Jason Hartman talks with Chris Porter, Senior Vice President & Chief Demographer at John Burns Real Estate Consulting, about what trends their company has been seeing. There have been some profound shifts in the way that Americans want their communities, what theyre looking for in a house, and whether they even WANT to own a house.
Investor 0:00
Jason This is Patrick Anderson just wanted to say congrats on 1000 episodes and wanted to let you know how much I appreciate all the education you’ve given. Me personally, it’s helped a lot. I just want to reach out and say thank you for everything you’ve done and appreciate all your help and real estate investing. Have a great day.
Announcer 0:22
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 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 on Now, here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:12
Welcome to Episode 1272 1272. Thanks for joining me today as i am coming to you from Tampa, Florida. Came here on Thursday evening for the Beck concert and took a friend of mine who is a huge BEC fan. Not sure if you’re familiar with the musician back. He’s a super talented guy. He’s won a couple of Grammy Awards. He was so gracious and gave us all access passes to the event. His manager escorted us around we were on stage on the stage. This is only the second time they’ve done this at a bet concert. He you know, let us go back there and film from the stage as we’re looking out onto 20,000 fans it it was quite exhilarating to do that. Really fun. And he was playing in Tampa. So I sent him a text and said, Hey, can you hook us up with some tickets? And he said, Sure, no problem. And that was really nice. So hats off to Beck, who is a podcast listener. If you hear this, thank you very much for just a great evening that you cannot get anywhere else. That was phenomenal. And a fantastic concert. I am now staying in Tampa to dodge the hurricane. Yes, this is a category five. Very scary hurricane. It’s my first one. And I’ll tell you something. Kind of a crazy little thing about me. I love storms. I was talking to my mother about it yesterday. And she said yeah, always as a kid you love storms and weather phenomena and I really want to go back home. I want to go back to the east coast of Florida and experience the hurricane but category five might not be one to mess around with. So let’s hope that people have a vacuum. prepared and they stay safe. Let’s hope that this kind of stays off the coast and doesn’t really hit the land too much. So, you know, we’ll see what happens is just too early to tell. But by tomorrow we are going to see what happens. And, you know, it reminds me of another thing. I remember a couple of months ago, I was talking to my girlfriend about this. And I was saying, you know, isn’t it amazing how grateful we should be that our lives matter? everybody’s life matters. And we were talking about it in the context of a TV show that used to be on maybe you watched it cold case, and how I think there was a cold case article I saw somewhere online and a murder mystery that was solved from 35 years earlier or something like that. And just be grateful for the incredible amount of infrastructure. we all benefit from in society. Whether it be Our tremendous legal infrastructure, for example, in the cold case and it might not be a criminal issue, it might be civil law. I mean, the courts are here to settle disputes and to get deadbeats to pay us when they don’t pay us and to rescue us from natural disasters. It is really truly amazing how far out the world is how much our ancestors have done for us. You know, I remember reading that the reason when when you’re on a plane, the reason they turn off the lights for landing at night is so that your eyes can adjust in case there’s an emergency and you need to exit that plane and you need to see outside. I know that might seem like a minor thing that you’ll never need. But it just goes to show you that so much has been thought out for us. There is so much infrastructure out there for us I read this morning that the mass transit the bus line in Florida has shut down its normal routes. And it’s doing evacuations. The shelters are opening. I mean, it is truly amazing the amount of infrastructure we all benefit from. And we usually don’t even think about it, we usually don’t even give it a second thought. The fact that, you know, you can turn on the tap and hot and cold running out that most of the time the internet works, it’s just an amazing time to be alive. And and I’m not giving the government a ton of credit for this, although the government certainly provides some of this right. But it could be done by the free market. And we could debate libertarian politics here if we wanted to, but, but that’s not really the point. The point is just being grateful that the infrastructure is there for all of us. And this is true no matter what country you live in. And it is really pretty amazing that it is all provided and in the way current people People have jobs, their whole careers are based around providing this infrastructure for us. And our ancestors have thought of so many problems and solve them for us, before we even got here, before we were even born. So, so it is truly, truly