In the first part of the show, Jason Hartman explains how hard money, short and long-term lending affects your debt to income ratio. Afterward, he talks to Daren Blomquist, Vice President at RealtyTrac. Daren explains what RealtyTrac does and its distinction from other data companies. They discuss identifying markets as linear, cyclical, and hybrid to understand good properties based on cash flow and ROI. Daren also talks about using homeownership rate and tax assessor information to analyze markets and rental properties.

Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.

Announcer 0:13
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques 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 multi millionaire 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 1000s 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.

Jason Hartman 1:04
Welcome to the creating wealth show This is your host Jason Hartman episode number 574 574. Today, our guests will be Deron Bloomquist realty tracks housing news report, we’re going to get into some great stuff. You’re going to learn some topical stuff about the real estate market and what’s going on out there. So I think you’ll enjoy that. And on Wednesday, our episode will be more on financing. I know that’s a question all of you are asking about constantly where we will talk about understanding closing costs, good faith estimates or GFS as they’re known, loan points, title insurance, things like that. On Friday, flashback Friday, we’ll talk about securitize rentals, and the potential lost decade for the American middle class. Maybe it’s really a last two or three decades. And one of our clients is here with me. And maybe we’ll get into that in the intro portion of the show. We’ve got some other great shows coming up for you. So stay tuned for that. But I am here in Providence, Rhode Island. And we’ve had a great venture Alliance weekend. And one of our clients and our very first venture Alliance member is here with me. And that is Mr. Neil Robinson. Neil, welcome. How are you?

Neil Robinson 2:18
I’m doing great. Jason, thank you very much for having me.

Jason Hartman 2:20
You’re finally on the podcast.

Neil Robinson 2:23
It’s been a while. I guess I don’t talk enough.

Jason Hartman 2:25
You weren’t on before? Or you’ve never been on? No, never. And you’ve been a client for many years, your great clients. So we appreciate your business. And just to give the listeners a little background, how long ago did you discover? I guess you discovered the podcast, brother.

Neil Robinson 2:39
I discovered the podcast to a friend of mine referred it probably about four years ago now. Okay, or something like that. And we did our first properties through you I want to say in the summer of 2012.

Jason Hartman 2:51
Okay. The Summer of 2012. Like Bryan Adams, the summer of 69.

Neil Robinson 2:55
He’s another Canadian. What can you say.

Jason Hartman 2:57
Yeah, Neil is a Canadian, by the way. And you live in Seattle.

Neil Robinson 3:00
I do. Bellevue Washington, actually

Jason Hartman 3:01
Bellevue. Okay with your wife, Elizabeth. And you guys have been to many of our events over the years. Neil, which ones have you been to?

Neil Robinson 3:09
I’ve been to six now that I think about it six. I’ve been to three of the meet the masters. Obviously, the two venture Alliance ones.

Jason Hartman 3:18
Right. Yeah, all 2 of them.

Neil Robinson 3:19
And also one of the introductory ones you had in the summer.

Jason Hartman 3:23
Like the creating wealth,

Neil Robinson 3:24
The creating wealth one. Yes. Yeah.

Jason Hartman 3:25
Oh, I remember when you attended that. That was last year. Yeah. Yeah. Irvine, California. Yeah. Good. And so you live in Seattle, and you are in the tech business. You work for one of the big tech companies. Feel free to say who that is, if you want. I’m not gonna say it.

Neil Robinson 3:38
Yes, I run some, I work for Microsoft and their dynamics, AX team working on tax and budget planning. So it is definitely financial related software development,

Jason Hartman 3:48
Good stuff. And then your wife works for if you want to say her company and other big giant company.

Neil Robinson 3:54
Yes. Yes. You probably have Elizabeth talk about it. But she works for T Mobile at the moment. She tends to jump around have done, done great work and a lot of tech companies. Yeah,

Jason Hartman 4:01
Good, good stuff. And so you have a lot of great experience here. You’re obviously sophisticated people and you know, very educated. It’s always really interesting talking to you. And it’s been great hanging out with you this weekend, where we started in and we met at the airport in Boston on Friday morning. And then we flew over to Martha’s Vineyard. And that was kind of fun. Your first time there too. Right?

Neil Robinson 4:23
Definitely my first time there. It was a really neat to hear I want to say that our our tour driver did a lot of names dropping

Jason Hartman 4:30
Yeah, you know, whether it be Carly Simon or Gosh, every celebrity boy, he knew them all. You know, the Clintons. He met Bill Clinton and talked about that quite a bit. Yeah, yeah. So namedropping huh.

Neil Robinson 4:40
Definitely a really beautiful spot and a really nice piece of real estate that was surprisingly inexpensive for some parts of it. You could spend a lot but there’s also put in place properties that were cheaper than say our property in Bellevue Washington.

Jason Hartman 4:52
Yeah, that’s true. And so Martha’s Vineyard it’s interesting because we of course, everywhere we go, we we look at the real estate market and about it. And on Martha’s Vineyard. Basically, it looks like you can buy a house starting at about $450,000 on up to about $29 million, I think was the one he showed us that was that. That one on Starbuck lane, not Starbucks, plural singular. Starbuck lane, right. We just had a great tour, saw some light houses, you know, had a nice lunch little day trip over there. And that was a side trip. So we didn’t do any real masterminding that day. But then we came back and we met everybody else in the group. And of course, it was you and Elizabeth. And then Fernando came over and met us on Martha’s Vineyard, too. He met up with us and,

Neil Robinson 5:39
and Brandon

Jason Hartman 5:40
Brandon was on Martha’s Vineyard, too. Yeah, of course. Sorry, Brandon forgot for a second. It’s been a busy weekend. But then we met everybody for dinner at the Dorrance. And wasn’t that gorgeous.

