CW 1031 - Increasing Time on Market, Increasing Inventory & Landlord/Tenant Relationships with Pat Parry

Through your company, I'm able to go out and purchase 12 homes in Memphis over just a few days, over a few months and most of them I've never even seen.

And they're able to cash flow.

Well, the checks just arrive and I speak to the property managers if I want to, but most of the time I don't. It just works out. It's amazing.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors. Welcome listeners from around the world and greetings from Germany. This is your host, Jason Hartman. And I am stuck. Yes, I am stuck. I am stuck on a European riverboat. We started this river cruise and I thought we were going to be moving, but guess what? The water level in the river is somewhat low. That's not really the problem. But the real problem is that a boat ahead of us on the river has run in to a sandbar and they shifted the sand and now all of the boats behind them on the Danube river are sand. Stuck. Yes, stuck. So we may miss some of this cruise. It looks like we're gonna get moving tomorrow, hopefully. We were supposed to set sail this morning at 4am I even got up at 4am and I took the dog out because we were supposed to be on the river for quite a while and I wanted to make sure the dog had her bathroom breaks. And guess what? My dog, my special dog, is the first person or the first person. Yeah, the first dog to ever go on one of their cruises. And everybody just is loving it, loving it, loving it. The crew loves it. The passengers love it. Everybody's having a great time with the dog. So hey, hats off to the pooch for making everybody happy. That's what she does for a living. She is the ambassador of happiness. Now I, on the other hand, it may be the opposite sometimes. And maybe this episode will be about being the opposite because we might have some bad news. News. You know, there are some signs now I want to be, if I can, a little early on this. I don't think the signs are serious, but we're going to talk about that today. We're going to talk about some signs that the housing market is cooling and maybe, maybe we are on the verge. We're getting the early view of the next cycle in the economy. I want to be really early for this. This time. I want to be really ready for it. I'm not saying that's true. I'm just saying let's take a look together. Let's take a look together. And our guest today is one of our former investment counselors and that is Patrick Perry. He is now a local real estate agent in Orange County, California, my old hometown. He's with Watts Team Real Estate. He's a partner with Watts Team Real Estate in Aliso Viejo, California. Patrick, welcome back. How are you?

Hey. Hey, Jason, thanks. It's an honor. Nice to talk to you again.

Well, it's good to have you on the show and it was great working with you many years ago when you worked with us at our office in Orange County. Yeah. We're going to take a look at the economy and the market and I think Orange county is a pretty good barometer. And I think that for a couple of reasons. Number one, I know it really well. You know it really well. It's where I got my start. It's where I lived almost all of my adult life. It's where I a large portion of our clients are in beautiful Orange county in Southern California, just south of Los Angeles, north of San Diego. So we're going to kind of look at that as a sort of a litmus test for the entire country, maybe the entire world. Because as I'm here in Europe for the last couple of weeks traveling around and now on this non moving cruise ship, you know, I've been talking to a lot of Europeans about what's going on in the market, people that work in London and they're talking about how the higher end market in London is getting pretty sluggish. Definitely read some articles about that in New York City. We're going to go into this in depth, but give us a little overview of what you want to talk about today before we get to it. Patrick?

Yeah, Jason, I believe, you know, I mean the most important stat is inventory and market time. I mean, if I compare Lisa Viejo, in March we had 35 listings where in now in July we have 125.

Wow. Times twice as long Substantial, Substantial. So time on market is twice as long and inventory has basically tripled.

Yeah, Lisa, VO is definitely a very small niche, but I mean, actually it's three times. So we had 19 days in the market back in March. Now it's 64 days in the market. Okay, so in all of Orange county, you're looking at 55 days in the market. Now you're at 80 days in the market. All of Orange County.

