Josh Barker Real Estate Podcast #18
Transcription of the Podcast Episode #18*
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Joey: So, housing inventory.
Joey: The numbers are out.
Joey: And the numbers are...
Josh: Well, right now, the inventory's growing. We're over 550 homes for sale in the county, which is a welcome change for home buyers out there right now because, prior, inventories were sitting stubbornly under 500, and when you're a buyer in the market right now, shopping, man, slim pickings.
Joey: So I mean, that's, like you said, the inventory's going a little up, so that helps the buyers.
Joey: What does it do for the sellers?
Josh: Well, days on the market's still shortening, and it started shortening really in November, December, January, and February. So, sellers are enjoying a shorter market time anyway because the buyer demand is still strong. The challenging thing, and you already know this, Joey, is that interest rates really have a pinch on affordability.
Josh: And so, even though the market's tight regarding inventory relative to demand, rates are still a dominant factor in the whole equation. So, even though about five people would like to buy that home, they can't be bidding it up 50 or $60,000 above market value and still buying it because, number one, it still has to appraise. But number two, because they can't afford it, the interest rates are just too high. So that's what's playing in right now. If I play the report, I did this in our market update at the beginning of the month, but here's what's interesting. Last month, and this will be for April, 160 homes closed escrow.
Joey: That's very low, though.
Josh: It's low.
Joey: That's very, very low.
Josh: It's down 44.4% over last year when they closed 288. And, at the beginning of the month, I can't go into deep detail when I do that market up. But that issue right there has a lot to do with interest rates. Because when the rates go up, it impacts when a buyer can qualify for demand starts to fall off. And that showed up in last month's report.
Joey: So sellers coming to the market are selling their homes. They're still not sitting on the market for a long time.
Joey: They're just not getting five buyers that are bidding 10% over market value anymore. So prices are probably much more in line with value, right?
Josh: Yeah. Yeah. Prices, for the most part, being in the spring every year, you see the optimistic seller come to market, and they try to set a price that might be higher than the recent comps. And that's to find out if we can get that price or not. And if they can get that price, that becomes the new comp. If they can't, you get a lot of overpriced inventory and start making price adjustments until it gets pended. And that's kind of been the theme right now is that we're going into the spring months, and you're going to see optimistic sellers in the market. But what buyers are really experiencing right now is that they're going to go out and shop, and they're going to comparison shop. They'll look at five to eight homes at the price point because that's typically about what they'll have available at any given time. And then, if they're motivated and want to buy in that month, they will pick one of them, right?
Josh: The thing is, there are probably four or five other people like them that have done the same exact comparison shopping, and so they all end up landing on the same house, and then they all write offers, and then, of course, the seller gets to pick the one they want. Again, I want to avoid getting the wrong misconception out there or anything like that, but even though you might get competing offers, it doesn't mean you'll sell for an infinite number above, but you'll probably get to pick your buyer in terms of the loan's strength, the escrow's length, probably having a few fewer concessions, etc.
Joey: But it wasn't like there for a while. I mean, sellers, were they had it good a year ago, two years ago.
Joey: There was some crazy stuff like, Hey, we're going to sell the house, but we're going to live in it for free, rent-free for six months. And people are like, okay. And it was just pretty crazy. You heard some like, wow.
Joey: Somebody had some huge negotiating ability.
Josh: Yeah, you're right. A lot of that was about those interest rates too. You were getting interest rates in the 3% range and a huge amount of motivation for a buyer to secure a home with that low rate. And the inventory was tied because of the pandemic. And you had excessive buyer demand that exceeded what was normal because you had buyers moving up here from outside of the area because they could work from home, kind of those remote buyer, trend, migration pattern shifts that were happening.
Josh: But all of that's slowing down now. We still have buyers, and we've said this on a previous podcast, we still have buyers coming from out of the area, but it's different from what it was during the pandemic.
Joey: Are you seeing any issues with the appraisal value coming back? You mentioned that in the beginning. Is there anything like the banks the appraisers tightening up, and no, that won't cut it?
Josh: Yeah, the appraisers are doing a decent job because the prices have, for the most part, either softened overall or they're holding. And so it's making the job actually easier on the appraiser. A few years ago, during the pandemic, when the prices were accelerating at 15 or 20% in a 12 to 18-month period? Those were really tough months for an appraiser because everything was selling above any comparables. But right now, unless you're a unique property or in an outlying area with few sales, the appraisers are not having a tough time getting appraisals in.