Neil Robinson 5:50
That was a beautiful, beautiful,

Jason Hartman 5:52
What a beautiful restaurant. I mean, this old building. And apparently, as we were walking in, we saw a sign that said Federal Reserve. So that must have been some kind of Federal Reserve office or something there. I don’t know.

Neil Robinson 6:04
Or maybe they’re upstairs watching you.

Jason Hartman 6:06
Yeah, yeah. Well, they’re always watching us, right? Because they’re in cahoots with the NSA. I mean, there’s a Federal Reserve branch and what St. Louis, Dallas, I believe, I haven’t really kept track of like where they are, but there’s like, what, nine branches or something? I don’t know that there’s one in Providence, is there? I mean, I don’t know. Who knows.

Neil Robinson 6:25
I don’t know it is the

Jason Hartman 6:26
Better check Wikipedia for that.

Neil Robinson 6:28
It’s a smallest state but it that’s big for its size. Our tour guide told us.

Jason Hartman 6:32
Oh, boy. This, this tour guide. Okay, so let’s just go in chronological order for so Saturday morning. We got up we met for breakfast, had this beautiful boardroom here at the Hilton. That was really a gorgeous boardroom. And we masterminded and had breakfast for about three hours. Then our tour guide picked us up and we had a private tour over to Newport, where we saw some pretty swanky mansions. What do you think of those mansions huh?

Neil Robinson 6:56
it was like, you know, I travel quite a bit, fortunately to France and to Germany. And you see those big old kathas old big manors. This is exactly like that.

Jason Hartman 7:05
That’s it’s the the era of American opulence. And I learned a lot during those. You know, Mark Twain coined that term, I guess, the Gilded Age, but it was not meant to be flattering. He thought that these people I mean, Mark Twain’s pretty populist guy, probably, he said that these people were just, you know, way too extravagant and it was kind of obscene level of wealth. And Neil was so interesting on that the tour of those mansions is that they were gonna bulldoze these things. They were

Neil Robinson 7:35
They did bulldoze them.

Jason Hartman 7:36
Wow, that is sad. I mean, and remember when we saw breakers, probably the most famous of all the mansions? I think they said in 1972 that was sold to the Newport Historical Society for three, like $397,000.

Neil Robinson 7:53
Yeah, something like that.

Jason Hartman 7:55
I mean, that’s the real estate deal of the century. None of our deals are anywhere near that good, huh?

Neil Robinson 8:00
No. I wish they were.

Jason Hartman 8:02
Yeah, no, they’re definitely not.

Neil Robinson 8:03
But then again, we don’t have the same property taxes they would have.

Jason Hartman 8:05
Well, fair enough for the upkeep. But gosh, I would have done that deal in the New York unit, you know, but yeah, those mansions were just amazing. I mean, that was incredible how those people lived. I mean, what they have in that house, they had, like 40 servants,

Neil Robinson 8:18
40 servants, there were like 36 or 38 rooms at the very top two levels that were all the servants bedrooms.

Jason Hartman 8:24
Yeah. And then they had, you know, multiple, like a cold kitchen and a hot kitchen. And that was amazing. What the other thing that was amazing to me about these, you know, incredibly rich Vanderbilts and Rockefellers and all these people that inhabited you know, these Newport mansions as their summer cottages, they call them the, these are hardly cottages folks, these are mansions. Okay. They are little palaces really? And is that they were there only what, six or eight weeks a year?

Neil Robinson 8:54
Yeah, that was incredible. Some of them stayed a little longer some of the wives but in general. And even then during that time, the husbands would only come back during the weekend.

Jason Hartman 9:01
Crazy, because they were in New York, you know, doing the business stuff. What was also interesting, and I think you actually commented on this is how they were basically their whole lives of these aristocrats, or that they had all these servants. And they would have people that just manage their wardrobes. And it was like a play where they were basically always changing clothes all day long. Sometimes the women would wear seven outfits in a day, because they would, you know, their servants would get ready to dress them for high tea in the afternoon. And then they’d have different clothing for dinner and different clothing for you know, whatever everything. I mean, amazing, huh?

Neil Robinson 9:42
Yeah, they say you think about the rich having a lot of freedom, but they didn’t seem to have freedom at all. There’s no way. It was very much all they could. They were they were there. They had a big schedule. They have to do swim at a certain time. It was just I don’t know. I don’t think I would want that much.

Jason Hartman 9:56
It was a lot of work, in a way. Yeah. You know, nobility obligates you know. Noblesse Oblige, as they say. And then Sunday morning this morning, it’s Sunday evening now and we’re about to see the blood red moon, the blood moon. It’s coming out here soon. So we got together and we did some masterminding this morning. And then yesterday, do you want to talk about a couple of speakers we had, and you know, some of the hot seat exercise, you’re

Neil Robinson 10:20
Sure. sure there were a couple of speakers, one of the speakers was a hard money lender. That was Mike and he, he talked about a number of things, on ways to invest other ways, from short term lending to the longer term lending. One of the things I thought was really interesting was one of the when we do mastermind, we kind of go through things, he was giving feedback on someone on, you know, amount of money and what your, what your credit score was. And he said, Well, you know, the impact of you know, do you lease a car? And then I said, sure. And he said, well, you know, maybe there are issues with that.

Jason Hartman 10:55
Yeah, yeah. Well, that was interesting, because I never really thought of this before. And I think you could actually do that as a game plan. Now, you know, me, I kind of like that. And I think that it’s a powerful tool, it can certainly be misused, obviously, you know, I don’t have to, I don’t have to even give that disclaimer or explain that. But if you’re going to pay cash for a car, what he was saying, and this was interesting, I hadn’t really thought about this, but it does make sense. If you’re going to pay cash for a car. And so say you’re going to, you know, spend 40 50,000 bucks for a car, right? You know, nice car. Not an incredible car, but a nice car for sure. Instead of paying cash for the car, lease the car, but get the lease, and then just pay it off quickly. Because that would actually improve your credit score, your credit score is largely in your debt

Neil Robinson 11:46
I want to be Yeah, yeah. Debt to income ratio.

