Josh Barker Real Estate Podcast #9
Frequently Asked Questions
What is a real estate market correction?
Typically a real estate market correction is when home values change by 10% or more within a short amount of time.
Are mortgage rates high right now?
Mortgage interest rates have increased from a low of 3.07% to an average of 6.125% in July 2022. For every once percent increase in the mortgage rate, purchasing power is impacted by an average of ten percent.
Is the real estate market going to crash?
The number of homes selling each month is slowing down compared to the sales volume of last year. If inventory continues to grow while demand remains constant or reduces, prices could expect to soften.
Transcription of the Podcast Episode #9*
The transcription is auto-generated by a program and may not be accurate to the conversation. In order to ensure you get all the information from the video properly, you must watch the video.
Joey: Okay, it's been a little bit. I'm here with Josh Barker.
Joey: I missed last month. Last month, Mike Medley was in here. I saw that.
Josh: Yes, he was. Yeah. We did miss you, Joy. I'm really glad that you got to come back and visit again, so.
Joey: I like to... I saw Mike, and I immediately said. You know what I loved is that he brought up the fact of the capital gains tax law change in the late '90s and how that 'cause I brought that up, and other people like Glazer were like, "No, maybe that had an effect." I'm like, "That had a huge effect. Look at the average time people had a home now."
Joey: I mean, they were just flipping hot every 24 months, and that... Can you imagine if they did that with the stock market? They're like, "Well, if you hold a stock for six months, you can sell it." I mean, that would immediately...
Josh: It would change the investment pattern.
Joey: It would change it huge, huge.
Josh: Yeah. And I did that for housing, and I think that was the perceptive or the perception that Mike was sharing, and it was a good perspective.
Joey: I thought so too.
Josh: Yeah, I liked it. And it did. It changed the volume, for sure, and it gave a whole another avenue for investors. For those who don't know what we're talking about, just go back to our previous month's market update podcast, and you'll see an interview that we did with Mike Medley, a 30-year broker, been in Redding a long time, and really shared a really cool story about the real estate market. So I've got a whole another set of facts that are kinda hitting the ground right now this month, though, huh?
Joey: Oh, big time.
Josh: Yeah. I'm watching all the realtors around there kind of start talking about it. Finally, it's like really becoming aware of what's happening.
Joey: So like some of the things that are happening, I mean, this would be episode three or four in a row where we said interest rates are rising, but they've actually come down a little bit, right? I mean, didn't I've seen some lenders I'm on a couple of their email threads and they're like, "Hey, interest rates came down a half a point... "
Josh: From 6.5 to 6. Yeah.
Joey: I've been even high 5s, which historically, if you said, "Hey, you can get a home loan in the 5s," that people would be like, "Oh my goodness."
Josh: "Compared to what?" Right?
Joey: Yeah, compared to historical. It's just that we've come out of when interest rates have been below 3% for mortgage rates? Ever?
Josh: Yeah, exactly. And maybe for our listeners, maybe that would be a good thing to talk about today first, is just the misconception around what the Federal Reserve is doing and how it's having an impact on the mortgage interest rates. You know what I'm saying?
Joey: Yeah, the difference between the feds do something to the rate, but what does that actually do to mortgage rates.
Josh: Right, right. When they move their rate up, why is that not necessarily transferring directly over to the mortgage market? And so like you're hearing, and you're probably going to hear by the end of this month, that inflation was at, what? 9 point...
Josh 9.1%, which isn't good, if anybody's wondering, at the targeted numbers...
Joey: For year high?
Josh: Yeah, for year high. And the target numbers are in the low 2s, and so they feel like they've got some runway now to raise that discount rate up even more now, and so they're looking at raising the Federal Reserve's interest rate by up to 1%.
Joey: It's huge.
Josh: It is huge. I think it's gonna be. For most of the experts out there, they're saying between three quarters of a percent and 1%, so I think you can debate all you want on those two numbers, but it's probably one of those two numbers. Either one is a lot of pressure on demand because as interest rates go up, it has an impact on what people can buy or how much they can buy or what they can borrow and those kinds of things.
