And we're off hey so it's friday, august 21st, 2020 and welcome back to this week in housing. I'm tom ferry super excited that you're with us this morning. As always, it's a live show here on facebook. So we're just going to wait a couple minutes and let everybody you know, get themselves organized and on to the show, but let's go and introduce our panelists uh as always uh the man of the hour.

Who brings us all this incredible data he and his team at kcm uh, so david good morning, good morning tom it's exciting to be here on i mean you just said the 21st of august i'd look at my watch and confirm that uh. Yes, that's crazy! I think many of us uh around probably march 20th. I actually say this - i would say the first two weeks of march went really fast. The second two weeks of march of 2020, i felt took like a decade and a half to get through um, but i remember, as i, as i said to many of you.

You know they were part of our pivot program. Our coaching members, i said, hey, listen, we're running a marathon! Ladies and gentlemen. This is not a 40 yard or a 50 yard dash. We need to slow down and focus on doing the right thing, starting with taking care of you so uh, it's good to see.

Everybody healthy and moving forward, so let's do some more introductions: uh coach, yvonne coming in from standpoint idaho, good morning, uh good morning coach. What's the good word in standpoint, i think we lost your audience there. We go well it's a lovely day up here in north, idaho and uh. Yeah action is happening everywhere and uh after this i'm gon na go golfing.

I love it well. We're gon na show a slide today that uh that i believe idaho is the only state in the u.s where affordability hasn't gotten better, because everybody i know from california is moving up there, so congrats hope you're selling a bunch they're coming from everywhere. It's crazy yeah! I'm seeing i'm seeing the same exact thing so and also we have uh coach, elisa essig coming in from baltimore, so uh good morning coach. How are you good morning? How are you thanks for having me again, i appreciate it.

Yeah outstanding so give us a quick state of the union what's going on in baltimore uh. Well, it's it's the same as it's been. You know it would be april like this is what april feels like um when everybody's trying to close today, because it's august 21st, and they want to get in before school, starts before whatever before september happens, um. So yeah and interest rates are just keeping buyers coming into the market.

So yeah, it's really it's uh. I mean i know you know for three of us as coaches and for david because of your. You know your activity with so many ceos and all these companies and all these agents through kcm we're all seeing the same thing, and i know everybody out here watching live um. The phrase i keep using is we basically compressed six months of buying and selling activity into, maybe two and a half to three and if you're, our friends in manhattan or over the you know over the hudson and hoboken, it's coming right.

It's coming and it's coming quickly. It's summertime in new york, city, david, everybody's gone right, everybody's gone, but the best agents like the one i just talked to this morning, big shout out to josh rubin. He is listing properties like crazy because he knows his compression of time, which would be about nine months into probably two september october, so exciting times. So for my friends that are out there, it's 8 32..

Why don't we jump into the show um? You know: we've got a lot to cover today, uh we're going to talk about forbearance, we're going to talk about home prices, we're going to talk about affordability, we're going to talk about a little unemployment, we're going to talk about what the builders are saying which, by The way david, the slides on the builders - everyone - that's paying attention um. I shared that this morning with a client from new york city who was shocked because you know the hallucination is the builders aren't building and you know they're not going to build and they're very nervous and skeptical right. I want to remind all of you of a statement that both david has shared with me as well as uh, steve harney. When someone gives you a fact, a data point something about the market.

The question to always ask after you smile and listen with great empathy and understanding is. Can you show me the article where you read that i'd really like to see that right? Because we know that most people today they're giving their opinion about the market they're, giving you their fear their the way they view the world versus hey? Let's talk data and facts and math to keep us on the left brain, not on that crazy right, brain so, david with that said, you also were surrounded by three redheads. So good luck! Thank you. Thank you.

I need it, but let's talk about. Let's talk about unemployment numbers, you know they just came out again, so why don't we start there and if you want to take over with the slides and then the ladies and i will jump in and contribute our uh our thoughts and opinions as we go through All this yeah, absolutely you know let's, let's start this conversation around forbearance, you know it's something. We've been talking about over the weeks and unemployment came out this week and you made a point there, tom somebody may say you know this is going on or or this or i heard this there's a difference between what can be said and what somebody can hear Right, and so we always want to bring this - is what's going on in the market. So i'll share this with you, it's the updated.

You know graphic around the weekly unemployment. You know when i look at this. I go gosh you go back to to march and you just mentioned that tom uh, as you were, you know, starting you know in the time we've come here. Look at the you know the drop in unemployment.

Certainly it's it's high, but the trend there we're not back where we were and over time this. This is coming down now what's out in the news here this week, so we bumped up a little bit uh this past week and you know that may cause somebody to say hey. I hear unemployment's going back up and we're going to watch this and we're going to stay on top of it, but i i you know we don't see that trend right now. What we want to look for is a trend, no doubt that we saw a little bit less than a million uh filings the prior week this week about 1.1 that came out yesterday and so we're gon na watch that, but the trend there overall is unemployment is Dropping and um you know that conversation always uh, you know leads into what about people that are impacted, and we always say you know, there's one person that doesn't have a job that wants it.

