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Is there a SLOWDOWN in Raleigh Real Estate? Market Talk with Stacey Anfindsen

Is there a slowdown in home prices on the horizon in Raleigh? Marti sat down with residential appraiser & market analyst Stacey Anfindsen to get the scoop!

Marti Hampton: I am so excited to have a conversation with somebody who knows Raleigh, Cary, and the Triangle real estate markets so well. Stacey, how many counties now do you research?

Stacey Anfindsen: Oh the big four: Wake, Durham, Orange and Johnson. But Chatham has gotten so developed and then Franklin and Harnett. Harnett’s really going to be the future for a lot of developments. So it’s yeah, we’re lucky to be growing like we are.

Marti Hampton: We are lucky. We are lucky and we’re lucky to have you because I’ve been studying your reporting and really reading it ever since I’ve been in real estate. And I’ve been in real estate just a few years longer than you have. But I know you’ve been in real estate since 1991. What do you do for real estate?

Stacey Anfindsen: I was an agent for one year!

Marti Hampton: Oh, wow. I didn’t know that!

Stacey Anfindse: It was my first job. At my first job out of college. So I did that for two and a half years.

Marti Hampton: So good, good. Well, all that experience, you found your niche, you’ve certainly helped me and my people in my team know more about what’s happening and try to keep up with local real estate. You know, I look at a lot of things that are national, but you really bear down. You dove deeper when it comes to local real estate.

So I just want everybody to know just the importance of your research and your experience over the years that you’ve been an appraiser. You’ve also been an agent. But you’ve got a website where you say, “Ask the Experts” that you do for the Raleigh Board of Realtors that I think is phenomenal. How long have you been doing that?

Stacey Anfindsen: Well, we’re not doing that anymore. We probably did that for about ten years. We had it when they had a change in administration.

Marti Hampton: You know, that brings the question, how long does it take you to compile all of the statistics that you do?

Stacey Anfindsen: Well, the writing of the reports program, page two, which you just got an email of this morning — that’s probably an hour depending on what the topic is. It’s probably about a 3 to 5-hour process each month in the quarter. As savvy as I am with hunting and gathering data, it’s still a lot to put together.

Marti Hampton: I know it is, I know it is. And I really, really appreciate all the time and the effort that you do to make us be more professional, and be able to help our clients better. So that’s great. So, you know, let’s just start out. There’s a lot of hype in the media about real estate. Of course, we’re always in the news, but reports are showing an increase in inventory. What’s your take on all of the news hype.

Stacey Anfindsen: Well, remember that the real estate and the media are headline driven. And sadly, consumers are headline driven where they will click on that and then read like a couple sentences and that’s it. So for people that write like me, that’s very discouraging. And journalists suffer the same thing, making a lot of effort into their articles.
So yeah, we’re still consumed and the housing bubble is what they like to look at, and they are looking for another one. Obviously, the Great Recession was part of the first housing bubble. And so when you had this unprecedented increase in house prices over the past two years, I think, oh my gosh, what goes up has got to come down.

And in order for that to happen, you have to have more inventory. And so that’s really what’s happened now. And really the key nuggets that they’re dropping into are the number of inventory, the total amount of listings, and then the number of listings that have had a price drop. So in this month’s report, I addressed both specifically price dropping because of some of the price dropping metrics.

And so price dropping is defined as listings that have at least one drop from the original list. They may have three. I just pick them up as one. So the numbers this month were in the high two digits and some of the low triple digits. And so when I see something like that, I’ve been doing this for such a long time, I think I made a mistake.

So I go back and I double check it. I think the number was something like 90% compared to June of last year, which is a tremendous amount. And so you’re going to get people like Redfin to jump on that. And, you know, they track that rate.

And I go, oh my gosh, house prices are dropping, house prices are falling. And that’s where we get into a slippy slippery slope in terms of communication because the consumer’s just going to log on to that. And so the challenge that I have and other people that report, particularly on the market, is to kind of explain and give it some context.

And so what I did with the price dropping metric was I compared it to June of two years ago and to June of other years. And it really is right in line with what we’ve seen. In essence, in June of last year, only 10% of active listings had one price drop, and that was because that was a historical anomaly.

It’s never been that low historically over time, and it really did pick June. But most of the months, you’re going to see about a third of end of month inventory have at least one price drop. So my opinion and my statement was that price dropping in June of this year returned to its normal level.

Marti Hampton: Hmm. That’s interesting. Has the merge of the MLS as you study statistics, influenced your numbers at all now?