Joey: One of the things that we talk about.
Joey: Yeah. So obviously, one of the big headwinds that we talk about that is the big headwind right now is interest rates. So where are interest rates right now?
Josh: Right now, rates are fluctuating right around 6.5%. As of the podcast today, the Fed did come out recently and raise that discount rate by one quarter basis point. So it didn't necessarily transition into a higher mortgage rate rates are prepared for that. The banks were already thinking that. Anyway, the real question, I think if we wanted to talk about it for a minute, is just, what do we think the Fed's going to do next?
Josh: Unemployment is still stubbornly low, although they argue that labor participation is also low compared to what it could be, which is why unemployment looks so low. But I'll. I'm hearing more and more from what I consider to be fairly credible sources that the Fed may not be raising rates at this next meeting. Instead, they might decide just to hold. That's a good signal for the mortgage rates on the homes because if that happens, I think that's going to be, what is that? A canary in the...
Joey: Canary in the coal mine.
Josh: Yeah, there you go. Maybe we'll start moving into a softer credit policy going forward.
Joey: And interest rates will start to come down a little bit.
Josh: Potentially. Yeah, Goldman Sachs, and it's been a few months since they said this, but they felt like rates would be in the mid-six as most this year. And a lot of the fact patterns they presented make a lot of sense, but they were fairly optimistic in saying this again. A few months ago, rates could be in the fives next year. And so, many folks are just waiting for those fives to show up again.
Joey: And so we talked about this before that usually what ends up happening is the market will react to the interest rates coming down faster than the interest rates come down. That's the whole idea of, like, buy the house now. Marry the house, date the interest rate.
Joey: Because if you wait for the interest rate to come down, the market will start, especially a market like this. The markets get thrown in together.
Joey: But Redding is such low inventory.
Joey: And so, what would you call it, I guess, priced good against the rest of the state? The prices here are still reasonable. You hear some of the prices in the other parts of the state, and I'm, who can afford that? It just sounds ridiculous.
Josh: Yeah, that's a good point.
Joey: So, waiting for that interest rate to come down, know that the housing will probably go up now. That would depend on the segment. Because when I think about this, I'm thinking of homes under 400,000. Because we talked about the cost of replenishment, right?
Josh: Yeah. I would say that it starts to nosedive right after 600,000. So 600,000 and below, there's some demand, and I could see that even on this report, I'm holding my hand right now if I can see it without my glasses on. But if you looked like it's 600,000 and below, that's where all the numbers are in the double digits, 24, 35, 25, 19. But as soon as you get over 700,000, it drops to three, four, and six. So it's just, it's super low. And again, we were saying earlier that the buyer demand in those lower price points is high. Three or four buyers are interested in that one home. If the rate were to drop half a percent, increasing purchasing power by 5%, all those offers would probably be 5% higher today.
Joey: Under $400,000, you've got two major buying groups. You've got first-time buyers. And you've got investors.
Josh: Yeah. Sure.
Joey: Investors usually don't in the Redding area, aren't going to buy like $800,000, but they are going to buy a $290,000 rental.
Josh: Yeah. There are some local investor activities still going on right now. A little bit of probing is what I would call it from some institutional investors of larger size. Recently, our office has been getting inquiries from folks out of the area interested in investing in real estate up here. And we're servicing them as we can, but we're heavily focused on the investors and the home buyers and move-up, move-down, and first-time home buyers here locally. But we are starting to see that. And it makes me a bit nervous because this isn't Phoenix, this isn't Nashville, this isn't Houston or Austin where you have these massive amounts of homes available, and investors are just a portion of it.
Josh: If you had institutional investors moving into Shasta County purchasing real estate, that would have a really negative impact on the ability of our local buyers to purchase. Because it's a supply and demand issue, but right now, for those who are watching, we're seeing only a few big investors coming in right now.
Joey: And we were talking before we started this about some factors affecting that lower part. And one of the big ones was you were talking about the cost of lumber, right? It had reduced dramatically.
Josh: Oh, man. Well, we talked about this last year. Earlier on in our podcast, I was like, well, lumber's going to fall. And I had a few people throwing darts at me for saying that. That didn't necessarily agree with it. And I'm like, well, if you just think about it for a minute. If you've got a lease on a piece of land and that lease is that you have to extract lumber over a period of time, well, and that lease is coming towards an end, what will you do?