Josh: Anyhow, on the mortgage rate side, why you're seeing rates actually coming down is that it has a lot more to do with mortgage-backed securities. So six months ago, the mortgage-backed securities, they were reducing the number of mortgage-backed securities they were purchasing, and that meant that the private market had to step in and start buying these mortgage-backed securities, and that's where their interest rates went up almost overnight, It felt like, right?
Joey: Yup. Oh, it did, fast.
Josh: I mean, yeah, the 30-year mortgage's almost doubled pretty much in the last six to eight months, and a lot of that's because the Federal Reserve stopped purchasing mortgage-backed securities at the same level they were. That caused the private market to step in. The private market said, "Hey, I'm not gonna buy mortgages at 3.5%, but I will buy 'em at 6, right?" And so, the interest rates have gone up. So even though the Federal Reserve will likely be moving the rate up, the Federal Reserve rate up, it doesn't necessarily mean that mortgage rates are going to go in lockstep with it. So if they raise the rate 1%, that doesn't mean that mortgage rates are gonna go from 6% to 7%. They might go up a little bit because of that impact, but it has much more to do with how many people buy those mortgage-backed securities. Does that make sense?
Joey: Is it still just the private sector buying them?
Josh: For the most part, yeah. Yeah.
Joey: Is there any news on the government buying them at all?
Josh: No. I mean, I don't know if there's any kind of policy that they're discussing at this moment that might change that, but right now, no, they're continuing to tighten their monetary policy, they're reducing the amount of mortgage-backed securities that they purchase, the private market is still having to step in to buy the difference. But you gotta remember, these guys were making nothing six months ago, so the fact that they're actually getting a return now by buying these mortgage-backed securities, the private market doing that, they don't have a lot to complain about. And I think that a lot of them feel like this higher interest rate environment probably won't be that long, and so they'll be the one sitting there smiling all day long with a nod at six or 6.5% or whatever it might be when mortgage rates drop back down to 5 or something. You know what I mean? So I think that some of the investors are looking at it that way.
Joey: It's too bad that there weren't regional interest rates. You know what I mean? Because I was just thinking about like, somebody could say, "Hey, you know what, I wanna get a loan in the Redding Market, because I think the Redding Market is still a very good market, even though it slowed down a little bit, it's just when you are full throttle in a car and you're going as fast as the car can go and suddenly you let off a little bit, now you're only going 80% of the maximum speed of the car, you're still moving fast, but not as fast as you were. So we just came out of arguably the hottest market ever, interest rates below 3s, people moving here, and we're still not getting replenishment of inventory. In your last market update I watched, we're still considered a seller's market. Well, wait, 2.1 months, right?
Josh: Yeah, so no, really, the low 2 is what he's... Joey is talking about the overall supply relative to demand and the absorption rate. So, anything up to a three months supply is considered to be more of a seller's market, and then a four to five-month supply is more of a neutral market, and anything over six months supply is considered a seller's market. And right now, we're at like 2.1, 2.2 months supply currently, and that means we're still a seller's market by definition, although I think everybody would agree that we're trending quickly to a neutral market. Inventories today are like 715 total residential units for sale currently, and the numbers aren't out yet because it's not the end of the month, but it's probably going to be 250 to 270 or so for total pending for the month, which will be down again from the previous month and certainly down by 30% or more over last year. Yeah.
Joey: Yeah. But that's to me, that just came out of the hottest market ever...
Josh: It did, yeah.
Joey: I'm still bullish on this market in comparison to other things that are happening.
Josh: Yeah, no, I agree.
Joey: But, I was on a radio show where we were talking about... And they said... It was opinion. But it was like, "Hey if you don't own a home, you absolutely should be buying a home." Because of the things they talked about, they talked about the increase in rents over the last 24 months in the local market.