amazing. And it is Labor Day, by the way, and maybe we should call it anti Labor Day, right? Because the whole point of becoming an income property investor is so that labor becomes our choice, not our requirement. And, you know, the first Labor Day, it was a result of a strike. And it was it was celebrated on September 5 1882. In New York City, that was the first Labor Day. We’re not sure who exactly came up with the idea, I guess. But it’s quite interesting. Whenever you think of Labor Day, think of that as why you’re investing in income property right, the most historically proven asset class in the world, so that you can choose your labor. Now, I believe in labor, I don’t believe in retirement, I don’t believe in kicking back on a beach. Although, you know, sometimes you need that right to recharge your batteries. But I do believe that meaningful work is an important component of life. And I hope you believe the same, but you’re entitled to view it whichever way you want. If you want to kick back on the beach, the rest of your life and collect your rents from your properties, more power to you. It’s just not my thing. But the idea that labor should be volitional that we should get to decide what labor we want to do and not be forced to do labor that is uninteresting to us. And that’s how we’ll create the best value for humanity. If something is interesting to us, then we are going to bring more of ourselves to that labor, and it’s going to be better labor, it’s going to be more valuable to other people. And that’s what we’re all here for it. Today we have a great interview coming up a returning guest back on the show, Chris Porter with john burns real estate consulting, we had a very interesting conversation. And without further ado, let’s dive into that one. And you cannot hear all about a variety of topics that we discuss. I think you’ll really enjoy this.
Jason Hartman 8:24
It’s my pleasure to welcome Chris Porter back to the show. He’s a returning guest, and he is Senior Vice President and Chief demographer at john burns consulting course is co author of big shifts ahead, demographic clarity for business, and we’re going to talk about a variety of topics today. I can’t wait to dive in Chris, welcome back. How are you? Thanks so much, Jason. It’s good to be here. Are you coming to us from Irvine, California?
Chris Porter 8:48
Yes, we’re based here in Orange County, my old hometown.
Jason Hartman 8:51
Good stuff. We were talking OFF AIR a little bit and maybe this would be a good start to just talk about the completely sort of primitive style in which we still build homes. And you made the Well, I don’t think it was a joke. I want to say it was a joke that the I’ll let you tell the punchline, what’s the biggest advancement in home construction? Chris,
Chris Porter 9:11
this is one of our clients had mentioned this to me one time, he says, you know, it’s the nail gun. I mean, look at the last 50 years and, and really, we have not made a ton of advances in building technology. I think there’s a lot we’re making homes more efficient and more energy efficient. I think there are some some advances being made. But really, I think there’s a lot more that can be done still.
Jason Hartman 9:30
There are and of course, that’s a joke, but it’s also true at the same time, because from abroad, look at things certainly construction quality is much better. The efficiency of the supply chain with all the software and information technology is is dramatically better. No one would deny that but you know, it’s still the same basic process and I cannot believe we do not see more modular construction. keep hearing about 3d printed homes. I don’t think I think that’s sort of a model. But you know, you can correct me if I’m wrong. It’s the same basic process, you know, the way we built houses 100 years ago,
Chris Porter 10:07
what’s going on? You know, you’re right, it is very similar to how we’re done before. Again, we are more efficient. I think the supply chain, as you mentioned, is a lot better. But I think we are going to get to the point where, especially as we’re dealing with a labor shortage right now, in the construction industry, I think this is a great time for technology to step in and help us rethink the way that we build homes and in the future. So we have seen some some that technology, the 3d printed home, you know, you see a lot of videos on that online. I don’t think that’s going to catch on with the mainstream right away. And it’s still very expensive at this point. But who knows down the road. And I think there’s, there’s a lot of companies when you look at other countries around the world that are doing this, I think it’s only natural, we move in that direction.
Jason Hartman 10:45
And so on one side of it, you’ve got this stigma from I guess it’s kind of an American stigma and I think it needs to go away it needs to change, where this old idea of a mobile home in a trailer park a mobile home Park now I own a mobile home park. And that’s a great investment by the way. Not Not all of them can make and like anything that can be problematic. But I mean, the stuff they can do nowadays that is modular is totally different than these old ideas from 30 4050 years ago, right?