Joey: You're going to get the lumber off the land.
Josh: Yeah. You're going to, right? But what happens if you have lumber that's sitting in the yard that still needs to be turned into actual lumber to deliver to the store? What are you going to do with that?
Joey: Reduce the price. Yeah.
Josh: And that's where it's come from. So right now, if you look, I got this. This is our lumber statistics that come out, all trading economics. So if anybody wants to look up for themselves, welcome to do that. But if you look at May of 2021, the cost for a thousand board feet was $1750. Then in March of '22, it dropped to 1480. And right now, this is the shocker. Right now, it's quoted $355 to a thousand board feet.
Joey: So it's down 80% from its high...
Josh: It's down 80%. Yeah. It's down 80%. Now, lumber doesn't represent 100% of the cost of building a home. I'm not sure exactly what the percentage is. I'm guessing right now and say it might be 15 or 20% of the overall cost, maybe 15%, actually. But now what's not dropped in pricing yet, though, is your central heating and air units, your circuit breakers, some of your plumbing fixtures, and those things that really can be purchased on the world market at ease, washer, dryers, refrigerators, all the appliances, those haven't necessarily come down in cost. Nothing like this, anyway.
Joey: And not labor.
Josh: No labor hasn't either...
Joey: Not permits.
Josh: Well, yeah. Well, here's another one. Let me pull this out for you. I did this one on our market report actually the beginning of the month too. Just take a wild guess if you didn't watch it. How many permits have been pulled in the city of Redding to build a new home since the beginning of the year?
Joey: Well, if I tell you, it's because I cheated.
Josh: Oh, okay.
Joey: But here I'll go with it. Oh, I don't know, Josh. 50.
Josh: No, that would've been last year's numbers. So right now, we're sitting at seven permits pulled in the city of Redding since January. If you go back one year ago, there were 70. If you go back to the year before that, in '21, it was 67.
Joey: So down 90% roughly from normal.
Josh: Oh yeah, it is 90% actually right on the nose. It's pretty incredible.
Joey: Someone took a math class.
Josh: Somebody took a math class.
Joey: Thank you.
Josh: And so here's the question that we all have to ask is, okay, so imagine this for a minute. You're a contractor, you have a framing crew, you have, or you have a finished crew, whatever it is that you do. And there are not a lot of homes to be built. So you get into competing bidding situations where somebody wants to build something. They go to multiple contractors and say, Give me a bid. To be competitive, you must present the best offer you can to build that for the lowest cost.
Josh: What happened last time, and this is when I go back to like 2005, 2008 in that range where the shift took place, I watched contractors go back to their crews, and they renegotiated their wages. They went back and said, here's the deal, guys, we're not busy right now. I can't win. I can't be competitive in our bidding situations. And so if everybody's willing to take a haircut basically, or a pay cut, and bring their labor costs down, we can keep everybody busy. But it's like a conversation that some of those contractors back then had to have. It makes me wonder if those kinds of conversations are going to start to take place now.
Joey: Because that's going to be a big one. And that's one that the locals can actually have control over. They don't have control over fixtures.
Josh: That's right.
Joey: And appliance and stuff. Labor's the second big one.
Joey: Have you heard of any conversations like that?
Josh: Not that I'm willing to quote. I've had conversations with contractors that have said that things are getting slow. And so that tells me that I have a feeling of what will happen next. People have to keep in context that in 2003, '04, and '05, the real estate market was on fire. It was like the American dream was being realized everywhere. The problem is that the whole housing market got way ahead of its skis.
Josh: And so from 2007 to 2008, the American dream turned into the American nightmare, where all of a sudden, we had massive amounts of inventory. It was very difficult to find buyers to purchase it because the inventory exceeded the buyer demand. And contractors had to make some really tough decisions. So, unfortunately, a lot of them left. They had to go move to locations where they could find other kinds of work to do other than construction like someone up to like the Dakotas to do some like mineral extraction. I am trying to remember what it was back then, but those are the kinds of things that we've seen.
Joey: Are we seeing any of that now? Have we seen any of that in Redding over the last year?
Josh: Well, it's not been the mass exodus. No, I don't think that at all. There were enough projects on the books that people were able to stay busy. I'm really hyper-focused on the next three to four months. I feel like this will be a pivotal three to four-month period where we're going to start to see some decisions being made, I would say, at the executive level. But what I mean is by anybody that's really running these companies.
