Hey everybody welcome on facebook to this week in housing, yes, new time same day, but different day from a couple weeks ago. So i'm really excited about today's show. I've been looking at all the information that david childress from kcm has shared with us and we're switching it up. I've been having coaches jump in and give us their perspective on the economy.

On the information we're sharing today from the east coast and the west coast, we have two team leaders of two extraordinary real estate agent practices. So let's do some quick introductions so starting with janelle garrinson from orange county. California welcome to the show janelle. Thank you.

So much for having me tom pleasure to be here um, i am janelle garrinson. I run a family real estate group, mostly in a north orange county area of orange county, california and um. We are a big business where we're at um, we'll do probably around 125 130 transactions this year so definitely been very innovative and chose to really look at pay, really close attention to the market. How it's ebbed and flowed.

Certainly these past six to eight months made a lot of different changes in our business to go along with that, so really happy to be here and share with all of you today, yes, and for those out there watching she's actually having a mom day today with Her, i am, and she snuck back in the office to share her insights with you, so janelle thank you and mr tom toole from uh from philadelphia. So so tom give me a little background. Who's tom toole give size your business a little scope sure. So my name's tom toole, i'm the team lead at the tom toole sales group.

We work the philadelphia and philadelphia suburban markets uh year to date. We've got about 120 25 million settlement, pending 332 transactions 331 right around there and we were the most restricted state in the country. Tom - and i talked about this like this - is, i think, there's a lot to be learned here from the data that you're going to see on this show, because i get these questions all the time we couldn't do anything and it was for about 60 days. So you know the perspective i got from from what tom had chaired and what david's been doing in kcm has been invaluable in moving the needle forward, once we were out of the real lockdown that we had with no in-person activities on on may 20th.

So i think it's an important distinction. You know for all the listeners around the world that are be checking in with us, live and then watching throughout the next few weeks. Tom help them understand. Like janelle, you know you called me early and said: hey, i got a friend in orange county and the local government, the whole thing's gon na shut down, and you were right on tommy.

You guys didn't reopen. Until i mean you couldn't go out and show a buyer or talk to a seller until may may 20th is when the restrictions got lifted, and this i felt like i was like on a political campaign and i am not political uh, but it was, and we Had talked about this, so yes, we had no in-person activities for 60 days and then they started to open the western side of the state because they had this traffic light but philadelphia and the greater philadelphia area where we work was still considered red. So we still couldn't do anything and if you didn't know what was going on in the market or about past economic crashes like 2008 or a lot of the kcm stats, where they talk about when housing prices went down when they went up, you know there's a Lot of folks they came out of the the shutdown and they were flat-footed and you know there was there was, but at the same time there was a lot of people ready to transact. So if you don't know, if you're not the knowledge broker - and i mean like understanding the economy, understanding where your premium price point starts, this is stuff that got our team through this and we're having our best year ever, despite no in-person activity for 60 days, and Some breakage and all the challenges people have gone through so all the more reason to understand the economy and not just work in the market.

I can't stress that enough. I mean that saved our butt here. Yeah love, it love it well again, really excited you guys are both with us today, david childers, keeping current matters. We've been doing this now for a long long time, so i think we should david, because everybody knows you, let's just jump right in, because we want to talk about today, the economy, some very interesting statistics around forbearance, and you guys created some slides that i requested So i'm really excited for people to see this and then we're going to talk about inventory.

My friends and i think most of you are sensing the same thing, i'm sensing. How it is right now is how it's going to be for a while. What are we going to do about it? How are we going to use this data to be the knowledge broker, as tom said, to be out there and active in the market, as janelle said so david? Let's talk about this overall, you know, let's do that and and tom you know, as you were talking uh tom toole. I was thinking about you know just it wasn't that long ago, right when no matter where you're at we were shut down, and so i want to give you a little perspective of the journey economically speaking, that we've been on uh over the last uh several months.

I'll share here - and this is a look here - you - you may remember - that if you've been watching this week in housing of total spending consumer spending as compared to january 1st, so you know we took this deep dive in april and you have kind of clawed our Way back to where most recently uh here in october, we're off 3.2 percent across the country in consumer spending very very positive. When we look at the economy and tom again, you talked about being shut down for 60 days there in pennsylvania to to go back to hey just you know. You know several months later being within striking distance of where we were in january. A very very good thing: uh for consumers, now there's some interesting data.

That's come out relative to the consumer. Experience that i want to share with you through this now as i share it, i don't want to certainly seem to be turning a blind eye to those that are that are challenged through this, because, no doubt there are. But when we look at the holistic consumer, their credit scenario has improved. The average u.s fico score across the country has risen uh in a recent wall street journal article.

We see that and - and there's some specific reasons for that. I want to point this out too. This is not people applying for home loans. This is not people that are, you know in the transaction right now, this is the average consumer has gotten stronger as we've gone through this now.

