The Data Driven Real Estate Podcast #4 – Builders and commercial real estate trends in 2020 with John Burns

DDRE 4 with John Burns

John Burns with John Burns Real Estate Consulting (JBREC) joins us this week. For years, the JBREC team has consulted with builders, institutional funds, built-to-rent firms, and Wall Street landlords offering in-depth market analysis and demographic trend to help businesses make better-informed investment decisions. This week, we take a deep dive into data. What matters, what doesn’t, and how Covid-19 has impacted builders and what trends are emerging. Some will certainly surprise you. Residential and commercial real estate may not have the same two-year journey. Commercial investors, you’re going to want to listen to this show!

Have questions or feedback? Each show is posted on the Data Driven Real Estate Podcast #4 in our community. Catch pre-show research and continue the dialogue online after the show.

Connect, subscribe and like onYouTubeiTunesSpotifyStitcherTuneInGoogle Podcast

Show Topics

  • 01:00 How John Burns got into the real estate game?
  • 01:52 John Burns Real Estate Consulting and their first huge client
  • 02:48 The major client types for John Burns Real Estate Consulting
  • 06:45 Polling data vs survey data: Which is better?
  • 07:48 The one data set with a 16% margin of error that traders love
  • 09:46 The missing data we didn’t have before the Great Recession that would have been helpful
  • 10:41 Good data doesn’t come cheap! Do you even understand?
  • 11:38 Nuance in real estate marketing timing, risk assessment, and charts that matter (and don’t)
  • 16:59 The genesis of one of the best (and only) books on real estate and demographics
  • 18:11 What is Surban?
  • 19:12 Has Covid permanently destroyed one of the hottest trends in real estate over the past decade?
  • 20:39 What’s more important in real estate: location or affordability?
  • 25:44 Will divorces explode and drive up real estate demand?
  • 27:18 What is affordable housing to Millennials, the most educated generation ever?
  • 28:28 Why haven’t we seen a builder boom this cycle?
  • 31:50 Are trade wars impacting builders and building supplies?
  • 34:14 Is real estate in markets like Houston susceptible to things like the oil industry?
  • 34:57 The secret trick to track migration patterns in near real-time
  • 35:33 Many people have escaped high-tax states by migrating to states like Florida. Will that continue?
  • 37:17 What builders used to do before awesome data and research by companies like John Burns Real Estate Consulting 38:36 Is there a different trend in single-family real estate versus commercial?
  • 39:13 While commercial real estate prices drop?
  • 40:59 What are builders most worried about?
  • 42:02 Are builders making any mid-build adjustments because of Covid-19 consumer trends?
  • 45:01 The real estate market in 2020 is going up?!
  • 46:16 The unusual category of unemployment that most people have checked being laid off because of the pandemic
  • 47:00 The issue small businesses are having because of the CARES Act
  • 48:18 64% of America can make more money on today’s unemployment program
  • 50:42 Will commercial foreclosures be an issue in the next few years?
  • 51:48 What types of commercial real estate will get hit hardest?
  • 52:48 Will office lease space have a vacancy issue with remote work gaining popularity?
  • 54:17 Is Amazon taking over malls?
  • 57:30 Why aren’t American homes built in factories?
  • 58:12 Are public builders getting into the build-to-rent space for single-family homes?

In the show, we mention the Single-Family Rental Index. John Burns Real Estate Consulting is looking for real estate investors with at least five properties in an MSA. In exchange for a survey, you get insights into that MSA. Please see their JBREC Rental Survey Information and how to get involved.

Show Transcript

Aaron Norris [00:00:02] Welcome to the Data Driven real estate podcast, the podcast from real estate professionals dedicated to driving business success using data. I’m Eric Norris, vice president of Market Insights for Property Radar. And with us today, we’ve got Shot Tool, CEO of Property Radar and John Burns with John Burns, real estate consulting. John. Guys, I’ve got to do the embarrassing bio. It’ll be quick and snappy, I promise. But John Burns, of course, was with the John Burns real estate consulting, which helps business executives make informed housing industry investment decisions. He is co-author of Big Shifts Ahead Demographic Clarity for Businesses. One of my favorite demographic books, a book written to help make demographic trends easier to understand, quantify and anticipate. And John has a B.A. in economics from Stanford University and an MBA from UCLA and works out of Southern California right here in Irvine, California. So thank you for joining us today. Our fourth show. All right. How did you decide to get into the real estate game?

John Burns [00:01:01] Completely, accidentally. After getting my graduate degree, I went to go work for a consulting firm. I’m there. Three months. They reorganize by industry. My boss picks real estate. So in 1999, I became a real estate counsel and I went and I went to a school with a really well-known real estate program. It took no real estate class. I figured it out later, I think.

Aaron Norris [00:01:29] How long were you there and when did you went to John Burns real estate consulting start?

John Burns [00:01:35] You’re gonna date me here, man. So I was there from eighty-nine to ninety-seven and I went out on my own in 2001. It’s thirty-one years.

Aaron Norris [00:01:47] Wow. Well, who was your first client? What did that look like? Why did you go out on your own?

John Burns [00:01:52] First client was the Irvine Company. I should have saved the check. It was for all of $1,000 dollars.

Sean O’Toole [00:01:57] Now, that’s a heck of a first client, though.

John Burns [00:02:00] I know. I started big, but very small. I just had done a lot of consulting all over real estate, commercial and residential. And I really saw the commercial guys were very, very sophisticated about managing themselves through the cycle. And, you know, it’s a little easier you can build a big company with buildings that don’t move when you’re a home builder and investing in residential. The buildings are changing all the time. And it was a little bit more of a cowboy industry was all about buying the land. Right. It wasn’t really about managing that cycle. So I saw an opportunity to take with the commercial real estate guys we’re due on and bring it to residential.

Aaron Norris [00:02:41]  Yeah. And your client rosters really change then? Over the last several decades. Then so who does your clients look like now?

John Burns [00:02:49] It started with home builders and developers. Now we have a lot of building products companies. We have a lot of hedge funds. We have a lot of private equity. This whole single-family rental trend. We’ve been at the forefront of that. So I sleep a little better at night knowing that my eggs are a little diversified into multiple baskets.

Aaron Norris [00:03:09] Very good. Well, and I know, you know, a lot of what we’re trying to focus on is a lot more of the data. I always like the hand this to Sean because this is his baby.

Sean O’Toole [00:03:20] Yeah. So before we start diving into you know, I know everybody’s gonna be anxious to hear what you think is coming, but we thought we’d cover some other stuff first. You know, this is the data-driven real estate podcast. So what data? You know, I think you guys have a variety of stuff, including surveys and other things. What data is important for you and your business as you help builders and these other folks, you know, make good decisions?