Jason Hartman 11:49
Debt to income ratio. Yeah. Your credit score is largely based off the concept of borrowing money, and the score showing how well you handle borrowed money. So if you borrow more, but you pay it back, and you pay it back quickly, I mean, that’s what I took from that. That that would improve your score quite a bit.

Neil Robinson 12:08
Yeah, I took that. And also, just in general, there’s a large impact of having that that car loan, because it’s something that is a, it’s about the same as a small mortgage, almost as if your monthly payment. And because it’s so and they don’t really track that over as much as short term. So it’s a much larger impact on your on your credit score. That’s kind of how I read it and your debt to income ratio.

Jason Hartman 12:29
Right, right. And but the funny thing was, and when we were talking at lunch about this, is that you wouldn’t want to buy the car with financing, and then quickly pay it off. You want to lease it, right? Because if you lease it on a three, basically, the way a car lease is structured, is instead of paying the down payment at the beginning, when you get the financing and get the car, you pay it at the end, it’s called a residual, right? And so you might finance half of the car upfront, and then pay the other half by returning the car at the end of the lease, or exercising the buyout option, and giving them cash and buying the car. But the difference is, when you buy it, you pay the full amount for the car versus with a lease, you use it for three years, for example, or four, whatever your lease term is. And then you if you were to pay the lease off upfront, right after you get it, you get the use of the car for three years, and then you turn it in at the end of that time. And that’s the down payment you never had to pay. I don’t know if that makes sense to the listeners completely. Or you’re looking at me like it kind of doesn’t make sense, either. But I don’t know.

Neil Robinson 13:37
I don’t know. It’s one way. It’s one way to think about it. Yeah, I’ve never leased a car. Right. But interestingly enough, my wife and I were talking about replacing one of our vehicles, and we considered leasing just to be able to free up some more cash for an investment deal. So this is kind of neat that that topic came up for us. Yeah, yeah.

Jason Hartman 13:52
And I leased a lot of them. And I’ve only bought a couple of them. I usually lease and now I just have a car, I own outright cash. But yeah, that was kind of an interesting point. What about some of the other stuff, we you know, we wouldn’t run into hot seats. And I know that’s something you particularly like, and you’re always very participatory in that and our members calls you always chime in and have something to add, which I love it that you do that. Anything on that that you want to share.

Neil Robinson 14:18
I think that one of the biggest strengths of the mastermind group is the hot seats. And if you’re gonna ask me, the biggest thing I get out of these events, to me, it’s that because what you’re really doing is you’re not just trying people talk about issues or goals, right? And they’re very candid, you know, they’re actually I’ll say that they’ll be closer and tell you more than maybe you tell a family member in certain cases, and you get great you get great support from the rest of the mastermind team is basically all this mind power helps you solve or troubleshoot or, you know, think about an issue that maybe you’re not sure about, but to others that might be more obvious and they give you other directions and hints on ways to follow. And then as they do that, as I’ve got my computer open, I take a lot of notes as we go, and a lot of these things I get out of it are things that I can apply myself really directly, even if the question isn’t about me in this example was the leasing one. I really got a gem that I could apply right away.

Jason Hartman 15:11
Yeah, yeah, good stuff. And I think that’s, that’s super valuable. But you know, I think one of the other things that’s really valuable, like this afternoon, after our mastermind today, and, and one of the things that you and Elizabeth suggested is that we have a little more sort of business time we’ll call it versus recreational time. And I kind of agree with you. I think that we ought to, we ought to make more, a little more time for business. But you got to do some fun things. What we did yesterday, of course, we saw the mansions and today we went to a winery, we went to a maple syrup place, we took a hayride, you know, we always have all these meals together. And I think a lot comes out. But maybe it’s hard to quantify in these just informal conversations, where you’re just having like friendly chit chats with people.

Neil Robinson 15:59
I think it’s more than just chit chats. You know, you and the example of of the hard money lender, Mike, after he did his one of his presentation. You know, later on, I was sitting beside him as we were touring that the mansions and we’re able to talk about things, and then go from there and get some other ideas that kind of I could apply directly to my mind, as opposed to a more general question. But I mean, the the being able to sit, we know, there’s three or four of us talking about ideas about what you know, what else the mastermind can do for us. You know, to me, that’s a lot of fun. Yeah. In addition to, you know, going out there getting to see all the sights and enjoy the one I didn’t know there was much of a wine industry

Jason Hartman 16:34
Yeah, me neither. That was, that was news to me. But yeah, we learned a lot about wine from that guy who was a college biology professor, I guess. And he knew all about nature. I remembered a lot of stuff that I hadn’t thought about since you know, eighth grade. And then college.

Neil Robinson 16:49
I never took biology in high school. So yeah,

Jason Hartman 16:51
Yeah, absolutely. The other thing that’s interesting about it is that one of the things I’ve really tried to design with this, is have the speakers of course, they’re speaking to a very small, intimate group, but have all the speakers hang out with us throughout the weekend. And so we had a syndication guy come and speak, and then we had a hard money lender speak. And then, of course, Fernando talked about, you know, that his portfolio and compared it to if he had left his money in the Apple stock and versus real estate investing. And that was certainly neat, but it’s having like, the access to all these speakers and, and they came out here. I mean, Mike came from New York City. Okay, so he drove four hours to get here. Dave came from Pennsylvania. So he drove about, I think, four and a half hours to get here. You know, they just kind of hung out with us for the weekend. And I thought that was just super valuable.

Neil Robinson 17:42
Yeah. And I think that these, they talk about presentations, it’s more of a discussion than if you had a larger group, you would have to be just a presentation and meet the masters or something where you’ve got 100 people that are that are trying to chime in. And it’s it’s much harder to get the level of detail you want.