The interesting thing is: there's a specific reason for that and the specific reason is households during this time have used their stimulus checks by and large to pay down debt and save money. Two-Thirds of consumers using the stimulus to to pay down debt, save money uh about a third or 29. You see they're in orange, spent the money and use that on what they needed to to continue their household and uh, and you know make it through this, but but most folks used it to strengthen their financial uh situation. Now i think, as we look at that, go ahead, let me just stop for a second, so janelle, janelle and tom.

When you look at those first, three slides, you know as a as you know, two of the most successful agent and team leaders in the country. Arguably, in the world, when you see all of that, what goes through your mind from a marketing standpoint from a communication standpoint, you know every you know this one where you know the world just said: hey the world is over we're gon na die. You know, remember, remember, we're gon na have a w we're gon na have the nike swoosh we had like 15 different variations and, at the end of the day, every major economist said it's going to be it's going to be sharp and it's going to go back Up janelle, what does this make? You think? Well, i think, with regards to that slide and the other slide you know there was. There was a moment of a halt.

You know, and i think any time you have a moment of - halt in your life that causes you to truly re-evaluate everything that you are doing and thinking you go back and you have to come into mind as to what's truly important to you at the end Of the day, if you're looking at it and you're in that moment of oh my gosh, what if i lose my job? Oh my gosh! What if i can't pay my mortgage and you start going through and think well geez, do i need to go to starbucks every morning and get my five dollar coffee? Do i need to go, and you know, keep an open amazon account and just chi-ching the moment that i want to buy something. So i think it caused more a mental re-evaluation in people's minds as to not only how they were going to spend their time. Because of adjusting to kids and school schedules and everything how they were going to spend their money and truly what they were spending their money on and at the end of the day, if this happened again, are they prepared for it and if they're not, how do They get prepared for it right tom thoughts. Amazing observations number one by janelle there.

I love that um. What what i've seen happen. I can say on from a couple different perspectives as like: a parent with kids, seeing what that's like going back to school and then, as a local community agent, people are putting a lot more value on their homes. Now, that's where they're spending all of their time.

So if they want to make a move and they want to make a move to a property where you know, we've seen some people, they moved every two three four years, they're looking at making that move to a 20-year home and getting there a lot sooner because They don't like where they were locked down like if you had three kids and you're in a townhouse, you don't want to be there if you're stuck there 60 days. Like i mean that's what i saw happening more than anything and to janelle's point: people are living on budgets and realizing if they want that in their lives, they've got to pay off debt, so their score can go up, so they can qualify for a jumbo loan. If that's, where they're going, i mean jumbo loan 510. That probably does nothing in your market.

You know, i mean it does a little bit here so that sort of stuff people are a lot more housing conscious because they know hey. This is my only place. I can go, relax and hang out anymore and who knows when that's going to change right so before we jump back this david, i just want to give a shout out, so i see a bunch of people checking in. Let us know, first of all, for you.

If you're live with us right now on facebook, let me know where you're from and as always tag one or two friends, that you know that maybe have a negative perspective on the economy or a positive one, and you want to reinforce it, but maybe the negative One and if you're, watching this later and you're like, is that why my friend tagged me, you were tagged out of love right. We want you to do better, especially if you're in this business. We need you moving forward, powerfully and being the knowledge broker. So i want to i want to see in the comments: where are you from and tag a friend or two that might need to see this message later? Your broker a buddy, a mortgage partner, etc.

So david? I think this one is just fascinating yeah. I would have predicted that people's fico scores, because of you know the the overwhelming things that we hear about forbearance. I was waiting to see that number go down, even just because of the five and a half six million people that you know took advantage of forbearance and - and yet when i saw this i was blown away. I was absolutely blown away.

So, let's, let's jump back into the slides, because the next slide as an entrepreneur and a fan of entrepreneurs. This one blew me away and i need to i need to ask you about this one. So, let's go back into it absolutely so. This is a slide that uh that tom's talking about it shows business applications across the us and what you see here, the short answer is they've skyrocketed this year, and why is that? I think simply put you can say that this downturn is being defined by innovation and business is saying: hey, you know we want to go out and provide a product and service we're able to go and do something to serve people through this downturn.

I'm not saying there aren't businesses that aren't affected, but you know we've talked before if, if you're in the plexiglass business, gosh you're you're having a banner year, if you're in the tele-medicine business you're having a banner year, just like our business innovation, great entrepreneurs saying i See opportunity i'm going to start a business, i'm going to offer a service that meets the need of a consumer during this time and we're seeing that play out in real time. You know i clipped kind of a funny slide here to say it's the best time ever to get braces. You can see this this orthodontist here smith, uh smile at the world orthodontics put this out there. What do people not want to do when they get braces? They don't want people to see the their braces, you know and uh.