John Burns [00:03:49] So there’s been a huge shift over the 19 years I’ve been doing this. At first it was, can you go find some data? There was none. And now there’s too much. So tomorrow, can you filter it down for me? So I learned back from one of my mentors out go bar way back when that it was all about jobs. I think it’s about more than that now. But I still have to monitor that job growth really well, because that’s an adult with an income that could buy your house or rent your property. And that data actually is very, very good data. We have the whole Covid period here where all these government programs have made things really messy. But usually that data is as excellent comes out every month. You can’t get population and other data very reliably.

Sean O’Toole [00:04:39] Yeah. Is it mostly government or private industry like folks like ADP and that kind of stuff or both. Or a mix.

John Burns [00:04:45] The actually the Bureau of Labor Statistics gathers it from the State Employment Department, California Employment Development Department. They have two surveys. One is a huge sample size of all the major companies out there. That’s what you normally hear quoted. They will miss trends like small startups and things. So there’s another survey, that one, the unemployment well, where they call people at their house, that that picks up those trends. But it’s a smaller sample size. So I usually find the right guy looking at both. And the right answer is usually somewhere between the two.

Sean O’Toole [00:05:19] Yeah. And it’s one of the things I find really interesting every time I look at your reports. I’m totally immersed in public records. Right. County assessor, county recorder. But you pull in all these other things, you know, population, unemployment, inflation, economics and all of those, of course, play a really important role. What percentage of that stuff do you think? You know, you mentioned like some of the labor stuff is survey-based. You know how much of it is survey-based versus real hard data? I mean, like we have employment data getting reported in our payroll reports regularly. Why isn’t that data available? Why are we looking at surveys?

John Burns [00:06:03] So ADP reports their numbers, but I think they only do 20 million workers or state somewhere around. So, you know. You know who’s got all the data? Is the post office, the post office and the utility companies. And so I’ve been trying to get it out of them forever. And, you know, somebody sued the utility companies a long time ago for some privacy issues. So that was the answer to your question. Lawyers are the reason that we can’t get one hundred percent sample size. We don’t even need to take the census. If they would just ask the mailman, is there anybody in the house or not? And how many people are in there? She knows.

Sean O’Toole [00:06:43] Yeah, that’s that’s pretty funny and very true. So, you know, with a lot of that data being survey data. Right. The survey that most people are familiar with is polls. And obviously, the polls got the last election a little bit wrong. And there’s already, you know, people questioning polls for this election. How do you feel, you know, when you’re asked about survey data and your reliance on survey data about its accuracy? And I mean, you can get a statistical margin of error. But, you know, do you feel that relying on survey data puts you at a disadvantage and. What are the issues there?

John Burns [00:07:26] I try to guess that we filter data. So I try to get as much data as I can. And if there’s 10 different ways of looking at something and nine of them are all coming to the same conclusion, I get some pretty good confidence in the conclusion. You’re you’re right. You need to be very careful about making a conclusion off of one data point. I’ll pick on the Census Bureau. New home sales number, which moves the stock prices every day and every time they published, it’s got something like a 16 percent margin of error. So they might say home sales were up 10 percent this month when they were actually down six. And people are trading on this kind of data. It’s just it’s just crazy. But if you’ve got seven other data points that are triangulating around that 10 percent, you have some confidence it’s probably right this time.

Sean O’Toole [00:08:16] And that’s probably why your clients are paying used to do that triangulation and look at those other data points rather than just rely on one thing that has a 16 percent there.

John Burns [00:08:28] That’s how we spend it for less than the cost of our person. You’ve got 60 of us trying to figure this out for you. So that’s how that works.

Sean O’Toole [00:08:35] Yeah. The public records play much of a role for you guys at all.

John Burns [00:08:40] I mean, we’ll look at everything. Yeah. Yeah. We will get all the public records we can. We’re very frustrated. They’re not very available in Texas, for example. My chief information officer, Steve Dutra, people call the data God and you’re not allowed to hire him. I know you guys are data geeks. He’s just amazing. And he knows what’s right and wrong by metro area of everybody’s data on his cobbled the whole time he’s been with me, all of us since the beginning.

Sean O’Toole [00:09:11] Yeah, no, I definitely know his name. And, you know, there really aren’t very many people. And on you know, I hang my hat is one of them. So I’m a little biased here. There aren’t very many people that understand both data science and all the nuances that are in the real estate data set. And, you know, I think that’s a real shame. I think we made huge mistakes in the crisis. Coming up, the two thousand eight, because, you know, even the Fed didn’t understand what they were looking at.

John Burns [00:09:46] You know, I look back on that as there are some data we just did flat out in half. I mean, I didn’t have data on option arms. We didn’t have data on what percentage of loans. We’re actually documenting people’s income. Now we have some of that data. So that’s one of the reasons we have a lot more data now than we did 20 years ago, is when problems emerge. And you can. Solve it with data. I think that gives everyone a lot more confidence or whatever investment they’re making.

Sean O’Toole [00:10:17] And there’s somebody willing to pay for it. Right. So I remember, like, you know, the big core logic’s and the first Americans all went back because they’d already abstracted the loans and they went back through all the loans to abstract the details on the pay option arms. And that was like a brand new hot data set that they were all competing with two thousand nine. But it didn’t exist before that. You’re absolutely right.

John Burns [00:10:40] Nobody would have paid to do it.

Sean O’Toole [00:10:41] So, you know, there’s a ton of data still in the recorder’s office that I would love to get. But it’s just not financially viable for us to go abstract it. And I think a lot of people don’t understand that the documents that the recorder get recorded is images. Right. It’s not. It’s pixels. Right. So you have to go abstract the information off of those documents. And OCR has largely failed to do that in any kind of regular or repeatable way. So it’s it’s an interesting it’s a tough thing. One of the things you guys come up with from your data is a set of indexes. And are those is that a pretty important piece of your work? And you’ve got a couple that I find pretty interesting, like your housing cycle index, for example.

John Burns [00:11:38] Yeah. So the housing cycle risk index is. Something we came up with. It’s kind of similar to what parents dad does. We’re just sitting back and looking at the entire cycle. And when the cycle goes on for a long time, either good or bad things tend to overcorrect. So we we we did this a long time ago, maybe two thousand five. So we were calling high risk before it blew up. But, you know, when demand gets higher than it usually does, that’s a sign that there’s very low risk by job growth is really strong or there’s more home buying than usual. But when supply rises to a very high level to meet that demand and all of a sudden supply is higher than normal. That’s a high risk, too. And then you look at the affordability in that market. People used to compare affordability between each market, but that didn’t matter. I mean, L.A. is always more expensive than Pheonix. But when Pheonix gets more expensive than Pheonix normally is, that’s high risk, too. So we built an index going back to nineteen eighty one in every market we noticed that certain markets there were very supply-constrained, like California, were more tied to the affordability. Certain markets where you could build as much as you want whenever you want, like Texas, where more supply to supply, more tied to supply. And we came up with our weighted average that didn’t call when the market would turn. But it would tell you when the risks are higher than normal or lower than normal and which way things are trending.