Josh: Oh yeah.
Joey: And those were escalating. They were crazy. Now, if you were talking about, "Hey, I own 10 residential homes, and should I purchase... I have some money. Should I purchase 11 through 12?" That's a completely different conversation than, "Hey, I'm renting a two-bedroom, one-bath house for $1650 a month."
Josh: That's unbelievable.
Joey: And that's the kind of numbers that you're hearing. So it was stuff like that. So I was like, "No, I still would be very bullish." And the other term that was brought up was the whole... 'cause I love this term. Is that you marry the house and you date the interest rate. You find your home now, you get settled, within two years... We are technically in a recession. So at some point, the 1% is to try to slow down inflation, but fast forward 12 months, 14 months, I have to think that that's going to be... Experts think that it's going to flip-flop a little bit. Okay, interest rates got high, we cooled off inflation, and now we have to bring the interest rate back down. And if you are locked in your house now... I still think... I think there's a big correction because things were just going... They were ramping up so fast. And... But this... What's the... Still the average price of a home in Redding sales last month versus a year ago?
Josh: Well, the median sales price right now is hovering in the high 370s, low 380s. But here's the deal, prior to the pandemic, we were probably at... The median sales price was in the 280s, 290s.
Josh: So the challenge that we have right now is that pricing got pushed up so high with low-interest rates and pretty high demand from relocation and all those other things, pushing the demand up. But you have the average or median sales price pushing up into the 400s, but that was based on really low-interest rates that allowed that to happen. Now that rates have went up, you've got buyers that are qualified down here, homes that are being... The asking prices are up here. And somehow, these two things have to reconcile. Either pricing has to come down, or the amount of inventory has to be reduced, or wages have to go up, and rates have to come down. But something has to happen in order for these people to come together. And if that doesn't happen, then what you're going to see is inventory will be price reduced, and to that point, we got D. R. Horton now, which is a national home builder. I think they say America's number one choice or whatever. And...
Joey: I think that's McDonald's.
Josh: Oh, that's McDonald's.
Joey: Think they're the ones that say that.
Josh: A billion served.
Joey: Yeah, exactly.
Josh: Yeah. So, but it's a good company. I'm not talking about the mechanics of how they run their show, but I think they make good sound business decisions. They're, I'm pretty sure, publicly traded, certainly professionally managed. And you've got homes that were priced in the high fours, and we just saw today price reductions on an average of close to 10% on a lot of different products for that particular developer in the city... In Redding right now. So there's a development over on the west side of town that they have about 43 lots or so, and they've already gone in and started price reducing these homes, and they've only been on the market for a few days. So they're not messing around. They're realistic about what the market's doing. And to that point, I was saying, you got asking prices for homes here, buyers qualify down here, and something has to give. And in this case, in the example I'm giving you, the seller gave, the seller decided to bring that price down, and now the buyers, I would imagine, are going to start purchasing because they're going to be reflective of what a buyer can afford. And you're going to see that, I think, going forward as a theme until we start to find that new equilibrium, whatever that might be.
Joey: So I wonder though if that correction where the average price will be in about four or five months...
Josh: The median sales price?
Joey: Yeah, the median sales price, because it might come off a little bit off now, but still, as you said, pre-pandemic, it was almost $100,000 less.
Joey: So even if it comes down like 20, $30,000, you still... Look at that.
Josh: Still have a big gain.
Joey: Yeah, look at that, monstrous gains.
Josh: Yeah, it's still a gain. And that's an optimistic viewpoint to see, and I totally agree with it in terms of Redding is still... We're not over-developed. We're certainly not over-supplied. We live in a state that's a pretty cost-prohibitive new construction kind of state, and so we don't... Typically, California doesn't over-build. And there are other states in the country right now that have been over-building, and I think that as things start to constrict and the demand starts to die off, there's going to be some pretty large inventories. I'll give you an example. I've got a good friend of mine that lives in Phoenix, Arizona. And, I have these numbers, or I'm going to try to get them the best I can. But my recollection of the conversation was, and this is a Remax agent out there, he said, 9000 units, 9000 units, I think it was 120 days ago for sale in Phoenix. And then, just two weeks ago, 18,000 units were for sale.