Jason Hartman 17:57
Yeah, absolutely. Absolutely. Well, good stuff. Well, hey, thank you so much for joining me on the show. And for joining us this weekend. You’re the first you and Elizabeth are the first venture Alliance members on. I’m glad you finally came on the podcast. Thanks for doing that. And gosh, the other thing we were going to talk about, but of course we’re running along as usual, is what Jeff brought up. Another venture Alliance person here this weekend, when he brought up on Friday evening at dinner, and we’ll just mention that we need to have you back for a whole episode and talk about this. But the age old inflation deflation debate, right?

Neil Robinson 18:29
Oh, yeah, that was hilarious. Someone who speaks with so much passion?

Jason Hartman 18:33
He is. Slightly. Jeff, you’re probably going to be listening to this. So you are slightly passionate. That’s of course, total. You’re very passionate guy. Yeah. Yeah. So that was interesting. And Jeff’s a CPA in Newport Beach. We should definitely do a whole show on that. You know.

Neil Robinson 18:49
Yeah, it’s it’s an interesting topic, because in a lot of ways, he’s got so many wonderful, valid things about his viewpoints on inflation.

Jason Hartman 18:56
And, and also, when on Saturday, when we went to the mansions, it was sort of interesting, like, we were trying to do the hedonic indexing, that’s one of the measures of inflation. And one of the ways they manipulate the inflation index of you know, comparing the life of people that lived in these mansions, these you know, Gilded Age aristocrats, right? versus life now, and a lot of us would argue that, even though they had all this money, all this power, these beautiful mansions, a lot of ways, the life of just the typical middle class person is better today.

Neil Robinson 19:27
In a lot of ways that definitely is.

Jason Hartman 19:30
Yeah, so very interesting. Good stuff. Okay. Well, hey, let’s get to our guests. Neil. Thanks for joining me and we got to have you back for a full show.

Neil Robinson 19:38
Thank you, Jason.

Jason Hartman 19:41
It’s my pleasure to welcome Darren Bloomquist to the show. He is vice president at realty track and executive editor of realty tracks housing news report. Darren, welcome. How are you?

Daren Blomquist 19:51
I’m doing great. Thanks for having me.

Jason Hartman 19:53
You’re coming to us from my old hometown Irvine, California.

Daren Blomquist 19:56
Yes, that’s right. Beautiful Irvine, California. It’s extremely hot here right now. But usually we’re, we’re doing really well in terms of the weather here.

Jason Hartman 20:05
Good stuff, good stuff. Well, hey, what is going on in the housing market, you know, the US is, is so unique. It’s such a large real estate market consisting of about 400 distinct metro areas. And I just can’t stand it there. And I’m sure this drives you crazy too when these Talking Heads Come on television or the radio or whatever they talk about the housing market as though it’s one big entity. I mean, that’s they don’t they don’t understand the concept of geographical segmentation, much less price segmentation and demographic segmentation. And there’s so many ways to slice and dice it right.

Daren Blomquist 20:42
That’s true. And there’s certainly some things you can see some very high-level trends, you can see what the national numbers but ultimately, it is, each market is different has a different set of circumstances. But you know, that doesn’t sound very good in getting that nuanced set up, the data doesn’t get the sound very, it doesn’t work very well for the sound bites. But yeah, certainly we love to talk about our data is ultimately down to the address level. So we’re extremely local, we’re not, you know, the data we put out on them housing market is not a survey of realtors. It’s not a projection. It’s based on publicly recorded documents, sales documents, mortgage documents, foreclosure documents that tell us what’s what’s happening. And every single number that we have in our reports, comes back to a document that was recorded for individual property. So we love that we can, you know, we can, we can roll the numbers up to that high level, but then we can get very granular too and see what’s happening at the metro level, those 400 metro areas we talked about, at the county level, the you know, we have data for on most of this data, we have it for well over 2500 counties nationwide, and then even down to the of course, city and zip code level and then address level.

Jason Hartman 22:09
So is that really what your company does? I mean, you’re you’re a data company, right? How did realty track start? I don’t think I ever knew the answer to that question. I I’ve had you guys on the show a couple times.

Daren Blomquist 22:21
Sure. Yeah. Yeah, we are a date we’ve grown into a really a data company. And and really, our roots are in data too. In 1996, gentlemen, in Southern California, it was it was a foreclosure data, he realized that it was somewhat archaic the way that realtors specifically learned about foreclosures, they would get them mail a list printed list mailed to them, there were services that provided that, that was about the time where the internet was really starting to come on. And so he thought, why not make this more efficient by posting this data on the internet bulletin boards for people to find for realtors, and it was really specifically targeted to realtors in Southern California. But then we acquired nationwide foreclosure data around 2000. And started providing this nationwide and consumers as well expressed very, very much interest in this data wasn’t, you know, not just for realtors, or even the real estate investors who would have the connections to get this information. But for any real estate investor and any consumer, and that really the business really took off, once we what we called, we call it democratizing the foreclosure data. And then just in the past year and a half, we’ve expanded this data set even more to include not just the foreclosure records that we license and provide, but exponentially broadened to include sales data, all the sales that are recorded on properties, as well as mortgages and property assessor information. So that what widens the scope from data on about 20 million properties historically, that have had some type of foreclosure notice on them to now 130 million properties, that pretty much all properties that exists in the United States.