Sean O’Toole [00:13:15] Yeah. Yeah, no. Super useful report. Does it not only for as I remember it like. You call out a couple of different things like, you know, supply supplies and, you know, labor and other components there too within that.

John Burns [00:13:34] So there’s 25 indicators we looked at, a few macro ones like consumer confidence that we talked about earlier.

Sean O’Toole [00:13:42] I wanted to ask a little bit about your intrinsic value index. This is something that’s always fascinated me. You know, in fact, back in 2008, I kind of said one of the big problems was, is that we used you know, I mentioned this in our last podcast. Right. The last three morons to say I’ll pay X, right, is how we determine what every piece of property in an area is worth. And, you know, especially like in the Bay Area where you got a company that goes public and you get three people who can just pay whatever, that doesn’t then suddenly mean everybody in that area can pay whatever. Right? And I was just I wanted to ask a little bit about that intrinsic value index. Are you looking at kind of like what the people that currently occupy that area can kind of fundamentally afford?

John Burns [00:14:30] Yeah. So, I mean, it’s the whole buy low, sell high. Warren Buffett, Ben Graham way of looking at things. So we have another index that feeds into this. So it’s just our home value index, which which is basically an Abia. Right. Right. That actually, we cheat. We get a whole bunch of people’s AVMs. Steve knows which ones are best in which market and we do a weighted average of other people’s AVM. But that’s how we do it. But then when a market gets far more expensive in relation to the local incomes than it usually does. That’s where we say it’s above its intrinsic value or what it overcorrects it’s below its intrinsic value. The tough thing on that, and I’ll pick on Denver, for example, is I believe Denver is a permanently more expensive market than it used to be. So, yeah, there’s some subjectivity involved, not just, you know, trading, going back to the median of trying to figure out what the new normal is if you will. So I’m not going to say that we’ve got it all solved mathematically. There is some subjectivity in it, but most of our. But when you chart it. You can show something to your clients and they go, OK, I get it. And that’s more than just a one guy’s opinion. You know, it’s got some data behind it. And usually, it usually ties pretty well to some local guy’s gut feeling, which actually that’s a good data point, too. I mean, smart people that are very objective when something doesn’t look right to them. I listen carefully. That’s good data.

Sean O’Toole [00:16:06] Good price reference. Back to Bruce Norris, Aaron’s dad. Aaron, do you want to talk a little bit about demographic’s? Obviously, a John’s and his team’s book, The Big Shifts Ahead a few years ago, I thought was just you said it was one of your favorite demographics, but it’s my only demographics book.

John Burns [00:16:28] So his only too, but he did admit that.

Aaron Norris [00:16:31] OK. Totally a true story. But I had to buy it again last night because I keep on giving away my copies and I’m surprised and people are like, how do you not read this? Markets like California that are so cyclical and when ups are up it’s great, when they’re down, man, you want to get out of Dodge. And I’m very visual as well. So what was the genesis of Big Shifts Ahead, it’s 2016. So for you, you know, almost…

John Burns [00:16:59] It needs a refresh, although some of the framework in there is helping me a lot right now. So the genesis of that was here we come out of the Great Recession and housing ain’t booming. Everyone’s got one millennial excuse after another. And I’m like, well, I think we can figure this out data-wise. So it started as a small research project that turned into a nine thousand hour research project with three really smart interns, all of whom work for me full time now. So that’s that. That worked out really well for that reason. But I just said we can make sense of this. When we got into it, we said, let’s break everything down to a decade born, because then you’re comparing 10 year periods to 10 year periods. Everybody knows what year they were born and it just made it all more understandable.

Aaron Norris [00:17:52] That’s putting it lightly. So, you know, Baby Boomers into the Baby Boomers, Gen X, Gen Y and then breaking it into 10-year cycles, it just seems a lot more sensical when it comes to trying to identify trends in the segment. One of my favorite words out of the book is Surban. Can you describe what that means?

John Burns [00:18:11] Yeah, we made that up. It’s it’s when, and I think the world is trending away from that right now, too. So it was bringing the best of urban to the suburbs. So urban, actually, due to a lot of local government investment, really got cleaned up a lot in the 90s and 2000s. Everyone knows how great York and San Francisco in other places have been recently. They were not that way 30 years ago. And then they became really cool and hip and the suburbs said, we want some of that in our city. And so they started zoning higher density, you know, not high rises, but 20 to the acre, detached housing or even attached. But you can do detached at that right next to retail. And so we called it Surban. And that that was really the hot thing until Covid hit.

Aaron Norris [00:19:12] So you I. You know what? I guess I thought Surban would be survive well. So you think that’s a trend that the Surban is just too dense?

John Burns [00:19:20] No, I. Well, I think I shouldn’t say you.. do is against aspects.

Sean O’Toole [00:19:25] Dense aspects?

John Burns [00:19:28] Well, I still think it will continue. One thing that surprised me, it was very different in this last cycle was that it used to be people would go to the suburbs and then the jobs would migrate to the suburbs because that’s where the people were. And you kind of get sprawl that way. And this cycle, it was like everybody went downtown, including the jobs. And so I can’t afford a house in this great location unless I get a really dense one. And so what has now shifted, I believe, is this whole proof that work from home works for a lot of people. We’re seeing it. It’s people are fleeing. It’s not an urban flight as much as it is, I can now live 60 minutes away. Frankly, I can now live in another state. I’ve been given permission by my boss to do so. We can go back to where I grew up. It’s a flight to more affordable housing. Which wasn’t there because the affordable housing was so far away, you couldn’t physically commute there to work.

Sean O’Toole [00:20:39] What portion. Do you think is more affordable versus more desirable? Do you think that they’re just going for cheaper and they don’t like it as much? Or do you think they’re going to also do something that they prefer?

John Burns [00:20:52] I think there’s some of both, but I think the big, I think the big difference is affordability. Even even if it’s an expensive home, I can get so much more than I could somewhere close to L.A. or San Francisco or close to even Scottsdale. Now, I can go out to West Pheonix and I guess I guess that would be a preference.

Aaron Norris [00:21:16] The quality of life changed to when I had a friend that moved from the Inland Empire up to the Bay Area, worked in Union Square and bought a home two hours outside and was making the drive back and forth every day to works of four hours out of his life. It’s just really hard to imagine the quality of life shifts when all of a sudden you get four hours of your day back.

John Burns [00:21:37] So his neighborhood right now, the housing market is on fire. Because everybody is joining him?