Stacey Anfindsen: One of the things that I have to watch is that just like an appraiser, I need to be competent in what I’m writing about. And so the four main counties are really enough for me because we have so many submarkets in there, and that’s really the challenge.

It’s a little bit easier for me because I’m dealing with a bunch of data. But with your agents, when you maybe go to list one in Raleigh and three in Wake Forest, and then maybe something inside of downtown Cary — Those are all different submarkets and you can have totally different market conditions in the sense. So that’s what makes it challenging from that standpoint.

Marti Hampton: Yeah. And to mention Wake, the largest county in North Carolina — I notice a steady monthly slowdown in showings. And in January, honestly, I wasn’t too worried about it because I saw there’s no inventory out there.

It was down 47% February, 47%, March. And then I got this month’s report or May’s report, I think, and it was down 47% showings and of course, showings or indications of future sales. So I was concerned about that. I was surprised. What’s your take on that showings?

Stacey Anfindsen: We got into this in the last year of people buying making offers on a house site unseen, that’s not a showing. Right. So I’m not sure. Look, there’s a seasonal pattern with it and essentially we’re replicating a seasonal pattern.

And the seasonal pattern is just showing its peak in February and March and then they rally in the fourth quarter. And that pattern repeats itself and it’s repeated itself every year with the exception of COVID, you know, 2020 where we had everything move about 30 to 60 days to the right. So I’m not sure that showings are as correlative to activity as they have been in the past, because I’m not sure they’re picking up the bulk of activity.

I think the metrics we don’t have a handle on is how many people are eyeballing your listings on your site. keeps those metrics. There’s a lot of portals that look at how many people are looking at real estate in there, then whether you got to look at new homes.

Whereas in the past, when the showing system started and you had a bunch of these sales models that national homebuilders have; they were not really predominant and there were spec homes built and you had to make unemployment for that. Well, that kind of captured the new home market. But now we have so many new home transactions that I almost think that the drop in showings is more correlated to more people looking at new homes.

You can kind of pick what you want with a resale, especially since last year in this crazy feeding frenzy. I don’t think I know a lot of buyers who said they’re not playing in that space anymore. So they decided to change their geography or change their house size and go to their homes.

Or at least you knew what you were getting. You knew the lot you’re getting on and that whole emotion of bidding. And, you know, you’ve seen it in your office. I’ve heard about it. You had buyers trying to get ten houses, 15 houses. SThere is an emotional aspect to buying a house, especially when you’re in a a culture that says, if I want something, I can get it, especially if I have the money to get it.

And then when you have the money to get it and then you offer more than it’s listed for, and you don’t get it. That’s a whole bunch of psychological issues that are brought up. Like real estate therapists were busy the last year and a half.

Marti Hampton: I know. Well, even with showings also look at pending sales, which I think boils down to pending sales is more important than the showings.

Stacey Anfindsen: Yeah. So the mortgage rate increase started in February. And if you say that, let’s have 30 days and most of the data that I’m looking at and everybody’s looking at is at least 30 days behind. So we don’t really have these real-time market conditions. Fannie and Freddie have it when because all the up mortgage loan applications go into their system.

But everybody else, we’re about 30 to 60 days. It’s probably 30 days behind. And so I think that really what you saw at the end of the first quarter and throughout the second quarter was the market absorbing those rates. And, okay, what are we going to do? Historically when rates are going down, people wait. Historically, when rates are going up, people go, oh, my gosh, we’ve got to get a house!

And so I think part of that, it’s just we’ve only had about three or four months of this. So yeah, the obvious answer is that pending sales have impacted all. Rising mortgage interest rates have impacted everything. But to the extent that we can quantify it, it’s still too early. And in my opinion, we won’t be able to pick it up until third and fourth quarter.

Marti Hampton: Okay, let’s switch to something I know a lot about and that’s Coming Soon Homes category in MLS. And recently they passed something that said that you can still have a Coming Soon home, but then they’re going to count the days that you don’t show the listing when it’s in Coming Soon status. And I think that’s going to give the public kind of a weird view of the market. What’s your take on that?

Stacey Anfindsen: The godmother of Coming Soon Homes! So this month the number of Coming Soon listings were down. They peaked at about 20% last year. This year they’re at about 10% and they’re dropping. Days on market is about flat compared to where it was. What it did do was the other metric that I tracked is number of resales listed. Those exploded.

So I don’t think it’s going to have an adverse effect on the overall days on market number. But it is a strategy that you are super familiar with, and it was a strategy used by yourself and your peers last year.

