minute. And honestly, it really wasn't until

00:47:06.539 --> 00:47:09.079
the early part of 21 that we saw the biggest

00:47:09.079 --> 00:47:11.820
spike in buyer demand. And rates had been low

00:47:11.820 --> 00:47:16.079
for most of 2020. So we can't just blame the

00:47:16.079 --> 00:47:20.119
rates. And homes were sitting for, I mean, there

00:47:20.119 --> 00:47:21.440
were homes that were sitting for a long time

00:47:21.440 --> 00:47:24.659
in 2020. There was not, it was not, we remember

00:47:24.659 --> 00:47:28.460
it that way. It was not, it was, back half of

00:47:28.460 --> 00:47:30.400
the year you had to get better, but it wasn't

00:47:30.400 --> 00:47:32.800
a frenzy until 21, 22 and rates have been down

00:47:32.800 --> 00:47:34.340
for about eight, nine months. So it just shows

00:47:34.340 --> 00:47:38.179
you how long it takes to, for sentiments to change.

00:47:38.849 --> 00:47:42.510
For sure for sure or they're fearful of something

00:47:42.510 --> 00:47:44.269
else, you know, there's something in the political

00:47:44.269 --> 00:47:47.610
like Political climate or eggs prices have gone

00:47:47.610 --> 00:47:49.269
up or you know, I mean there are other things

00:47:49.269 --> 00:47:51.510
other factors that have happened in in our world

00:47:51.510 --> 00:47:54.710
in our universe in recent year that People are

00:47:54.710 --> 00:47:57.030
like, oh you can't can't afford a house now because

00:47:57.030 --> 00:47:59.030
the grocery stores and they're just kind of sitting

00:47:59.030 --> 00:48:02.110
on the sidelines making these you know, yeah,

00:48:02.190 --> 00:48:04.400
whatever they what they call that like a pre

00:48:04.400 --> 00:48:05.840
-conceived notion. Armchair quarterback, right?

00:48:07.280 --> 00:48:08.920
Armchair quarterback, exactly. All the plays

00:48:08.920 --> 00:48:10.940
that you're not really in the game on, but they're

00:48:10.940 --> 00:48:12.760
not willing to step into the game to even inform

00:48:12.760 --> 00:48:15.039
themselves entirely about what is exactly happening

00:48:15.039 --> 00:48:17.780
in this industry and how it's changing or what

00:48:17.780 --> 00:48:20.099
leverage they do have as a buyer, a bill seller,

00:48:20.300 --> 00:48:22.539
whatever. They don't think about the fundamentals

00:48:22.539 --> 00:48:24.619
of real estate as an asset class. It's just the

00:48:24.619 --> 00:48:27.139
bottom line is these are not cars. These aren't

00:48:27.139 --> 00:48:30.900
even precious metals. These are homes. I mean,

00:48:30.900 --> 00:48:35.380
they have 3D, they're 3D structures. They have

00:48:35.380 --> 00:48:37.719
emotion, they have feeling, they generate, they

00:48:37.719 --> 00:48:40.440
create the city. I mean, there's no city without

00:48:40.440 --> 00:48:45.239
houses. It's something so fundamental to restaurants

00:48:45.239 --> 00:48:50.099
can fall and fail. Tech companies can fail. But

00:48:50.099 --> 00:48:51.920
at the end of the day, real estate as an asset

00:48:51.920 --> 00:48:56.300
class is just not, it's just too resilient and

00:48:56.300 --> 00:49:00.019
it's too rigid. And it's got a, it's got not

00:49:00.019 --> 00:49:03.809
nearly enough elasticity in it. that would have,

00:49:03.809 --> 00:49:05.889
you know, this kind of instability that people

00:49:05.889 --> 00:49:08.570
associate with the stock market or cryptocurrency

00:49:08.570 --> 00:49:10.809
or whatever. Right. Even the car market. Those

00:49:10.809 --> 00:49:13.670
are all topics that have played into some of

00:49:13.670 --> 00:49:16.030
the narratives that we've heard, you know, that.