All of Orange County. Now, of course, everybody listening, you know that you've got to. You've got to peel the sun in back. You've got to slice and dice it. You've got to look at price range, market segment, product type. You know, is it condos, is it single family homes? And then, of course, in Orange county, the areas are so distinct that you've got to look at that, too. So we'll kind of dive in and talk about that stuff. And today also, I want to talk about commercial real estate a little bit. We want to play a video. Charles Payne did, a good video that I've seen, shared a lot on social media, and I think it'll be interesting to our listeners as we talk about this. But first, Patrick, and then we'll dive into this subject deep as to what's going on in the marketplace and your opinion as to why it's happening and give our listeners some insight into that and kind of all examine it together. But hey, commercial real estate business. So we get asked all the time, and I know you got asked this question a lot, Patrick, when you were an investment counselor with us years ago, people would ask, well, what about commercial real estate? Why should I do residential over commercial? What are the differences? And when they say commercial real estate, I hate when I hear that term because I don't know what it means. I don't know if they mean office buildings. I don't know if they mean retail centers or apartment complexes or self storage facilities or mobile home parks. I don't know what the heck they mean. But in Orange county, you've got a very active commercial real estate. And Patrick, I bet you know a lot of commercial real estate brokers, don't you?

I have to. Yeah. I need to refer people to.

Yeah, yeah. So when you refer people to commercial brokers, what are they doing? Are they looking to lease office space or are they looking to buy commercial properties or all of the above, probably, right?

Yeah, all of the above. Yeah. And it's one of those things, I guess. Quick comparison. I mean, residential is like bowling with bumpers, where commercial is like pulling without the bumpers.

I love it. That's a good comparison. So, you know, I've done some episodes in the past comparing in depth single family homes to apartment complexes, single family homes to all commercial real estate asset classes. But, you know, Patrick, I realized just the other day that I left out a huge component about that comparison of commercial real estate to residential real estate. Now, residential real estate is defined as four or fewer units. So if someone has a single family home, you know, or single unit home, whether it be condo, single family, detached, whatever, or a duplex, triplex or fourplex, that's all considered residential, quote, unquote, residential. And I think that's defined either by HUD or under the RESPA laws. RESPA stands for Real Estate Settlement Procedures Act. In your world, Patrick, you hear about that all the time. Of course, a lot of RESPA forms you deal with and stuff like that. But you know what most people don't address in this comparison? We could talk about cash flow. We could talk about the outlook in the economy, for example, retail properties and the retail apocalypse that's going on with Amazon being the killer of all retail businesses. We could talk about all of that stuff. We could talk about people working out of the house and not needing an office anymore. You know, as I mentioned, in 2012, our company went completely virtual. We have no offices. And, you know, we gave up our last lease in Irvine, California, and the lease expired and we moved. And I just found myself really struggling to get our staff to come to the office. Everybody wanted to work at home. They wanted the flexibility to just work at home, to be with their families, to have all that convenience. And I thought, well, hey, you know, the company can save a lot of money on office space, and we could spend that on producing better podcasts or doing better conferences or whatever. And we've upgraded all of that stuff since then, so that's been good. But I don't want to talk about our last office space. I want to talk about the one where you worked. Okay. You remember that space where you worked? I remember your desk. Exactly. Your desk. And this is.

Yeah, I positioned right out front of your office. It was perfect spot.

You did. I used to hear you talking on the phone all day and you probably heard me. You know, one of the things that I have never really addressed about residential versus commercial in all the times people have asked me and all the stuff I've talked about it in the show, I think is pretty significant. And I think that is the general legal climate and the ethical climate of these Two industries. Okay, so we talk a lot about investing in markets that are landlord friendly versus markets that are tenant friendly. Of course, if we're the landlord and we're the investor and we're the owner, if we have a tenant who's a deadbeat and doesn't pay us rent, we. We want to be able to get them out so we can make our property perform again. Right? That's what we want to look for. One characteristic. We want to be in a landlord friendly market. Right? And coincidentally, most of the linear markets versus the cyclical markets, the linear markets that we like to invest in are the landlord friendly markets versus the cyclical markets. California, New York, Oregon, Washington state, these are all this more cyclical markets and they're more tenant friendly markets. Right? So that's one thing we talk about, but we have never talked about the difference in the landlord tenant relationship between commercial and residential. So residential, four units or fewer, you have, as the buyer of those properties, you have tons of protection under the law, the RESPA laws. And Patrick, you in traditional real estate, and you know, I spent many years in your business, in your side of the business in traditional real estate. And I mean, there are tons of disclosures. You know, I'm curious, how many pages of paper does it take, well, or you know, docusign, whatever to sell a house nowadays? Because I haven't done that in about 12 years. A traditional house, what's it like nowadays? I'm sure the paperwork just increases every year, doesn't it?