Chris Porter 11:17
You’re exactly right, I think and build a panel in a factory and really control the precision. I mean, they have fantastic calibration on the precision of these, you know, where they’re able to put nails in and actually reduce the amount of waste as well cut and think about how they’re cutting lumber to fit exactly and reduce on site waste. I think there’s a lot of advantages and the fact that you’re not necessarily limited by daytime hours, for example, or by weather, right. So if you can build the pieces in a factory and assemble them on site, I think there are some real efficiencies that can be gained there
Jason Hartman 11:49
there are and you know, this, this whole stigma needs to change. I think it’s really got to change and we’ve got to get more high tech about construction and and this could lead to some some relief in the cost of housing. And it can only be good, right? We just got to move past this idea that sticks and bricks for houses. It’s just old fashioned it needs to mature. Now we investigated this because it sounded way too good to be true. And it turns out it was, you know, you know, the all the the media loves to run with these articles. And it’s just a half baked story of who buy a $10,000 house on amazon.com and have it delivered. And well, I called those vendors myself because I wanted to see what they’d say it turns out, by the time you’re finished, it’s $200 a square foot with engineering construction, plus my own costs. That didn’t turn out to be anything like it was advertised. And how big is the home? Well, they you know, some of them look pretty cool. They’re not very big. But, you know, they have like the container style homes, they have the log cabin style homes, and they had one that looked really cool. That was $40,000. And I thought I’m just going to start buying up little lots of land. I’m going to play developer myself. Put bunch of these on my my lots and rent them out. It was nothing like it seen. This is a myth. You’ve got to have the electrical, the plumbing, the hva see that you’ve got to hire engineers, you’ve got to get permitting. It’s a whole big process, right? It’s almost like building a
Chris Porter 13:18
house. And we’ve seen a little bit with the sort of that tiny home movement that was going around for a little while. Yeah, all we’ve heard is that after a year or so some of the novelty of that just kind of wears off, and they’re ready for a little bit more space and a little bit more storage. So it was kind of a fad for a while and I think we are looking there are certain segments of population want to sort of minimize but in terms of a long growing trend, I think that talking house movement is it was a fad.
Jason Hartman 13:43
Yeah, it was a fad. It’s funny, speaking about this, though, the changes and building styles. I mean, tell us about some of those changes because when you mentioned the tiny house thing, I think houses really could be smaller if they weren’t designed. So traditionally You know, just a couple examples, right? I used to have a really nice 38 foot motorhome. And I loved it. It was amazing how much storage capacity was in that. Because instead of having a nightstand on either side of the bed, you know, you had built in cabinets, and there was storage under the bed, the bed popped up and you put stuff under there. We still have this idea of traditional furniture in traditional things. I also used to own a boat, and that had a lot of storage. And then my girlfriend and I just went on a cruise about two months ago in the Baltic Sea, and our little cabin on the boat had loads of storage in it. It’s funny how houses just aren’t very efficient. And in that sense, they really seem like they could be smaller, and you could still have as good a lifestyle if they were just more efficient.
Chris Porter 14:53
Yeah, and I think what we’ve seen is function really matters to buyers today. They like design and they like space. But function is something that they’re really willing to pay for Willis home, work for my family and I. So that’s a big priority. I think for providers today,
Jason Hartman 15:09
any good innovations you want to share with our audience on that front? You know, anything’s builders are doing I mean, and I know it’s not your maybe your beat or your department in the company. But, you know, john burns is always putting out various things about changing styles and what buyers are wanting and such.
Chris Porter 15:28
You’re right, it’s not exactly my be, but I can I can speak to a few things. I think one thing is the idea of the outdoor indoor space or indoor outdoor space, I think more people are living in a part of their life outside and so they consider their their yard and their patio space is part of the indoors almost, and so they may not need as much space physically in the home. But if they if they’ve got that extra space outside that they can use for multifunction purposes. If they’re eating out there, they might set up a flat screen TV outside, just a place to really congregate and bring people together. That feels like part home as well. So that’s I think that’s one thing we’ve seen for a while now. And it’s still very, very popular with buyers. Yeah,
Jason Hartman 16:05
it’s a good trend. I like it myself. Yeah.