Aaron Norris [00:21:43] How did the big shift the head book really change what you were offering clients? Or was the demographic conversation always an overlay on what you were covering?

John Burns [00:21:53] No, it was it was super clarity behind all the discussions that were going on in my clients about making big investments and demographic trends. You know, it’s usually based on somebody who’s gut feeling, usually was based on something going on with their son or young son or daughter, you know, and their friends. I’m like,you know, that’s cool. But you guys do realize that your skewed because you make a lot of money. That’s not the world. And so we went and figured out what was going on with everybody. And it. It’s become a big part of our reporting.

Aaron Norris [00:22:27] I also am a big fan of your podcast. Guys do a great job and I love the term the jewel box. So as you’re sort of dissecting the trends in the different age groups, I my father, Bruce Norris, is moving to Florida. It’s now been made public and he’s moving to a jewel box. He’s downsizing outside of California, moving to Florida. And that’s specifically what he’s looking at. So a jewel box. Can you describe what that is?

John Burns [00:22:56] It’s just a really cute, small place that makes me really happy and is very low maintenance.

Aaron Norris [00:23:04] And well appointed? Is that fair?

John Burns [00:23:06] Oh, yeah, no. Yeah. I mean, you see the price per square foot on these things can be really high. But the absolute price can be relatively reasonable because there’s not that much square footage, you know, and your dad doesn’t have five people he has to live with. He just lives by …

Aaron Norris [00:23:22] This has not stopped him from buying really big houses for two people. So I’m excited to see them downsize a little bit.

Sean O’Toole [00:23:28] Well. we’ll see how that goes.

Aaron Norris [00:23:33] He’s going to thirty-five hundred square feet.

Sean O’Toole [00:23:35] So tiny.

John Burns [00:23:37] That’s a jewel box?

Sean O’Toole [00:23:40] That counts.

Aaron Norris [00:23:42] I was gonna ask something about the California Association of Realtors and they were releasing information about New Built and it escapes me. Maybe I’ll come back to it. Is there going to be an update on Big Shift Ahead? Is or is it Bigger Shifts Ahead? Is it coming soon?

John Burns [00:23:56] We talked about it, but it hasn’t hit the top of the priority list.

Aaron Norris [00:24:00] Is there anything that hasn’t worked out like you thought it would? I mean, Covid being maybe Surban. We’ll see if that sticks or goes away. But is there anything else?

John Burns [00:24:10] I’m pretty proud of everything we forecast in that book except that one massive miss, which everybody told me I was wrong and they were right. Was it we were calling for falling homeownership. They were right for the wrong reasons. And I was wrong for a different reason. I really did not think we would continue to see falling interest rates and for year after year after year. And I thought the documentation did get horrendous on the mortgage, but I thought things would tighten up more than they did. And actually, FHA went, we’ll take all that subprime market share. I’m exaggerating a little bit because they are documenting everything. But the bottom line is a government played a very aggressive role, growing homeownership. And so we just. And the falling rates. I mean, we got that one wrong. And now it’s going to look really wrong because I think homeownership is taking off right now.

Aaron Norris [00:25:05] Because I covered that last week, didn’t we, Sean, about the different kinds of demand, people getting divorced and forced house creation.

John Burns [00:25:15] So divorce is on the rise.

Sean O’Toole [00:25:17] You know, I don’t know that yet. It’s just it’s pure speculation. We kind of walkthrough like, what are some of the things we see, you know, coming out of this? I’m going to dive into Covid in a bit. But, you know, just the idea that people spent a lot of time in a house that they haven’t spent time in before and are probably realizing it’s not the right house and they spend a lot of time with a person that they probably haven’t spent quite that much time with before, even if they’ve been married for a while.

John Burns [00:25:45] So I actually have some data related to this. So we had the same question. So my guys have figured out how to use Google Analytics to check all sorts of trends. And the trends on divorce attorneys are up, but they’re not up substantially. So we also checked pregnancy and some of the indicators were up and some of them were down. So we said what? The jury is out on that one. But it looks like divorces are trending up in China. Apparently, they spiked the day they opened. So that’s what think.

Sean O’Toole [00:26:25] OK. That’s awesome. That’s good stuff. Yeah. Google Analytics and the, you know, there. Yeah. Them telling you how much things are searched on is super useful for that. That’s those smart on your part.

Aaron Norris [00:26:41] At last, I remember what the data point was, the California Association of Realtors does there. I think the last time they did it was 2015. But it was the impact report where they look at buyers, sellers and investors. And they broke down this time by demographic buying trends in the new. I don’t know if it was reseller new space, but what was surprising to me is that millennials, because they had waited, the homes that they were going into were higher priced in some points up to the Boomer levels. So it’s like they skipped the whole affordable housing. They’re like, nope, we’re just going to bury ourselves for 20 years and something more expensive.

John Burns [00:27:14] Yes. As you know, we’ve broken into a decade so we could, so the group born in the 1980s. We call them the shares because they develop the sharing economy, have the highest college education ever by far. So they’ve got more dual-income than ever before. And they’re waiting to 32 to make their first purchase. So if you just think about those two things you’re going to see, particularly here in California, people can afford very expensive homes because there’s two college-educated people that have 10 years of experience chipping in to purchase the house. That’s never happened before.

Aaron Norris [00:27:52] That would make sense. All right. Builders.

Sean O’Toole [00:27:56] Builders. So, I mean, obviously, they’re you’re your primary client. And it still feels to me like part of what drive is driving this market, at least in California. I don’t know where we’re expanding nationally. So we’re starting to get data on the rest of the nation. But I’m you know, I still know California best in Arizona and the places we cover today. So what’s you know, what’s builders sentiment like? Why haven’t we seen a bigger ramp in supply over the last handful of years? Maybe start their.

John Burns [00:28:37] You’ve been to a city council meeting lately. It’s pretty hard to get your land entitled. In fact, I would say during this cycle, the land developers who got in at the bottom of the market and have sold recently have done fine. But they’re now saying, boy, I completely time the market perfectly and I just did fine. Am I going to go out and buy some more land and try this all over again? No.

Sean O’Toole [00:29:06] Not a chance.

John Burns [00:29:08] That’s been the conversation probably for the last four years. So really, everybody’s been I’m not going to make the big long term bet, put a ton of capital in, get messed around by the city and the Army Corps of Engineers and the NIMBYs and everybody else. And I had a client or the city one day decided that they wanted, they wanted a bridge built to highway standards instead of just normal standards. So that cost them several million dollars. And that’s the type of stuff that makes developers pull their hair out so that the capital doesn’t think the risk-reward is really there in a big way. And so the builders, you know, development is different than building. Some of them will go out and do some of that for their own account, but they will try to do it. They will try up the land, tie up the land under an option agreement until they get all the entitlements through and they understand the costs before they’ll go ahead and purchase the land.