Marti Hampton: Well, that’s good feedback on that. You know, we’re starting to see some price reductions. We mentioned that. So how is the number of reductions in comparison to last year?

Stacey Anfindsen: We’re significantly higher.

Marti Hampton: We went from 10% to — Did you say last year we were 10%?

Stacey Anfindsen: Now last year, there’s two metrics that I count. One is the number of listings that have at least one price drop And then I take that number and divide it by the total number of listings. So if you look at it as a percentage this year, June’s percentage of price dropping listings compared to total inventory is about 32%, 33%. Last year is about 10%.

Yeah. So that’s a huge increase. But if you go back to June last year, it was about 30%. And if you go back three Junes ago, it’s about 30%. You have to go back to the recession where it pops up to about 50 to 60% of the market. So it’s really a return to historical norms. Last year was just such an outlier and so many metrics that I think it’s important with what I do to kind of convey that.

It’s like, oh my gosh, you can’t compare what’s going on now to what happened last year because the circumstances, economic circumstances last year were so totally unique compared to anything we’ve seen in the last 30 years.

Marti Hampton: Right. I totally agree. I’m interested in your take on new construction homes. Because I know that we’re moving into a market where a great percentage of the home buyers out there are millennials. I think when I bought a house, I’m a boomer, the average age we bought a house was at 27. The average age of millennial buyers, a house is 32.

A huge number of millennials will be moving into house buying in the next 3 years. And I saw that new home inventory is up by 150%. So we’re building some new homes, but I’m worried we’re not building them in in the price range that is going to allow that first-time homebuyer. What’s your take on that?

Stacey Anfindsen: Yes. I think the really smart people running these homebuilding companies are aware, but they don’t really want to say anything because it’s a really scary number. Matter of fact, I wrote specifically about that in my June report and I gave an example of a couple that bought a house in December of 2010, which was the low point.

I think 2.38% was too low for that. And then I looked at what that house was in terms of size and year built. And then, you know, how much did that cost? And so then I carried it forward to June of this year and I said, How much, you know, what did that sell for? And there’s probably about $150,000 change in that.

So that’s fantastic. Right. But the problem is that 2.38% is dramatically different than five and a half percent. So if you wanted to go and move up, so that was about a 2000 square foot house built in 1991. If you wanted a new home, meaning that you want something bigger, you don’t want that 2000 square foot house.

So I bumped it up to about 3000 square feet in Wake County. That’s based on active listings and that’s a decent sample. It’s not certainly everything. And you can get alternatives and different price points. It’s about $650,000. So that really almost doubled the monthly mortgage payment.

So part of that has been apartments. Okay, well, we got them. It’s just really a straight up competition between new and resale. But once you’re in a house and they’re trying to convince you to get a new home, that argument is now. It’s hurricane-like winds, not just headwinds, because you’re looking in a two-year period.

Yeah, if you had the right stock, if you’ve done really well. So Apple still has done well compared to December of 2020. Facebook has done terribly. So it depends on where you’ve had your portfolio. But if you’re talking about almost doubling a monthly mortgage increase, I know wages have gone up, but I don’t know if many households, unless you are super trying to stretch yourself or somebody is going to sign off on, Hey honey, I think doubling our mortgage payment is a good thing to do to move up and that’s just conning.

People are sitting down at the dinner table, the breakfast table and talking about that. That’s that’s not like 50 bucks a month or 100 bucks a month. That’s a huge headwind that I think they know they’re coming. I don’t know how you react to that, but I think that’s something to look at as we go into the third and fourth quarters, because interest rate trends are upward. They’re not downward and they’re not flat because inflation is still way above where they want it to be.

And so this hammer — not only does affect the mortgage interest rate, but it affects car payments, it affects HELOC loans. There’s a lot of things that it influences. And so, yeah, the other thing is, hey, let’s add on to the house. Well, we got all this equity in here, but our HELOCs used to be at three and a half percent.

And suppose you want to, you know, do a $200,000 home renovation? Well, $200,000 borrowed at two and a half percent. It’s different than $200,000, 4-5%. So we have not seen the influence. I mean, this is still the onset of what’s going to be really challenging market conditions.

Marti Hampton: Yeah, I think so, too. Something I saw back in the 2007 when the market for the Great Recession went down, we’d see what was happening, let’s say in 2006 or before it happened. We’d see what was happening on the West Coast and we’d say things like, Oh, that’s never going to work here.