Chris Porter 16:08
And you see a lot of companies in the building product side that are catering to this, you know, there’s one company that I’m aware of that makes these huge sliding windows that really allow you to open up that space. And there’s no problems with flow between the inside and the outside of the home. But then at the end of the day, you can still close that that up, and you’ve got the nice views. But you’ve got a little bit that separation between indoor and outdoor, for security and for weather as well. So it’s, I think we see that as a continuing trend, the idea of bring the outdoors in and indoors out as well.
Jason Hartman 16:38
Yeah, that’s good. Good stuff. Okay. Great. You know, we’ve kind of covered this topic a bit. Let’s switch gears, you know, anything you want to share demographics, that is your thing. Anything you want to share on demographics, and how that’s impacting the market or really anything else. We got a bunch of stuff to cover?
Chris Porter 16:54
Sure. So I think one of the things we talked about in the pre call was just no worse than the big shifts that we’re seeing right now. And housing and I can relate some of this back to demographics as well. But, you know, I think we’re kind of at a bit of an inflection point in the market right now. We’re starting to see home sales slow a bit leveling off around 5.3 million across the country. And that’s, that’s on the existing home side. You know, we’re calling for a slight dip in home sales this year versus last year. But I think the low mortgage rates in the US have just really helped fault that from falling further. And as we look forward, we haven’t really seen mortgage rates this low since late 2016 3.55%. mortgage rate and nationally, yeah, it really is amazing. It is. You know, I think the other thing is we are continuing to see a shift to the the entry level buyer, you’ve seen a lot of builders pivot to really target that that consumer,
Jason Hartman 17:46
it doesn’t it doesn’t feel that way. But you know, versus the market we had before the Great Recession. There was a you know, good amount of KB homes, Dr. Horton, you know, entry level stuff out there and it doesn’t feel Like that yet. Now, Dr. Horton recently came out with a statement that they were committed to providing entry level housing. So that’s good. But
Chris Porter 18:08
yeah, I think you’ve seen a lot of builders say, look that we realize this is a growing target for us and pivot some of their strategies, opening up new brands that really do target a more entry level style home. So I do think there’s a lot of opportunity there. What we’re seeing though, and we can talk about this a little later as well, but from a demographics perspective, I mean, it is a little bit of a delayed buyer. So they have, maybe they’ve invested in their education, they’ve gone to college, more of them have gone to college in the past, then they have the student debt on top of that they’ve got to pay off. But once they are buying, you know, hopefully they’ve made a good investment in their education. It’s paying off in terms of their, their salaries and allowing them to buy homes. So I do think there is a especially as we look at this group born in the 1980s and then the group that is now coming of age born in the 1990s. They are reaching those years where they are forming their house. sold and buying homes that I think we are going to see some pickup in the home buying segment. Really just as a matter of demographics, even if it is delayed, their numbers are just still so big,
Jason Hartman 19:10
meaning there’s so many millennials out there that need to buy little about 80 million, right is that we’re referring to, okay, they’re moving out of their parents house. Finally, they’re definitely impacting the rental market, a lot of them are renting. But ultimately they’re going to move into the homeownership market is what you’re saying right
Chris Porter 19:29
down the road, and it’s going to be a bit delayed from where they, you know, their parents or the grandparents were at the same age. But, you know, you look at survey after survey, and we’re still led to believe that everybody wants to or not everybody, but the majority still want to own a home at some point in their lives. Yeah, it’s just taking a little bit longer. Right, right.
Jason Hartman 19:46
Okay. Okay, good. And what about the baby boomers moving out and renting their new house but then there’s a lot of, you know, there’s a lot of talk about aging in place. I mean, there’s some kind of lot of conflicting stuff here, and I don’t I don’t know what make of
Chris Porter 20:00
it thoughts. You’re right. It is kind of conflicting we we I mean I naively before I got into the homebuilding arena used to think for once you retire, you just pack up and move to Arizona moved to Florida and, and that’s it. That’s really that’s really not the case. I mean, you do see this preference to, to age in place, and I look at my own parents, you know, they live in Michigan, after a couple brutal winters, we thought for sure they were going to move to the south. But it’s hard to leave your community that you have built up for the last 3035 years. And I think they’ll eventually move, but for now, they’re staying put, and they’re actually built a new house in Michigan. So I think great majority of people do tend to age in place. So I think there’s some really good, positive upside for the remodeling market, and that respect and that they’re helping, they’re going to need to improve their homes to make sure that they’re livable in their older age. But one of the things we’ve also seen is a growing preference for renting amongst the older households. You know, part of that I think was driven by the Great Recession when the housing The market crashed. We did see people out of financial necessity turned to renting as opposed to owning a home and whether they got foreclosed upon, right, but I think there’s a preference shift as well. And it’s a great story. But I do think there’s a greater percentage of older adults who are saying, you know, I like the flexibility that renting gives me. Yeah, it allows me to go on vacation and let somebody else worry about the maintenance of the yard of the home when gone. And I think especially as they’re traveling to be near their kids or their grandkids, that is something that’s important to them is having that flexibility.
