Hey so welcome back to the podcast super excited to talk about the things that are on your mind, the most. Let me just give you some words. You ready interest rates, inventory levels inflation. Should i wait? Did i miss the market? Is the entire economy about to explode? Are we in a bubble, and oh yes, there's a war? So do i have your attention? That's what today's show's about and to help us get there to help us unpack all this stuff.

I've got clayton collins, ceo of housing, wire and sarah wheeler editor in chief, i'm stressed just having you on the show sarah just remembered so she's she's. Judging all of us, i failed every english class and can't write it all and i have three books. So, thank god for editors, so sarah give us some some context. Um so tell us your backstory.

How did you get here and, like briefly help us understand what does it mean to be the editor-in-chief at housing wire? Oh great yeah. I've been at housing wire for nine years, so i was there before clayton collins uh bought the company um great time being there. My background is in both newspaper and in marketing ad agencies, all of that kind of came together, and so i launched our sponsor content program back in the day and now all the content rolls up to me whether that's news sponsored podcast, video whatever it is. So it's fun so when like when you reach out to people, do people get nervous like oh they're, writing an article about me, potentially yeah.

Potentially i'm sure you got a lot of writers for that, but, like you're, the big boss, i do. I have a lot of writers for that they do a great job, and so what when i call it's, usually uh, more friendly love, it love it and then clayton. Just so, people have contacts, you know sarah sort of dropped, the bomb that you bought. This company, yeah um, you know we got to know each other through through a bunch of other transactions, give them just some context.

Where'd you come from and then like talk to us about what it's like to run: housing wire yeah. I'm a banker turned housing media guy, so i started in banking, uh, citigroup in new york, then world bank of canada at rbc. I fell in with a group that was doing a lot of m advisory of media transactions so, like i was learning like the media business on the the transaction side as many advisors do kind of got the itch to be on the other side of the table And said all right, it's time, let's go and find a business to acquire and operate grew up around the real estate mortgage world. So the the combination of like this, this subject matter this vertical and media just made perfect sense.

So we acquired housing wire in 2016., spent a lot of time, putting in place the right management, team and tech stack and processes and all the things that it takes to get a business moving in the right direction and uh and since then have been charging forward. On our our mission, that is all things housing, so we were trying to connect news and information across the entire housing vertical from real estate sales to home construction and new home sales. Home financing. Refi is all the housing economy news that housing professionals across the ecosystem need reverse mortgages, prop tech.

So today we operate four brands: housing wire, which covers real estate and mortgage financing world real trends, which is covering the real estate agent brokerage world uh reverse mortgage daily, and you guessed it reverse mortgages and finn ledger covering prop tech so like that is our there's. Our current fiefdom, covering the housing world but uh, have big ambitions of where we're going. It's so, first of all, congratulations right! It's so interesting the perspective that you guys receive right like because you talk to so like i try and talk to a lot of people. You guys talk to, i feel like even more people than i could imagine so.

Your world view of housing is very different, like when i talk to ivy zellman as an example or the guys at keeping current matters. Or you know even some of the people at inman right, like everybody, is getting all this and then we put their filter on and we put it out there. We want to talk today about these these issues that are really pressing for people. So if we just started the game, we say interest rates, the fed told us they were going to raise.

The rates. Did no one listen right, i mean they told us, they would do it three times and now we're like interest rates and what's going on we're like we were talking about this last year, so so give us the state of the union interest rates what's happening. What can we expect to happen, and obviously this is you know somewhat time stamped because we're sitting around april 19th? So so what do you see? What do we need to know help us yeah, so i the thing that i think is most important when you're talking about interest rates is historical context and if you look at the freddie mac freddie mac data, that's been probably the most reliable source of data for Tracking 30-year fixed-rate mortgages for the last three decades is. We are in a multi-decade downtrend in mortgage interest rates and while mike five percent, where we're kind of fluctuating around right now might feel expensive on a 30-year trajectory.

We are dirt cheap rates and if you talk to anybody who is in this market for more than one cycle hell for more than three years, they know that the housing industry can operate can thrive in a five percent market and that and that's challenging. But there's like that, we can take this conversation to buyer psychology and elender psychology and agent psychology and all the feelings that come when interest rates shoot up as fast as they did, and that's probably the most important thing to talk about here is not that rates Rose, nobody should have been surprised at that. It's the velocity at which they rose and how we went from. I think we're like the lows were in november december.

We were talking about like rates with a two handle on the front, and you know your smart home owners and smart uh loss got refined and got their clients refined, and these 2.65 2.8 we're not there anymore we're at a five percent market. Um still right, like it's, not the worst cost of capital ever, but it's the speed of three months of shooting up, and there was a period a few weeks ago, where we shot up 100 basis points or a whole. Her whole percentage point in a week and that's just that's - that's that's tough for a lot of people to stomach but uh historical context, yeah, please. I think the other thing is, you know the fact that the fed they did want us, but they said six more times.