Josh: And so, their inventory has already doubled, that's going to have a corresponding effect on value because unless demand paces with the supply, the only thing to give in that equation is going to be asking prices. So, you look at Redding. I don't think we're immune from that. It'd be foolish, I think, for somebody to say that we were...
Josh: I do think that if you look historically at the recessions over the last, I don't know, 30, 40 years, with the exception of 07, which is Funny Money, a really bad time for policy for financing, most of those recessions, they slid in the housing market, and It was a six to eight month. Little blimp where things got soft for a period, and then they just started to move up again, and I wouldn't be so surprised to see something similar. History doesn't necessarily repeat itself, but I think they say that it rhymes. I would agree it's probably going to be something similar to that coming out of this, and for a lot of buyers, just to think about it, would you rather buy a housing bubble, which was probably what we were dealing with, potentially running into if we didn't stop, or would you rather be buying in a recession, and when you know that pricing probably is more suppressed than it normally is, and that means there's an upside to the equation longer term.
Joey: Now, with a national recession, there is a definition of two quarters with negative GDP back to back. Is there a definition? Is there a formal definition for a real estate recession?
Josh: No, I think it probably trends along with similar lines they use... That they had one figure in that, as they say, if it changes the value of the asset by up to 10%.
Joey: And based on what you just said with D. R. Horton on reducing there, that's kind of one of those...
Josh: Because recession means nothing to a buyer or seller of a home. What matters is correction, not recession. So a correction typically is defined as something of 10% is considered to be a correction, whether it'd positive or negative, it would be a correction, and in this case, we're all contemplating a correction in the negative sense, and that's if pricing were to drop up to 10%. It would be defined as a correction at that point from most economists' perspectives.
Joey: I'm going to put you on the spot.
Josh: Go ahead.
Joey: Is there the median price over the last... Since January to now, do you have any idea like what that's... A medium price got down 5% overall pushing D. R. Horton out of the picture...
Josh: Maybe in sales price it's dropped down approximately 10%, I think if I were to look at...
Joey: Okay, so then there you go, so that is...
Josh: That's only the median sales price, so it's not necessarily on selling prices, and again, median sales prices for everybody, that median sales price is actually the middle number, so if I had 100 numbers on a piece of paper, number 50 would be the median sales price alright? And an average sales price, if I were to take the collection of all hundred of those and then combine it, then divided it by a hunter, that would be the average. So when I talk median, I'm talking about that middle number where half the transactions were done for less and how the transactions were done for more.
Joey: And then within that, there's gonna be segments that there's... The lower end of the segment is probably not gonna see that reduction because you cannot replace inventory, you can't afford to build a $1000, or excuse me, a 1000 square foot house in the city of current customer... Can you build it for under 300 roots when you talk about permits and the purchase of land?
Josh: A house that size?
Joey: A 1000 square foot.
Josh: Yeah, that'd be really difficult.
Joey: Exactly, so you couldn't build something for 300,000, so any of these houses that sold in the high twos and some of the neighborhoods, I think they didn't see a reduction, they're not gonna see it's the house maybe that were like you said, listed at 500 D. R. Horton is bringing it down to 450, the 650 down to 610, stuff like that. So even within the market, there are sub-markets and segments.
Josh: Absolutely, the lower-priced homes in the marketplace are gonna have a little bit more... They're going to be more insulated to a market disruption because the demand is naturally higher on those points where they get pressure is coming in directly, so when Higher price properties begin to readjust their prices down, that it says Has a compounding effect all the way down the price segment.