You know now that we have to wear masks it's the best time to get that nobody has to see that you have braces. So i think, entrepreneurially speaking tom we're seeing that spirit. You know alive and well and and folks starting businesses. Folks, you know doubling down and investments in businesses to to be able to meet needs in today's market.

I mean, i think you know all of us know as entrepreneurs. You know the great peter drucker said all businesses, innovation and marketing, but if you read deeper into most of the brands that we know today that we admire right, whether it's a facebook started in a recession, whether it is you know, netflix same thing, you could go Through the disney corporation apple, some of the biggest companies in the world started in absolute hardship because they saw a problem that they were able to solve. So i mean so tom when you see this, does it shock you? What does that make you think like? Should i have started a few more businesses? What's on your mind? Well, i i mean i was through this in 2008. Right like this isn't the first time i've been through something like this and that's when we first got connected, and i really you know i was selling real estate before, but i feel like i was born as an agent then, and you look at people have to Pivot now i mean look at some of the stocks that have risen like peloton stock is through the roof.

Um. That's one example: people aren't going to gyms anymore, so there's more of those companies that are looking for the at-home experience and there's a lot of tech disruption right now. So it makes a lot of sense because there's new business plans available that wouldn't have been viable in january or february 100 janelle. How about yourself i mean you have a lot of friends that are entrepreneurial.

When you see that i mean look at. That is a you know for my friends watching. That is a massive spike. I mean this is this is enormous.

What goes through your mind? Well, you know, i think i come from a little different perspective i mean being in california, there's, obviously a lot of other things of consideration of cost of living in the state of california. So, truly you know seeing those graphs don't utterly shock me, because we have a lot of people that are looking for opportunities to start their businesses or don't necessarily need to go into buildings anymore, that can be more mobile, um and that can take advantage of living Elsewhere or they're already at home, which let's face it if you're put in a totally different environment, if you're used to day in day out getting in a car commuting going to an office building getting in the office, doing your job coming home and then all of A sudden, that's completely blown up and now you're in your house, and you see how your house interacts daily with the changes. Of course, if you're a bright entrepreneur spirit, things are going to start popping. Your head of thinking well wait! If i'm here and i'm doing this and i'm having this difficulty, i'm sure there are other people, and so it's basically created this starting ground for all of these different great brains and thought processes to come up with solutions 100.

So so david to be interesting. To see, and i'm sure we can find the stats somewhere to actually see if we could break this down to see what are all the industries you know, is it all the typical ones or are we seeing some some new opportunities, some older opportunities re-emerging again, i Think we need to ask the team to get on that yeah. I think it's a good call, i think we're going to see it divine by by technology, certainly uh, but then a wide spread of businesses that are doing things differently. Again, i go back to the plexi glass business home improvement.

You know somebody told me the other day. Anybody with a pickup truck in their town is booked solid. You know uh people that need help with things, so a lot of businesses uh seeing this is a time where they're innovating they're growing they're doing things differently david. Do you see this as a business? As far as because i know this is happening - a lot where i'm at that because of the upheaval in the educational system right now, there's a lot of different groups getting put together and building basically small home school businesses to actually operate.

These cohorts. Sure i think there's a few things happening and i speak as a parent of three. You know. I think i think parents are trying to figure out.

How do we do it now. So i know in our area that there are cohorts of folks and even teachers that are helping people out now and doing tutoring and things like that um. You know some folks saying: hey we're gon na put our children in a different school. I think there are a lot of different things happening.

You know for uh, for those that um, you know are trying to figure out. How do we continue things on uh relative to? I know that that's a big business thing here that has has changed substantially is actually running an operation of small cohorts, not surprising yeah, yeah, yeah and - and i i think the you know - i'm not one of the thing you know the complete world's gon na do 180, but i think a lot of this is going to stick around. I think the parents are going to see there are different options or you know in a business. There is an opportunity to capitalize on this and back to your point, tom, some of the best businesses that we use today were created in the you know, the downturn of 2008, absolutely so so speaking of the downturn of 2008.

Let's talk about the housing market and real estate, specifically, i know forbearance and other factors are going to come into play. So, let's jump back into slides yeah. I know that housing market recovering index is going to be one that everybody needs to take this slide. Take it screenshot it post it do a video about it, put it in your email.

You need to scream it from the rooftops. My friends yeah and i before i i hop into those slides. I want to say one thing: we're gon na go through a couple of things here: we're gon na do an update really on our business, we're gon na talk about forbearance and i'm doing it for one specific reason. I get a lot of messages and i've talked to a lot of you about people that are out there right now on youtube and other places saying a crash is coming.

I don't know if anybody else on this call, or you know tom, even if folks, in the comments you know have seen that i'm gon na give you some information of just what experts are saying to be able to have that conversation when it comes up. Okay, so as we start to look at this, you know the housing market recovery index, we started tracking this a couple of months ago, it's put out by nar. It looks at four components of our business demand, supply price and time on market. Where are we at today? We are well above where we were in the february downturn - 11.8 percent versus 106.5 uh on february 1st, and you know we kind of kind of dipped off the map and uh in march.