Sean O’Toole [00:30:04] Still significant risk in not right, because they’re going to get all the studies and all the rest. I mean, it’s hundreds of thousands or millions of dollars to get to the point where, you know, whether you’ve got a deal or not.

John Burns [00:30:14] Right. And if the market turns on you, you’re going to own that thing for a decade. So it’s very illiquid.

Sean O’Toole [00:30:20] Yeah, for sure. So builders sentiment, though, today is we feel really good if we can get the mouth to work that kind of where it stands and just getting the mouth to work super hard right now.

John Burns [00:30:35] I use the term cautiously jubilant. So June June was actually the highest sales rate per community since probably 2005. Five. Yeah. So they just killed it. But they, you know, they’re not running around saying, I think this is gonna go on for years. I think it’s gonna go on for the rest of the summer or maybe the rest of the year. So I’m jubilant about what’s going on. I’ve got my balance sheet in great shape. I’m making a lot of money and doing really well. But once again, I’m not going to go make a five-year bet on the housing market right now that’s being driven by a sub-three percent mortgage rates during the greatest job loss in my lifetime.

Sean O’Toole [00:31:23] Yeah, it’s a very, very strange mix of numbers for sure. How much? So we talked about, you know, one of the big problems is how difficult it is to get something entitled. Right. I guess really more on the development side. And what about like materials? We’ve got all these, you know, trade war things going on in the rest. And what about just, you know, cost of lumber and granite and all those things that go into building a house? Is that causing your builders much consternation? The trade wars really hit them at all?

John Burns [00:32:05] Surprising, so I have two guys that pay attention to that, Steve Basten and Todd Tomalak, like they do our bill building products consulting, which has become a big part of our business. And it varies a lot by product, the builders are very wise and they figured out pretty early that this particular countertop was probably not going to be coming from Italy so we’re gonna have to go get one somewhere else. And this, and one of them I heard like tied up six months worth the cabinets just to make sure he had the cabinets. So the big homebuilders have done OK. But you go into Home Depot. In fact, I went to the Home Depot two weeks ago and there was a sign right at the doors like we have some supply shortages. I’d never seen that before. So it varies by company. And initially, I think it was international. Now I’m hearing it’s more domestic because somebody had to shut down because a worker got sick.

Sean O’Toole [00:33:03] Right. Yeah. That makes that makes sense. Are you seeing. Are there. I mean, we all know how bad it is to get something entitled in California. You know, kind of best states? worst states? What you know, as you look around the country, are there places where, hey, we can just build whatever we want and like, there’s no regulation, just. No.

John Burns [00:33:29] You know, you used to say that about Houston, but we joke that so many Californians have left Houston, some of them are city planners. So now it’s worse than it used to be, pretty much everywhere. But I would say Houston is much easier to get things done. Among the major cities, clearly rural areas, some places you don’t need a permit at all.

Sean O’Toole [00:33:52] Right. And, you know, I guess with that speaking of Houston. Right. The whole oil market being decimated. Right. You guys have to look at those kinds of local economic factors as well. I mean, one of the things that, you know, I was born and raised in California and everybody wants to bag on California, but it’s one of the strongest economies and one of the most diverse economies in the world. You know, you take someplace like Houston and so oil-dependent. That always seemed to me to be much higher risk. And all my California friends going there to invest and I’m like, God, isn’t it kind of a one-trick pony? And I don’t know if that’s fair. I’m asking.

John Burns [00:34:27] You know, if it was in the 80s, it’s less so now. It’s actually got a huge health care presence. Not that that’s not doing well either, but. But David Jarvis, who runs our Houston office, is part of the Greater Houston Economic Partnership. And so he stays on top of a lot of it for us. And actually, Houston is doing great both on the rents. The rents at rents are pretty soft. But, they’re doing better than I thought, our rentals. And they’re killing it on home sales at all price points. Oh. One of the tricks data things we do that you’ve probably seen me present before is that every quarter we go to U-Haul’s website and price out renting a truck from one city to the like, from L.A. to Houston and then back should be the same price if you have the same flow of people. Right. Same truck, same distance. We are still seeing in-migration into Houston right now, despite the $20 dollar, strong in-migration, despite the twenty-dollar oil price. And I think that is overcoming the local distress right now.

Sean O’Toole [00:35:33] Yeah, and demographics plays a big role, too likely. So, you know, Florida has a you know, definitely an aging population. And with the SALT tax stuff, we saw a lot of people escape New York and places like that for Florida. But it kind of felt to me like, boy, that’s got to be reaching an end where, like the future outlook isn’t very positive there. Bruce and Aaron came to a very different conclusion that, you know, they see Florida as a good long-term location. I mean, doesn’t that kind of bubble burst at some point as these as the Baby Boomers start to die? Let’s put it too bluntly.

John Burns [00:36:14] Well, there’s multiple Floridas. So if you go down the southwest coast in Naples, where it’s all retirement, I mean that someday it’ll soften. But area started buildout in nineteen sixty-one. So that’s only fifty-nine years old. So there’s quite some runway there. You go up to, I know where Bruce was investing between Tampa and Orlando. And Tampa is like America’s back office. It’s like a mid a little mini-Atlanta, if you ask me. It’s not a retirement area at all. And Orlando is all about Disney World and tourism. So it is very different stories here and in that state.

Sean O’Toole [00:36:53] Right. You go up further north. So. So, I mean, at the end of the day, these things get very local and that, you know, I know you guys, one of the, I would imagine one of your biggest products is the feasibility studies where you come in and help builders not only understand what that current market’s like, but what’s the best product to build in the rest.

John Burns [00:37:17] Yeah, no, we love doing that. And, you know, before we started doing it, they really were just guessing like the price that the house down the street does at this price. It’s kind of like your appraisal thing. We found three people who bought it. So if we build it, we’ll find three more. Right. Say there’s actually tools now, some of which are actually inside PropertyRadar. So you need to roll it out the rest of the country to really understand who the buyers are and what they’re looking for. And we’ve been doing focus groups now which, the trick there with is turning all that information into something useful. A lot of times focus groups are just big, huge printouts of reports and you don’t know what to do with them. But our clients, particularly our rental clients, more than our for-sale clients, are really using it to put in the amenities to figure out the mix of one-bedroom, two-bedroom. I think the one-bath stuff is pretty much dead right now. Everybody wants the one and a half or more. You’ve got to learn that stuff if you’re going to compete.

Sean O’Toole [00:38:21] And you guys do apartments and the multi-family as well as the single-family as well to right. That. That’s a big part of that. What do you…With, you know, kind of the issues around density and stuff, do you see a pullback on the apartment side, D.C., differences in what happening in single-family versus apartments?