That’s never going to happen here. What? It does matter. It moves from the west to the east. You know, the national economy matters. So I loved the comparison that you did for the two Apple buyers, which included their stock portfolio and what it was worth now.

Stacey Anfindsen: When I was teaching CPE and when I speak to people and I’ve always tried to emphasize what the components of a house price are because especially with what you do, it’s just price. You got to get the house.

The price costs are influenced by the mortgage payment. The buyer is too. But to kind of look at the components of what consumers have to buy a house and wages, one stock portfolio is two and then home equity is three. And you can play around with all those examples and you can come up with a really wide variance in the type of house that you can afford.

And I think when those trends are downward, eventually, that’s going to influence house prices because wages, even while wages are going up, it’s economically impossible that wages go up in a recession. But when you look at those components of being less than what they were in the past two years, the amount of those that they can apply to a house price is going to be less. And that’s that’s going to have an influence on a market.

Marti Hampton: What do you think about depreciation? Are we going to just level out, have slower sales or house prices? Because there were some people that actually got lucky. It’s almost like Vegas in the last six, eight months. They really priced it out there and they got their money. Are we going to see some depreciation?

Stacey Anfindsen: Well, well, so the kind of the snarky joke was when you go to a group of people and you ask them, whose house made more, did your house make more than you did last year? Right. And a lot of people said yes. I mean, some of these house price gains, especially New Hill, the other parts of the triangle have just been staggering.

I mean, to make six figures on a house in 18 months is just unprecedented. Whether that’s healthy or not, it’s healthy for the people that bought it. I just happened to be in the right place at the right time. You’ve got a house price, it’s an economic fact, and you’ve got a value, which is a concept, and we mangle those, co-mingle them all the time, and they’re really two different things.

And so it’s really a challenge to kind of say, okay, what are we talking about here? Talk about a house price. Well, you really can’t talk about a house price in terms of anything. If you talk about a house price other than a specific house, you have to kind of talk about the whole market. You just can’t say, well, what is your house price going to do?

Because your house is located in a submarket and each submarket has a whole bunch of different market conditions. So the way I like to answer that question is by looking at overall house price metrics, which I look at average sales price, median sales price, median sales price per square foot, all those things are there. When you look at other metrics like price dropping listings, that is indicative of an imbalance, the incorrect list price where the buyer finally has the principal substitution, which from day one in real estate was what and anything else?

Not necessarily just real estate, but when the consumer has a principle of substitution, which means you’re shopping apples with apples and you’re going to take the lowest price apple. If you don’t have that, you’re not going to react the way that you should. You’re going to react emotionally. You’re going to react based on how much money you have to put towards that.

So that kind of skews things. So what I see in terms of these, the number of price dropping listings now is that people are really still looking at this like, Hey, I’ll put a price on it and get multiple offers. But what’s really changed now? This morning in prior markets, you would sit down with your seller and you go to your CMA and I’d say this is where I think we need to price it and we’ll check back in 30 days, maybe in sometimes 60 days.

But we’re going to if we don’t have anything in 30 days, we’re going to, you know, readjust this. Now, it’s like a week. That’s really interesting because one of the metrics that I keep track of is the days on market for house prices that have at least one price change. And then the days on market for those that don’t.

Usually there’s been about 30 to 60 days difference between the two. So for June with resale as things that had at least one price change, the days on market was 33. And I went, That can’t be right. That’s just way too low. Well, the days on market, if you didn’t have a price change was nine.

So that 33 days was explained to me by the agents who have readjusted their expectations. We’re going to look at this in a seven-day period actually think, that’s pretty good because now you have an efficient pricing scenario in place versus what you had before. And the longer the relationship you have with your seller where it doesn’t sell, the more uncomfortable it is.

So I think it’s really good. I wouldn’t call that panic price dropping. I would say you’re really adjusting because we have a very fluid market. We have people coming in here daily and looking at house prices. And I think the ability to adjust house prices on a weekly basis is really good.

Marti Hampton: Going back to house prices, and going back to new construction and the millennial buyer and everything, that all depends on what the developer can get the land for. What are you seeing in land sales? Because I’ve seen some amazing things happen in the last two years with land tracts.

Stacey Anfindsen: Well, for the most part, Wake County, you would categorize as being on the back end of development the majority of big tracts. There are some in Apex, which is still you know, they’re trying to figure out what to do with that. But Wake County now versus where it was when we got in the business is totally different.