I think that has freaked people out and really we don't know. If that's going to happen, i mean inflation is a bus. That's they're running after as hard as they can, but is it actually going to be six times we'll have to see? Yes, yes, but but the the market is already pricing in those six and i think that's an important like that's a key distinction like with home price appreciation index. They knew it was going to happen and they're still saying 2027.

All the way out prices are going up, yep, so yeah, like yeah. We go to home price home price appreciation, but i think it's like you have like people still scared. That rates are gon na keep moving at the velocity. They are which feels like a very unlikely scenario, considering that capital markets are already pricing in six rate hikes right now.

If the stock market keeps shooting up and the fed feels that, like their their purview on the market, should extend to kind of restrict infl inflation through um further interest rates increases, then it hey that could um. That could put some more upward pressure on rates, but right now it feels like we're pretty priced in and uh. I i'm kind of feeling some stability. What do you think? I also think that you know you have the opposite.

Uh. You have some other forces we're going to talk about war. At some point i mean working in in the other direction, so it's not clear to me inflation right now versus inflation in a month two months i mean it's a lot, there's a lot of uncertainty right now. I i'll just put in my two cents, because obviously you two are experts in this and live in it every single day.

I i look at the data and say: okay are showing still happening. Yes, they are right. People are still out looking at houses. There's no doubt like back in the summer of 2018, when it went from 3.9 to 4.9, like on a tuesday.

It was happening during one of my live events. Literally it was 3.9 4.9, i'm like whoa and everybody. The the reaction to 4.4.9 might as well been 490 right because we were so used to that three like we got semi used to the two, even though we knew it was kind of a false economy right, we just got used to it. What would you say to a home buy a friend of yours who's like oh, sarah, i don't know, did i miss it like? I just feel like i'm buying it.

It's high prices and high interest rate yep. No, so i have had this conversation with my kids. So i have all millennial, kids and they're. Like you know, some of them bought some i haven't bought they're like am, i am i missed it and from my perspective you know our lead analyst logan motashami is on every week and he writes for us and his feeling is that the demographics that are pushing The demand, yes are, are good all the way through 2024.

and in fact, right now you have all those people who are bidding on houses and losing. So i wonder if it even pushes out farther than that so and he's basing that on household formation during those years, you know millennials coming into their biggest home buying years, they they want to buy a home. So, even if it's five five and a half whatever it is - and so i've told them you should buy now, just like you should have bought last year, just like you should just you know you should buy now you have not missed out because, especially if you're Buying a home to live in that's the best way. You know right if you're buying it for an investment.

We could talk about different things. There, i'm not the expert, but if to live in yes, you should buy right. It's it's so hard when you're again, like everyone knows that i know that you know that, like that's good insight to be able to say to people any time, you could buy a house and hold it for long enough, you're gon na do great. I just remind people, are you? Are you selling people a house today as an investment? Are you selling people because they want to get in and out of it, really quick? If that's the case yeah, you probably missed the mark, but if you want to raise your family or start your life or you know begin your new career like this is definitely the time right.

But if you're, if you're buying as an investment, you have to look at the other side of the market and part of the market is hey, buy a house live in it, raise a family. Do whatever you're going to do. The other part is rent it out to someone else, who's going to do that and what are rent prices doing right now, right running, even faster than home prices. I take all my thoughts back on investment.

That's not what i meant. I was thinking short term like the short term yeah buying trying to you know, flip this thing and get in and out of it yeah right. You can certainly do that, but they may use hard money. They may use other levers to get it done, but i agree so so interest rates are going to be the way they are.

Are we going to see the sixes? I don't know so i think, if we do, it'll have to you'll have to look at the war in russia that that's what logan has said. So that's not my area of expertise, but he really feels like to get up that high um. Then then, some of those other things are going to have to drop. Otherwise you know the 10-year yield people are flying to safety.

Then you know right. Yeah all bets are off and i think the like just like we talk about home price appreciation and inventory and interest rates like it is a housing market and like a market has has two sides, and one of the sarah's mentioned logan and logan's, been in a Lonely camp, the last few months, as he's been calling himself team higher rates and uh talking about like you could get lynched for that. Exactly he's like kill that guy, yes, buy uh real estate agents, but if you are a homeowner who is sick of seeing 23 19 whatever like market, you live in home price appreciation. Higher interest rates are one tool that the fed has to put to control inflation and control home price appreciation, and so there is a a counter balance there and um there's other, like.

Obviously, we saw rates shoot up in the last few months and home price appreciation has kept running, but we have to see what kind of the tail of that is like. What is this recent increase in rates due to home price appreciation in q2 and q3, and it might be the control that this weird supply and demand imbalance like actually needs to bring the market back into balance? And so we talk about the housing market and all we all want like success and great market dynamics right now. But if you're in this for your career like like, i am, i want a healthy, sustainable, accessible housing market for decades to come and when you look at demographics, if the demographics support continued transactions, people buying their first home upgrading at some point relocating. That's healthy that if you can buy and upgrade and relocate when you want to we're in a market right now where people don't always have that flexibility, the obvious next step might be too expensive relocating for that job in california might be off the table.

