WEBVTT X-TIMESTAMP-MAP=MPEGTS:900000,LOCAL:00:00:00.000 00:00:00.000 --> 00:00:06.160 Talk to us about what you're seeing in terms of levels of confidence if you cannot get the supplies to build but indeed 00:00:06.180 --> 00:00:13.985 everyone's paying a lot more for them a net more positive than usual. You know it's sort of like we're coming on the Christmas 00:00:13.980 --> 00:00:19.475 season. Paraphrase Charles Dickens. It's the best of times and the worst of times. And the demand is there. 00:00:20.490 --> 00:00:25.200 Household formations are high. People are still moving out of cities into smaller markets. So 00:00:25.200 --> 00:00:32.465 the demand all around the country is very high for housing. That's the good news. The bad news is as we were talking about 00:00:32.460 --> 00:00:38.765 before we went on air. The supply chain is such a mess right now that builders will pull the permits and get ready. But they 00:00:38.760 --> 00:00:43.115 can't start building until they know they're going to be able to stick to their construction schedules. 00:00:45.000 --> 00:00:49.380 And that is almost impossible to guarantee right now. And we've heard from so many of the homebuilders in their earnings reports 00:00:49.450 --> 00:00:55.920 the executives talking about just that here. Is there sort of a break point where they actually start to revise down I guess 00:00:55.920 --> 00:01:01.565 their plans for what they plan to build or can they sort of stick by those plans. And just along long I guess the timetable. 00:01:02.270 --> 00:01:07.805 I think there is a break point. I'm not sure what that is because we've never seen anything like this before. 00:01:09.060 --> 00:01:14.375 But at some point they're going to have to look and say until we know we're going to be able to get lumber until we know we're 00:01:14.370 --> 00:01:21.005 going to be able to get concrete little loan appliances in the things that go into the finishing of our house they won't be 00:01:21.000 --> 00:01:24.665 able to to stick to a plan for too long if they're not sure of that. 00:01:25.710 --> 00:01:31.980 In the meantime I'm curious about who's eating the costs for all of these. When you look at some of the single family homes the 00:01:31.980 --> 00:01:37.775 multi-family homes. I mean rents are rising. Maybe that's helping the multi-family business. But if you're in this 00:01:37.770 --> 00:01:42.150 business of construction and you're looking at the rising lumber costs and the rising concrete costs and the rising labor costs 00:01:42.290 --> 00:01:49.565 are those builders able to pass those on to the consumer you know in some facets of the market. You can. And by fast I mean 00:01:49.560 --> 00:01:59.675 the higher end homes. Sure. You can pass it on to the consumer. The starter homes the first time homebuyer market which is what 00:01:59.670 --> 00:02:04.685 really drives the housing market as a whole much more difficult to pass on to the consumers. And therefore we're worried about a 00:02:04.680 --> 00:02:13.150 slowdown if we don't get the supply chain back in order real soon. Hopefully by the spring building season we laugh. That 00:02:13.150 --> 00:02:20.195 remains finally getting us so far. But anecdotally it feels like we are unplugging things ever so slightly. Do you feel that way 00:02:20.190 --> 00:02:27.810 in the building sector at all. Right now I'm getting anecdotally stories from builders all 00:02:27.810 --> 00:02:34.320 around the country that they're not going to build until they know they can get the materials. They're having problems even 00:02:34.330 --> 00:02:41.675 signing contracts with their customers because they can't guarantee that a house that they are contracting is going to be 00:02:41.670 --> 00:02:47.430 buildable at the price that they're signing a contract for. They're putting escalator clauses in there putting delay clauses 00:02:47.430 --> 00:02:49.805 in right now. It's never been done. 00:02:50.970 --> 00:02:55.955 We've never seen this before. And it's something that they're trying to adapt to to try and save the market as best we can. 00:02:55.950 --> 00:03:02.645 What about the labor dynamics. I mean we've heard from some of the homebuilders. They've had issues with wages. It's much more 00:03:02.640 --> 00:03:07.015 competitive environment across industries now. You've obviously had some longer term issues with immigration that have sort of 00:03:07.010 --> 00:03:13.710 cut into the labor supply. How are they dealing with that. Well we've we've had problems with labor way before the pandemic and 00:03:13.710 --> 00:03:18.035 actually even before the Great Recession. You're seeing Americans have traditionally told their kids 00:03:18.030 --> 00:03:24.630 you're gonna go to a four year college you're going to get a degree you're not going to work in construction. The reality is 00:03:24.630 --> 00:03:30.695 that construction jobs are very good jobs. You can set your own hours. You can even own your own company much earlier in life 00:03:30.690 --> 00:03:38.880 than if you go to college and they're saddled with some debt there. So we've been trying to convince the American people that 00:03:39.000 --> 00:03:43.625 construction is a good career to get into. We're having some luck. Believe it or not. 00:03:45.750 --> 00:03:51.455 But the real key as you mentioned is immigration. Immigrants have built this country from time immemorial. And until we get 00:03:51.450 --> 00:03:59.670 an immigration policy that recognizes homebuilders or construction as a skilled trade and lets them come into the 00:03:59.670 --> 00:04:07.805 country we're still gonna have a shortage. Texas geographically we in New York City have heard about the 00:04:07.800 --> 00:04:16.920 mass exodus to the suburbs down south to the southeast. What have you learned. Again maybe anecdotally about who is 00:04:16.920 --> 00:04:24.455 moving where and is that movement permanent. You know it's it's hard to tell if it's permanent yet because we're still really 00:04:24.450 --> 00:04:31.120 coming out of the pandemic. But it actually started prior to the pandemic. The exodus from the cities really started when 00:04:31.180 --> 00:04:37.625 unfortunately the violence erupted in the cities right before the start of the pandemic where people moving to people in New 00:04:37.620 --> 00:04:45.215 York are moving to western Massachusetts. They're moving to the Catskills. They're even moving as far north as Vermont. As long 00:04:45.210 --> 00:04:50.735 as you can get a plane flight back into the city. However often your employer tells you you have to show up in the 00:04:50.730 --> 00:04:57.510 office. It's easier to live somewhere else. It's cheaper. And some would say the quality of life is better. So in the 00:04:57.510 --> 00:05:06.690 northeast you're seeing people move into upstate New York. In New England more than in the past in the West Idaho Boise Idaho 00:05:06.690 --> 00:05:14.910 is one of the fastest growing cities in the country right now. Reno Nevada places that are small midsize they still have a lot 00:05:14.910 --> 00:05:22.230 of quality to life. A lot of entertainment and culture but they're more affordable and it's just easier to live there. So 00:05:22.530 --> 00:05:28.685 we're seeing that all over the southeast has been a popular place for a long time but that's seen a real uptick there too. 00:05:28.710 --> 00:05:34.325 Caroline is or have been the hottest markets even since before the Great Recession.