So anything that’s going to be assembled now is going to be infill and it’s going to be extremely pricey. And that’s really that just makes sense. When there’s less of something to develop, then the price is going to be higher. So really what is going to happen, in my opinion, is that you’re seeing this in Harnett County and you’re seeing this in Franklin County as the sprawl of the triangle will continue to grow.

And as the roads around us get better, the outer loop gets completed all the way around. The connector between the outer loop, not I-5. You’re going to see Harnett County and parts of Cumberland County, all that stuff where it’s a 45-minute commute. And that’s really up to an hour, which is really what the New York, Boston, Chicago, L.A., San Francisco — they’re used to an hour commute.

So I think that’s really what you’re going to see because unless we go back to the Great Recession, where you had people getting overleveraged, developers getting overleveraged, and all of a sudden somebody pulled the carpet on and everything delivered quickly. And then you had a bunch of land in some stage of development that the banks got back.

I don’t see that happening. That’s we have to build that. You don’t see builders overbuilt now. And there’s too many things that if you look at a builder as a manufacturer and the manufacturer had a full complement of labor and a full complement of parts theory, they’re going to build that 100% of capacity.

Builders are not in that at all. I’m going to guess 30, 70 or 80%. I don’t think I’m totally wrong on that. I think I’m pretty close. So I don’t think we’re at this. You’re going to add too much. So this whole shelter thing is a really interesting topic to discuss because not only does it apply to fee simple ownership, but it also applies to rental property.

And it is a huge answer to the homeless population, which is just something that I think we’re all going to have to get our hands around in terms of seeing this mentality of overbuilt. If you read anything about the amount of shelter that has been created in the past 15 years, past 20 years in this country it is significantly below what demand is.

So you get a whole bunch of builders and a whole bunch of labor and we won’t catch up. So I’d like to take overbuilding out of the conversation because when that word gets thrown in, then the homeowner goes, oh my gosh, my house values going down, and they go up against it. Yeah, I don’t want it and we can’t have that.

Marti Hampton: I looked at the statistic and it said that for the last 14 years we’ve been below what we need for housing. So I think that’s accurate and I think that’s a great thing for homeowners to know and for agents to know that they’re not going to overbuild in their house and may not appreciate at what it once was.

You know, I think in the last 24 months, some areas appreciated, 25%. I’ve never seen that. You know, I’ve never seen 20% plus of.

Stacey Anfindsen: And neither have either myself or my appraisal peers or anybody that analyzes the market. And some of those have been 3% per month. So I think that’s one of the things that make people say hey, I like that. That’s really cool. And it’s not sustainable and not healthy, certainly not healthy, especially if you’re our age or younger and you’ve got a son or daughter that just graduated college.

You say, I loved my first townhouse in North Raleigh at $55,000. I had to have a negative AM mortgage to get into it, but I got into it. It’s tough to say that your entry level property in Cary, Apex, Morrisville or North Raleigh’s $400,000. That’s a big house. That’s a big mortgage payment, especially now it’s 5.5%. Instead of 2.5%.

Marti Hampton: Exactly right. And I think about the, average price range in California is double what we are. And it’s hard. We’ve doubled in such a short period of time. So anything else that you can say to agents in that you would tell them going forward? This is what you need to focus on when you’re helping a home seller decide on price or decide whether to sell in this market?

Stacey Anfindsen: Well, now buyer agents are super attentive to mortgage rates. I don’t know that those who list are as attentive to that, but I think we appraisers are on both sides of the fence, because this is unprecedented territory for all of us. For this type of increase to happen in such a short period of time, with the majority of opinion stating that it will do this for the third and fourth quarter until inflation gets under control.

So none of us have any experience with this. When I got out of college in 1982, my dad was in title insurance and I think that was the last that we had of inflation. Gerald Ford at his inflation now bottomed out there. You remember that? And so there we go. There’s 40 years of knowledge that nobody has any concept and the Fed bankers don’t have any concept of that.

So they’re having to go back in the history books. To think that the practitioners have any idea or can be predictive about what it’s going to do, not their market conditions are going to change on a daily basis. Inventory is going to come on the market on a daily basis, and it will have its price adjusted on a daily basis.

What I wrote in my June report now is to pay more attention to new construction because new construction, their pricing model, kind of got in at the end of the dance. They saw all the multiple offers in the bidding on resales and they said, hey, we’ll do this. And then, you know, we’ll release a section of townhouses for release, a section of single-family houses where we have the sheet rock and roof, and then we’re going to put a price on them and then you’re going to bid on them.