Josh: So if a 500 becomes a 450 or 450, then becomes a 400, or 400 becomes a 350, and then 300 and 250, and it just kind of pushes it is way down there that way. It doesn't come as fast in the lower end. For sure, it's a much slower process, and it comes back a lot faster, too, because more people can afford it at that price point. So when the market shifts and gets more positive people going into the market, as you bring new buyers into the market, they tend to purchase at the lower price point when they're new buyers into market. And so the other part that we're gonna have a challenge with for a short period of time, it's just gonna be the move-up, move down, move sideways transactions where I already own a home, I need to sell it to go buy the next one, not a lot of that's gonna go on right now because they're sitting on a mortgage at three and a quarter percent who wants to drop off that and go buy a house at 6% right?
Joey: No, yeah.
Josh: And so we're gonna have that issue at the moment, but once we get through this transition, you could see move up, move down, move sideways buyers in addition to new buyers coming into the market, in addition to a fairly low home inventory, because a lot of builders won't be building if they're concerned about pricing. And so you can see real quick how this actually could run up really fast once we make it through that small recession, a correction that we're looking at.
Joey: And I think there are two other factors that are really driving this too, that I don't know if we've ever seen before, and one of them is a shortage of labor, and the other is the supply chain disruption, and I don't know... I don't know the first one. That's a whole different discussion, but the second one I've seen like... I have a friend in roofing, and OSB went, it went... It was like 37, it went up to 120, and then it came down to 41. And they went to... I mean, it's all over the place, so I don't know how much of the supply chain disruption is like, "No, it'll level off, it'll be okay, it'll come back," or it's like, "No, just materials just aren't going to... Those prices... You'll never see all those material prices again." Right?
Josh: Well, to think we're going to go back to pre-pandemic pricing across the board of... I don't believe anybody is saying that that would be the case, I think there will be some markets that are just out of lack of supply, the pricing is artificially high right now, and once that supply is replenished, that's going to bring the prices down. Lumber is probably one of those where there's some disruption, but there's a lot of speculation, lumber runs a lot like oil, there's a lot of speculators in lumber, so they buy a lot of futures in that too, and the over-pay and then they hold on it for a while.
Josh: And so you're going to see some shifts in that market probably, but I just read a Kiplinger letter which is a pretty good economic forecast. They were talking about the freighters and the cargo ships that are coming across the oceans delivering products and goods and services over to us. And when they're coming over right now, the cost for that shipment now has dropped dramatically. I think it's down anywhere between 20 and 25% and 50% of what it was. Now, it's still two to three times higher, though, than what it was prior to the pandemic, that's how much they were gouging people, and that was really, really having an impact on the cost of goods for the United States. But you already see in the cargo ship, and cargo ships pricing is dropping now to the point where I would imagine in the next 6 to 12 months, we probably will have a more competitive price across the board. Where the real issues showing up in the supply chain now is in the Midwest, where you got all these rail cars now sitting with all the product sitting on a rail, and the warehouses are still full because the economy is slowing down, and these guys that have bought all this stuff, they're kind of slow to go pick it up from the trains.
Josh: So now that's that new problem right now, is clearing out those rail cars.
Joey: Sounds like any new TV reality show.
Josh: Well, you know, it just reminds you of traffic, how many times you've gotten traffic, you're stopped, and all of a sudden when you get past it, you're like, "What happened? There's no accident, there was nobody here, and then they're like," Oh, well, a half hour ago, some guy cut across four lanes and took the exit, and that slowed everybody down, and you're still experiencing all of that, that... What's that?
Joey: The Accordion effect.
Josh: The Accordion effect, right? So I think that's playing into that, but I think supply is catching up, and I would not be surprised if our Inflation numbers right now are at 9.1. I'm hopeful that that's the peak, and then we'll actually start to see that number begin to drop.
Joey: Well, that's the official number. I'm trying to find...
Josh: I agree.
Joey: Sights were only gone up 9%.
Josh: Yeah, no, I get it. I don't disagree. I think that that number is baked, but as long as they stay consistent with what they're baking that with. I'm saying that if 9.1 is what it is now, I'm hopeful that that number will be lower in the future.