Joey: So if you got an estimate eight months ago, you might want to go back to the market in a few months.
Josh: A hundred percent.
Joey: To get a new estimate.
Josh: Yeah. Respectfully, I'm sorry, contractors out there. I don't mean to disregard your hard work or labor, but if you're in the market right now to build anything, it's wise to go out there and see what those bids might look like. You have to keep in mind, though, that the pressure of additional building restrictions, permitting issues and considerations, meeting the state of California requirements, and things like that, are ever-changing. So the longer you wait, the more red tape you'll have to cut through. But I would be checking pricing right now.
Joey: And it's going to take a while for that to hit like the market. That's one of the big things about the building. It's that accordion effect where it's so slow to like you said, and they overbuilt where they just overshot the demand.
Josh: They did.
Joey: And then so what they do is it recoils way back, And then as demand goes, it's they don't pick up on it fast enough. It's just because of how long it takes. As I said if we talked about last time, if we decided to build a house right now, I mean, I don't think if you started today, I don't think you can move in within 12 months. You can't move in within one year.
Joey: You'd be on a very fast pace to pull that off.
Josh: I don't know if I would a hundred percent agree with that. No, and the only reason why is I see what that National Home Builder's doing here in town right now. They're finishing products in six months or less. And so it's getting done. The question is, can it get done by your contractor? Right now, with our access to labor, it won't be a lumber issue. It won't be a labor issue. It might be a transformer, or it might be a circuit panel breaker box that has delayed you or windows, or it's going to be something that's unique to your property that perhaps is creating that bottleneck, if you will, for you to get your home done in a shorter amount of time. It'll probably be a supply disruption more than anything else that would prevent it from getting done fast. The reason why that National Home Builder's doing well is that they have enough products sitting in warehouses and yards somewhere that they can just pull. They're not buying 10 windows; they're buying 10,000 windows, so they've got access to move inventory around.
Joey: And they've got tons of projects across the country, so they can just move supplies and people.
Josh: Yeah, yeah, exactly.
JoeyS2: A little logistically for them to manage.
Josh: It is. And if you look at the market right now, though, it's still tight. If you look at the rental market, for example, right now in the state of California, it's quoted that the rental rate currently today is 3.9%. The last time it was this low, and it was actually just a tiny bit lower, was in 2016, and it was 3.6, and that's the lowest that I can find on record. Prior to that, it was 2001. It was 4.2. And my wife and I moved back to town in '99 after I got out of the service, and I was in college in Southern California. And when we moved back to town, it was in '99. I started working with Michael Medley, actually at Prudential Medley Real Estate. And, we were trying to find a rental, and it wasn't easy, and it got really bad by 2001, and it dropped, it was probably in the seven, 8% range in the late '90s, like '97, '98, and then it dropped down to 4.2.
Josh: And then it did it again, like I said, in '16. Right now, at 3.9, that means that there are not a lot of rentals available. There are not a lot of new building permits being pulled. The whole crunch on the market right now is interest rates. That's the whole crunch. When rates drop, I think you'll see everything start to move forward.
Joey: I think it'll be like the accordion effect where it'll just overshoot again. Just all of a sudden, if interest rates come down, the market will just catch fire again, and our inventory will drop. But it's back and forth. That might spark a bunch of people that weren't going to sell, and now they're going to sell because they were locked into a great interest rate, so they couldn't stomach selling the home they were in with a low-interest rate, then to buy a home with a much bigger interest rate. So the cycle just keeps on going and going.
Josh: Well, not to be on the political side of things, but just looking at the economics of it, our population's going to spike in the next couple of years. It already has in the last year and a half, but it's gonna spike even more in the next year and a half. And the amount of people moving into the country right now. Legal, illegal doesn't really matter. Just demand for housing, period. See, before. You could anticipate, based on the birth rate, what the construction would be. These large national home builders were able to identify how many housing units would likely be needed at the national level, and they could decide how many of those units they wanted to participate in. Well, right now, that's all off the table. You have a massive amount of housing needs right now, and we have to figure out how we will meet them.
Joey: Yeah, and everything's... I bring this up all the time because I think that this is one of the flaws in how we communicate about it is that we throw these monster markets around, and it's like Redding is a unique market. Very unique...
Josh It is.
Joey: Very separate from the state, very separate from national. There are headwinds and tailwinds that affect us, like interest rate, the big one that transcends the boundaries within the United States.