Jason Hartman 24:23
Right. So you’ve got and I want to ask you about some of the trends. But just one more quick question about the industry, like your industry and your competitors, if you will. So you’ve got these different data companies out there. And you know, many of them admittedly are more than data companies, but you’ve got Corelogic, which I believe is no longer affiliated with first American if I’m not mistaken, but I don’t know. You know, CoreLogic, Fidelity Title has a data company of some sort. There’s Zillow, Trulia, which is now one. You see RedFin is sort of, I think wanting to play in that space. Little bit, you know, what’s the distinction between those just just quickly, I mean, there’s the listeners want to know about the real estate market. But

Daren Blomquist 25:06
Yeah, very quickly. We would really consider ourselves in this data licensing space as one of three competitors. CoreLogic is the other one, and Black Knight is the third one. And Black Knight, formerly LPs, were the only three companies that have the ability to license this data to resell it. So actually, companies like Zillow, and Redfin would be customers of ours, now they get the data and can play with it. But they’re, they’re licensing it, they ultimately don’t own it. And they have restrictions on their use for it. Whereas we have the ability to license this data to other people, they’re licensing it from us. So that’s really the the bottom of the pyramid is are these three companies that have the data, at least nationwide, there’s other smaller companies that would have this locally. But those would be the three nationwide who have the ability to, who are collecting that public record data, and then also have the ability to relicense it, resell it to other folks.

Jason Hartman 26:12
Yeah. Okay, good, good stuff. So you said at the beginning, we talked, we bemoaned the the fact that, you know, the sound bites and the big media don’t understand the old saying all real estate is local, which we fortunately do. And our listeners do, mostly at least. So what are the big high level trends that you could say are happening to the, quote, housing market, unquote. And then let’s, let’s drill down and talk about some specific markets.

Daren Blomquist 26:40
Yeah, I think one that holds true, it’s very broad based, that shows up in the national numbers, is the number of sales, they’ve been very strong this year. We’re showing home sales through the first six months of this year, are at an eight year high, the highest level they’ve been, at this time of the year, going all the way back to 2007. And that’s not just nationwide, but that we looked at the market level. And now for this, we analyzed 190 markets, so not quite all 400 of those markets you talked about, but the big ones, the larger markets, out of 190 markets across the country. 65% of them did have similarly an eight year high in home sales, like we saw at the national level. So that’s a that’s a big trend that’s happening in many markets, that home sales, really this especially in a second quarter, have really taken off. And this is when I say home, I’m talking about single family and condo and townhome sales of properties that that have taken off. That’s that is one big trend. And we can talk about this further. But I think that’s driven. There’s a few things that are driving that. But it’s it’s really good news that this recovery is spreading not is broad based. It’s not just an investor driven recovery, which is real estate investors really help set the floor back in 2012 and help this recovery, kick this recovery off. And now we’re seeing first time homebuyers, other traditional buyers participate. And that’s why we’re seeing those home sales numbers at eight year highs in many markets.

Jason Hartman 28:24
So the homeownership rate has been declining, which I oddly, no one will agree with me on this too much. But I think that’s really a healthy thing. I think it was too high. I think that the real homeownership rate, if we didn’t incentivize and subsidize and do all this stuff that we I don’t think should be doing. I think the real homeownership rate should be about 50%, you know, about half.

Unknow 28:50
Wow.

Jason Hartman 28:50
And I know I, believe me, I

Daren Blomquist 28:53
Pretty extreme.

Jason Hartman 28:54
I get a lot of flack from it. You see, do you hate me for saying that?

Daren Blomquist 28:58
No, I don’t hate, you know that. We are, I would say, we’re not completely agnostic. But we’re fairly agnostic about the date. I mean, we don’t have honestly at the end of the day, it doesn’t matter to us, if homeownership rate is at 50% or 70%, like it was during the height of the market. We don’t have a membership that that is depending on homeownership rate to be high, the people who are buying the data from us, you know, they’re just trying to determine how to how to react to how the market is behaving. So I you know, I think 50% I do have, you know, more of a personal rather than a company opinion is that homeownership is good for many people and it does help them build wealth, but I also agree that we were, we were, we’re, the data proves that we were at a too high level of homeownership. We were, homeownership is not for everybody, and there was a segment of people who are buying homes? Who had no really no business being homeowners? During the last bubble,

Jason Hartman 30:07
No question about it. And you know, homeownership in many ways, surprisingly, I know it’s Contrary to popular belief, but it’s bad for people, because it lessens their mobility and increases unemployment. Doesn’t let them go where the jobs are when they need to move for jobs. So it’s not all it seems to be. I used to completely believe that also. I changed my view on that a few years back. But but that’s sort of another discussion, maybe for another day. So um, first of all, what do you see in some of the, the markets? I mean, you’re gauging price trends. Are you also monitoring rent versus own population in various markets? Are you monitoring anything that might relate to cash flow or the what might interest in investor and investing in a certain market?

Daren Blomquist 30:54
I think pretty much all of what you said, you know, the rent versus on is one thing that stuck out to me. We do we we can tell from the tax assessor information if the property is, is a rental or, or Well, I can’t say it for sure it’s a rental, we can tell if it’s owner occupied or non owner occupied. And certainly, we’re showing that and I’m sorry, I don’t have the numbers right in front of me. So I’m pausing here, but I, you know, it is the person, there’s about 16 million homes, and I’m sorry, I don’t remember the exact percentage nationwide, I can figure it out out of about about 80 million. So we can do the math there that we would that we show as as non owner occupied. And so those would be rental properties, and vacation homes. And it’s interesting to look at that from Market to Market. That’s one of the things we track. And certainly as homeownership rates have gone down, that market has has become bigger. It’s been a market that Wall Street has been attracted to, of course, as well, that kind of single family rental market. But yet, that’s certainly one thing we track, we look at home prices, which that’s another, I would say fairly consistent trend across many markets. Although that this is where we, I think we start seeing more variation. But when we look at median home prices in July, our data shows us that they’re at the highest level. Since September 2008. Nationwide, the rate of appreciation is slowing down pretty dramatically. We’re up 2% year over a year, whereas even earlier this year, and last year, we were seeing double digit appreciation in home prices. And then when you start looking at markets, you start to see markets, consistently many of them slowing down to single digit appreciation and may and even a few going negative for a month or two this year. So there’s definitely some softness in home prices that I don’t necessarily, you know, just like you don’t consider homeownership rates being bad thing, I don’t think the home price appreciation slowing down is necessarily a bad thing for the market. But we’re definitely seeing that happening.