Moving home to be a family in florida, wow real estate prices just doubled. So we have some dynamics right now that actually are unhealthy and can really get in the way of agents and loan officers and everybody else in industry who are trying to build careers of steady transaction volume that they can grow their market share by being great at Their job not just grow their in current year income, because the market flooded them with an awesome opportunity like it did for loan originators right in 2020.. It's so interesting. It's like what's going through my head, is a client of mine, paul in ottawa, ontario canada, who has this beautiful team ridge and and he's frustrated by you know, hey.

We take an 800 000 listing 2017 listed on thursday launch it on friday, 27 offers over the weekend final sales price, 1.1 million they've had like 43 year-over-year price appreciation in ottawa, ontario canada and you sit back and say that sure feels like a bubble is going To burst soon, so, even though it was at the bottom of my list, let's talk about that. What what's your sense of you know? Look at parts of california, parts of florida parts of everywhere, every nook and cranny boise, idaho, the president of my company, moved from there my he moved from boise to uh to dallas. He puts his house under contract. He closes 60 days later by the time he closes he's got more than half of the required 25 down payment for his loan already back in appreciation in 60 days.

That is crazy. That's insane! You know. From my perspective, one of the things we talked about is how do you, how do you define a bubble yeah, so a bubble is not just like things went down a little bit, a bubble is like it. It went down to where it started going up, which would be 2012 right right.

If right prices have to go back to 2012, you would have to see a 20 to 30 percent drop you'd have to, and why would people do that? Why would people sell their house at a loss when they have great financials that you know the homeowners right now? They have great balance sheets, they're, they're, doing great, there's no reason they. You know we have great jobs right now, so we don't have a job loss recession coming. We don't, you know. Is there a recession coming of course there's.

You know these are cycles, but there's no reason for people who are in great financial shape to sell what just to go and and rent at a high high price, but not every recession is a housing recession. We all have this like this recency bias in our seven eight nine ten has a lot of people look in their wounds, so they hear recession. That's all they experience, and this is not the case. They hear that the value of the properties they they currently own are going to go down.

They hear that, oh, i don't own anything now, so i'm going to wait until that bubble. Pops i'm going to buy again, just like my friends and family did during the last cycle. That is not what any of the data is pointing toward right now and what in like real estate's a local game. So we can talk about like boise or parts of california or or dallas, but we look at it at a national level.

What real the data is pointing supported by jobs, supported by supply, demand and balance supported by relatively still affordable interest rates. We have our home price appreciation, has set a new floor and like so. If we talk about a softening and home price appreciation, you're gon na see the people who don't cover this every day and don't talk about it every day and see a data irregularity and call it softness. If home price appreciation flattens out, it could be a really good thing for for the housing market, it does not mean that home values are, are popping or bursting or going down to um great housing, crisis kind of kind of levels, and i think that's like the Really important distinction here is: this housing market has has found a new floor.

Housing is more expensive than it was pre-covered um and the demographics and the economic data is supporting this this floor so like if home price, appreciation fluctuates, comes down, probably not a bad thing, but rest assured the people who don't know this market well are gon na See a slowing in home price appreciation and start start crying, but i also think you know it it's also. We need to talk about the loan products that people have. These are not arms they're, not under water. They they got 30-year fixed mortgages.

Yes, at 2.65 right, vanilla, they're, never leaving you want to brag about your interest rate until you die yeah, exactly and - and that does create that next problem of inventory like because if you sell your you're, a buyer who wants to sell it in this thing. But again, who wants to sell, you can have a crash, it's not a bubble. If you don't have a lot of people wanting to sell at a loss, doesn't it make you think if you're an agent today listening to this, you should be trying to get as much local data as you can, because we talked nationally right on this kind of Show where we're like here's what's happening, we're 1.5 million properties we're going to build this year in the us. What does that mean to me and wherever you are right, you got to get the local data.

You can get the local mortgage data to figure out how many homes in your marketplace have a mortgage. What percentage your homes have 90? You know loan to value 15 once you start getting the local data you're like wait, a minute like if the world hypothetically fell apart, we went into a recession you're still looking at 39 of all homes across the country. Don't even have a mortgage right right and then, when you look at the percentage that these little money down they've had so much appreciation since 2020, they went from three percent down now they're sitting at 20 right, so all of a sudden it makes you think. Maybe i got to get out of the hype exactly okay now, but you guys are in the media business there's some hype in the media business.

So i'm not busting your chops. You know like the old line headlines do more to terrify than they do to clarify right. So what's your prediction on the next 24 months, what's going to happen with inventory, what do you think's going to happen with speaking of hype? This is fun. Interest rates, inventory levels and inflation what's going to happen, i'll go i'll, go back to the the hype and the headlines comment a good meeting right there.

Yes, so i mean our mission at hw. Media is moving the housing market forward. I am, i do not we're not writing consumer headlines, we're not out there trying to generate facebook buzz. We don't need to like build our business off of clicks.