Joey: But everything else, the permits pulled, and the amount of inventory, such strong tailwinds that they don't have that issue in Los Angeles, they're not having these issues in other major cities. So, when I think about Redding market, I don't see any pressure getting taken off the lower segments.
Josh: No, no.
Joey: I don't see it at all. If interest rates come down, then it's full speed. It's all tailwinds. It's all just going crazy again.
Josh: That's a good point you bring up. I get asked that question quite a bit, and you probably do too, about why don't the builders build smaller homes.
Joey: How? How?
Josh: Well, and you're right, because the cost for curb, gutter and sidewalk, street lights, fire hydrants, water, sewer systems, electrical systems, all that stuff, when you run it down a street, it all costs the same, right?
Josh: The more lots that you can fit in there, the better off you are. However, it costs money to build a home. And bedrooms, baths, kitchens, central heating, airs, and roofs, for the most part, will be in a similar pricing segment. So as you increase the square footage of the home, you get a better return on your investment, the builder's investment. So they don't start to make an actual profit until about 1600 square feet or higher. That's when it starts to show up. It gets really hard for them to do anything smaller than that. At least here in Shasta County. And whether or not that changes in the future, I don't know.
Josh: With insurance, the cost of insurance to be in the outlining areas, it seems like all the development's getting pushed more and more and more into the city. And so we'll start to see things go more vertical over time.
Joey: I think that's along the same lines. You see all the ADU trying to get people to put ADUs in their backyards.
Josh: Oh, sure.
Joey: That's part of that pressure. You've already got the existing lot, and now we just maybe gotta do a little bit of a trench to the water, but it's already sitting on the street.
Josh: Yep. Those homes are costing you in the low twos.
Joey: For small.
Josh: For small, yeah.
Joey: Small footprint.
Josh: It's in the low two's for 900 square feet or whatever it is. The city of Redding, actually, for anybody that might be interested, they have plans down there that you can purchase at a discount. Already have a streamlined process for approval. You could build a pretty attractive home on your existing property that you have a house on now, as long as you can meet the setback requirements and stuff like that. We have yet to see a ton of that being done, and it's again because the unit cost for that house is so high. The rental market will support it. Right now, I think the median rent in Shasta County for a three-bedroom, two-bath, two-car garage, about 1400-1500 square feet, will run you about 1800 bucks a month.
Josh: Yeah, rentdata.org would give you that actual detail. Sacramento, it's 2100 bucks a month.
Joey: Yeah, it's not that much higher for Sacramento. I would have thought it would be substantial, but that's really not that much. It's about 11%.
Josh: Yeah, I think the composition of that home changes, though. That's their median rent down there, right? Ours is a three-bedder and two-bath, two-car garage, right? Where down there, I didn't look to see what that composition is. My guess is it's a much smaller home.
Joey: I don't know if you've ever been to Chico, but when I lived in Chico, the same kind of pressure was there.
Joey: And so everybody's garage was a B-unit. So there was a lot of that, there was a lot of like all the garages were turned into detached garages. It was built much tighter, and you could tell it was a secondary thought. It wasn't. In the first phase of homes, they didn't build them that way, but you could tell they converted them that way. Then in the second phase, they were building them to build...
Josh: That's right, yeah. Yeah, we're gonna see that in town a lot. I think you're gonna see a house built in the '60s, and then you're gonna see the brand new 2023 modern-looking home that's 900 square feet on the same lot.
Joey: Or the detached garage is completely remodeled and looks like a little home, and it's got the 145B.
Joey: There was a lot of that in Chico, and it was just because of the premium of land and the pressure of the university and needing rentals and stuff like that, so I think we see similar type forces at play.
Joey: And where else can you do it, as you said? Or go vertical, which they're doing downtown, where they've got the zoning where the ground floor might be a retail or commercial or something like that, and then the second and third floors are residential.
Josh: Yeah, it looks pretty good. There are a lot of units coming up for that, and the real question I think I'm going to be curious about is what will be the demand for those types of units in comparison to a subdivision home over time? You know. I agree that I think a lot of the younger kids enjoy having the city life, if you will, downtown. I think that's probably fun, but as soon as you start wanting pets and kids running around in the backyard and all that stuff, it starts to limit your options really quickly. Because I've had people ask me, Where should we invest? And it's like, single family is still done well. I'm not saying that getting into a huge apartment complex, the cap rates can change and stuff like that, but most people can't afford that. So buying a nice little rental is a good way to invest for the long haul.