We want to have it uh and get back to work, and you know luckily, during this time we've had this thing called forbearance that has been built uh, you know by uh, you know fannie and freddie in in, in an avoidance of some of the catastrophe back In 2008, and - and i want to start here, some of the concerns of forbearance versus the reality. So if we dial back the clock - and we look at what you know, forecasters were saying could be as much as 30 of individuals needing to apply for uh. You know for help in making their mortgage payment, or you know some type of assistance, because they've been impacted economically through their job. Whatever the case may be uh in this you know health crisis.

That's caused an economic downturn. Now we know the the peak was actually at 8.6 of mortgages that have had to go into active forbearance and we know currently we sit at about 7.21 uh percent of mortgages actively in forbearance. Now, if you follow kcm, you saw a blog. We we posted this week and maybe uh something on instagram or you know, different platforms of the number go ahead.

Tom david before you do, though, go back two slides for a second yep, and i want to get the ladies involved in this. I hear at least two to three times a week in a coaching session. A client will say to me: you know alicia, you know i've got this. I've got this buyer, i'm working with.

I've got this seller, i'm working with, and they're they're waiting for a sign right, they're waiting for, like you know, is it getting better? Is it getting worse before they move forward? So i we're going to cover a lot of data today, but i want to just i want to. I want to get both ladies opinion on this to me when i look at this, this is a sign right. This is a sign so alicia thoughts on that yvonne thoughts on that. Like you know, how do we help the agents that are watching right now that have that buyer that are like? Oh, i want to do it, but i'm just afraid.

What's going to happen, or is the world going to fall apart? You know the first quarter. I heard that one this morning everyone's going to get fired in the first quarter, no one's going to go back to the office, all hearsay ladies thoughts and opinions on that. First slide: go ahead, alicia um! So i'm i'm personally not hearing that. To be honest, so i'm not hearing that either in my local practice or amongst my coaching clients um.

When i look at this slide and when um we looked at or i looked at it last night, my my curiosity, because i always want to break it down just like you tom, is how does this slide and you guys may have covered this uh apply like I'm sorry: what's the word um, oh, the brain just stopped functioning. What does pre pandemic unemployment applications look like sure, and so how does? How does our current so we've come down from from the height and we're now hovering at this like one mil one 1.1 right? So what does it relate to so? Is this basically? Are we kind of back to normal, like? Is that what normal looks like or is? Is this not normal and, and i think if and when i would hear that i would want that statistic like this is actually no different than non-pandemic life like that's where we are. I agree and i would also add you have to look at your personal area and state, because this is now employment is now going to be very specific to location. I was just listening to the news.

Foot locker sent all of their employers. Employees back took them all off furlough, except for california. So you know when you start looking at those micro spots, you're going to start having difference of opinions in different locations so make sure you get hyper local yeah. I i agree 100 alicia.

I should have pointed out higher end. You know one to four million dollar price range people that are working to buy those houses. That's the objection that you know a few of these people have been getting like we're, just not certain like what's gon na happen, what's gon na happen with the election, i think that's gon na start here we're gon na start hearing more of that when we get About 30 days out of that election, maybe a little closer right now the biggest challenge we're seeing isn't about the fear of buying it's sphere selling. Where am i going to go? Yeah yep, we've been hey.

That's a major topic we'll be discussing at the summit for two and a half days. So, yes, um. Let me respond to nash's points, real quick, because you made a couple of really really good points. The first one is, there is a general fear that is not unfounded and there are people i'm going to call them on youtube and different things that are saying unemployment's about to go back up.

Here's the most direct answer. I can give you for that. No one is forecasting that are people saying it. There are some people saying it sure.

No one reputable is forecasting that so that's number one. Now we don't have a crystal ball. I can't give you tomorrow's news and we're gon na follow it, but for from a forecasting standpoint, that's not true now. The second point was a was a really good point is: where do we sit relative to pre-pandemic unemployment? Now those numbers bouncing around call it three to four hundred thousand a week.

We're at one point one: here's what i call that we're back in striking distance. Are we there we're not there yeah, but we're not it's six million jobs lost in a week or or you know, or some uh. You know former fashion there. So that's that that is the story.

There is like okay, now we're at a multiple of two, maybe three times where we were, which is gosh. When we look at what we've come through. That is great great news. The numbers don't justify the hallucination right yeah.

Well, there was a line uh david, you said two weeks ago and i think hopefully you can just recall real quick about headlines, basically creating one here, yeah online again, it came well. First of all, it's not my line. Let me clarify that it came from a new york times or a wall street journal article that said headlines do more to terrify than clarify yeah and that's the reality of the world that we live in today. Is the headlines designed to get viewership to get clicks to get people to look at it? It's not designed to give you any type of information.