Joey: And what about labor? That would be the other big one.
Joey: All of the trades are... It takes a while to replace those two. They're also something that you just don't flip a switching, okay, we... We got 100 carpenters and 100 plumbers here. No problem.
Joey: And that one's a tough one too...
Josh: Yeah, the labor one's going to hurt, and...
Joey: I think those are big tailwinds.
Josh: Well, I see labor's a head wine, actually.
Josh: Yeah, I do.
Joey: Or cause you're thinking of buyers...
Josh: Well, when I'm thinking on labor and new construction and things like that, is that right now they were competing for labor, driving the cost up. Right? And so, I guess on the cost of the home, I could see it going down.
Joey: That's what I meant.
Josh: But I'm thinking about the people that are going to get the conversation by their foreman and their superintendents and their employers that are saying, "Guys, girls, sorry, but our wages are gonna have to get back down to a more competitive pricing." I'm concerned about that. I think some deflation in terms of wages and the construction field or a possibility.
Josh: I do. Yeah.
Joey: Okay, I see. I was thinking the opposite. I was thinking that all of the people I know still have such a struggle to get labor.
Josh: Well, that's still an issue right now.
Joey: So they have to pay a good way.
Josh: But six months from now, if there's nothing to do... You know what I'm saying?
Josh: Well, no, nothing, that would be a huge extreme, but if there's less to do, but you still have a lot of labor available to do it, you might make a decision that "Hey, I'm gonna do that job for a little bit less."
Joey: This stuff is so complicated.
Josh: I know.
Joey: Can we just go back to, like sorry. Or we're in...
Joey: Monopoly or just like I'll roll the dice and went in on Baltic, I'll pay you, I got 60 bucks.
Josh: Well, I think the cost of new construction will be lower in the future.
Josh: I do. I think that's the bottom line. And it'll be a combined effect of the supply chain catching up, access to materials that like refrigerators and appliances that slow things down, and labor, I think light labor could soften a little bit. I hate to say it, but I think there's a possibility. That's the case.
Joey: Well, as some of you know, it's all of these things go up and come down, so it's just a matter of timing it and how long they're up for and...
Joey: Down and everything like that, so the interest rates are supposed to be raised a point at the end of the month. I'm not really sure. It'll probably increase mortgage rates, though, but not to the extent...
Josh: A little bit. It won't be a lock-in step with it. Yeah, I don't think you're going to see a lock-in step rate gets raised by 3 quarters of a percent, so the corresponding mortgage rate jumps by 3 quarters of a percent. I don't see that. I see that if the rate goes up 3 quarters of a percent, maybe the mortgage rate goes up a quarter percent, which still sucks, I'm not saying that's a good thing, but I don't know if it's going to be lock-in step with the fed.
Joey: If the other decides we're talking all about supply and the effect on the supply, but talking about demand, are you seeing less buyers into the market?
Josh: Oh yeah, for sure, I would estimate it around 20% right now, reduction and demand overall right now. This is leaning towards why our inventory is growing a little bit. We definitely see an impact on demand showing up in the numbers now. Our sales report last month reflected it, this month at the end of July as I said, we'll probably be off roughly 20%.
Joey: Wow. And is this making seller nervous a little bit?
Josh: Sure it is.
Joey: Because we're used to just like...
Josh: Well, you couldn't be wrong if you're willing to wait. Right? So if you're listing your home over the last 18 months and, let's say, you over-priced it by 5%, just wait a few months, and you'll get your price, right? Where today, if the market does shift and you don't price it correctly on day one, theoretically a month later, you might be doing a price reduction, and that's a huge difference from what it was six months ago.