Oh, yeah. I mean the files I put together, I mean they're like a textbook, you know, at the end of the file. Done. It's a textbook for sure. It's between me and, you know, all the disclosures between escrow and, you know, just real estate. I mean, it's got to be somewhere around three to 400 pages in total.

Are you kidding? Three to four? Well, you mean, you mean with the escrow instructions and that? Maybe even the title, the preliminary title report and all that. But yeah, if you take out the prelim and the escrow instructions, like your contract, your deposit receipt, what is that nowadays, about 812 pages? I don't even remember. But when I got into the business, I'll tell you, way back when, when I got into the business at age 19, it was one page. And then I remember when it went to four pages, maybe it was three. I think it went right from one to four. All the real estate agents were just up in arms. Oh, this is so ridiculous. Four pages to sell a house. Oh, My God. Now looking back, that's like simple compared to today, isn't it?

Very simple, yeah. I mean just the residential purchase agreement is 14 pages and then they're just doing an offer. You do a statewide buyer and seller, there's a bunch of disclosures, there's wire advisory, there's agency relationships.

Yeah.

I mean just the initial offer itself is going to be 25 pages on the initial offer and then there's much more disclosures signed up.

Yeah. Wow. It's just, it's mind boggling. It really is. So suffice it to say that if you're thinking, you're listening to this and you're thinking, well, I want to become a big wig and invest in commercial real estate. You know, never mind that the single family home generally offers the best return on investment of all of them. Forget about that for a second. I just want to talk about the legal and ethical climate and I'll share a personal example. Okay. Now I had about seven different office spaces over the years for, for my different real estate companies. And we always lease them from different landlords. And you know, coming from the residential market where, yeah, there are sleazy operators and you know, there's agents that'll try and take advantage of you and you know, but that was like the minor leagues. It was like kindergarten compared to when you get into commercial real estate. It is cut throat. And the way the law views it is they think, hey, if you're a business person, if you're doing a commercial real estate deal, whether it's a purchase of a property or a lease of a property, regardless of what side of the table you're on, you know what you're doing. That is what the law assumes. You are an expert. Even if you're not, the law is going to assume you are an expert. And the commercial landlords will just lie. I mean, it's mind boggling. They'll just lie. They'll just take advantage of you. It's incredible. And you know, I'll just give you one of many examples. You know, with commercial landlords, we had an office space and we rented this office space from the landlord directly. It was not a sublease. And I think we were paying $2.75 per square foot. The overall rent on the office space was about $15,000 or something like that, give or take. And then there are cam fees, common area maintenance fees and all of this stuff. And, and you know, these leases are like 80 to 120 pages long. And it's a lease. You're not even buying it. It's just a lease, right? And you've got to spend many thousands of dollars on attorneys fees just to review the lease. It is absolutely mind boggling. But check out what happened on this one deal I did, right? And this is how cutthroat commercial real estate is. I lease the property for my company, we move in, we're there for a whole month, maybe a month, give or take a week or two on either side. And a friend of mine, a buddy of mine walks in who was in Young Entrepreneurs Organization with me, his name's Alex, he walks in and I see him walking in the lobby of the building and I said, hey, how you doing? And we start talking and he says, oh, yeah, I'm good. I'm just looking at an office space here in your building. And he says, I found an office space in here for 92 cents a square foot. And my jaw dropped. My jaw just dropped because we were paying 275 per square foot, okay? And this is, by the way, per month. That's what you pay per month, per square foot of space in the office, right? And I mean, I thought, oh my God, you must be kidding me. And he says, yeah, there's a couple of them between 92 cents and a buck 10 per foot. And I said, show me, I'm going with you. He takes me in the building to one of the office spaces. We talked to the occupant in the space and they said, yeah, we'll do it for, you know, 92 cents a foot. And I remember I asked our landlord, I said, you know, we want full disclosure of every other space in the building that's available. And they just lied. They just completely lied. And they did not disclose these material facts. Now, if that were in residential real estate, there is no way they would have survived doing that. Because there's so much protection for the buyer, the consumer in residential real estate. And I know some of you listening are thinking, well, you know, I bought this house and the seller screwed me around. Yeah, I know. But believe me, it's nothing compared to what goes on in commercial real estate. In commercial real estate, it is absolutely cutthroat. It is just unbelievable. And the terms and the deals and the leases and the purchase agreements and the sale agreements are so punitive, it just boggles the mind. And you know, I go to the landlord and I say to them, you didn't tell me this. And they said, well, you know, we didn't have to. And then I go to my broker and I say, hey, I had a broker. I did not represent myself. You know, I'm not in commercial real estate. And I said, hey, you didn't tell me this. And he said, why? Didn't know. Oh, how convenient. You didn't know and they didn't tell us. Here we are on the hook for this lease. So, you know, we go in, try and renegotiate the lease with them, blah, blah, blah, make a little bit of headway, and ultimately say, you know, no way, we're absolutely not paying this. And conveniently, it was kind of in the middle of the financial crisis, so that was another reason to just say, look, we got to renegotiate this deal. You know, that's how things go. You do not have the protections in the commercial real estate world. If you are going to be playing in that game, you better have very good lawyers and you better be an expert. You better know what you're doing. And you. Not only lawyers, but you better have very good research. Research. That's the thing I learned from that, is, you know, how did my friend Alex find out about these other deals in the building that the landlord did not disclose to us? When we didn't find that out, we had a broker, a very experienced, highly recommended commercial broker. He just. I didn't know. I mean, that was his whole thing, you know. Unbelievable. So I remember the commercial real estate friends that I had in Orange County. You know, they would tell me about the deals they were doing and stuff, and it was like every man for himself, you know, just zero care and concern in the residential business. Kid gloves. Kid gloves. Okay. Even. Even if you.