I would argue world enough to know the enquirer magazine on the the check stand. You know that the headline was to get you to grab it and put it on there to check out. I can still see it. Michael jackson's, alien baby.

Yes, that's right all right! So so, let's go to this one, because i think this is also one of those as i flip it right off the table. The conversation around forbearance when everybody said, oh, my goodness, the whole world's going to end yeah. Let's go back to this because i want to hear from the ladies: how would you take this and tell the world or tell your instagram and facebook followers this story? I would just say that um it's interesting, because this slide and the next one um. You know it's number of mortgages in active, forbearance is leveling off and then the next slides talked about and we're going to get.

There talked about how they're being paid, though they're inactive forbearance, but the mortgages are being paid right. So you have to take all of that big picture in one piece to explain that to people that hey what they did. In my opinion, consumers went out and heard on the news. Yep stop making your payment yep and the banks will be all for it.

Okay, then the consumer went row that wasn't a good idea and uh now they've they've, two months, no payment. They went back and started making payments, but they've got to bring those two months current. So i think that's where we have to look at that and explain it that if, if that were to go away right now, these numbers would even be a lot less yeah alicia thoughts on that very similar to what yvonne said. It's it's about again that perception people only read the headlines right.

It's kind of like the the second subject line, they'll read the headline and the second subject line, um and, and then that's it. They think that they've gotten the whole thing um and so they're, like oh okay, i'm gon na i'm gon na not pay my mortgage payment or i'll go ahead and i'll apply. I think that this is still yet to see, because these forbearance, the actual forbearance agreements, are getting ready to expire, um or potentially be extended one way or the other, and i think that between the unemployment, like people will say, people don't buy a house to not Pay their mortgage, they just don't! No, so i think that they want to do. They want to do the right thing and so we'll see what happens in the next 30 days.

Um the forbearance stuff. Again, i'm not hearing a ton of that right now so um. It was all about the fear. You know um right the fear that initial forecast of 30, the initial forecast of of job losses and how it was going to annihilate businesses, and all of that now the reality has occurred and it it's not as bad as what the initial forecast was right david.

I i you know it was in my mind there, thomas what's the worst case scenario. What's the best case scenario, what's the likely scenario, those are those are situations we deal in every day, right, um and often times as these things happen, and, let's just let's, let's pause in time here and go back just a couple of months where people were saying This is as bad or worse than the great depression, and let's look at where we are today yeah yeah, so you were clicking right into that next slide before i. I drove us backwards for a couple minutes there. So the number of mortgages and active forbearance is leveling off correct.

So you know, if you look at this slide, you've seen it uh. You know certainly on social, if you're, following keeping current matters on instagram facebook different places. But we look at the beginning of july, where we were at about four and a half million uh mortgages across the country, and now we sit at uh 3.9 millions that are in mortgages that are in active forbearance. What does that mean? They've they've declared hey.

We we need forbearance now, we'll break that down, just like it was mentioned, and what are people doing there, but the the good news is: this is leveling off. If not, you know, certainly over the last two months dropping and we want to see that continue to drop. There is a provision by the cfpb. If you're still in trouble, you can uh.

You know continue or request uh to extend that forbearance talked about the significant equity in homes across the country today, if someone should uh need to, you know to liquidate their home seller home and the scenario there, and i think we all you know we even talked About that in the susie ormond uh, you know a conversation that we had and and i'm not saying that as we go through the next 12 months, there aren't going to be foreclosures we're going to actually i'm the team's breaking down a lot of that right now. For what we deliver at the summit and really the you know, we're sitting at a point right now in this country that we're record low, uh foreclosures, because there's been a moratorium placed on foreclosures based on forbearance, and so a lot of that information is starting to Come out now, but i think it's compared to where we were it's it's favorable yeah and to be clear, david, there's foreclosures happening every day across the country, not right now, clearly because of the new regulations, but prior to this there was foreclosures every day right right. We just but when we hear foreclosure we go 2007, eight, nine, ten eleven hours, you know and everybody gets into a state of panic, but remember like it was happening in 2004, when the market was screaming hot. There were still agents that we work with that were getting foreclosure listings, yeah yep.

No, absolutely it's always that there's always divorce, there's, always job loss, there's always death, there's always kinds of things that these happen and the foreclosure market is consistent. I mean i've been in that world since 1994 and it just it just goes. You know the reo agents that have those accounts. They get them every year, all year, long they're, just not in large numbers and people have to not think so negatively towards that that uh topic yeah yeah.

I think it's a great point. You know i flipped the slide here to just show just another uh reaffirmation of that. The percentages of mortgages that are in forbearance is uh decreasing as well over the months. You can see it there if we look at that as a line graph right here.

This is very interesting. You see that fannie freddie ginny those deals are dipping down the one. That's kind of kind of plateaued there's is labeled private label. Okay, so think about these, as you know, in our business typically is referred to as a non-qm.