And so, when we look at our our business across the country, very, very strong relative to the components that are measured here now, i i think, as we look at, that we go okay. We sense that in our in our local market we sense that, and what we're doing back to tom toole to your point home has become more important to people in the last six months than i'm going to argue before the pandemic. There are things that we think about now that we didn't think about. Then you know and weren't concerned now.

The interesting thing is we start to think about: okay, what's coming uh in the next 12 months. So let's look at this uh. What experts are saying right now about projections for home price appreciation? Some big moves here recently, since we last talked about this zillow coming in saying, we think we're gon na see seven percent appreciation, uh ivy zellman tom, who you just had on a podcast great podcast. Five point: nine, almost six percent appreciation very bullish.

I got ta jump in and interrupt because if you remember guys right as the pandemic was happening, zillow came out and said: minus three on home appreciation and they've gone a 10 point swing. They were bullish before. But this is new. This is just from two weeks ago.

This is new information, they're, saying seven percent appreciations for someone like janelle in california. That means 10 12 13, depending upon your price point: double digit appreciation, but first janelle. When you see these two slides, how do you, how do you see your team and tom i've been asking the same question? How are you going to get the word out on this and not just sound like a boastful sales person, but the educators, the the market, leaders that you are? How do you see taking those data points and actually getting them into play in the market? Well, i think it's important for people to understand why those appreciations exist right now right because, if you look at it from truly an analytical perspective, a financial perspective. Not all of these points line up to make this make sense, but it makes sense because the fed is supplying this scenario right.

So i think we need to counsel appropriately to say all of this information, and these numbers make perfect sense and under the status quo, as long as the fed keeps funding it, if the fed decides to retract or change course in any way, shape or form, then It's anybody's guess as to what any of these numbers are actually going to look at, so i would counsel a seller to say: look we always talk about. Nobody has a crystal ball, but we do know what we know now. It is in everybody's best interest for the fed to keep funding to kept keep the economic climate in check, and so with that going on sellers, you have a unique option right now to capitalize on your investment. So if you are in a situation where you were planning or thinking of moving in the next year or two, and it is not within this immediate area, you may want to consider that right now, if you are in a price point that can really truly at Such point reach a ceiling.

So let's talk about the condo and townhome market because, to a certain extent that is going to reach a certain ceiling and then get a little push back. Find yourself sell that property capitalize on that investment. Look at possibly going into a short-term rental for a little bit and then capitalize on your next big home that you want to purchase um so and if you're, a buyer, that's a totally different perspective. Um, you know - and i don't want to take over the whole thing so i'll.

Let tom kind of um talk a little bit from from that perspective. But you know the vast majority of ours is listing. So that's the conversation that we're having in in place with that and if their concern is well, will i leave money on the table because in a year i might have gained five more percent appreciation, it's an insurance policy right. You do what you do.

What you know now at this given point in time based on your current circumstances of need and then the rest of the world plays out the way that it's going to play out. But if you're buying something to bank on a five percent or seven percent appreciation - and you have to have that happen - i would tell you to really question that again, because this whole situation is fed driven right now, yep tommy. What are you thinking? Well, awesome stuff by janelle number one i mean that is so on point. I hope people were writing that down the other.

The other considerations that i see and you mentioned about the buy side janelle. So if you're upsizing you're going to save a lot of money on your payment, that's how people buy homes and and it is fed driven. So if you're going to that 20-year property you're getting three and an eighth on a jumbo loan, which is a big deal in our market here like that, is saved money right, so you're getting into a home, maybe you couldn't afford and if you're selling, that lower Price property, the perfect storm here and something that hasn't been mentioned is the millennial home buyers that didn't buy anything forever and now they're all having families having kids they're moving, at least in my market they're, moving out of philadelphia, they're coming to the suburbs. So now you've got even more demand for that, like trade trade-up, first-time buyer property.

So if you look at the flow of home ownership, first purchase trade up premium, the trade up to premium, that's where you can win, even if you're not looking to cash out, because you're getting a lower payment, it's a lot more affordable, and maybe you have a Little extra money to put down to hit that 20 scenario. So absolutely right. What janelle's saying - and i would even take it a step further and talk about this unique trend of the millennial generation, not owning real estate and now getting into ownership. Because of everything that happened because of the pandemic right so tom, what's interesting is two things.

First, i'm looking at tristan who's over there watching the show and he's like yeah. That's that's that's my wife and i yes, the next move right. We can get even more in my interview with ivy zellman, if you guys didn't catch it. It was last week on my podcast.