Well, they got some of that. But now I’ve started to see and that’s one of the reports that I do put up on my site. There are new home subdivisions with more inventory and we have new home subdivisions that are actually dropping list price. So that did not happen last year at all. That new construction, the peak new construction really dictates where house prices are going to go.

And I think we didn’t really have the ability last year to say, hey, these listings are available within the subdivision. I think you’re going to see that now. And think you’re going to have to price your listings off of that because most of the metrics that I track in terms of list prices or resell listings that struggle, which are those that drop list price.

And so you know, those houses didn’t really have any competition postcode. It’s a house that may have been updated, may not have been updated, but when you’re looking at a house, it’s 30 years old. And especially the nineties was not the greatest decade for component construction. You still had a lot of things in those houses that had class action lawsuits regarding them, but now that’s a big deal, like a 30-year-old house versus a new house or even a house that’s been built in the last five years.

I get they’re on a smaller lot. They may or may not be smaller, but never underestimate the difference between a brand new house or a house that’s a couple of years old versus one that’s 30 years old because of stuff that you have to do to a 30 years old is all five digits. There are no $100 fixes to those houses.

Marti Hampton: I’ve always said that the resale, which I specialize in resale, but we’re always outnumbered by or we were always outdone by new construction because people have a choice they’ll buy new as opposed to resale except for some very specific things that they might want. So I appreciate that you’ve helped me so much get a handle on this

I feel good. The last question, if you had that son getting out of college right now, would you tell him to buy a home, let’s say, in North Raleigh or Cary real estate?

Stacey Anfindsen: Well, if he can live at home and his parents are okay with him living at home like mine are, save your money. But boy, this is a super challenging time. I get the fact there’s not a lot of inventory. So in theory, it should be as least risky as it was before. But you’re also talking about a lot of money.

If you could get a $400,000 house and you could put 10% down, you know, that’s 380 mortgage for your first job. I mean, good gosh. Even if you put $80,000 down, you know, a $320,000 mortgage for a single person, it’s tough. We’re blessed with people that make salaries to do that.

But if you were to look at the total population, say, just take the 20 to 30-year-olds that are not married, you’re really talking about 70% of the market that is really going to struggle making that. And so I think that’s not good. When we got back to my townhouse in 1983, there are plenty of things to pick from and yes, that was a big mortgage at the time, but it wasn’t it wasn’t $3,000 a month!

I’m a college graduate. Both my kids went to college. They got a job at law firm. They’re working at Cisco, they’re working with RedHat, they’re working with Apple. They’re making six figures. You’re going, what’s the problem with that? Well, you’ve got to remember, there are people that are out there in service industries that have college degrees and they’re not making six figures. They’re probably from, you know, 50 to $60,000. If you look at median family income. Yeah, in Wake County, the Triangle, there’s a disconnect between that and our average sales price.

So that’s a big challenge set to kind of not answer your question. When is the best time to buy a house? That’s when you can financially afford it and it fits in with your lifestyle. I agree with that. But trying to try to try and time the market. Good luck with that.

Marti Hampton: Real last question this time: relocation. We’ve got just tons of people moving in here. Do you see that continuing?

Stacey Anfindsen: Yeah, that’s really it’s a curse and it’s a blessing. Right. So you come here from Northern California, you come here from Southern California, you come here from other parts of the country. We don’t have the shelter for them. And that’s really what this whole postcode thing has been. We’ve had significant gains in inbound population. Well, in addition to the gain from a numeric standpoint, there’s a significant gain from an economic demographic standpoint.

And so they have come here with more money. They’ve come here with more home equity, and they’ve come here probably, definitely with a bigger, bigger stock portfolio. If you look at the biotech companies or a lot of the tech companies and the people here just can’t compete with it. And so that’s a huge challenge now that is predicted to maintain itself in some instances.

I’ve read that a lot of Silicon Valley views RTP as the East Coast version of Silicon Valley. Well, if you’ve been out there and you’ve studied the housing market there, you don’t want us to be like that. Yeah, it’s great. We’re not Detroit. We’re not a Rust Belt city that is really struggling to get people in here. But you’ve got to be careful.

You’ve got to manage the inbound population. And really the number one way to manage it is to create a whole bunch of shelter, because if you closed down your shelter creation like they’ve done in Northern California, like they’ve done in Southern California, all of a sudden you have a bunch of people with a lot of money chasing the finite resources, and prices of houses just keep going up and it knocks a lot of people out of your market and it produces a significant homeless population.

And none of those is what we want to hear.

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