We need to build our business off of our most loyal subscribers readers atten event, attendees. Coming back to us, year after year after year, because we provide information, data, insights resources, community that helps them be more successful real estate professionals. Now, if anything, there's times where we need to like push down the hype and that's why i'm talking i'm forewarning, that home price appreciation data is going to come down and you are going to see from consumer focus big media outlets, saying that a bubble is popping. But that is not what the data is actually saying.

Yes, and so, like it's a it's a funny position to be in yeah, we love big traffic days. Everybody does you love to see when your podcast gets uh triple the um, the downloads as normal or three times as many page views or we've had days where you have 100 times the page views it's normal. That's that's great, but we're not writing headlines to attract the the search audience the whole, the prospective home buyers who are out there looking for a reason not to buy a home like we're talking about we're trying to inform industry professionals and give them the information they Need right, so that's your question, keeping it real so what next 24 months so just just for fun, because uh before we started this show we were talking about um the data around showings yep, so i did get uh february. Let's see now i got year over year right so, let's see showing index over the last five februaries.

So in february we had 271. I don't know how they're giving me this. Do you see that 271 thousand i'm guessing that's on a monthly basis right, because that would seem pretty small for a year or it's 271 million showings, which sounds like too many? That's a that's an index. I think it's writing off a hundred okay.

So 271. 000.. It's got to be 1.71 times the typical showing amount. So, but what we're seeing is we're.

Looking at 2019 showings we're down from 2018 2020, they spiked up a little bit: 160 20 21. They went from 160 to 240 and in 2022 they went to 270. yep wow. So so a lot of people are like.

I almost think, sometimes agents talk themselves into the negative hype right. They get concerned, oh my goodness, and then they start talking about that stuff. So again, going back to the original question: what do we forecast for the next couple years? What do you think's gon na happen, so i can speak to inventory right so inventory is content? Is gon na continue to be a problem? The the builders are not incentivized to build, especially when you still have these supply. You know change in issues problems they that does them no good and really they every every house they build becomes the competition for their for their next house.

So they, i think learned back in 2018 is when is when they kind of got burned by that. So they're not you know, they're not looking to build a whole lot. Then we just talked about the fact that you have a whole bunch of people who have a super low interest rate, and you know have all this home price appreciation. Why would they sell right? We already are seeing housing tenure now above 10 years.

It used to be like seven years now. I think it's closer to 15. and - and you can just see that that's probably gon na continue. So if you don't have new homes and a lot of your existing homes, people are disincentivized to get out of because of interest rates.

It's hard to see how inventory changes and because of that, i think you still have home price appreciation, because you have competition for the few houses that are there. You've got a ton of demand. You don't have enough inventory you're going to have home price appreciation. You look at the size of the millennial cohort compared to the boomers.

The millennial cohort is bigger than the boomers and the boomers like i. I made a statement and i'll i'll get lambasted for this, but i say the the boomers have to die for the millennials to buy like it sounds horrible, but like they're controlling all the inventory, including all the investment properties. So so you know we know we're down. 5 million properties do we have no hope for the future on builders.

I i hate to say i don't i don't think so. Yeah the housing market can't bet on on new home construction to to solve its problems. I think it um it's part of the solution, but it can't be. The only thing rely on and we also can't rely on the the boomers dying.

The average boomer is not even 65 yet exactly like, and they have they're all living to be longer and longer and longer and longer yeah and they value aging in place and they want to be close to grandkids they're, not all flocking to arizona and florida. So there's other dynamics that are like that: keep boomers in their homes longer the other thing that kind of compounds the the differences between boomers and uh millennials is that the average boomer bought in their mid-20s and now the millennials are buying at 32. and which is The reason we're in this wave right now more people turned age 32 in 2000 than any other year in history, the only other year that was beat was 2021.. The only other year that will be is 2022 again in 23 and again in 2024..

I i'm making the argument the same thing. I'm like people ask me like how's the market, i'm like okay, well, yeah, we have less inventory. Interest rates are up. We have very real inflation, it's the greatest hedge to buy real estate and then they go but who's gon na buy it.

I'm like this. What do you do between 22 and 42? You? Maybe you graduate college, you get a career, you start a family or you don't, but you buy something and it's usually a house and goods and surprise surprise. Uh gen z is a little bit smaller than us, millennials right, not much smaller, and the data that we're seeing right now is showing they value home ownership or potentially might buy even earlier than the millennial generation did. Since we a point to myself as a millennial, we're scarred by this experiences of our parents during 2008, 2009, 2010.

um, so dynamics fell a little bit different, but inventory looking at 1.7 months right now, like just all-time lows, i mean we look, we look back. We haven't seen low we haven't seen. Inventory has been on a steady decline since 2005., right and uh that just it changes the market for originators and real estate agents transactions are still happening. It's happening fast, 2005 or 2015.

uh. It started declining in 2000, yeah. Okay! Well and also got it because i was thinking about the obvious spike of the the horribleness of seven eight, nine ten but yeah you see the you see the spikes in there like there there's some there's some spikes and day in months on or the the monthly Inventory and end of market, but like the overall trend, is tightening and 1.7 months i mean that's national, so we know of all those markets where it's way less than a month, and you know it's even harder. I look at this and say um.