Joey: I'm seeing a lot of those, that internal real estate traffic words, there is a lot of subject line, price reduced, price reduced, price reduced. A lot of that could have also been that some of the listings I would see 'em. Now we talked about this about three or four episodes ago, where I was like, "Wow, more power to you, that you got your agent to list it at that," and they were flying off the shelf, but it caught up. Whatever they thought it was, hey, just let's go to... As you said, 5% higher. We'll get it. Now, now it's important to price your home right.
Josh: Well, it always depends on the market. Different markets require different approaches. So if you know you're in a rapidly approving increasing market, if you price a little bit higher than the existing inventory, you're probably going to be okay. But that's not a good practice when the market is flatter shifting because days on the market from a buyer's perspective is a concern. So here's an example. For years, sellers asked me, "Does a price reduction look like I'm desperate?" And that's a good question to ask. Our experience has been because we've asked buyers this very same question for years, and what we've seen is a bit more of a pattern is what we've learned that price reductions are typically internalized from the buyer's perspective as motivation. Sellers are motivated. That's why they drop their price. Days on the market is typically interpreted as there's something wrong with the property, and so a seller has to make the decision, "Do I look motivated by changing my price, or do I look like there's something wrong with my home by sitting on the market forever?"
Josh: Right? And neither one is a good option. I'm not suggesting it is, but you have to look at that and make a realistic assessment of what you should do.
Joey: How many... I don't know if you know this stat right now, but days on the market are the average because that's obviously climbing as well, right?
Josh: Not as much as I would have thought. Actually, it was in the, I think, in the mid-high 70s this last month. In the last month's market update, it'll probably be in the low 80s now, so it's trending where it's growing a little bit, but it's not a huge difference yet. And partly because we don't have a massive amount of new homes coming to a marketer or resell homes come into the market. Like in 2007/8, as Mike said in his podcast last month, we had overnight just massive amounts of inventory just being dumped under the market. That's not the case right now. We have a very conservative introduction of new inventory to the market every month. So I think we've almost run out of time. Is that Marcus? Two minutes left? So, everybody who is watching, you got a two-minute warning. We'll have to put up with us for two more minutes.
Joey: Red zone. Red zone. Okay, so the bottom line is, yes, the market has come down a little bit. You said you're seeing 20% less buyers in the marketplace.
Joey: In 2022, you'd say there's about a 10% reduction on average of the median price. Again, the right in the middle of the thing. But it still... I think these numbers are all off of the highest fastest market, so these are still... As you said, the inventory It's 2.1. The replenishment rate is 2.1. It's just considered a seller's market.
Joey: And we have to get up to six months before we would consider that a buyers market.
Josh: Yeah, and you still have to think it this way, you're either renting or you're buying. If you're renting, pay 100% interest every month when you make your payment 100% interest. You're not securing an asset over the long term to appreciate. You do not have the tax savings for home ownership. You're not being able to kind of control what you want to do with your property when you want to do it. You have no real protection over somebody evicting you. Versus owning a home and having the benefits of all the things I just talked about. So it's a tough decision to make. I would really finish off by saying if you're thinking about buying a home and staying there for a short period of time, don't. Don't buy one right now. If you're thinking about staying for a period of years, two, three, four, five, six years, you want to stay longer than that, I think you're going to be in good shape long-term, so in case... I think we're almost finished up, but...
Joey: Before we go, is there any resource somebody could find online that would show the average increase in rent and renting versus it just being antidotal where you're talking to people like, "Yeah, right." Is there something like that? Does that exist?
Josh: Rentdata.com is something I think will provide some insight into that.
Joey: Yeah, because I would like to see the number over the last 24 months because I think it would be shocking.
Josh: Yeah, yeah, rentdata.com, I'm pretty sure, is the one. I've got it in our previous market updates on our website, rentinghomes.com. You can watch the...
Joey: I'll link to it when we publish this.
Josh: That sounds great. Let's do that.
Joey: Okay, thank you for your time, Josh. As always, I appreciate it.
Josh: Always Joey.
Joey: If you guys need a real estate agent, give Josh a call.
Josh: Hey, we're here to help. Thanks.