Economic Crisis Update - More Jobless Claims

What's up, business freedom podcast listeners? Lars Hedinburg, founder of Real Estate B school and co founder of High Performance Real Estate Advisors in Charlotte, North Carolina. I'm going to do an update, as good as I possibly can of what's going on in terms of the economy, in terms of things perhaps getting back to normal. My take on where I think the real estate market's going to be and how it might impact our businesses. And I don't watch the news, so that is the interesting part of what I want to share with you today. I am only following like three, three data sources. Well, two are folks that are looking at data and then just looking at data. So one of my business coaches tells me to use look at the data and apply logic to the data and to absolutely not consume the news or social media. And I was already off social media and I don't watch any news. I haven't watched news for a long, long, long, long time. News is always going to spin the data any way they want. So there's this. There's this gap between what is actually going on and where you are. And so there's always going to be just, even without this Covid crisis, there's always going to be a gap between the data, what's actually going on, and your perception of it. And then the question is, what are you going to fill the gap with? And so I do everything in my power to fill the gap with data that I can process and I can make decisions on what I think is going to happen. If you watch the news, there are. It's a roller coaster. So, you know, a good example is chocolate's great for you. Chocolate's not great for you. Red wine is great for you. Red wine is not great for you. Like, you can get more of that chemical, the one little chemical in red wine that's good for you. You can get a thousand times it in like a little pill. And so news just spins everything all the time. And I recommend, if you're watching any news, just stop it and stop it, stop it, stop it, stop it. So the podcast episode title is Economic Crisis Update and More Jobless Claims. So as I'm recording this, this will air. So funny enough, this episode will actually air after the next jobless claim report comes out. So Thursday morning. Yeah, let me just get the right. Yeah. So Thursday. So every Thursday for the week ending, the prior week ending is when jobless claims comes out. Comes out. So I have the most recent data, which is going to be a week old by the time you consume this. So as of now, 30 million jobless claims the last six weeks. So when that, when the virus like really, really started taking, taking impact here in the US and states shutting down and all of that. March 21st it was 3.3 million. March 28th it was 6.9 million. April 4th, 6.6 million. April 11th, 5.2, April 18th, 4.5 and April 25th 3.8. You may actually look at that, you may be one of the positive guys and say, oh, it's been declining every week since March 28th. The previous record for the most jobless claims in a single week was something like 680,000. I think it, I forget which it was either back in, I think it was in the, in the 80s recession. So relative to that, even though we've come down each of the last five weeks, we're still what, six, six times as much as the highest week ever. And the last week was the lowest of the last five weeks. So 30 million altogether. So the question is, and I'm going to give you some good news too, so this isn't. I'm not a negative Nelly. I am. I've got this buffalo on my desk here. I'm holding it up. If you're watching the video, I've got a buffalo on my desk to remind me that the buffalo, and this could be a myth. That's not actually, I don't know if it's actually real, but the buffalo supposed to run into the storm versus cows. Run away from the storm. If you want to run away from the storm, you're going to be in the storm longer, you're probably going to die. If you run into the storm, you're going to get through it quicker. So I'm a buffalo. My mindset is built that way. So I'm not worried. I'm not anything like, I'm taking all the, doing all the right things to protect pivot and profit and all that good stuff. My worry though, if I have one, when I'm just consuming data and I'm applying logic to this data, is that how the heck are we going to recover from 30 million jobless claims? Like if you're a top producing agent or a team leader and you don't have a clear plan right now, I think the opportunity to grow through the economic crisis that's going to follow this acute period of time when we're allowed to go back outside and things get back to normal. They're not going to go back to normal. Folks are not paying their mortgage payments. Folks are not paying their rent. We're just on the front end of what I think might happen. And so that's part of me is watching these jobless claims. There's a report coming out for from the Bureau of Labor Statistics on May 8th that is going to give the complexion of all of these jobless claims. The only one we had before this was it was only 700,000 jobless claims that they analyzed in the previous month. So we're going to get a good piece of the puzzle, I believe here in about a little over a week. So I'm definitely going to rip into that and draw my own conclusions about what I think is going to happen, how quickly these jobs will come back. So that's on the not so great feeling side. Like, I think there's just some stuff that we need to work through and contemplate. I do track y' all have probably heard of keeping current matters. We had David Childers on our we just finished our virtual intensive. It was virtual this time and he presented at our event and he gave a phenomenal presentation. And basically you need to be thinking about these questions. And there's four questions. You know, when is the economy going to recover? Are we going into a recession? Is this going to be like 2008? And what about the job losses? So there's all this talk about how we're going to recover. And this could be more of a pause button than an outright like just slump. And there's B shaped recoveries and U shaped recoveries and L shaped recoveries, even W shaped recoveries, where the economy is going to go down, it's going to recover. Then there might be another Covid, you know, recurrence of COVID and it's going to go down, it's going to recover. So who knows? But they poll economists. The good