I googled a couple days ago because i was just curious uh how many homes are right now and it was like 386 000.. That's correct, right: nationwide, yeah nation, the whole country, u.s, 386 housing. You go back to a typical april spring market: 1.2 million 1.5. We we all hear these numbers, but when you hear that number, you think that's the entire country.

Now we all know there's a tremendous amount of off-market deals that are happening every single day. But the most important data point that i saw was kind of a green bar of old inventory carrying over into the next month right and we went all the way back, like you know, uh, beginning of the pandemic, and literally looked at like february over february february, And, what's what we're seeing now is like this much green, this much blue right, like all the old i i would jokingly say to my clients, all the crappy listings, you thought would never sell finally sold at a record price and you look like a star. The problem is now there's no more inventory yep, so so it doesn't sound like we have any answer for that. Coming soon.

No - and i i like, on a national level like going back to this, like 16-year trend too yeah, we're also like timing. This with a digital evolution in real estate and a time in 2005, where it took several weeks to get the word of a listing out there and you're still going through you're, still going through print and now, if you're, an avid realtor.com or zillow user you're. Probably screening for listings in the last 24 hours or last seven days right so once something makes it past eight 14 days, like a lot of the new eyeballs, aren't even aren't even seeing it right so, like i think, there's some there's some like demographic and supply And demand things driving this long-term trend of uh of lower inventory, moving from staying on market for month to month, but we're also, finally seeing some of the the benefits of technology that are making the real estate market more liquid. It's easier to buy and sell as hard as it feels as an agent as hard as it feels as a loan originator.

Well in originators. The timing to close alone has actually gotten worse over the last decade, so we're not like in a better place right but um. It's actually better. No, no pun intended better yeah.

Sorry better! Today's show is not brought to you by better visit housingwire.com for more details on tom's inside joke. Okay, we kind of covered inflation. So so, let's switch to a lot of consumers are saying agents are saying you know, i'm like. What's the biggest objection concern where you get, did i miss it? Should i wait now you talked about your own personal experience, but what does the data tell us? I think the data long strategic pause.

I think the data says that at least through 2024 and probably a few years after you're going to have huge demand. That's that's driving prices up. So if you wait today how how long do you have to wait right? Do you want to wait until 2027 and maybe it'll come down by then, but then do we have gen z coming through? So from my perspective, the demand is going to be there for the next five years. So you should.

You should do something now, if you can and did you miss, it is like well i mean we could all say that i missed buying in california. You know in the 80s dang it you know, but um. I should have invested in amazon right so, but to me to your point even and - and you can even still do investment deals now, it's not like you just if you're living there there's there's an industry calculus and there's a personal calculus as well and there's like Every potential home buyer has to calculate the advantages: the the intangible um benefits of ownership versus renting and then also the financial benefits of ownership versus renting. If we're talking about markets where rent price growth is going up 40 and that 23 home price appreciation doesn't sound, doesn't sound that bad right and so there's a there's, a math equation that can be done here to figure out if in the current year it makes More sense to to own a rent and then what's that projected benefit going out now i don't want to expect every homeowner and every agent to start running, excel models.

There's tools out there, where you can do very easy cost benefits, benefit analysis between between renting and owning and if the economic data that we're reporting on that we're talking to logan about we're talking to mike fratt and tony about the nba everybody at gnar, all the The chief economist at corelogic and first american, the data is supporting a a floor in home prices and, if home price appreciation slows that still gives this prospective homeowner a roof over the head in the school district they want to be in, and the stability in their Lives that most people are seeking when they buy a house now, if you're buying a house in march or whatever month, we in now april 2022, because that you think in april of 2023, that house is going to be worth 20 more and that's the only reason It makes sense is because you're getting 20 home price appreciation, that's a harder bet to make um hey, it could happen, but i'm not rooting for that outcome. 20. Home price appreciation again is gon na put the overall housing market in a really perilous position. I agree.

I agree it's so hard because we're you know we all own real estate this. This is our livelihood and you don't want to see anybody mentally cause themselves suffering right right. But but i i've been saying to people over and over again, do you need time or dating money right now and and what i'm finding is the very best agents team leaders broker owners loan officers? What they need is time because they're so busy, because they're not listening to the noise they're keeping their blinders. You know kind of up and they're just doing the work serving clients every single day.

The loan officers are less busy but they've the ones that were smart. That were really focused on agent relationships, they're busy right now, the other group's trying to figure it out. This group needs deals and money right, so so i'm just trying to tell people like hey if you're over here and you think it's hard right. This is not hard.