John Burns [00:38:43] Huge, huge differences. So if homeownership is rising, that’s got to come from somewhere, right?

Sean O’Toole [00:38:50] Right.

John Burns [00:38:50] Well, it’s coming from apartments. We are right in the middle of finishing construction on a 33 year high of apartment construction. So you wipe out the jobs you’ve done, so you wipe out the demand, you add to the supply. That’s a pretty ugly mix. We’re very, very bearish on apartments over the short term here. But I will say you can look at the demand and supply all you want. But in the apartment world, it matters how much money is out there and what they’re looking to do. And there seems to be a lot of capital that’s willing to overlook twenty or twenty and twenty twenty-one and just say, give me some long term yield, buy it, backed by an asset in the United States and I’ll take it. So that’s the vacancy here may get pretty ugly. But I don’t think the prices are going to get really cheap because of the demand from capital.

Sean O’Toole [00:39:44] Right. Right. Interesting. Do you see? Do you see any of these apartments like, you know, as people want to own their own place? Do they condominiumize?

John Burns [00:39:57] They’re called condo conversion hasn’t really worked out. Let me say it another way. So it really is about the design of a unit. You really take a unit that was designed as a rental. It’s really not designed to for homeowners. It’s usually smaller, maybe doesn’t have that extra half bath. Some of that other stuff. So some of the apartments this cycle where we’re actually old condos that were converted, they built as apartments. I think those could convert back to for-sale condos because the bigger a larger and they were initially designed that way.

Sean O’Toole [00:40:36] I actually met an investor one time and that’s all he did was play the cycles. He would buy apartments and turn them into condos and then buy them back as condos and turn it back into an apartment. And this cycle that way is pretty interesting. Older guy and kind of gone through it a couple of times. So was it interesting? Interesting take on things. What’s top of mind for builders right now?

John Burns [00:41:05] Government policy. So in Big Shifts Ahead, we come up with this thing called the four, five, six Rule because we studied all this demographic history and every big shift was caused by some sort of government policy like the G.I. Bill would be a significant example of that economy, obviously, which we’re talking about new technologies which enabled certain things to happen. And actually, this all single-family rental business that has exploded is the institutional ownership has been enabled by new technologies that didn’t exist before. And then societal shifts and the societal shift to being able to work from home right now is something that we know is massive. I don’t know how massive it is, but with the anecdotes that we’re getting from that are just unbelievable. Personal and all of our clients too.

Sean O’Toole [00:42:02] Are builders like, switching midstream and like changing the bonus room into like his and her offices and things like that.

John Burns [00:42:11] Yeah. I mean, you take the bedroom, you pull out the closet and you merchandise it is a great office. I mean, you can do that right now. The biggest shift that they’re doing is they’re now buying land a little further out because they see the demand there. And that’s why I was saying the Surban has got to trend down. They were buying the higher density stuff closer in, which is really expensive and paying a premium for it. And now they’re saying, oh, I can. Now it’s back to where it was 20 years ago. I can go out further out and do a homes on a seven thousand square foot lot that are less expensive to build. There’s generally fewer NIMBY’s, too, and there’s tons of demand right now.

Sean O’Toole [00:42:51] Good. Well, I think we probably know everybody is curious to talk more about covered and market forecasts kind of stuff, which I know you guys just finished a big report.

John Burns [00:43:06] I’m not sure which report you’re referring to. We do big reports all the time.

Sean O’Toole [00:43:11] Yeah, well, I’m looking at one, looks like three hundred and sixty pages.

John Burns [00:43:17] I hate to say that, but we produce that every single month for our clients, so it’s. So that’s all the national data we can get our arms on. I don’t print it out like you guys did. My clients look at it on the computer.

Sean O’Toole [00:43:32] Oh, I wouldn’t print it.

John Burns [00:43:34] Right. Aaron’s got a printout. And then we do seventy-three pages on every metro area, too. So that’s what I meant. We went from go find the data to now there’s too much of it. But we, we collect it all because it’s all something I want to learn from.

Sean O’Toole [00:43:55] So you know how has Covid-19 like just big picture netted out for us. How has it changed your forecast or your. You know what? How has it changed what you’re telling builders in the last, you know, 90 days here?

John Burns [00:44:11] So we have been saying because of the housing cyber risk index and some of the things and that big, huge report about how much leverage was in the system, that we were in a high-risk part of the cycle that was going to feel more like 2000, 2001, most likely than 2008, 2009, because we’re 10 to 12 years after the Great Recession. Back then, we were ten to twelve years after the SNL debacle, which SNL was all the capital for housing. So there are a lot. And so we weren’t overbuilt. The industry was very disciplined. We’re adopting documenting the mortgages and we figure the next recession rates would probably fall like what happened in 2001 and we slide through it. So when this all went down, we said we think that’s what’s going to happen. We think it’ll be a little worse given the job losses that we’re seeing. We actually suspended our forecasts for three months from March through the end of June and got a lot of new data and then came out with a forecast for us I call slight down. We just revised it to a slight up because the evidence that we’re getting that mortgage rates are most likely to stay sub-three for a long time. That government, Democrat or Republican, is going to continue to throw more money at this, that the F HFA has tools in place to try to foreclose on as few as people as possible. You know, I never thought that they would pay my payroll for two months, but they did that. I mean, they’re kind of all in to help us out. And then you lock everybody in their house with all their family and everybody’s focused on the house. They can’t spend money on their vacation. All of that’s making me crazy to think that I’m gonna be calling for OK times when we have 11 percent unemployment.

Sean O’Toole [00:46:11] Yeah, yeah, I know it’s a nutty set of factors and, you know, definitely give you..

John Burns [00:46:16] One data point on that, that our chief demographer pointed out most of that unemployment. People have checked the box, that they’re temporarily unemployed. The vast majority of that and I didn’t even know that box existed. So I want to say, like, I think we’ve grown, we’ve had almost three million permanently employed people, but something like 20 million temporary employed. So if you just look at the total number, it’s it makes you sick. Three million makes you sick, too. But this doesn’t appear to be the Great Recession all over again, at least in terms of unemployment.

Sean O’Toole [00:46:59] And I know this is you know, there’s lots of folks really hurting, you know, I don’t want to minimize that at all. But,I have quite a few small business friends that are having a really hard time getting their folks to work because of the six hundred dollar bonus. You know, it’s 15 dollars an hour on top of unemployment. And if they’re paying that employee even 20 bucks an hour. Right. They don’t want to come back to work. So I actually get less money than they will staying on unemployment. It puts the small business in this quandary where they can report that employee. And, you know, that employee will lose that unemployment kind of forced him back to work. But that employee will then also hate them forever, which isn’t what you want having coming back to work. So they’re not reporting them and kind of surviving with less people. You know, that’s anecdotal, and I’ve been in an area that’s economically pretty strong, a lot of people are coming here to shelter and I don’t know how true that is. What what are you seeing in that kind of larger job market? The impact of the unemployment. It ends this Friday. What do you see in there?