She basically said you need to go to your clients and and kind of hold them by the shoulders and say, listen to me if you're watching the 10-year treasury she's forecasting at the end of next year. The 10-year treasury goes up, which means interest rates go up and she said, and the only reason that's happening is because the economy has normalized and she knows that there may or may not be a different president. She knows all that she's still saying that's. What's going to happen and her message janelle, interestingly enough was you need to say to anybody if you, if you're thinking about doing something in the next two years or three years, she said you need to start talking about payments, because if you do it today at Three and an eighth, if you do it today at you, know 2.85, because you bought down the rate versus doing the same property at 4.2.

What's the difference and that rate conversation price point of your payments, she said, that's the dialogue, you got to start hey, you can totally wait, it's completely fine. I understand you're feeling the pressure and prices are going up and you're feeling. But let me tell you what happens when the rates go back up, she's saying: we've got basically 20 21 and then the scary part and david i'd love your insight on this. She said the scary part is gon na, be what happens in the next five to seven years when all these people own these homes at 2.25, 3 and now they're like hey, i want to move again and i'm going to buy that move up house and the Interest rate is four and a half percent right.

She said i she said i i'm predicting, and so you guys can go back and listen to the iv interview. She says i'm predicting that group that's buying right now at these rates will be locked in for a very long time because again we're seeing historic, low rates. So it's it's that balance like tom, like you're, saying, and you know, you're saying we can't come across like the sales person, we've got to be the educator, but i want to know from a marketing standpoint. You both were kind of talking from a marketing standpoint.

How do you get this information out? What are you going to do? Yeah i'll jump in um, so i already know what i'm gon na do and hopefully tom's on the same page is this is a video you put out consumer knowledge? I mean this. Is i'm literally taking notes here and if you've been thinking about making an upgrade in the next two three years, do you want to save on your payment now or do you want to wait and buy it? Maybe the same price point and still have it cost? You more money like it's that simple and do some case. Studies like pull out like show some examples of people who have had that extra demand. They get those multiple offers on their property, where maybe that's not happening in a year, and you know they hit that perfect storm, because that's what this is for move up this i mean i've been doing this 20 years, and this is the perfect storm to make A move up, i mean hell, i did it myself, i mean that's that i mean that's a message.

You need to put out there so to me it's as simple as putting it out there and then, when the objections come up being ready to have that exact same conversation over and over and over again, because the objection is not hey, i'm not doing this. It's! I got a question about what's best for me and my family right and they're, trying to time the market so janelle from a marketing example tom's right, because tom does a lot of videos he's gon na. Do a video he's gon na push it out, promote it. What are you thinking about? So you know i would agree with tom, but i i would actually fascinate it more to a person with a slide presentation, because the one thing that i've noted is you can sit here and you can listen to people talk and maybe you're.

Looking at your phone. While you're listening to somebody talk, but if you literally put numbers right in front of somebody's face and say you bought this house for eight hundred thousand dollars today, your mortgage payment would be this. You bought this house in a year at 750 000, and your mortgage interest is this. This is what your payment is right.

It completely. It completely goes against what the thought processes that most people have is. Oh well, i want to time it because i think the market's going to come down and then i can save money in actuality. They're, not they're, going to be paying more for the same thing, exactly what tom said.

But a lot of people literally need to see that in black and white, big bold letters to have it sink into that. So we do. We do a lot of direct mail marketing as well too. So i would put it in from that platform, and you know you, you can run this from two different directions.

You can take it from a seller's perspective to say if you were waiting for that time that you wished, you would have taken advantage of last time and gotten the most out of your money before the market went down. Maybe this is your time, yes and then on the flip side, for buyers waiting for the market to save you money question whether now is the time to do that or not because the pendant price is not necessarily what's going to take money out of your pocket. Every month, right, you literally, you literally said that, like it was the headline of a direct mail postcard. I love that so for my friends out there watching um, if you feel it's appropriate some hearts and some likes for having these two rockstar agents sharing their perspective and then david.

I know we got. We got one more slide to talk about housing and it's this one. So let's jump back in and then i want to get right into forbearance, but i want to just see how the response on facebook is so if you're liking. This give us some hearts.

Give us some likes, especially for tom and janelle, sharing today, so yeah this this slide here tom, you know, shows what you just mentioned a few minutes ago. The dramatic change you know in these forecasts you mentioned zillow going from three percent depreciation. Originally, you know in the pandemic to now seven percent appreciation uh and you can see on down the line there and - and you know why is this important right now is? Is i'm gon na go back to what i what i said before in in the fact that people are calling for housing crash calling for depreciation going into next year? It's that line of. I appreciate you feel that way, and i want to talk more about that.