It's somebody that doesn't fit the box. This is not you know old, alt, a or subprime, or things like that, and you know typically in a a private label - and this is not true of every one of them, but but there's much uh oftentimes a much more fiscally literate person in that that's uh. You know managing debt versus incurring debt, and you know i think about that, a lot of times and they they maybe entered forbearance in the federal government or whoever the the servicer was said. You want to pay now or later and they said well pay later.

You know um and so we're starting to track this by. You know the type of loan and, what's going on there, so that we have a big uh. You know a complete picture there, but the point that that was made earlier is that more than a million households in forbearance here, you see from ds news. It was published just two days ago in forbearance are still paying their mortgage that comes from nba, and black knight that shown about a quarter of households in active forbearance are still making their mortgage payment so got about four four million across the country.

A million of those are uh still making their payment and are on time, and the the the others are in some form of you know. Maybe they've missed multiple payments, maybe they've missed a portion of those payments uh and you know in some form of of uh. You know forbearance relative to that, so we're going to stay on top of this and continue to watch it, but it's very good news relative to what we you know where we started uh. In this conversation, i think also on that private label.

People have to remember those include jumbo loans and a lot of people in the jumbo market. They are uh company owners, ceos of companies, they do it strategically yeah. So there are certain things that you have to take into consideration on those private label loans as well. Yeah, so really quick from the audience.

I'd like to i'd like to just ask everybody a question: when you hear all these numbers and these slides and these opinions, i want to know from you in the comments. How do you see yourself educating people on the facts? The data these you know these talking points that we're discussing i want to just. I want to see it in the comments. Let your marketing mind work for a minute.

It doesn't have to be perfect. Just give us. How do you see you know like literally today, yvonne i'm on a call with josh rubin, and i said okay, so your client told you that in new york city, everyone's going to lose their job in the first quarter, and i just read him all of these Slides and he's like, can you send me a copy those right, because i'm going to make a video on that now? Josh is a very successful agent in new york city. My friends, you know 140 150 transactions.

You know a couple hundred million dollars in volume, so he just said: i'm just going to take that stuff and just start posting it everywhere. I want to know from all of you right in the comments. How are you going to use this right? So i want to see it in the comments and then david: let's go right into prices, while they're, while they're bringing in their comments here absolutely so i want to start the pricing conversation off of this. This was a you know.

Point we made last week. I brought the actual quote here from the black knight study that was published by mortgage news daily says this. Those shopping for a home can afford 10 percent more home than they could have a year ago, while keeping their monthly payment unchanged. This translates into nearly 32 000 more in buying power.

That's the story of the market that we're in right now and tom. You and i talked about it last night of just looking at this and going. This is the message we have to get out there. This is what is: is the substance of today's market.

Ladies, when you uh, when you read that what goes on in your marketing minds so much, i mean i'm sitting here right now and i've got an app on my phone to figure out what payments are and i plugged in a conventional mortgage of five percent down. Uh 350 000 average sales price out there and at two and a half percent interest it's about nineteen hundred dollars, and that includes your taxes and insurance, um, california, taxes and insurance and at five percent interest. It goes up to twenty five hundred dollars. So it's a thou, it's it's! It's! It's five! Six hundred dollars difference to get three hundred.

Fifty thousand dollar house i mean, and that just goes across the board. The buying power is magical right now it's ridiculous um and you know you have to get that message out. You have to tell people um and then the people that are sitting there going i'm gon na wait for my rate to go to one and a half. I'm like are you serious? This is like free money and you need to take advantage now, because you can't time that market, you don't know, what's going to happen two months from now, that rate could go to six tomorrow.

I've watched it happen many times, uh, hey. How about last uh july and august, when it went from like in the threes to five and the whole world went, i almost almost gave it into a mini recession. Yep yeah, i mean you know i i did a lot of just reading this morning. You know inflation comes out next week, pce and that's going to be a number that that is going to be looked at and you know we've seen in this business as the economy gets.

Better rates are going back up, i mean we're, seeing people are saying they could go down, they can go back up. We don't have a crystal ball on that, but typically that's what happens in our business. Is we look back and we're like hey, remember a couple of weeks ago, when we looked really really good alicia? What about you when you see this slide? What goes through your marketing mind? How could your buyer's agents use this information to get either people off the fence or find those renters that have always dreamed of owning a home? What goes through your mind? So you know we. We talked about this um before our little call and - and i i had a current renter um - that's i think, being entrenched in the market right now is why we're here you know, and so this buyer was like.

Well, i'm renting right now and i don't know i'm really overwhelmed by everything. That's happening, and you know i you know, because i'm sitting here going there's five offers on the property you saw it five minutes ago. I need you to tell me that you want to buy it or you don't you know, and then all the strategies that i've talked about. You know presenting her best foot forward and i said, look what's the worst thing that can happen.