John Burns [00:48:17] Yeah, so we figured out that 64 percent of America can make more money on today’s unemployment program than they’re currently making. So they I mean, talk about the government going all in. But you’re right, it ends this week. And so they’re gonna come back, I don’t think they’re gonna come back with zero, but they’re not going to come back with six hundred too. And I think they’re going to try to solve the.

Sean O’Toole [00:48:40] That issue tried to make it where there’s still some incentive to go back to work, but also not leave people where they can’t pay their rent.

John Burns [00:48:47] Yeah. But part of that is they didn’t want somebody to be forced back to work to make money and expose themselves to getting sick. So, I mean, this is why I’m so glad I don’t set policy for a living. I can’t imagine.

Sean O’Toole [00:48:58] Yeah…

John Burns [00:48:59] Risk lives like that.

Sean O’Toole [00:49:01] Yeah. Yeah. No, that’s a great point, too, because there’s definitely especially if you’re in a high-risk family or you’ve got older folks at home that you’re coming back home to. Right. That’s where we’re seeing locally. That’s where we’re seeing most of our spread is multigenerational families. And the kids have to go to work and they bring something home. And the folks are you know, parents are getting sick.

John Burns [00:49:24] Right. So, you know, bringing that back to housing. So if you’re living a multi-generationally and a house that’s a little too small and pretty old and the other sub-three percent mortgage rate, and you’re still confident you’re going to keep your job?

Sean O’Toole [00:49:38] Yeah, I mean, you’re looking at maybe even separating and saying, hey, let’s be in separate households. This doesn’t make sense?

John Burns [00:49:46] That’s right.

Aaron Norris [00:49:47] Do you know how much the mortgage market is controlled by the federal government?

John Burns [00:49:53] I’m going to get the percent wrong. I’m not going to quote it. It’s more than half.

Aaron Norris [00:49:58] It’s more than half. And what are some of the tools? I don’t know this. I know there’s a lot of different things that are not new. They rolled it out during the downturn as far as the stuff that’s not federally controlled. I know here in the hard money loan space, there’s not much you know, the government’s not sweeping in to help private lenders, but for the nonqualified mortgage mortgages out there, the private independent banks, who’s coming to their rescue?

John Burns [00:50:22] Nobody. I mean, non-QM was two percent of the mortgage market. And non-QM used, you know, probably half of those people have some sort of issues that make them high risk. The other half just don’t have the documentation for one reason or another. I feel sorry for them, but that’s not going to move the overall housing market here.

Aaron Norris [00:50:42] Do you think? Do you see foreclosures being an issue for either residential or commercial in the next couple of years?

John Burns [00:50:48] Commercial is gonna be a disaster, but I do. I do think the government learned their lesson in the last cycle, that if we just foreclose on everybody, we basically drive prices down on our next foreclosure. So everybody loses money. And so Calabria, at least on the residential side and even on the apartment side, he said, we’re going to work with you guys because it’s in our best interest as the lender. Your best interest is the owner and in the best interest of the tenant or homeowner that we try to figure this out. I still think we’re gonna see foreclosures for those homeowners who maybe just can’t get their act together. But, you know, they had their act together when they bought the house because the documentation was impeccable.

Sean O’Toole [00:51:33] I mean. Yeah. Yeah. To some degree, you have to have some foreclosures. Otherwise, people just stop making their payments and want again. Right. So that’s a little bit of it at least has to happen as a dissuasion tool. My guess. So, you mentioned commercial is gonna be a disaster. Let’s break. That is a lot of different sectors of commercial. Right? Retail, industrial distribution, different things. What do you think? Where do you think it’s going to be worst hit and least hit that?

John Burns [00:52:07] Well, retail was already struggling going into this. So now I hear there’s a lot of centers where they’re collecting 20 to 30 percent of the rent that does not pay the mortgage. So and I think we’re just this latest round of closures is gonna be the death knell for places that could have survived a two-month closure that now can’t. So somebody is going to loan those that’s got to be worked out. And the loan loss reserves that the big banks just reported this last quarter were massive. And that’s a that is a big, big, huge problem that needs to get solved. And that’s retail. Office, this is very interesting. So with this whole work from home, you know, as much space, a lot of companies are saying we don’t need much at all. But in those areas, particularly like the Manhattans of the world where everybody was working elbow to elbow, you can’t do that anymore. But when they come back, maybe they’ll be back in offices again. So maybe half as many people come back. But you’ll need as much space. So I think we’re going to see some pretty significant office vacancy here for a while. But then again, does the lender want to own the building or are they just going to work with the owner to help them through? Lesson learned in the past is you’re better off working with the owner if the regulator, the Fed, will let you in. I gonna bet on the Fed this time. They don’t want to own buildings.

Sean O’Toole [00:53:39] Yeah, I think they learned that after SNL. Like, I mean, we definitely saw a difference in 2008 where they worked through most of it versus, you know, they didn’t want to take back the dirt. They don’t have the dirty dirt issues either. Right. Especially on the office that really isn’t so much a problem. But certainly, you know, any of the other places where you have gas stations or industrial or painter booths and all of that. So it seems like distribution is probably booming. I would love to own some warehouses.

John Burns [00:54:11] It’s the new retail. I mean, that’s how that’s everything you’re ordering online, isn’t it? Industrial building somewhere.

Aaron Norris [00:54:17] So I know Amazon has been targeting malls because they’re so well located in cities. But I’m hoping that the malls decide to diversify into residential senior housing, hotels, other kinds of…

John Burns [00:54:31] That was going on already. One of my clients, Brooksfield, has one hundred and sixty-five malls that they got out of the GGP bankruptcy and you know, they shared with us at our conference in November that there is a lot of areas of the parking lot already if it is not being used. So you could actually do an apartment complex on there already. And those tend to be primo locations.

Sean O’Toole [00:54:56] That was always my take. Everybody is like malls are going to get killed. And I’m like malls have some of the best locations in the United States. And, you know, you could do so much in those locations. And they’re large pieces of dirt that, you know, already zone for quite a bit of density and have good traffic egress and ingress. They seem like just awesome locations.

John Burns [00:55:18] Yeah. People keep thinking about the structure of the facility. It’s actually the parking area that’s easiest to develop into residential.

Aaron Norris [00:55:26] Yeah. Missing those three-story J.C. Penney’s and Macy’s. And Forever 21s.