Try interest rates at 19. right, try! Interstate 11., try just you know, summer of 18., that little like we were starting to take up and then it it froze the market. Try selling real estate in the high end after 9, 11 right in new york city or los angeles or miami right like shoes, you're hard right. I think all the best people are actually birthed out of marketplaces like this.

When there's uncertainty, the vast majority of people that aren't as committed right, they're kind of riding the wave start to pull back and that's where everybody else can jump in and really make a difference. Yeah. What are your thoughts on that? That's the difference between the professionals and the passerby. Like our theme for housing wire last year, 2021 was pivot to purchase.

We were calling that in january and anybody that listened um, not just us like everybody out there, every every mortgage professional that has been through a single cycle, two or three cycles. They really know. What's going on even through a single cycle, you understand when you focus on purchase and that time, it's all the time you always always focus on purchase. You always get close to your real estate partners.

You always try to get close to homeowners and your past clients from referral, business and return business, and it's the people who forgot that or came into the industry in a refi cycle. They'll get flushed out and hey. Maybe that's fine, maybe it's better, for maybe it's better for the industry hate to say that, but like it's um, it's a dynamic, that's existed for for decades. I have a slide that i show a lot from october of last year.

That was the study of all mlss across the country and i'm i'm about to get the new slide. So, if you're listening, i want that new slide, which is the first quarter for the us across the board october, said 73.5 of all, the volume was done by 25 of the agents. Wow, that's 51 of all. The sales volume was done by 10 percent, so you've got 1.6 million agents and we know there's a bunch of agents that are not affiliated with nars, so call it two million call whatever you want.

That means it's the rich and the rest, and i think i'm expecting going into this first quarter at the end of that that that number's gon na be even tighter and greater that that the flight to quality for consumers is very real and those that just put Their head down and do the work seem to get more success and the ones that are sitting around the water cooler complaining. I mean we see that through america's best rankings, real trans national media partnered, with with you on there and that not gon na like like blurt out all the early give all the early stats we'll do a whole live show on that yeah we're uh. We have the 2021 data in we're doing our analysis now preparing to announce america's best in in june and uh. It's pretty telling that these um these.

We clicked that on about the top one percent, one and a half percent of agents, but we're getting a majority of the transaction data that happens in the country so like you're, seeing this massive scale come from top producers. That's that's we're not just talking about, like the coastal top producers, we're talking about people who do volume in texas and it's it's interesting one of my clients. In 2020 he and his wife and their team team ridge right did 864 transactions in 2020 did 3025. The next year, wow like like we're talking like mon, but but again it's that consumer flight to quality.

Who do you trust? You know? Who does the right thing puts out the right content, like, i think, the smart agent's gon na? Listen to this take five or six of your little micro clips and just put that into their instagram into their content. So they can say it wasn't me. Sarah wheeler said it right. That's pretty much! How i live.

My life excited to say: sarasota, sarasota yeah! I like that strategy, you know to your point about flight to quality in this kind of market. Are you going to trust somebody who is a hobbyist? Are you going to trust someone who's, no you're like listen? If i have any chance of of getting this offer done, i've got to have a professional i've got to have someone who knows what they're doing, and so i i do think you're going to have more shake out. Yeah yeah and that's it's hard because, like i i always say like i agree with you and then i say to myself: that's somebody's spouse, somebody's mom, it's somebody's aunt and somebody's kid um. But again you know the industry churns at two percent every month and but the numbers show like 87 of people that get in the business five years later out of the business um.

So i think that consumer flight to quality and your point around technology and better marketing, better educators, the view that are taking your content and putting that out there and doing like a video screen behind them of here's, a housing, wire ad or an ad. I should say a housing wire article right and literally saying here's my interpretation of that we're, seeing more and more of that that's who's, winning right now on a broader scale. So so, let's end with war and economy. On a high note on a high note, um, you know it's it's really hard to to know what that's going to look like.

I know over the last you know two years. One of the things that logan motors tommy has said is that the you know we had a first shock with kova 19 right and then we've adjusted, we've adjusted to it in you know, in the way that we consume goods and the way that we work and In every way - and so you wonder if you know i to your point - we're fighting wars all the time. This one is a very visible one and it has some real impacts on energy on supply chain. So so it is uh more impactful than maybe some of the things going on in the world, but at the same time we adjust so to me it's a it's a short term, even if the war goes on, we will learn how to do this within the War, that's that's my take the tragedy.

Is we got used to it in every other war? It is sad right. It's terrible yeah. I hope for the person, if you're just listening, like the frown on my face, like it's just it's just ugh right like really yeah um but then again like having friends in ukraine and having friends in russia, like you, just hate to see that suffering at scale And now it's it's, it's not a war on cnn, it's a war on tick! Tock! Absolutely it's like you see it everywhere. You go there's just this real content, so i think it.

It creates just a layer of sort of black cloud for some people like we. Finally, got the layer of covid off, especially today, right like you, can get on airplanes now with no more masks right, which is exciting. But now there's like this new layer, and i think it just creates more uncertainty for people. So they're not trying to be a buzzkill here.