Tell me where you're hearing, that from right in bringing in the facts of what uh, what experts uh across the country are saying right. So, let's talk forbearance because this is, i mean i was i was pleased, but i'm also nervous because you guys added a couple. Slides that i had questions about so for all my friends out there you know forbearance is a is a very real thing. We've got some very important data, so this is probably that moment that if you haven't gone to tomferry.com forward, slash no mykcm.com forward, slash tom ferry you're going to want to download these slides, especially these next few, because this is on the minds of people.

Everyone is saying the same thing david, i'm out in vegas. Just you know last weekend in a golf tournament: oh oh yeah! It's hunter you're that real estate guy, hey man, i hear the whole world is about to go back into the foreclosure market. But what about the forbearance? Everyone everyone's not making their payments? I'm like okay, slow down 38 year old! Who knows everything like? Let me i'll send you some slides so so david take it away and then janelle and tom, let's jump in and let's let's just keep the same banter going so yeah yeah. So let's, let's talk about that? Let me let me set this up, because i think there are a couple things happening, we're seeing some interesting things that i'm going to share with you in forbearance uh.

You know the driver of this, i'm going to say: uh is unemployment. That's where these questions come from a lot of people out of jobs. We have. We have forbearance which we didn't have back in the housing crash to you know, help people weather the storm, real relative, uh related to their housing and uh, and there are some questions to answer now and i want to say this kcm we're following this.

I think the thing we want to look at into the future is: how do we continue to see unemployment come down? Forbearance come down and the the danger is, you know: do we stall out at some point you know, but but let's look at the numbers and let's kind of go through that, so i think, as we start off here, i'm going to share uh the number of Mortgages and active forbearance and that number is decreasing. So for the last couple of weeks, we've seen a significant decrease. You know if we we go back to you, see on the far left there in may. You know knocking on the door of of 5 million people in forbearance.

Now we sit just under 3 million, so significant decrease. We want to see people uh continue to to to come out of forbearance and we're going to talk about those that are coming out and what that looks like, but in the literal number of people in forbearance and the percentage of people in overall forbearance. We're seeing that start to come down, you see in may the height there at eight and a half percent uh of folks in in in forbearance now to 6.3 uh in october, and the latest number so we're starting to see that come down want to see it. Come down more uh, but but but the question becomes what happens as people come out of forbearance? I would argue that a lot of the things that people have reached out the youtube videos that i've seen is hey.

This wave is coming, and i want to give you some information to help you make sense of it. Just like you said you know at the golf tournament uh that somebody came up to you. So, let's, let's unpack this a little bit here of the 5 million 289 000 families granted forbearance. This is what happened upon expiration of the plan as a black knight data.

As of september 22nd, so uh 2.8 million roughly extended their forbearance. Now you go back to this the cfpb plan for extension, 180 days. Initially, you could ask for another 180 days for a total of 360 days, so 2.8 million ask for that extension. 41.

You see that number at the bottom of the slide either were removed while performing that means they took out forbearance, but they continued to make their payment. They just kind of said. I don't know what tomorrow is going to bring i'm going to go ahead and opt for it, but i'm going to make my payment, or they literally paid their mortgage off during that time, okay, david, before we go any further. That is this is what i asked for this is such an important distinction, my friends, because everyone says, but it's five point.

You know 5.2 million and i'm like a lot of those people kept making their payments yeah yeah a lot of people just hit the button because it was so easy on wells, chase bna who you were with they hit the button and they continue to make payments. So let's go: let's go back to the slides and i talk about the last two and then i want to get janelle and tom's opinion on this so yeah. I think i want to go back to that point. It's what janelle said earlier.

It's the individual that says i don't know exactly what's going to happen, so i'm going to take this out as an insurance policy right. We know 41 of those came out, they were paying or they literally paid off the mortgage. 267. 000.

The gray bar you see there expired while delinquent and enter in some form of work out with their bank. Remember we talked about this on the front and we said after the housing crash, the bank does not want these homes back. They will, i believe, do what they can to help people stay in their homes right and then you see the the bar at the far right. 54 000 expired while delinquent.

Now that is going to be some form of the people that are at risk for foreclosure. That's going to be, you know, some type of distressed sale may be foreclosure, maybe they sell the home and i'm going to talk about those people in just a minute. But that gives you perspective to your point, tom of like 5.2 million people in fort beards. Every one of them is going to go into foreclosure.

No, it's just simply not true yeah and remember my friends. There's a hundred and twenty eight million homes in the u.s and you've got 42 percent of them that have no loan and ivy. Now we're chatting about this dave and you'll appreciate you know 77 million ish homes and of that group, what 10 of them have less than 10 percent? I don't want to misquote the number. I know there's a slide here, but 90 of them have so much equity in their property.

If they were in this position, they would simply put it on the market. Sell take the money and go do something else: yeah tom janelle, when you, when you hear all that, what what goes through your mind, give me the going back to this slide yeah. What are you thinking? Well, i think you know exactly kind of what to david said. I i believe the blue graph was really an insurance policy for a lot of people.