Bumpers.

Yeah, bumpers. Bumpers. Exactly. Thank you. The bumpers. Even if you listening, don't think it's that way. It is that way. Because the laws are far more in your favor, dramatically in your favor. And if you've been burned in a deal, we want to help you, we will help you with that. So just let us know and we will send you our hall of shame list and provide you with resources where you can recover. Hopefully you can recover some of any losses that you might have had. So, you know, just wanted to share this one hidden thing about commercial versus residential real estate. I just thought of it the other day and thought, you know, it's like the landlord friendly versus tenant friendly market. In the commercial world, there is nothing friendly to you. The other side is they owe you nothing. The law owes you nothing. The courts owe you nothing. And no regulator will help you in residential, you file a complaint with like the Department of Real Estate or even the Board of Realtors. Right. The association of Realtors. They will help you in commercial. Hey, good luck, man. You're on your own. Any thoughts, Patrick?

No, you're totally right. I mean, and not only that, I mean, anybody. The commercial investors and brokers, they have this very high tolerance for loss and vacancy. I've seen them leave units vacant for three years. I don't understand how you can operate like that, but they do.

Yeah, right.

You know, like you said, it's just cutthroat.

Yeah. Yeah, it really is. And a lot of them are big institutional players, and believe me, they are smarter than you. You know, they have teams of people that do financial engineering. They have teams of attorneys and accountants, and it's a much higher standard. You cannot be a babe in the woods in the commercial real estate world, okay? Residential, you got way more protection. You have bumpers. I love that metaphor. You have bumpers. That's really a good one. Really good. I want to interrupt this episode briefly for two special announcements. We have something new that you will love. It's called our Pro Property Cast. This is essentially a podcast where instead of having audio, you will have Property Pro Formas. Yes. PDF files of Property Pro Formas, just like you see on our website@jason hartman.com. simply go to itunes or whatever podcast platform you use and look for the Jason Hartman Property Cast. Property Cast. Yes. It's like a podcast with properties, and it's really, really cool because you will be able to see Performas right on the RSS feed. Now, I have been told we are still experimenting with this a little bit, but I've been told, and, well, I've personally experienced that it's easier to see these if you are using an iPhone or an iPad to access our podcast through itunes, but it can also be done through PCs and androids. We're working to refine this a little bit, but check it out. It's brand new, and you can see property performance as they become available on the Jason Hartman Property Cast. So please be sure to subscribe, rate, and review that. I'll say in air quotes. Show. It's not a show in the traditional sense. There's no audio. It's simply property proformas. Yes. I discovered something totally new and innovative that you could actually put a PDF file in an RSS feed for a podcast. So there you go. The Jason Hartman Property Cast. The second thing, our upcoming events in Hawaii. A lot of you have been buying tickets for those, and we appreciate that. We've still got super early bird pricing for our event at the two day conference Prophets in Paradise on Waikiki beach at the most iconic hotel on Waikiki beach in November. And then we've got our Venture Alliance Mastermind event following that in beautiful spectacular Kauai. So join us for those early November go to Jason Hartman.com to get your tickets at super early bird prices. See you there.

Foreign.