Josh: And I think the demand is going to be there still. The units that we're seeing downtown, there's a lot. And most of those multi-family are getting rented out fairly quickly. But if we get into a situation where the market, the rental market starts to soften, what softens first? Subdivision homes or those homes over there that are in that higher density living?
Joey: I'm picking up on your question that it's going to be those higher-density homes.
Josh: Is that what you think?
Joey: I don't know. Honestly, I never thought about it. When I look at somewhere like New York, I don't understand how people live there. I don't understand how people live vertically, right? Like you said, and you see TV shows, the guy takes his dog down and there's a one-foot by one-foot square piece of grass where they're just standing there to go to the bathroom, and he immediately picks up because there's concrete everywhere else, right? And then it takes the dog right back up to the 13th floor. So to me, that's like, what?
Josh: Different places.
Joey: It's what you get used to it.
Josh: Yeah. And that's true. I think the landscape for real estate's going to change. We know for sure that we're short housing in its overall, both locally in the state and across the US and for all the reasons we've already talked about. It won't be one size fits all or one answer fits all for the problem to solve. But, gosh, I really wish the state of California would recognize its responsibility for some of the challenges we're running into because the number one solution to home prices is supply. If you want home prices to stop going up, or if you want them to soften, increase supply. Bottomline. Increase supply. How do you increase supply? Well, deregulate some of the policies on the books now that make it more restrictive for development. But nobody wants to do that because everybody has their own idea of what should be fair and right in the world. But with all those rules, there comes a cost. And so I'm curious, I'm so curious to see what five years from now brings.
Josh: Are we going to get to the point where at the state level they go, You know what, we've overshot here, we're going to need to pull a few things back policy-wise, we need to bring this cost down? Or are they going to stick to the agenda they currently have and continue to keep those prices high? If I'm out of the market right now and don't own any real estate and aspire to it someday, I hope the prices come down. But for someone like me on the other side of that spectrum, where I own a good amount of real estate, it doesn't even hurt us because that means my current assets go up in value.
Josh: So I would like to see the state continue to be proactive with solving some of the housing issues, but it can't only be solved at the private level. The state will have to participate, and the easiest way for them to do it without it costing everybody a ton of money is if they were just to cut some of the red tape.
Joey: Well, the good news is, the Governor put out his budget, and he's only 10 billion over. He had a $10 billion.
Josh: Wait a minute, we're going to be at a $30 billion deficit.
Joey: Wait. We're at a $30 billion deficit, which is only $10 billion more than he had originally projected.
Josh: It happens.
Joey: So, that might be the motivation necessary.
Josh: But we're the...
Joey: Wait a second. That's going to reduce income.
Josh: Yeah, it's going to get interesting. There are some programs that'll be going away as a result of that. I am still determining what those will be. Leave it for the smarter people to figure that out. But a $30 billion deficit, when we don't have the luxury of printing money, means a couple of things—job cuts, which relates to our podcast about the impact on housing and things like that. There'll probably be job cuts as programs go away. And then also you're probably looking at some debt that's gonna have to be assumed, so we'll be trying to sell some of California's debt to somebody else to buy it, so we can finance what we don't cut. And that's just Economics 101.
Joey: Yeah, I wouldn't put a high probability on the cutting of the budget. But, yeah, I don't see it. It feels more like taking on debt and getting somebody else to buy, but I don't know.
Josh: Yeah, well, they will first have to go in and start looking at programs that need to be rethought. What's the word they use? Re-imagined.
Josh: I think that's the words they'll use for that. And then what's left will likely be a negotiation of issuing bonds or something along those lines to fund some of the stuff they want to keep. And they keep pointing the finger, " Oh, well, the stock market's soft. It's like cyber is not that soft at the moment. Crypto blew up in a lot of those who were based out of California. But we shouldn't have been establishing the state's economy on a Ponzi scheme anyway. Not that all Crypto is Ponzi, but a lot of it was.
Joey: Instead, Bitcoin's doing really well. No, most of it was Ponzi. Most of it. All the meme coins. There are a bunch of legal coming against it. People needed to understand what Crypto was about and what the difference was. Why Bitcoin, why Ethereum, where's the potential of this kind of stuff, and then you just have actors and influencers going, Hey, I'm on the latest coin, like Dragon coin. And you're like, What's the concept behind this? I make a lot of money. Nobody caught that, and it's like, so, no regulation.