They were really uncertain and there was an opportunity similar to business owners that had an opportunity to get ppp, whether they were going to need it or not. It was an insurance policy to make sure that they needed it. They would have that capability of executing on it um. You know - and it's it's always good - to have a safety net, so that doesn't surprise me that there was a large percentage of people that took it as an insurance policy fortunately ended up not needing it um and were able to continue on with their payments.

I think the green graph - i would question - was that people that truly paid off their mortgage or were those people that realized. You know what i'm not i'm not going to be able to make it this payment anymore. It's best for me just take advantage of the market and sell it. Um certainly could be people in that.

It's a great point. You know, but but let's let's distinguish that they didn't turn into a distressed, sale right. They did what we said they would do. They would sell because they have equity exactly, and i think that is what becomes in question of the big orange graph right, because we've truly seen so much, at least in our market we've seen so much appreciation from march until now that for the extended forbearance graph, I think the question needs to be brought to light of okay after a certain point in time, after six months after nine months after a year, you've really got a question if this is really a financial decision that you should be holding on to this property anymore, Especially when you have the capability of getting out with equity in your home versus being in a distressed financial situation with your home right - and i think the problem is most of the public - looks at this information and sees these high numbers of forbearance.

But doesn't have the overall picture of what that property purchase was versus how much equity is there versus the capability of them being able to come out of it fully whole and not going into a situation where they are in the hole and having to do a Short sale or a foreclosure situation, yeah yeah. I want to hop in here and say one thing of this of that data, because you bring up a really good point. You know what i would hate for somebody to hear out of this information is hey everything's all right. We don't need to be worried about this.

We don't need to talk about it and it couldn't be any different from that. From my perspective, we need to be talking about this. There are people that are going to need to do things and we need to bring that information to the market and that's where i think you know i'd love to hear you. How do you bring this to the market, there's even data to suggest right now there are people that are delinquent, that aren't in forbearance, and we need to be talking to those people too and saying hey.

If you need help with this, let us help you through it, because there are options today that weren't around back. You know in the housing crash due to equity, due to all the things that we know tom. I can't help but ask i mean, as a great prospector, marketeer sales person. You know public access to this data, where you can go in and start directly reaching out and seeing if you can help people.

Are you thinking that, like where's your mind going with all this well yeah, i mean there there's a lot of ways to get in touch with those folks. Right i mean you, can you can get really aggressive, you're, gon na start, working, nods and and and that sort of thing and and more importantly, a lot of people? Don't know they have options? I mean you know, janelle mentioned it david. They don't know that they can get a short sale and that you know a short sale may not be that bad people hear that there's a stigma attached to it, but they're you know or if they have equity in the home and they just let that go Away because they're afraid about making payments, i mean that's not a good financial decision, uh period, uh, no matter what the ra, what the situation is - and you know the pride is a real thing: people don't like getting in those situations, so you know being the knowledge Broker right i mean we've been talking about this a lot and also understanding what the options are like if you're really going to help people you've got to know hey. This is how it works.

I've got someone that can help you, that's where it's really important a lot of agents. Don't take the time to understand this and that's where self-education is going to be really important, because i can't tell you how many homes i see like not so much now, but in the past 18 months they expire from the market they're a short sale and the Agent didn't know how to handle the short sale and all of a sudden you put them in touch with the right person. These people don't have a uh. You know a default judgment against them.

I mean they're, you know that's what helping people is all about, giving them the hard news, even though they may not like it, but it's what they need to hear and that's what a great agent does and tom to your point and providing an alternative, a solution. It's it's carefrontation. I care. I can help.

I've got options for you. What you don't want to do is just see these people lose themselves right, lose their life, lose their livelihood, so so be mindful of time david. I know the next two slides are important, but really that the one beyond this quote, so, let's jump back in share this, because i really want to get to this slide yeah, let's um. Let me go back to that quote.

I was hopping over that uh when you were talking, but let me go to that and show people then we'll we'll go through this. So quote here: uh from rick from realtytrack, we'll certainly see more repossessions by lenders once the foreclosure moratorium has ended, but maybe not as many as people might expect. Given the record amount of homeowner equity, it seems likely that many homeowners in financial distress will opt to take advantage of stronger demand among home buyers and sell their property rather than risking a foreclosure again. I would underscore that with our job today is to get the word out there, so they know they have options now.

This next slide is the way we want to look at janelle you asked about it. We need to be looking at the 2.8 million people that are in forbearance now, i'm going to give this to you of distribution of loans in active forbearance by combined loan to value okay in the in the the the quick answer there is 91 of these loans. Have at least 11 equity and you can see across the bottom how they shake out. There's there's there's a small portion that are even underwater one percent.