Let'S go back to the bumper business. And before we do, I just want to play a short video here. And this is Charles Payne, one of my favorite financial commentators. He's great. This is actually a video, but we're just gonna play the audio part of it. Obviously on the podcast, you know, he's talking about how the economy is doing pretty darn well and in a lot of ways it is. And then we'll kind of examine the real estate market after this video.

Well, folks, it was a wild week and today we saw a very strong jobs a June jobs report. It exceeded Wall street consensus as April and May also revise higher by 37,000 from their prior releases. Now there was some disappointment on hourly wages. They rose only 2.10of a percent from the prior month, 2.7% from a year earlier. Anecdotally, it felt like this would have been the month where we saw maybe a 3% or even better increase in wages. I mean, consider There's a record 6.7 million job openings out there, more and more people quitting their jobs. The pace of improvement though is edging higher, but still of course, well below those customary levels that we saw before the Great Recession began. So on that note, Wall street shared the fact that wages are at least the wage increases have been held in check. While there are several ways to measure inflation, keep in mind the old rule of thumb is too much money chasing too few goods. So Wall street doesn't like when Main street makes too much money. Blue collar jobs, that's the story here. Soaring. We were told, as I said in an earlier segment, they would never come back. And yet here they are, not only coming back, but coming back with the force of a tornado, cutting paths of prosperity in places that were also written off for good. The goods producing jobs actually pay more than the average sector gigs. Hourly wages for mining over $28 an hour, construction and 2756 and manufacturing over $21 an hour goods producing jobs were listless. Think about this. In December 2016, the chart was just drifting 753,000 creative since then manufacturing up 362,000 since that point. I happen to think that these great blue collar jobs will continue to increase in part because of strong underlying trends that I'm seeing, including big rig demand. That's right. The big news that nobody talked about this week, the continued record pace of Class 8 truck orders. June orders soaring over 42,000. And to put that in perspective, the industry saw 18,700 orders in July of 2017. That was their first year over year increase since November of 2015. And keep in mind truck demand and traffic for the US Economy. This is sort of like the blood pressure, right? It's when you go to a doctor, I don't care if you go for a doctor's appointment or an emergency, they always check your pulse and your blood pressure. Truck demand. Speaking of which, truck stop.com has an index that they use. It's called the market demand index MDI. It goes, it takes your loads versus the trucks. It's at 77.1. What you need to understand is that that is an all time record. In January 2006, the MDI was only 21. So measuring the tariff battle from today's stock market session. Let's think about this. The market obviously rallied on the jobs report, but there were some key equity proxies that I think represent what's happening when the trade war. Semiconductor names look pretty good. They were actually down in the session early. They climbed up, finished higher for the session. That's the soxx. Boeing finished slightly higher. Caterpillar slightly lower. Apple was up 1.4%. But get this, soybeans up almost 5%. Go figure. Now next week earnings will take over the headline. So it's important to know that this recent weakness in my mind is creating great investment opportunities. I haven't told you in a while, but make sure go check out my daily market commentary every morning. W street.com okay.