Jason Hartman 33:12
Yeah, there’s this funny belief in in just sort of everybody’s psyche. And I think it’s just silly, Darren, that, you know, a good market is when prices are going up like crazy. And a bad market is when prices are either flat or declining. But, you know, it depends who you are. That’s, that’s, that should be a relative thing for everybody. But it’s just strange how those beliefs become adopted.

Daren Blomquist 33:36
Yes, I I completely. I completely agree with that. And, and there Yeah, there’s this feeling like if things are not continuing to go up, at least very dramatically, then somehow the market is struggling. And this is to me an expected cooling off. that’s necessary because of the affordability issue that many markets are facing. And and so it’s expected in many ways. And it’s actually a sign that the market is behaving rationally.

Jason Hartman 34:07
But I’m kind of curious, we sort of went down this road, that actually surprises me a little bit, because it seems like every market that my real estate company is in is just booming. I mean businesses, you know, it’s it’s hard to find you like in other words, the deals, the deals ain’t as good as they used to be, you know, to use a little slang here, it’s getting just harder to get a good deal and to get that rent to value ratio that investors really like that’s becoming more challenging. Where are you set? You’re saying it’s cooling off in some areas where where do you see that, by the way?

Daren Blomquist 34:40
Oh, yeah. And so when I say cooling off too, I think the mental image is Oh, those markets are doing poorly. The prices are still going higher, but at a much slower rate. I mean, I think certainly Phoenix is always a good market to look at it considered a bellwether market and we’ve seen Over six months now, not close to nine months, I believe that have been single digit appreciation, home prices are still going up. And, and the other thing that makes some of these markets not feel like they’re cooling off as much is they’re still not a ton of inventory available for sale. And so buying homes is very competitive. But even in the Bay Area of California, we’re seeing home prices slipped down to about 10% appreciation where it was 20 30% appreciation in the last few years, Oh,

Jason Hartman 35:35
Where is my violin? I’m telling you, where is is the violin.

Daren Blomquist 35:41
Yeah, and so it’s, you know, the cooling is in the prices. And that’s a rational rational behavior doesn’t mean that it’s easy to find a deal. Because inventories low, and particularly, one of the hallmarks of this market that we’re seeing now is very low foreclosures. In fact, we’re now seeing foreclosure starts, what we consider foreclosure starts are properties that received their first public notice of foreclosure. And those are at a 10 year low as of July. And in fact, they are lower than they were prior to the crisis. If we compare the number of foreclosure starts, we’re seeing now this year on average, they’re averaging less than they were then in 2005, and 2006, before the bubble burst. And so that tells me, there’s not only is there less inventory overall, but particularly for real estate investors who are looking for that bargain, that foreclosure that could be represented by foreclosure, it’s really hard to find that because of these extremely low foreclosure rates.

Jason Hartman 36:54
Okay, so where is the market going? You know, what is your crystal ball, say, this is what everybody wants to know, if you divide the nation up into three market types. And by the way, I’d love to know, you know, feel free to poke a hole in this, but there’s the way I view it, the linear markets that just chug along, they’re kind of boring, but they’re good, solid investment markets. And then they cyclical markets, the high flyers, they’re always making the news. They’re very sexy and terrible, you know, depending on which end of the cycle you’re on. And then the hybrid markets and Phoenix is a hybrid market. It’s kind of in between the two. By the way, do you agree with that assessment of the three market types? Is that a Is that a fair way to look at it?

Daren Blomquist 37:32
Yeah, I hadn’t thought of it quite in that context before. But I, I think I’ve I mean, the hybrid one, I think it’s harder to, to define, probably, at least in my mind, and you probably you probably have a great definition. But yes, there’s definitely. There’s definitely, and I’ve experienced this personally, I used to be I grew up in the Midwest, and and now I’m in California, and seeing the difference in those markets, and then seeing the data is is really interesting to look at. So yeah, I would I would in general agree with that classification.

Jason Hartman 38:07
If we look at it that way. You know, where do you think like, what is the crystal ball say for? I mean, they all act in almost lockstep? You know, it’s not like they’re extremely different if you divide them up those three ways. You know, like, if one of the talking heads that got on TV, you know, you see him on CNBC, if they would say that way, not the housing market is doing this or that if they would say, well, the cyclical markets are doing this, the linear markets are doing this and the hybrid markets are doing in between the two, you know, so what, what would your outlook be for some of these different market types?

Daren Blomquist 38:43
Yeah, I think there’s actually more upside with the the boring market. I’m sorry, I forgot what he called linear markets. The linear markets, sorry, yes.

Jason Hartman 38:55
Boring, we do not take offense to boring as long as it gives good ROI.