We can equate that like uncertainty to sentiment - and that's where i think probably the most important thing to talk about - is like the global um economic stage impact on the u.s housing market. A big part of that is driven by sentiment, so we talked about homebuilders a little bit earlier right. I had rick placios from john burns on the housing news podcast last week and the march homebuilders sentiment survey that john burns has been doing for 13 or 14 years kind of like the the bellwether for for home builders. Um massive drop off in sentiment in march from from february, primarily driven by by two factors: um we're primarily predicted to be two factors: there's a third in there, so one supply chain, um, the global economy, the global uh stage is, is messing up supply chains and Obviously, like this, like the bigger concern, is the impact it's having on the citizens of ukraine right, but there's the the supply chain impacts are large and far reaching and those supply chain problems began long before this ukrainian conflict to start with so supply chain issues are Huge that flows through to higher materials cost labor, so the labor market is incredibly healthy.

We're, like three point, seven three point: eight percent under four percent unemployment. I call on that number: let's go for it! Okay. I was listening to this podcast with a woman who's. Uh she was like one of the great advocates of the early days of women coding and she was so now.

Her new thing is like. During the pandemic, 11 million women walked out of the workplace to take care of their husbands, their kids, their lives and decided. Hey i'm out so so i hear these large chunks of numbers and i haven't heard them come back so when i hear that like 3.7, even like, i don't care obama, trump, ding, ding, ring-a-ding, name the lunacy right. They always talk about these numbers, but there's that giant group of people that have just checked out that opted out of the workforce right.

So so i hear you and i'm not calling you know bs on you, i'm just saying i hear those numbers and i'm like. I don't know it's hard to say i mean job openings. We have 11 million job openings, i know 11 million, so you have to i feel like i have all those. Yes, yes, us too, and and so you go, you know if you have opted out for different reasons.

Have those reasons change and now you're opting back in right sounds like something we should look at or or not opting back in and then then the number is real, but but ultimately like wage growth is happening right now, because of inflation, inflation and because of low Unemployment now, if people who opted out of the job market during covid, decide to come back in, maybe that will put some uh pressure on the the wage growth and we'll see wages, kind of return to a more normal level. But when you talk to people in the home building industry, the wage stories are are insane right and like like, like essentially like doubling the cost of labor in in some markets, for certain trades and and that puts a lot of pressure on new home prices. And it puts a lot of pressure on builder sentiment, so i mentioned supply chain, i mentioned uh, uh wages and then interest rates, so builders got scared to death when they saw that five percent number right changed really quickly. So i was talking to rick about this anecdote in charlotte, there's a new home community with 51 houses and a wait list of a thousand prospective home buyers like that's.

That's insane 51 houses, a thousand people waiting um that uh that waste that weight list has shrunk as rates hit. Five percent, not just because potential home buyers got skittish or their sentiment weekend, but because they actually got qualified out due to affordability, so their their non-purchase-focused loan officer, qualified them for that house um at 500k. At three percent interest rates, the home price has now gone up to 550 or 600. interest rates are five percent, so their payment has just jumped a considerable amount and they can no longer afford it.

So homeowners or home builders are are scared of that dynamic and uh, and when home builders get scared, um they retreat and they bring less houses to market and they slow down and they control their pipes. Like sarah mentioned earlier, every new house they bring to market is the the last one's competition if it hasn't sold. Yet it also helps set new floors. So if you're building uh homes in a 51 home community - and you can benefit from the last house having more pressure on it, so it sells it three percent higher the next one sells it three percent higher and three percent higher you get to the squadron release Plan a plan b plan b right yeah.

They know what they're doing but sentiment matters so um. We have what's happening on the global stage, impacting consumer sentiment. We have and fannie mae just did a study that came out in the last week and i think they're seeing um, there's they're, seeing consumers believe that their housing is becoming less affordable and more difficult to find so they're just opting out of their their search um. But we still have this supply demand imbalance that um is weighted toward the demand side.

So even as some consumers prospective home buyers, prospective trade up, buyers may opt out or may sit on the sidelines. The demand imbalance still sits there. So it's uh, you see weakening in metrics, but the imbalance still persists. That should drive continued health and appreciation yeah.

You know i um, i was talking to ryan lundqvist he's an appraiser in sacramento, which is a huge hot housing market, and you know he had. He had um metrics through march about you know our homes being sold above or below listing. Actually in march they they sold uh above listing more than they did in january and february, either at or above up to 25 more but okay, that was march right. So, even so long ago, right, but even in the last couple of weeks, he said that you know what base what what people are telling him.

What he's seeing as an appraiser is that um you, you still have really strong bids, but instead of like 15. Maybe you have 10. right, but listen i mean that's still incredibly strong ten is ten. Five is five.

Two is better than none right. Two is better than one we're gon na have a lot of good things to talk about the gathering of eagles. I can't wait. Yeah, we're uh we're heading out to um to colorado, springs to the to the broadmoor, we're inviting uh mr tom ferry to stage so tom's gon na be joining us with this group of real estate brokerage ceos and you and you've used team ridge a few times.