So Patrick, what do you think of that? He talked a little bit about construction, but tell us more about what's going on in the Orange county market and what do you think is coming? I mean, or what are you hearing? What's kind of the vibe?

Lot more listings, definitely. I mean just our office. I mean we, you know, doubled our listing count this month and properties are lasting on the market longer. Sellers. I just had a seller pull their home off the market after two weeks. You expected it to sell in two weeks?

Oh my gosh. Well, that's a little ridiculous, right? But some of the stats that you quoted me the other day when we were going back and forth, are you properties in the higher end price ranges that are taking between six months and a year to sell. I was really surprised. I thought the market was a lot swifter than that. But the buyers seem to be kind of just resisting some of these high prices, right?

Correct. Yeah, like for, you know, if you want me to quote some price ranges.

Sure.

You know, from the 2 million to 4 million range, you know, back in March it was 190 days. Now it's 250 days.

Okay, so the average property that was, what did you say? 2 to $4 million. So we're talking high end. But hey, for Orange county you can spend a lot more than that. Okay. I mean, I owned three houses in Newport coast and some of those homes were 15 million bucks. And now I, I bet they're even a lot more than that nowadays. But 2 to 4 million, you're gonna be on the market on average for what do you say, 250 days, almost a year, like nine months, something like that, right?

Yes. Okay, correct.

And that used to be. And if you go 150 days, say that again.

That used to be 193.

193. Okay, now it's 250. So it's increased by, by two months. Okay, go ahead. Next one.

Over 4 million. Just under a year, about 330 days now, 511 days.

So a year and a half. Wow, wow, wow. Okay, what about when we bring the prices down a bit to more realistic levels here?

1.25 to 1.5, 75 days back in March. Now you're looking at 126 days.

Okay, so if it's 1,250,000 to what'd you say, 1,000,750, 1.5 or 1.5 million? It used to be, what, back in just March, just a few months ago. And now what is it again? Say it again.

75 days. Now it's one. 126 days.

Okay. All right, so significant increase in time on market. All right, give us more. What, can we go down from there? What's below, you know, a million 250?

Well, just below a million 250. So 1 million to 1.25 was 82 days back in March. Now 100 days.

Wow. These are significant increases in time on market. Okay, now what about normal houses that normal people live in?

So in Orange county, normal house would be, you know, 750 to about a million. A normal home, a middle class worker that would afford a normal home. 750 to a million was about 40 days back in March. Now you're looking at 72 days. So almost twice.

Almost. Almost double. And it's so funny that you say middle class because a lot of people listening think that's really expensive if they don't live in California. But you know, that's how it goes. Yeah. And if you look in the media folks, you'll read a lot of stuff about how the high end market in New York City is collapsing, how it's collapsing in London, all these trophy places. I don't know what it's doing in Dubai or Hong Kong I hear is pretty robust. Still, I don't know, I may have old news. You know, this is not stuff I track closely. Yeah, I mean, what do you think is going on? What are people saying?

Well, I mean, I think sellers are all trying to catch a high price. You know, they're seeing the market, you know, go up so high and they're like, they have a lot of equity, they're trying to take advantage of it. So they're all coming to the market, you know, they're seeing what they can get.

Right.

And they're pricing it ahead. The pricing ahead of what? The last comp sold. And that's not the best strategy right now.

Yeah, right. Yeah.

In Orange County, July is always a very slow time. Uh huh. Oh it August could turn some things around. But I mean every since 2013, once you hit June, late June, July, it slows down, market flattens out. Now is it going to flatten out and go down the other way? It's possible. I mean, I know in New York it's done that. San Francisco, it might be doing that. Sydney has done that based off that article you sent me.