You know the worst thing that can happen here is that in five years of owning this home, maybe the property doesn't appreciate as much as maybe it could. So you have to either you don't get any money or you maybe bring a little bit of money to the table. Well, when you do the calculation on rent for the next five years, you've, then you know pissed away 50 grand so owning is always better and when you have an additional 32 000 of buying power, the two things that go through my mind are great. Now you have a cushion to fight for the house that you really want yup, because you have to fight and um or you can, you can buy more or you can save you don't have to you know.

You thought you had your mortgage payment would be this because this is what you're paying in rent, but it's actually less. So you know, i said to her, i said, get a roommate, i'm like and then have them pay you and she's and, like now, you've got somebody else. I'm like that's way. I literally said this to her.

I said: can you ask a friend of yours to just deposit money into a savings account for you every month? She goes. No, i'm like you can when you get a roommate, if you buy a house, that's right, yeah that you know and that's the perfect it's it's the old uh marketing we used to do and then we would give it to the the land of the tenants as Well, rent versus own: it's a flyer, you create a flyer with it. You do a video now about it. What is the benefit of renting versus owning and vice versa? And right now you need to buy because the really the actual amount of money you're paying for a mortgage payment is actually less in some markets than what rents are right now, undoubtedly less undoubtedly, and the reverse of that is you have a seller that gets cold Feet about selling because they can't find their next home to buy uh every market.

I've ever been in, like this i've always told the seller. Do the sacrifice rent sell your house, put the money in the bank and be a renter for six months so that you have bargaining power, your money's in the bank? There's no contingency, you can go in and you can you can get whatever you want negotiate hard, and so you have to sacrifice in a rental in an apartment for a while. Do it it's worth it right now, yeah yeah! Even if you vrbo and get something for 30 to 45 or 60 days, so many more options nowadays than there was 10 years ago right. My assistant, ruby, just sold her place right cashed out made a fortune for her in the last like three years and she's.

Like i'm scrambling, i need to buy a house now and then i said slow down. Let's go find a one-bedroom rental. You know a short term and she's like oh okay, i'm like right now. Now you have all the cash jackson, the zen of real estate.

You know it's like when the game gets a little fast, slow, the pace down and take control that right love it let's show this next likes. I think this will be the slide. I mean there's a lot of great slides here, but this is going to be the slide that people are going to be posting over and over and over because because this one this one, we have to explain the next one punches people right in the face. Yeah.

Let me give you a little setup on that slide. It comes out of you know, a study from nara lawrence young said this. You know, and this is the reality of the market. Although housing prices have consistently moved higher when the favorable mortgage rates are factored in, an overall home purchase was more affordable in 2020.

Second quarter compared to one year ago, yeah so literally, what's happening in the market is we're we're rolling back time in in in the the research team built this slide the last time housing was this affordable by state, and you look across here and you go wow Lower rates have literally put us in a position where homes are as affordable as they were. You can see it by state some pre-1995, which is shocking. Some you mentioned idaho current, but but but affordability dominating uh. The story line there in uh in purchasing today yeah the one i was shocked - was maryland yeah alicia's, like not me, but that one shot can you know kentucky west virginia.

I totally understand um iowa. I was actually really shocked about. I mean iowa. If anybody's paying attention has become a pretty interesting tech hub, a lot of companies are going there and and making sort of affordability to live and work, etc.

Phenomenal arkansas louisiana, i wasn't shocked about, but your state right there we go idaho. The only orange one yvonne it's crazy yeah, it is um an incredible thing. That's going on over here, um from the southern part to the to the northern part in in and southern idaho. Boise is going to be your biggest hub um.

That's where most of the uh uh immigrants are moving into uh from every state and uh up here in northern idaho, we're 50 miles south of the canadian border and standpoint and uh. I'm getting calls on our lots on listings um from west virginia from florida from texas, all over colorado, uh utah they're, not just coming from california, and that's one of the things people need to understand. There's a large influx in from california into idaho um, mostly southern cal, southern idaho. However, it's really from all over and um and that's and it's been affordable and there's - remember idaho, as a state only has 1.7 million people as a state.

You know with four and a half million people in in san bernardino, riverside county. You know california, so when you start thinking about the numbers and then the expanse of property, now a lot of that land in idaho is national forestry and all of that, so an open space uh. So but there's a lot of room to grow, it'll run into problems. I mean we.

We know that already we're going to run into you know they just did a census. A guy came around knocked on the door yesterday and you know what are you doing and who lives here and all that because we're open for another uh seat in the political aspect so um. So that's gon na change, some dynamics too in idaho. So but it's here i mean, we've got people coming from everywhere and they're paying it.

It's the sad part. The people that have been here a long time are upset because the prices have increased so much um that it has priced a lot of people out of staying in their local area um. But that's happened in every state of the nation. Yeah hawaii used to be inexpensive, right, yeah right just for the record oceanfront hawaii.