Daren Blomquist 38:59
Oh, yeah, I love Boring. Boring is predictable. Right. Those markets actually have at this point, I think have more upside. What we’re we’re seeing there is some of those boring markets. One of the things that stood out to me on this whole price piece is that among major markets of I believe that the threshold was 500,000 or more. In July, there were 10 markets where we saw a new all time high in home prices, not home sales, but median home price. And the first year those markets, okay, those would probably I think you define as the first one is hybrid, it’s maybe Denver, Colorado. Then the second one is, is San Jose, which is the cyclical, but then most of the rest, I think would fall under your definition of linear we have Columbus, Ohio, Nashville. rally Omaha, Colorado Springs, Madison Boulder. And Burlington, Vermont

Jason Hartman 40:05
Boulder would not be linear. Boulder would be cyclical too, or at least hybrid or hybrid hybrid? Probably. Yeah. Cuz boulder is an expensive market, you know, very constrained. And

Daren Blomquist 40:16
Yeah, I can definitely see that. There’s so but what I see is those because those markets, the ones that are experiencing, of course solid underlying fundamentals that’s a key component here. Those have more upside because yeah, we’re just seeing in the numbers I think that maybe because people are willing to move there for jobs. And they see if the affordable housing is icing on the cake. And and so we’re seeing prices recover. And and of course in many of those markets, prices did not go down as dramatically during the downturn. So that’s the linear markets, the the cyclical markets are also doing very well. And seeing home prices, getting in many of them getting close to their all time highs. And and that’s, you know, when I think of the cyclical markets, I think of mostly a lot of the coasts, California coasts, also places like Seattle, and South Florida and New York, and those sorts of markets. They’re doing very well. But the the challenge I see in those markets is affordability. And that’s not necessarily bad for the real estate investor, although it definitely can be but it you know, for the traditional buyer, those markets are just extremely unaffordable. And I think at some point that that becomes a risk factor for those markets. And, and the hybrid markets are, you know, probably in a very good position as well, without typically the the affordability is not as much of an issue. And those are at least the ones I’m thinking of. And you’re the way you described them.

Jason Hartman 42:09
Yeah, yeah. Interesting stuff. Interesting stuff. So if you were investing right now, what would you be doing? Or maybe you are investing right now, buying properties, you know, what advice would you give to investors now?

Daren Blomquist 42:21
Sure. And yeah, I definitely dabble in investing. It’s great to have this data, data at my fingertips, and on a couple of rental properties, and now we own in Southern California, which is not the best place to own a rental property. But, you know, I think places some of the places that I mentioned there that have that combination of jobs, and a lot of them are our university towns that I just mentioned, that have these these new home price peak markets that that combination of jobs but are still affordable, are attracting the younger by potential buyers and or renters. So places like Columbus, Ohio, even though it’s at a new home price peak, the median home price there is $155,000. So, you know, you can make a rental property work there very, very easily. But you also have, I’d be looking at places like that, to to invest.

Jason Hartman 43:28
We like Memphis and Atlanta and Columbus, we do business there too, a little bit. Not that not that much in Columbus. Indianapolis has been great for many years. And just these linear markets, I mean, Orlando, you know, those kinds of places, they just work, you know, you can make the cash flow work. And that’s the key to having a sustainable real estate portfolio. What’s going on with foreclosures? I know we got to wrap up here. But you know, what’s happening in the foreclosure world. It’s interesting to me, I just did a show while to today actually talking to someone from our Chicago market, which we do a little bit business in the outer Chicagoland area where it makes sense. Also talking to someone from Orlando, and, you know, with these judicial foreclosures, I mean, they’ve still got a foreclosure market, you know, it’s just crazy versus the other markets where there has been price discovery and market clearing already. that are, you know, long past that cycle. And I know which way I’d rather see it happen, you know, discover price quickly and move on. That’s, that’s the way it should be. But right yeah, rip the band aid off it hurts more when you take it off slowly. Very good. Very good metaphor.

Daren Blomquist 44:37
Yeah. So yeah, we are seeing are the the consequences of that kicking the can down the road and we’re seeing it fairly widespread, but it’s definitely most dramatic in the states that have that judicial foreclosure process that that’s more extend the philosophy of extend and pretend. And and those are the markets where we’re seeing this kind of resurgence

Jason Hartman 45:06
Extend and pretend. I love that. Extend and pretend that’s good. In other words, the people get to pretend they’re not going into foreclosure because they get extended forever. Go ahead.

Daren Blomquist 45:17
Exactly. I’ve also heard it called delay and pray. There’s also there’s

Jason Hartman 45:20
Delay and pray. That’s good too.

Daren Blomquist 45:22
Yeah. And that, you know, that strategy I or you know, and I know, I’m giving it too much credit to call it a strategy. But that that plane out of the way to market work in some of these is definitely turning out to hurt these markets and cause them to lag more than than other places. So looking at specifically at Bank repossessions, this final stage of foreclosure. I mentioned earlier, foreclosure starts that are attending your low. So there’s not a lot of new people going into foreclosure. But these this backlog or shadow inventory, whatever you want to call it, a people who have been in foreclosure for years, and just have never completed the process, we’re seeing more of that get flushed out. And step started starting with the nationwide trade. And then I’ll I’ll drill down to some of these markets. In July, we saw a 30 month high in these Oreos, these bank repossessions nationwide, and these Oreos were up in 44 states. So it was pretty widespread. But if you look at the judicial states, that’s really where we see the problem.

Jason Hartman 46:36
I just want to point something out there, though, you call it a problem. And I agree with you, it’s a overall problem. But that means opportunity for investors too. You know, it’s like, it’s kind of like in those markets, you’re operating in 2011 or 12. It’s sort of like you get to rewind by maybe three, even four years, you know, versus the other markets. They had mostly cleared by say 2012. Would you agree with that, by the way?

Daren Blomquist 47:04
Yeah, I think that’s a perfect way of saying it. This is uh, you know, from our perspective of an investor, if you feel like you missed out on, you know, the the buying frenzy in some of these other markets, there’s still this last gasp it looks like of, of opportunities to buy these these bank owned properties. And some of these markets of Florida, I think you mentioned, Oreos are up 78%. year over year in July. Ohio up 69%. New Jersey is one of the highest. I mean, it’s almost unbelievable at 344%. In terms of these Oreos, and not surprisingly, well, New Jersey is the state with the absolute longest foreclosure timeline in the country based on our data are showing on average takes 1200 days to complete a foreclosure there. And that’s average. I mean, we hear the horror stories of it taking

Jason Hartman 47:59
three years?