Sure, yeah. Yeah. Interesting. And I was talking to some Australians here at lunch today that are here in Germany on this trip and they live in Sydney and I was asking them about the market. They weren't super in tune with it. So I don't have any super gems to share, but it's pretty interesting. I mean, you know, this may be a sign that at the top end people are reining in their horns a little bit or the sellers are just getting too darn greedy. You know, the thing with markets is people are always looking in the rear view mirror. Appraisers are looking in the rear view mirror. Buyers are looking at comps, comparable sales in the rear view mirror. Yet sellers are looking out the windshield way ahead thinking, hey, you know, greater fool theory, whatever that guy got for his house, mine's of course way better than that one. It always is, right? That's what they always Think it's always much better than that one down the street that sold. You know, just take that one and add 10 or 15% to it and there's my price. Right? Because they get so accustomed to this massive increase, this constant increase in prices. And it's like musical chairs, isn't it? At some point it ends. It doesn't go on forever. What goes up must come down, right?

Past performance does not necessarily predict future results.

I love it. That's very, very, very true. Now, do you have any gurus out there who are talking about, you know, the real estate market? I mean, I remember in the old days we used to have Gary Watts, you may not even know who that is, and a couple other people that would come around and predict this or that. And, you know, Gary Watts was. He was pretty good until he fell on his sword. You know, in 2005, he was saying, oh, 2006 is going to be a boom year. And he was saying, you know, things are going to the sky, to infinity and beyond. And he was completely wrong. David Lara with the national association of Realtors, he was saying the same thing in 2005, 2006, he was completely wrong. And he's pretty much disappeared from. We tried to get him on the show to interview him and he just. You just can't find the guy. And then, oh, who else did? I want to say we used to have in California, the chief economist for the California association of Realtors for many years was Leslie Appleton Young. I don't know if she's still around, but I'd love to hear what some of these folks are saying.

Well, most of them are, you know, just basically predicting another typical summer where things slow down, everybody's positive, Everybody's positive. Once, you know, again, January comes, we're going to see the same as we did the last five years in a row, which is low inventory, high demand, and prices will increase half a percent to 1% a month till May or June. That's the typical kind of basic forecast that we're getting from most economists.

Pretty interesting. Well, we will see how it all pans out. This nobody knows. But folks, if you've got to have a home to live in, you know, you've heard me talk about that ad nauseam, so I won't lecture you about it. But, you know, the general rule is if it's under 250 or even now, say $300,000 in value, you should probably buy it and own it. If it's above $300,000 or so in value, you should really consider renting the home in which you live just from a numbers perspective. Perspective. I understand there are more perspectives than that. There are emotional, you know, and peace of mind kind of perspectives as well that I won't argue with. But the rental properties, the little inexpensive linear market rental properties just make sense. Are the, are the safe, safe bet. So that's what I say. Patrick, give out your website or tell people how they can find you if they need help with real estate in Orange County. And a lot of our listeners do live there. And then, you know, any closing thoughts you have, and let's wrap it up.

My cell phone is always easy. Call me if that's okay.

Sure.

Text message as well. 949-235-8614. I get a lot less. I get a lot of calls from people that shouldn't be calling me. So I would love to talk to any of your people if they ever want to call. Don't hesitate or my website. Pat.perryholmes.com Last name is spelled with an A, so P A, R R, Y. And I'm again with Watts Residential in Aliso Viejo.

Fantastic, Pat. Well, thank you. I'm just curious, why did you say you get a lot of calls from people who shouldn't be calling? I gotta ask you.

I mean, my number's so public, Jason. I mean, I get people trying to sell me, marketing people that can't even afford a home calling me, asking me for a property that's $100 a foot. They've seen some article online. Well, I see $100 foot more or less what it costs for a national builder to build.

You know, you can't, you can't come anywhere close to a hundred dollars a foot. Even in the furthest out location in the Inland Empire in Riverside, San Bernardino, in the, in the, like, the worst neighborhood, you probably can't get 100 bucks a foot. That's crazy, huh?

Correct.

Yeah.

I said if you find that, I'll buy it off you for 200 a foot.

Yeah, yeah. Good stuff. Good stuff. All right, Patrick, thank you so much for joining us. That's Pat Perry, P A r r y.com Right.

That Perry Homes.

Pat perryhomes.com Good stuff. All right. Hey, thanks so much for joining us and giving us some insight into the Orange county market. Really appreciate it.

You got it, Jason. My pleasure.

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