Maybe we need more team ridge leaders to join us at the gathering. I would argue, especially for all my team, uh leaders, team merch is just broker broker team versus traditional broker and then all the teams that are out there if you're watching this, you should absolutely join us. I will be there um. This is one of those conferences that i share with people that and i'm a mainstage speaker, so i i say this like with the most respect, even for myself, it's not about who's on stage.

It is about who's in that room, yeah right, it's! It's! The industry, movers and shakers on the mortgage side on the real estate side, like i kind of plan my experience at gathering is like who do i need a meeting with who do i want to sit down with and who have? I just not seen in forever that i just want to say: hey, you know, we've known each other for 25 years and for the last two years we haven't seen each other anywhere, except maybe a zoom meeting. So i'm excited is there a room? If somebody wants to sign up and go to this yeah, there is so yeah. You can visit real trends and check out the events. Tab um, steve murray, started this event a couple decades ago, bringing in the movers and shakers of the real estate industry for for a lot longer than i've been part of it, but we're thrilled to carry forward the the gathering torch and bring together people and people.

People love this media, this gathering, they love it they're super loyal to it and we have time in the afternoon for them to do. The kind of networking deals happen. Mma has some ideas happening. People figure out more mortgage jv's have happened, that's right because core services deals so fun fact for the person that's listening.

I was looking at some 2018 data right, so in 2018, 87 billion dollars in top line revenue into the real estate brokerage industry called gross commission income right core services - 1.87 trillion dollars. Let me say that to you again, one point: eight seven trillion dollars into mortgage title escrow like all the different other services um. So it is interesting to watch the teams and the team ridges and the indie brokers finally realize that over the last decade and race into these deals. So i know a lot of that.

Stuff's happening there too, and that's just a fun fact for everybody to pay attention to absolutely i mean we just we just wrote a story last week or the week before about about a brokerage that their whole model is they don't make money on on the real Estate side they make money on the title side: yeah, that's one of tracy's stories right and it was uh, no samson properties um. I think matt wrote it up, but yeah yeah. They worked out together yet, but definitely like hit on the theme of like 100 commission model, but the the brokerage is biting my tongue right now. But yes, there's a model for everybody.

I know, but no but hey not not advocating it profiling. Yet so yeah check check it out on real trends. You got to get a feel for what someone trying to trying to mix it up is doing. You can even argue like southern california, because the commissions are so high, like i, if someone's like, hey, i'm starting a real estate brokerage in southern california.

Like do you underscore company? Do you have part of the title company? Because if you don't you're already dead right so so i think that's interesting. What is the agent site you guys have once more sort of agent-centric in terms of content so, like we open house so open house? Is our newsletter focused on agents so yeah? So if you're, if you're on real trends, you can subscribe to two newsletters one broker source, that's more focused on like the broker, the team ridge leader, the team leader and open house, which is kind of like agent-focused and like broader housing market information. I think open house is a lot of those like tidbits repurpose and into content to educate the consumer. I agree.

We went from war and uncertainty and bad sentiment amongst builders and to open house and come to a conference okay, so this has been super fun guys. We covered a lot of ground um. What i find with my listeners is: they have a tendency to listen longer right, whether it's on youtube or podcast, whatever it is um they take a lot of notes. They're, probably gon na have questions.

Is there a way to ever get access to the two of you putting you probably on the record here on the show sarah hw media.com send me a line. I answer lots of things and we're also very you know, on social. You can find us through editorial housingwire.com, sarah, with an h-s-a-r-a-h hw media, dot, com, okay and, and anyone can. His home number is yeah stay out of my inbox.

Hit me up on twitter, clayton, a collins, um or or linkedin um. My inmail is always open, so uh or find me at gathering of eagles i'll, be there in person and we can have a cocktail together but um last question: no good good, yeah clayton, a collins on twitter or clayton collins on linkedin um yeah. I'm there. I'm active okay, so is elon gon na buy twitter, yes or no um.

He is gon na. Take one more take one more swing and then some other sponsor is gon na come in and back it with a deal at ten percent more than he did. That's my pontification here on april 18, 19, 19., so yeah by the time the whole world's gon na be different um. I think yes, i'm gon na say yes, he's gon na.

Do it yeah, yeah man, we're gon na, have to debate this on the drive back. I'm just i'm looking at my nose right now like we have to start a new question called if you're the president of the united states and you can do any three things. What would you do, but i'm gon na save that for another show, because these two might have some real answers. We want to keep it fun all right.

So, thank you guys so much for being on the show, absolutely make sure you reach out follow them on twitter. If you got questions, sarah is a wealth of information, as you can tell reach out. Ask questions. Most importantly, thank you so much for watching the show like subscribe.

Leave a you know, leave a question. A comment hit the notification bell, all that good stuff i'll eventually get that script down, but thank you so much for watching we'll see you guys on the next show take care you.