Jason Hartman 21:31
Yeah, I couldn’t agree with you more that’s see that stigma, the stigma of being a renter versus being a homeowner, that seems to have dissipated. It hasn’t quite happened in the modular home discussion. I’m hoping we’ll see it there too, because some of these modular homes are fantastic. I mean, the product is really good. So
Chris Porter 21:52
yeah, I also think the the single family rental market has opened up a huge opportunity for these older homeowner or excuse me, older households as well.
Jason Hartman 21:59
Yeah, the big institutional investors like in home, sir. Sure, absolutely.
Chris Porter 22:02
If you look at the rental housing market across the country, a third, fully a third of all renters in the US are renting a single family detached home that’s been going on for decades. It’s got a lot of press in the wake of this institutionalization of that space. But now that you’ve got these companies that are managing them and managing them in mass quantities, I do think it provides a great opportunity for somebody to rent and they’re not having to rent an apartment, not that there’s anything wrong with that. But if they, you know, they’ve accumulated things over their lifetime, and they just can’t stop cells moving into a really small space and putting all their stuff in storage that can rent a detached home, still have the space, but have the flexibility of being a renter as well.
Jason Hartman 22:42
I agree with you. I agree. That’s neat trend. Now, do you think, Chris, that the institutional owners are in it for the long haul? Or are they are you seeing any like activity of how they think, hey, they’ve made some money the past several years, it’s time to start unloading these assets and Don’t know buy something else with air, you know, do some private equity deals or whatever they’re going to do. Right?
Chris Porter 23:05
I think, you know, it really has become a very established asset class. And I think that there is a long this, this really does have some legs to it. I think he’s going to have a long future. I think the the challenge has been, you know, now that they’ve scooped up a lot of the distressed properties out there, it’s finding the next batch of homes to buy up. So we’ve actually seen an emergence of the build for rent concept, where these companies are looking at how do we build an entire community, you know, rather than having random homes scattered throughout a metro area, right, they bought up individual homes, how do we actually build a community that’s designed to be a rental, but it’s detached homes and manage that? I mean, there’s some great efficiencies there about being able to do it all in one neighborhood or one community. Sure, absolutely. I
Jason Hartman 23:48
call that a and maybe you call it the same, the horizontal apartment complex. In other words, it doesn’t go up like a lot of them do. It just goes horizontal, right? Yeah,
Chris Porter 23:57
right. Well there so I would make a little bit of a distinction. So there are some horizontal apartments that really just do feel like apartment buildings. We’ve also seen some really nice, nicely well done detached homes that you know, really look no different from the home you might see on your street, but really built with the the renter in mind. And, you know, so it also affects the types of products they put in the home, they want something that’s going to be durable. That space continues to evolve. And I think we’re going to see more and more of builders looking at how do we incorporate rental homes into our communities?
Jason Hartman 24:31
Yeah, yeah, I think it’s a really interesting trend. And that is a huge shift. We have never seen that before in our history. That’s a real change post Great Recession. That looks like it’s gonna be with us for a while. You guys coined the term serban a mix of urban and suburban what is serving?