When my when my stepmom lived there, it was very inexpensive alicia when you see this map like this. This to me is uh an entire video just going state by state, maybe region by region. What does it mean? Let's go back and say if you bought a 400 000 house this year versus a 400 000 house in 2017 in california. What do you think? I think i mean again: i love the fact that you know what this shows is that we're more affordable than you know, generally speaking, overall, like it's all pale blue right, so we're more affordable than we've been in in the last seven seven years.

You know whether that be interest rates or appreciation either way we're we're doing really well in in my great state of maryland. You know it's interesting um. I have been taught - and i see this in the up and down markets - that i've experienced over the last 20 years maryland - has a unique um kind of a slight insulation and the reason why is because we are right next to dc, so we actually have a Lot of dc suburbs that um that are maryland, and so the dc is always in business right, we're, never not in dc's, never not in business. So we have so many things that then filter out that we don't like.

We didn't experience it as severe as some other parts of the country in in 2007, 8, 9 and 10.. I mean we experienced it, but there are certain jurisdictions, more hyper local to yvonne's point that really didn't see the 30 drop they saw, maybe a 10 drop. So so the fact that we're more affordable than 1995 - it just kind of glosses over that we didn't really experience what everybody else experienced and so that interest rate at two per you know two points what it. What did my client get 2.625 or something crazy, low? Um, you know that is really paying a huge factor.

Um and we didn't go down, but we also haven't gone up and the buyers aren't they're, just not having it right now. They're they're fighting for it, but they're fighting for it more strategically than i think they did in 2005, they're just willy-nilly, offering god knows what, and i know in some jurisdictions across the whole country there that is kind of happening again, but the banks tightened restrictions. They didn't loosen restrictions, you know they, the appraisers. I can't tell you how many tidewaters and under appraisals i have to deal with on a regular basis, because they don't want this to happen again.

Oh, can we talk about appraisals right now? It is appraisals, the appraisal industry is intriguing me right now it is um in a market like north idaho. Now, california, we have a lot of appraisers out there, so you're we're still getting an appraisal, they're still fees or about 600 to 700 for an appraisal fee. On a normal residential home in north idaho, there are a handful of appraisers and there's so much stuff going on, whether it be refinances or purchases that there isn't enough appraisers and it's going out to bid for appraisals and rural areas are usually like that. However, we're talking about thousands of dollars for a residential home appraisal and um and buyers, the purchasers are putting a thousand dollar incentive on top of what the lender will pay.

The appraiser - and you know it's a very interesting. We had a our own personal commercial property. Being purchased by a um city and a transportation department, so kind of like eminent domain, that appraisal would normally be a commercial appraisal, would normally be about five six grand uh that appraiser got 17 000 for that commercial appraisal, and so it is nuts and it's it's A really interesting uh kind of undertone thing that people aren't talking about, but it is interesting to see that happening right now, i'm going to i'm going to go totally different direction with you. I am so fascinated by how ai automation and outsourcing, let's just call it asia, the three a's right, if you look at sort of the the consumer's desire for a better quality experience from portal search to move in move out the entire experience.

So much of this is going to be disrupted by the three a's right, but when i when i say this is funny my my 21 year old son, who said well dad that sounds like real estate, i just want to have a job soon. I was like well son. Let me give you a little perspective, there's what a thousand different skus of an automobile today. So if i'm in the, if i'm in the car market, there's a thousand different skus now what color i want and this and wheels and not that done, is it the right engine and you get it? I still got a test drive.

I said all that still requires a sales person and he's like well. Okay. That makes sense. I said now.

I give you that data point, because i want you to consider this. There's a hundred and twenty eight million homes in the us guess how many are similar. None right everyone's got it. I mean it the the only way we can really disrupt this, and i think the appraisals right they're in for a really good run.

They're gon na do really well because they're, the ones that have to come in and actually say. Let me explain the house, let me explain the story, let me tell you what it's all about. I understand you know this side of the street versus outside street this view versus that view. None of that none of that's going to go away right away.

My friends, unless every home in america suddenly was like a cookie cutter, three bedroom, two bath 1400 square foot with the same view, the same lot same pool so look at bob mccrane said, but the appraisals are all over the place. Yes and that's the other issue, and and so when you have that, then it takes a live person, a realtor to then negotiate how you're going to handle that you know it's an interesting phenomenon yeah. I i i appreciate you know i'm i'm in this weird generation. I'm i'm not much younger than you tom, because you had a birthday so you're enough you're in a new yeah, i'm in that 5-0 generation you're in a different decade.

Now, i'm still with a four um, but no i i i i straddled the old school and the new school, and i i'm all for technology and automation, um, but what i i still believe on so many levels, particularly now - and i touched on this - i think The last time we were um together is um. People's anxiety is super high and uh a robot's not going to fix that um and that's only going to be um taken care of by a human. By being able to say things like. What's the worst case scenario, what's the best case scenario, um only a human can do that and um.

You know i i can tell you right now. I have four closings scheduled for next week. In fact, my phone is blowing up right now with people who don't know that i'm on a national webinar like i need to attack you um, because there are problems and there and problems get solved by humans, not by computers. So um, i don't think you can safely tell your son that we're all going to still be employed but, as you've said, um the cream will rise to the top.