thing about keeping current matters is they just take all of the data out there and they give it back to you in a way that you can understand. So a lot of economists think there's going to be U shaped recovery where we're going to be down for a couple, couple, three, four quarters and. And then it's going to take us a while to get back to where we were. And who knows, right? Who knows actually what's going to happen. There is a lot of folks are wanting to Compare this to 2008. In 2008, the housing market is the thing that caused the recession. That is not the case Going into what we went into. The housing market was just fine. We had low inventory back then. We had or back then? We had, yeah, we had a ton of inventory back then. And prices had appreciated like just dramatically the five, six years leading up to the housing crash of 2007, 2008, it was probably about an average of about 10% for six years in a row. The average going into the last six years, coming into 2020, was only about four and a half percent. So there's lots of things that are not like they were and folks aren't taking equity out of their home like they were back then. It's just a very different feel. So while the last two, like the Great Recession took about 10 years to recover. So in the ninth, 10th year, we got back to unemployment where it was in 2007, 2008. They're calling for a year or two for us to get back to where we were before. Who knows, right? Who knows if unemployment is going to be the thing that sort of, you know, lags and brings us into a not so great place. There's way more homes now with a ton of equity. It's like 57% or some crazy number. 54% have more than 50% equity. And that was not like that back in 2008. So a lot of different things that are happening and things that are not correlating the way that they did in other recessions. And home depreciation has not been linked to recession either. So on the one hand, like if you're in real estate and you're like me, you're running a team, you want to have a sense of what is going on. And so hopefully this gives you a little perspective of the things that I'm looking at because I'm in the real estate business and I'm also helping real estate teams and top producing agents, you know, position themselves to absolutely profit. You know, we talked about protect as soon as everything hit in our members group is everything was about protecting mindset, protecting your finances, getting in a good cash position. Now we're mostly through the pivot. You know, everyone's pivoted to the virtual consultations. Even states that are closed, they're still signing buyers and sellers consistently. Now we're moving into that profit phase where agents are freaking out in most markets and how can you bring on really good agents that don't have a plan, they don't have any systems built out, they don't have any cadence whatsoever, they don't have, you know, systems or processes around productivity or tracking or it's just nothing. And I fear, I fear those agents and I fear those team leaders that don't have a plan and they're not already through protect and they've already pivoted their entire business. We're doing things differently in our, in our members businesses that I don't think we'll ever go back to the way we went we were before. Like our virtual consultation process is so good and we're helping our members put virtual consultations in place where I don't think we ever need to go back to the way we did it before. I think consumers are preferring everyone's going to come out of this crisis with a preference toward getting on a Zoom meeting than getting in your car and driving to an office for 60 days, maybe even more. In some markets, everyone will have learned the technology of either using Zoom or Google Hangouts or I think Microsoft has a team video sort of deal. So that's kind of it, you know, that's, that's my update. The things, this is real time, you know, so I don't watch news, so I'm only looking at the vital pieces of data and I'm only really listening to a couple guys that I really trust their opinion on where things are going. If you don't have a clear plan, the only thing I can offer you is a conversation about your, your business. And if you're running a good sized business, either a top producing agent or you, you're, you're running a team and you have others following right now, you are called to step into this, be the buffalo and charge through this thing. And you can't do that if you're, if you're really not ready and you haven't protected and pivoted and you're not already excited about what's going to come, come on the other side of this. So if that's you and you want to have a conversation about your business, where you are today, where you'd like to be, the opportunity to grow. Not just like grow in the hypothetical sense, like grow as a person, like actually grow your business. I went from 58 sides to two years later, 178 sides. In the three worst years of the Great Recession here, that was 2008, 9 and 10. Those years, even 11 was really bad. And then on to 248, the year we did 248. I only sold one home that year. And I did it on the exactly right economic model. An economic model is a whole different story. I think I've covered in other podcasts and if you don't know what I mean by economic model and you're growing a business, then you definitely need to have a conversation with me because we have to have you building the right economic model. So my friends, if you need help go to realestatebschool.com just request a business growth strategy session. There are orange buttons on the site, easy to see and fill out a few bits of information about your business just to know that we're going to make the best use of our time and I look forward to serving you while you're there. There's a bunch of free resources. You can subscribe to the podcast, which hopefully you already did. You can grab our Market Shift toolkit which is a free resources. It's the 12 trainings that are just 100% applicable to anyone going through this crisis. And that's all I've got for you friends. So keep your chins up, stay in the game, look at data and apply logic. Do not, do not consume the news or scroll through social media as your source of information to make decisions in your business. That would be a monumental mistake. All right friends, be good and we will talk to you soon.