Sean O’Toole [00:55:32] You know, those buildings are fully depreciated, right. They’ve been around for so long. There’s no doubt they really left in the buildings to scrape them. It does matter. We look at that. We look at the. It’s interesting how we look at the value of your take on this, John. Right. Like, so in Japan, like, you know, the rules actually say like the building depreciates over time to zero. Right. That’s the the tax rules. But yet we still pay a lot for buildings that are really old and crappy rather than tearing them down in Japan. My understanding is that, you know, hey, after 20 years, I tear this one down and build something new that’s cool and modern and like, why the heck are we doing that? Well, then just be awesome for the economy and all the rest. They’re already entitled. And why do we keep living in these chip boxes from the so Fargo? There’s so many of them here in Tuhoe because they all got built around the Olympics.

John Burns [00:56:31] There’s no repair and remodel business in Japan either. They basically don’t spend any money on the house either until it’s ready to tear down. Like I said, there’s some cultural issues about you really don’t want to live in somebody else’s house. So there’s not a real active resale market there for cultural issues. Everybody would like to live in a new space.

Sean O’Toole [00:56:50] Oh, that’s interesting. And it’s interesting to me how they can you know, how they’ve made that work economically. Right. Because it’s you know,.

John Burns [00:57:00] They do factory-built housing. There are one of my clients, Sekisui does that. They’ll tear down it off. They’ll buy an old building, tear it down, put four new ones on there and made in a factory. And they’ve got it. I think they do. Fifty thousand a year. So it’s a machine that just does it over and over and over again. And there, they’re like, I’d rather have it built in the factory because I know it was built right. And the angles are 90 degrees as opposed to the way we do it here.

Sean O’Toole [00:57:30] But why aren’t we? Why aren’t we building houses and factories here?

John Burns [00:57:35] Well, you’re going to have to have a whole nother hour-long podcast for that.

Sean O’Toole [00:57:40] Going to have you back.

John Burns [00:57:42] I would say the primary reason would be local zoning. The zoning is different and every single city. We had the benefit of low-cost labor coming from south of the border that Japan never had too. And the industry here has also been so cyclical. Factories are big investments. So, you know, you want to build a 30, 40 million dollar factory and then have the housing market turn on. So I think it’s a combination of all those things.

Aaron Norris [00:58:12] Do you see the public builders getting into the built to rent space, sort of diversifying their own portfolios?

John Burns [00:58:18] So did you know that we have a conference on that tomorrow? You’re teeing me up here?

Aaron Norris [00:58:23] I didn’t know.

John Burns [00:58:26] But actually, this won’t be tomorrow because this is airing later. Right.

Aaron Norris [00:58:30] This is putting out Thursday. So, yeah, we’ll miss it by a day day.

Sean O’Toole [00:58:33] We can tweet about it or like let people know if you if you’re looking for more sign-ups.

John Burns [00:58:38] We’re full, actually. Well, it’s kind of hard to say you’re full online, but we actually are trying to break. We’re trying breakout rooms as part of this to bring back some networking. Our six breakout rooms are fall. Yeah. That that has become a third of our consulting business is built for it. It is. Wow. Everybody is building it. I should say everybody is planning on building. It was actually not that much of it under construction.

Sean O’Toole [00:59:05] And build for rent that’s not apartments like single-family or like townhomes or what are they building for rent?

John Burns [00:59:11] It’s. Yeah. So I’m actually that’s the opening part of my presentation is trying to clarify that. So there never really is contiguous communities that we really should just start calling them apartments. There they just have half of them are detached and the other half are attached. But more like row towns, more single level, some two-level row towns. And then there’s another component of it where, you know, builders are just selling six of the homes in my community to this guy and another five to that guy. So that’s more to the scattered home guys like the American Homes for Rent, if you will. Who would be buying those? It’s but none of this was feasible before all this technology that allowed guys to figure out how to do this. Right.

Aaron Norris [01:00:03] Well, we’re up about that hour Mark. I wanted to bring up the single-family rental index. If people were interested in finding out how to participate and who you’re looking for.

John Burns [01:00:14] Yes. So, again, where there’s a hole in the market, we’re trying to get data on it. So this single-family rental data is not that great, because if I decide to rent my house to you, how does anybody know what the rent was and whether or not I gave you some concessions? So we’re trying to get a better trend data. So we are doing a quarterly survey. We partnered with the National Rental Housing Council. So we’ve got the big boys in there, too. And anybody who participates in that will give you back the survey results. Plus, I think we’re given some of our forecast data too.

Sean O’Toole [01:00:48] And we definitely have a lot of single family-run landlords, so we’d love to get them participating and I’m sure they’d love to have access to the data.

John Burns [01:00:56] Yeah. What we’re asking is and we don’t say who, but, you know, just tell us some stats about what you’ve seen going on on the market. Just a few questions and then we’ll return to everybody else’s results.

Aaron Norris [01:01:07] How many properties in an MSA would you like them to have? I think it’s five. I knew the answer before I asked. Devyn. Devyn tells me five. And what I’ll do is, I will post links everywhere where we’re producing the show so people can find out how to get involved in to.

Sean O’Toole [01:01:26] All of our landlord folks listening, if you have more than five units, they suggest you take advantage of this. Because I do this actually for a software company. I put in my data into some of these surveys and then I get back the results and I can benchmark my company against all the other companies. And it’s super useful. It’s something I do regularly.

John Burns [01:01:51] Yeah. We only ask a few questions. And Devyn’s email is

Aaron Norris [01:01:59] I was gonna to say for more information. Is that where you’d like people to go? The real estate consulting dot com? Yes, please. Yeah, there’s great blogs. You have links to the new Home Insights Podcast. Real estate investors, it’s one of my favorite places to go to hear what builders are doing. Trends and different demographic spaces. So as you’re rehabbing homes. They let the stuff out for free. It’s ridiculous.

Sean O’Toole [01:02:21] Anybody, I mean, even I mean. Yeah, just the podcast and the other things. I think it’s something that realtors, real estate investors, our mortgage folks and all the rest should be listening to and paying attention to. I realize they’re not your primary customer, but they may know some of your customers and they can send them as well.

John Burns [01:02:38] So, you know, more importantly for me, they’ve got intel in the market. I don’t have. So, you know, we like to swap some free stuff for some intel.

O’Toole [01:02:47] Awesome. Awesome. You know, good stuff. John, awesome. This is really good. Hour went fast. Lots of really, really good stuff. Thank you.

John Burns [01:02:55] You bet. Thanks, you guys.

Aaron Norris [01:02:56] Thank you for listening to the Data Driven Real Estate show. You can find show notes and links to some of the resources mentioned in the show at, click that “Join the community,” and you’ll be forwarded to our community where you can even ask questions for upcoming guests. Ask questions of current guests. We monitor there and we’d love to meet with you. Please don’t forget to like favorite subscribe and share on any of your favorite platforms. That helps us out a great deal. Thanks for listening and we’ll see you next week.