Joey: So it was...
Josh: Well, and that's where I look for the state. I just go, well, we have the largest state, economically speaking, in the union. It's definitely the most beautiful state in the union. We have great access to ports. We've got the ability to bring in and out lots of goods and services. We have amazing weather to top it off, and then somehow we still manage to mess that up, and at the state level, I don't know, I'm hopeful that as we continue to see people moving up here and getting back to just talking about Redding, we're bringing in some pretty cool development here. As the state, the bigger cities, it seems like they're... I don't know all their issues, but whatever is happening down there is not all that attractive for the people that are there, and we're seeing more people move here as a result of that. I think... I don't know if it was on a podcast or not. Hey, Marcus, tell me if I ever said this before, but I had some kids who were about Marcus's age that came in. He's not on a mic right now, so you guys won't be able to hear him, but when we did...
Josh: I had this conversation with this group of kids, and I said, Hey, what do you think about Redding? Why are you guys here? Like in their 20s. I'm like, Why are you guys here? Why aren't you guys down in the big city? And they told me that they went down to the big city, hung out there for three to four months, realized they liked Redding better, and then came back. And I was like, Really? And it was a lot of them too. I didn't ask one kid, I asked 10 of them who were all hanging out together, and unanimously they were all giving me the same answer. And I walked away kind of proud. I was like, You know what, that's pretty awesome that this community now in Shasta County is retaining some of our younger population and that we're solving something for them to the extent that they like it here better than elsewhere. And thank God for that.
Joey: Yeah, the next generation.
Josh: That's right.
Marcus: I know the only thing that would take me away from Redding is just bigger jobs that aren't here yet. Because Redding's small.
Josh: Yeah, bigger jobs. Yeah. Yeah, that's true.
Joey: When my generation left, that's part of it. In the late '80s and early '90s, the local economy there wasn't any... There wasn't any. There were no jobs.
Joey: It was minimum wage, which back then, I think, was maybe still $6 or something. It was pretty low. Maybe even lower than that. And then there was... The mills had some. There was UPS. There were some, but we had a huge gap. And so young people, they had to leave.
Joey: They had to go.
Josh: Yeah, you're right.
Joey: But that seemed to have come, especially with the telecommuting and telework and the internet economy and things like that. I've met more and more young people in the last couple of years that work for large corporations, but they work from home. They're in customer service. They're in sales or even HR or something. Because it's logged into a software product and doing your work, and just more and more, and so suddenly that puts Redding back on the map, and as we've said before in previous episodes of that, you can either buy a house in Redding... As much as we're talking about the prices and everything, still, when you compare it to Sacramento, San Jose, LA, or anything like that, you can't buy down there for $400,000.
Joey: There's nothing for sale for $400,000. And here, you can still buy a very nice home for $400,000.
Josh: That's right.
Joey: So if you can work geometrically.
Joey: And then study, take that math and use it to study geology, then you're in the right spot. But if you can live anywhere.
Josh: Yeah. Well, yeah, you get affordable housing, a great climate, and wonderful, beautiful surroundings, still in the state of California with easy access to just about everything. Well, that's why we're growing. We've said this a couple of times. Redding has now been found out. And it's growing, and people are realizing just all the really cool amenities that we actually have to offer. Such a good job.
Joey: Yeah, and using that geometry to geology. But especially now that the lake's full again. I know it's a small thing, but this time last year, we were pretty like, Wow, it was low, it was scary low.
Joey: And now I believe, if it's not full, it is real close to full.
Josh: Actually, it is full.
Josh: I was riding my mountain bike up there this weekend, and it was just dribbling over the top of the dam.
Josh: It was full. So, ladies and gentlemen, Shasta Lake is full. Come up and hang out with us. Enjoy the boats. Enjoy the fishing. Everything.
Joey: That's huge.
Josh: It's huge.
Joey: Because it's one of the single biggest attractions up here.
Josh: Oh, man.
Joey: It's not the concerts. It's not the NFL football team, right?
Joey: It's nature.
Josh: It's nature, man. So we got Shasta's Lake full and Whiskeytown's full. Our trails are beautiful and just filled with awesome people having a great time. Yeah, if you're into the outdoors, this is the place to be. Well, thanks again for your time this month.
Josh: Thank you.
Josh: Appreciate you very much, and we'll catch you next month.