There will be no room for the agent who does not is not skilled and knowledgeable um and and treating this as a full profession when showing time was down yesterday a lot of the new it was really honestly kind of funny um. The new agents are like: what do you mean? How do how do i schedule? How do i schedule an appointment? Oh my god! Oh you have no idea. It was kind of funny it was like. Well, you have to pick up the phone and call the listing agent and they're like for all of them.

Oh, it's really fun. You should just always have an mls book sitting inside your office from like 35 years ago, just go here. There you go here's the homes for sale, yeah yeah, so you know. Yes, i think that um automation's great and i think that it's going to make us better, faster, stronger, um, more knowledgeable, but it still needs to be human.

Always we're going to talk about that. A lot by the way at the summit david, take, take us back into i'm looking at this javier uh vivas. I think i'm saying that right. This slide talk to us about this quote and i'm again we were just talking about housing, market recovery data.

Let's, let's jump into all of this yeah i mean this is this? Is the story right here? You know, as we look at that affordability all that what does that mean going forward, and so i think it's articulated uh well here uh from javier realtor.com says, with supply and demand moving in opposite directions. If you remember that that slide, we have we've used. Sellers are clearly gaining the upper hand in the market, as buyer, competition builds up and prices gain momentum going into the fall, and so what we see is all the things we've talked about going into. The fall is that you know pricing is gaining momentum and we've used this slide here, uh again from the housing market, recoveries nars recovery index - you see we're at 104.8 we've kind of broken through that baseline of february 1st, not quite the 106.5, where we started before The downturn but we're real real, close right now, we'll look at demand supply time on market all the factors that are that are brought there relative to the strength of the market as we go forward.

So you know i look at this and i go. Okay. Look. We've talked about this, you know for for many many weeks now we drop down we're, you know coming back up and - and i think certainly where we stand today on the 21st.

Like you, you started off the call with uh here in august, um i've seen the housing market recovering very well from everything that's gone on over the summer yeah. So i'm really glad we have this. This next discussion. We've got a few more slides for my friends out there watching um.

I teased you in the beginning, saying um. New construction is a really important leading indicator. Everyone needs to be paying attention to. I don't care if you're in new york, city or new south wales, you know sydney.

Australia, like new construction, really is a super important leading indicator. So david, you and the team put together a bunch of really interesting data points on this yeah. Let's jump right into it, i think this story here uh, you know the research team has done a wonderful job. Looking at what's going on with builders, you know and some very good information coming out in the last week that i'll share.

I think it's going to be really good to say. Okay, what do we do to you know to capitalize on this? So i'll start with zillow quote: uh page views for new construction listings increased dramatically during the spring and summer, with greater than 34 year-over-year growth over the last four months and we're up 81 in july. Shoppers continue to show interest in designing a new home talked about this, and you know the needs that are uh out there today that weren't there. You know four five six months ago and saying: okay, let's go out now we can afford it, we can buy the home that we want.

We've got increased, purchasing power and builders are no doubt feeling that. So as as we look forward from mba mortgage bankers, association, new home sales activity continue to rebound in july after a pandemic induced low point in april. In fact, applications for new home purchases with home builder affiliates were 39 higher than july of last year. So significant activity, not just in theory of you know, builders, are seeing this now.

What was uh published here is builder confident at the highest reading in the 35 year measure of that series that just came out so we're seeing the needs, change and folks going in and saying we want to do that. We're seeing activity happening and builders certainly reflect that uh in uh in the index, uh housing market index and their confidence uh on in the market, i mean you know, just just just an example of this of this drive back forward. Go ahead this this slide right here, i think, is critical for people to to really absorb the the little note that i just wrote down, if you guys can see me writing, is i want every one of you today to do an instagram story or just instagram Story because i want to be able to say yes or no, if everyone with me on that sort of yes, no polling, the question is: are you living in your dream? Work teach and live home now, because you look at what a lot. What are a lot of people doing right now right? Are you living in your dream? Work, teach and live home now and then the next page for me would be have you had any thoughts of making a change? Yes or no.

I challenge every one of you to do that today and just watch the responses. As i talk to just friends of mine that are saying you know, i i loved forever the quaintness of my little two-bedroom two-bath bungalow. You know in the village they're now like. I need a pool, i need a backyard, i need a home office and these are the same things.

You've been hearing for the last. You know 120 days right really more so the last 60 days, but you might want to just test that today and see the kind of response you're going to get back to that zillow slide. All these people dreaming and fantasizing about building their home trust me and they're, not thinking how do i get something smaller with less space right alicia i talked to. I had a coaching call with someone yesterday who is in the um new york state, so um about a two hour-ish commute from the city and um.