Daren Blomquist 48:00
5, 7, 8 years

Jason Hartman 48:01
Oh my god that long. I was I was saying three but

Daren Blomquist 48:04
Yeah, three is? Well, a 1200 1200 days we’re talking about. Definitely about four years. So. And that’s, that’s New Jersey and New York, also in that category of very long in Florida. And that’s where we’re seeing some of the biggest increases in these bank repossessions which, and that’s just really in the past three to six months that we’ve been seeing that in most markets. So I would suspect what that means is, in the next 36 months going forward, we’ll start to see more of those bank repossessions, bank oreos turn into actually being listed for sale. The bank’s putting them up and making them available to purchase.

Jason Hartman 48:53
Yeah, very interesting. So those markets are more slow to recover. That’s the upshot of this. And that’s what we’re seeing, you know, we’re just seeing it play out that way. So so it’s very interesting. Are there any things going on, you know, in just as we wrap up here in the political environment, or, you know, with Fannie Mae or FHA, or, you know, Freddie Mac, or, you know, anything there that you see on the horizon that is going to influence the market one way or another? I mean, you know, a few years ago, it was, they’re gonna let Fannie Mae go, it’s just, you know, they’re gonna let it go out of business like a regular company, like they should. And that that would have a seat. I’m another weirdo in real estate, and I say, let Fannie Mae die, you know, prices will go down, rents will go up, everything will adjust. In a couple years it’ll be back to normal. Maybe?

Daren Blomquist 49:42
Yeah, I think I would actually tend to agree with that. I’ll it’s, maybe I’m willing to say that because I know there’s very little possibility of that actually happening, given the political environment. But yeah, we don’t. You know, in that in terms of that specific question, we don’t see that happening anytime soon. What we do see is that we’ve reached the tipping point where the reaction to the housing bubble burst was to reduce risk in the market. But now we’re seeing the balances tilt back toward introducing more risk in the market. Fannie just introduced a program. And I don’t know if you’ve heard of this where for loans, that one of the loan programs that they’re proposing would be one where income from non household borrowers could be included in the income to qualify that the buyer. So in other words, they’re building into something that would be good for multi-generational household, or someone like, you can include income from a basement tenant, they even say in there. So that’s one example of, okay. They’re realizing affordability is an issue in a lot of these markets, people are not making enough income to afford the home prices. So they’re introducing what I would consider as a more risky loan product. FHA is, as at the beginning of this year introduced, lower their insurance premiums, which introduce more introduces more risk into the market. And that’s one of the big themes I’m seeing going forward is it’s been a very risk averse market from a policy perspective. And now that that seems to be the pendulum seems to be swinging back. And also on the foreclosure side, the pendulum is swinging. You know, it had been give people more time, more time more time to make sure that they can avoid foreclosure. But I think as evidence with this recent surge in Oreos, we’ve also reached a tipping point there where it’s okay, we’ve given people enough time. These lingering foreclosures are only hurting the market at this point. The best course of action is to resolve these and get them into the hands of a new homeowner.

Jason Hartman 51:59
Yeah, yeah, very good point. So your website realtytrac.com. Are there any other specific resources you want to refer people to, Darren?

Daren Blomquist 52:07
Sure realtytrac.com has a lot of this information at the local level. If you go to the stats and trends section, you can type in a zip code even or a county or state to see some of these trends I’ve been talking about. And that’s completely free. Our subscription product allows you to research at a property level, at realtytrac.com, and neighborhood level. And then we also if you’re looking for custom reports to say okay, what’s happening in Indianapolis or Memphis? Should we be getting into that market? Or should we be pulling back at that market? Our data solutions team can help prepare customized reports for you. And you can contact them through data dot realtytrac.com.

Jason Hartman 52:53
Excellent. Daren Bloomquist, thank you so much for joining us.

Daren Blomquist 52:56
Thank you, Jason.

Announcer 52:57
I’ve never really thought of Jason as subversive. But I just found out that’s what Wall Street considers him to be.

Announcer 53:04
Really. Now how is that possible at all?

Announcer 53:07
Simple. Wall Street believes that real estate investors are dangerous to their schemes? Because the dirty truth about income property is that it actually works in real life.

Announcer 53:18
I know. I mean, how many people do you know not including insiders who created wealth with stocks, bonds and mutual funds? those options are for people who only want to pretend they’re getting ahead.

Announcer 53:29
Stocks and other non direct traded assets are a losing game for most people. The typical scenario is you make a little you lose a little and spin your wheels for decades.

Announcer 53:41
That’s because the corporate crooks running the stock and bond investing game will always see to it that they win. This means unless you’re one of them, you will not win.

Announcer 53:50
And unluckily for Wall Street. Jason has a unique ability to make the everyday person understand investing the way it should be. He shows them a world where anything less than a 26% annual return is disappointing.

Announcer 54:05
Yep. And that’s why Jason offers a one book set on creating wealth that comes with 20 digital download audios. He shows us how we can be excited about these scary times and exploit the incredible opportunities this present economy has afforded us.

Announcer 54:20
We can pick local markets, untouched by the economic downturn, exploit packaged commodities investing and achieve exceptional returns safely and securely.

Announcer 54:31
I like how he teaches you how to protect the equity in your home before it disappears and how to outsource your debt obligations to the government.

Announcer 54:38
And this set of advanced strategies for wealth creation is being offered for only $197

Announcer 54:45
To get your creating wealth encyclopedia book one complete with over 20 hours of audio, go to Jason hartman.com forward slash store.

Announcer 54:54
If you want to be able to sit back and collect checks every month, just like that. Or Jason’s creating wealth encyclopedia series is for you.

This show is produced by the Hartman media company All rights reserved for distribution or publication rights and media interviews, please visit www dot Hartman media.com or email media at Hartman media.com. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax legal real estate or business professional for individualized advice. opinions of guests are their own and the host is acting on behalf of Empowered Investor network, Inc. exclusively.