00:49:16.030 --> 00:49:18.650
Exactly. Like I said, the eggs. I mean, there's

00:49:18.650 --> 00:49:20.750
just random things that pop in, people just associate.

00:49:20.849 --> 00:49:23.110
It's not necessarily. And if you average it out

00:49:23.110 --> 00:49:26.849
or look out over the entire scheme of the real

00:49:26.849 --> 00:49:30.260
estate market, it's always... performed. It has,

00:49:30.320 --> 00:49:32.239
if you can hold on to it, if you can keep it,

00:49:32.619 --> 00:49:37.340
it has, you know, proven itself over time as

00:49:37.340 --> 00:49:40.639
a earning. A robust asset class because it can

00:49:40.639 --> 00:49:45.369
also be utilized. It has utility. It has Um,

00:49:45.449 --> 00:49:46.670
you can borrow against it. I mean, there's just

00:49:46.670 --> 00:49:49.030
so much that it has to offer. Of course it's

00:49:49.030 --> 00:49:51.289
the location. If you buy something in inner city

00:49:51.289 --> 00:49:53.789
Detroit, of course it's very, not every investment,

00:49:53.969 --> 00:49:55.489
real estate investment has been a great, has

00:49:55.489 --> 00:49:58.230
been a winner, but overall, if you're swimming

00:49:58.230 --> 00:50:00.349
with the current, right? And everyone's moving

00:50:00.349 --> 00:50:02.130
to the Sunbelt and everyone's moving to low tax

00:50:02.130 --> 00:50:04.409
burden states and everyone's moving to suburbia.

00:50:04.449 --> 00:50:06.289
I mean, let's face it. We did a walkability episode

00:50:06.289 --> 00:50:09.050
a couple months ago. It's not taking off. It

00:50:09.050 --> 00:50:11.409
just isn't. Suburbia is where it's at. If you're

00:50:11.409 --> 00:50:12.929
investing in Suburbia, you're not investing in

00:50:12.929 --> 00:50:16.130
these surfside condos in Miami that have had

00:50:16.130 --> 00:50:18.489
taken a beating. I mean, if you're swimming with

00:50:18.489 --> 00:50:20.170
the current and you're buying single -family

00:50:20.170 --> 00:50:22.030
residential or town homes, you know, something

00:50:22.030 --> 00:50:24.130
where you kind of control the earth you're on,

00:50:24.989 --> 00:50:28.429
generally, you're pretty safe. And it might not

00:50:28.429 --> 00:50:31.090
be the best. Exactly. It might not be the best.

00:50:31.090 --> 00:50:34.869
Maybe not always as an investment, but as a home,

00:50:35.090 --> 00:50:40.159
you can't go wrong. Well, good. All right. So

00:50:40.159 --> 00:50:43.239
that's what's going on in Q3. A lot, but not

00:50:43.239 --> 00:50:47.099
really? No. More just information. How do we

00:50:47.099 --> 00:50:49.579
feel? How do we think buyers feel? How do other

00:50:49.579 --> 00:50:51.980
agents feel? And how do other builders feel?

00:50:52.840 --> 00:50:56.019
It all kind of plays into it. It does, for sure.

00:50:56.269 --> 00:50:58.650
For sure. Well, thank you. I appreciate your

00:50:58.650 --> 00:51:01.409
time. Sounds good. And we'll be back soon. So

00:51:01.409 --> 00:51:03.750
you guys tune in again next time. We will look

00:51:03.750 --> 00:51:06.309
forward to seeing you then and we'll have more

00:51:06.309 --> 00:51:08.170
great topics, more great insight, more great

00:51:08.170 --> 00:51:10.829
information, and look forward to an opportunity

00:51:10.829 --> 00:51:13.329
to chatting with you then. Thanks. Bye -bye.

00:51:16.159 --> 00:51:18.199
Thanks for tuning in to the Press the Process

00:51:18.199 --> 00:51:21.280
Podcast. Make sure to follow us on Spotify to

00:51:21.280 --> 00:51:23.699
stay in the loop with the latest insights, project

00:51:23.699 --> 00:51:26.239
updates, and everything in between. See you next

00:51:26.239 --> 00:51:26.579
time.