Are we need to acknowledge that? But when we look at the numbers, you see the financial and equity strength of these homeowners, which again goes back to to the options they have to sell their home versus do something else uh in in the situation. So i think this gives us a view into. What's going on with those that are in active forbearance that we can say? Okay, i can have a conversation with somebody that says i just saw an article or a video on youtube saying you know, everybody in forbearance is going to go into foreclosure, not true, but i think there are some things that we need to look at in our Business to be able to get the the message out and serve these these individuals, these families that are in uh, you know, potentially going uh into into foreclosure, are going to lose their homes. I agree i agree so being mindful of time.

Let's show them that last iv slide and then let's get into the listing portion of this right and drive this thing home. So absolutely i love this quote. I think it's just right off my podcast. It was, it was so if you haven't listened to the ivy zellman interview that todd did tom, did it very, very good.

The likelihood of us having a foreclosure crisis again is about zero percent. Is what ivy zellman said so uh a great listen there relative to the facts around uh foreclosure love it. So, let's talk. Let's talk listing inventory.

Absolutely, let's go out with inventory yeah i want to give you give you some perspective on the data there around inventory and a couple of ideas, and i think it's really um tom and janelle, where you guys are gon na, be able to to hop in on This i'll start with a quote here from mark fleming from first american rapid house price appreciation and its impact on existing and first-time homebuyers will persist until the supply and demand imbalance begins to improve in the game of musical chairs. It's clear that a housing market needs more chairs okay. So what do we know? Um about the market right now, relative to inventory. We know a couple of things: builder: confidence at an all-time high builder, saying: hey we're seeing more demand new home uh sales are up.

Uh we're seeing more and more people say: hey we want to build a home, we want to, you, know, choose what what we want in a home home has become more important to us and they are bringing inventory to market at the same time, we know nationally Across the country we are losing inventory, literally homes are being purchased as quick, if not quicker than we bring them to market. So i would say, based purely on the data right now. The number one reason not to wait until next year is that the supply of listings will increase substantially entering the new year, including you know not only new construction, but those that say, okay, i feel like i can safely put my home on the market. At some point, those that say hey, we are going to take advantage of the time to sell right now, the time to buy and and and helping sellers understand.

This could lower the demand for their home. So a couple of pieces of information on that uh. If we go back and look at inventories, uh levels this time last year, you see december january, we kind of dip down, and then we start to come back up in march we hit april and obviously shelter in order and lock down in place and and continue To grow up through may and start to make this this, you know step down as we go through the summer, and people are literally buying homes faster than they come to market. So what does that? What does that mean? Most folks are going to wait.

We know till the spring to bring a home to market. We know that right now we're dipping down with low inventory. You want to sell something, as there are fewer of that thing on the market, and i want to give you this last slide that i hope helps articulate and give you a visual representation of maybe the sweet spot, but even the sweeter spot, where we are right. Now, in in selling a home, you see the sweet spot there originally in january february of this year, when there's you know, inventories dipped down, but this gives you just a look at where we are right now, relative to inventory and literally the lack across the country Of available homes on the market for those that want to buy them, tom, tom and janelle, you look at this we're looking at 2.6 2.7 months supply of inventory across the country.

Right i mean this is it's nuts, so so that was a lot of information by the way right, david, i'm gon na i'm gon na go, ladies first just being polite janelle, i have all five of those slides in front of me. The number one reason not to wait: inventory existing levels, the builder confidence uh. You know the sweet spot slide. What what's going through that brilliant mind of yours? What are you thinking? What do we need to know and what should we do with this information? Well, so let me start with the builder confidence um.

As we know, everyone loves shiny pennies. They love brand new construction right um, where i'm situated. We have a lack of newer construction unless you're in a very strategic area of orange county, but on the outskirts, suburban area. There is really not a lot of newer construction, so that does drive that entity of people purchasing older homes, on larger lots and rebuilding um.

But you have to also look at the cost of goods right now across the board. It's costing builders more money to build product so where we're finding at least where we're at it makes more sense in more of a luxury market to do that, because the cost of goods have gone up, but they can get a higher price point for the newer Construction because people are willing to pay it um. So that's something to kind of keep in mind and then you're going to see. I think, at least in our area, you're going to see a little bit of a start of the differentiation between brand new construction versus resale and people wanting to purchase resale, but make it look like brand new construction on the side of the inventory levels.

There was the slide where it shows you know when we're last two months right. It still comes down to the home itself and tom. You probably attest to this as well. You know most of the homes if you're in cookie cutter, neighborhoods and or track homes.

Yes, those are you've got this certain amount of turnover when you've got more custom homes on different size, lots, irregular lots, um homes built in the 1970s versus homes built in the 1990s versus homes built in the early 2000s. There is a little bit more of ebb and flow as far as the time on the market and pricing. That's that's happening with regards to that um, but what we are truly finding here is, if you have a home, that is a home that someone can just move into and not necessarily that everything needs to be done, but maybe pink carpet or, for the most part.