She said and she's like, i think, the third string choice of of suburbs for people who are trying to leave the verticals and so she's like well they're. They they were going to the hamptons and the hamptons are priced out and then they're going and she she mentioned a couple of other other um areas and she's like and now they're coming to us, because they're um, i guess their median prices, is like four to Six - and you know you can get a single-family home with all the stuff right. So all the things that you just mentioned live work, teach whatever um, plus the yard and uh, and they can't same thing. They cannot keep the inventory um.

They just can't, and you talk about idaho. You know we come up in idaho and you're, getting a two and a half to eight acre parcel. You know um and able to build your house on it and that property is maybe a hundred and twenty thousand dollars and uh. However, problem is, builders are quoting two years out for for the completion of the construction.

So it's you know, but it's it's everybody and retirees um they're, looking to build a house they're moving to arizona and they want new construction. You know um it's a very interesting thing with the contractors, and i think the builders right now are really happy that they didn't load up on inventory, because that's one of the reasons that they're they are happy right now, because they don't have the standing inventory like They did back when the market was hot before the crash and they ran into a lot of problems at that point, so uh one of the things i would tell you, though, the realtors out there need to be paying close attention, new construction and pending resale houses. You need to be talking to the new construction sales offices. Make friends with them, talk to them right.

I've got to build. Oh, is it? Yes, i've got a buyer that can slide right in no and it and it's funny david, you know i'm i feel like i'm taking over tom's job, but that's what you get when you ask for two three right: um david cue up that slide see you tom. I was already there, it was a great setup, great stuff. You know it's it's funny and you're you're.

You know this is exactly the slide. I i i literally got a call from a new home construction. Rep um either a text we we did a deal earlier in the spring. My people bought a house she loved me.

I have these great little trifolds that i created um for um. Basically, it's like a it's like a business card right. It's just that this is who i am. This is how i'm gon na sell your house kind of thing and uh, and i gave them to her and she literally was like.

I need more. I need more of those trifolds because i have so many people that want to buy these houses that don't have realtors she's like, and i love you because i know you're going to sell it you're not going to get in the way. It's super important. The flip side of that is, i think, part of the reason why the building is doing so well.

Is you have the whole you? You know how many television channels dedicated to you know flips and renovations, and new construction, and everybody wants the shiny new penny. That is also a tale of two markets. If there is a home that is in you know, and - and i even have a slide in my listing presentation that says top 10 pitfalls, one of the things is, if you think that that updates or renovations made greater than seven years ago are current, you are Sorely mistaken yeah um, i have two houses or three houses in my current neighborhood on the market they're just sitting stale because they look like they're straight out of 1988 um and they're asking a premium price. You can't ask that, but to get through to the current crop of homeowners that your house is dated, and people don't want, it is actually very, very difficult.

They just don't want to hear it. They have to sit on the market. If you look at the expired data, these homes, they get listed, come off, get listed, come off, sometimes it's three years with hundreds of thousands of dollars of price reductions before they finally figure out. This is actually what my home is worth and to that point, um realtors need to really up their game with the technology, because you can take a house, that's outdated, like that, and do some virtual staging photos and you get that out there, because now the buyer Can can now picture what it will look like and if you want to go a step further, get some get some contracts that says: here's what it'll cost you we've gotten some bids from some contractors.

Here's what it'll cost you to make this room, or this part of the house, look like this and you've got to give the ideas, because i, as a daughter of a builder married to a builder, been around the new construction industry in my entire life. People want to build a new house, but they don't really have any vision of what it will look like. You got to give him the vision david. Let's go to that builder confidence and we're almost uh we're almost near our time.

We got two important slides left here, so the one i'm looking at this builder confidence matches all-time high again based on record traffic. It's an important message right. So so this you know this message here is kind of a you know, the the text of what that graphic shows. You know: uh comes out of national home builders in a sign that housing continues to lead the economy forward, build our confidence in the market for newly built single-family home increased six points to 78 in august.

According to the latest uh national home builder wells, fargo housing market index and again it's the highest reading in the 35-year history series of that matching the record back in 1988. So i i think that message of you know, building relationships with builders. Right now is what we're, what we're talking about kind of going back to the slide that uh, that you were mentioning before that home builders are looking for um agents to be able to partner with to um. You know i'll, just read it here.

Builders are reportedly looking to build long-term relationships with real estate professionals and builders realize they need real estate pros to bring qualified home shoppers to the builders sales offices, as resale inventory remains. Tight agents are realizing. They need to build builders to give their buyers more options. So you know i'll, let you guys discuss that, but but really that idea about building relationships with builders and - and i think you gave a great example earlier of it - uh at least yeah in in in thinking about that.

How does that fit into my business yeah? Let's i mean let's talk, ladies just for a minute here, you know strategically. We have a lot of a lot of friends out there watching right now. What's the best way to approach the builder right or you know that maybe the person that's building, you know 10. 15 houses or three or four houses.

What do you think is the best way to approach that builder? You go look them up and and just talk to them go out and see them. Take them to lunch. Um you know, take lunch to them.