Chris Porter 24:50
Really, it’s the idea of bringing those urban conveniences to traditionally suburban environments. I think it’s something that the suburbs have seen the investments that big cities have made in their downtown’s and seeing the benefits of those big cities have reaped from those investments and the suburbs say we want some of that as well. And so it’s really a planned strategic move on the part of the suburbs to develop their their downtown’s create mini downtown’s, where maybe they didn’t exist before. It’s got a mixture of retail of restaurants have, you know, maybe some office and some residential as well, the idea that you could live, work and play all in the same area. You might not need a car in the week during the week. But you might want a car in the weekends if you want to get out of town, for example. But the idea is really bring that was urban conveniences to these suburban areas. I think it’s been something that’s been highly in demand by the group’s born in the 80s and the 90s, that the millennials, as they, you know, lived tend to live in the cities when they were in their 20s. And now they’re moving out to the suburbs as they start to have families and, you know, move out for affordability or move for better schools. They’re demanding some of those same urban conveniences. And so I think that the combination of the suburbs investing their downtown’s and these Millennials moving into the suburbs is really helping this idea to gain further traction.
Jason Hartman 26:05
I’m going to feign a little bit of naivete here. What are those amenities?
Chris Porter 26:09
So you’ve got really it’s kind of walkability. It’s, it’s having a downtown Main Street atmosphere. You know, we know that people tend to move out of the cities for school quality, for example. So in the suburbs, you have better schools than you might have in an urban area, you’ve got lower crime in the suburbs than you do in the urban areas, for example. And so that’s part of it. There’s also just the idea of having that walkability of retail and restaurants, somewhere where you could, you know, park the car and you could still walk around for a couple hours and eat dinner, go shopping. And you know, for some people that might be the same place where they work as well. You know, might be a walk to the restaurants from their their office and then another walk back to their apartment or condominium. Yeah,
Jason Hartman 26:54
good stuff, Chris. We’ve maybe addressed this already, but just any other shifts, your Seeing now in you know housing styles what people want just start one at a just ask you one more time. Is there anything else we didn’t discuss on that side?
Chris Porter 27:10
I mean, there’s a lot that I could I could speak on that I think at the moment nothing’s nothing’s jumping out right at me. I think that indoor outdoor space is a big a big deal for for people and in function. How do I make the homework for me
Jason Hartman 27:23
make it more functional? Yeah, good stuff. Anything else you want to share? Before we wrap it up?
Chris Porter 27:28
Sure. I you know, one of the things we had talked about a little bit was the delays in homeownership and and maybe just address that a little bit is a demographic issue. I don’t know maybe it’s not that controversial, but I think it is because I studied this for a while. The Census has been reporting homeownership going up nationally for the last couple years. And it’s it’s dropped a little bit in the last couple quarters. But, you know, we’re fully a point or two above where we we were back in 2016. You know, we made the call about three and a half years ago and somewhat controversial at the time that homeownership was going to continue to go down in the US Really demographically driven, just as we saw these big waves of young adults coming of age and renting. And then on the other end of the age spectrum, a large number of people aging into those years where they’re either passing away or they’re going into assisted living, and they’re 80% homeowners and everybody in between was less likely to own a home than their parents or grandparents at the same age. So we made the call, we thought homeownership was going to continue to fall, we think that maybe the homeownership rate hasn’t fallen that much as we are forecasting, because we’ve had lower than expected mortgage rates. And we also think that lending practices have been a little bit looser than maybe what we would have been led to believe by the guidelines. Dodd Frank established Yeah,
Jason Hartman 28:38
it doesn’t feel that way. Anecdotally, it sure seems like getting alone is pretty tough nowadays, but
Chris Porter 28:44
yeah, I mean, there’s definitely some areas where I think it is, you know, you still have to have good documentation, and you have to have good credit scores. But I also think we’re seeing higher loan to value ratios that maybe we thought we would add debt to income ratios. And then you know, see all these stories in the newspaper about Alternative loans popping up here and they’re starting to. And so, you know, I think it’s not as tight as we thought maybe it would have been but yes, still much tighter than it was was before. Yeah, back in the mid 2000s. No question about that is I look at the the census numbers, you know, if we were seeing the kinds of growth and the absolute number of homeowners that the census numbers are saying, you know, I think we’d be seeing higher existing home sales. And I think our builder clients would be jumping for joy. And I think the census is also reporting some declines and overall declines in the overall number of renters in the country. And we’re just not hearing that from our either apartment clients or our single family rental clients. So it’s a bit of a conundrum for me. I’m trying to figure out some make some sense of the census numbers. But I do think we are heading towards more of a renter society. We’re never going to get to the point I don’t think we’re it’s 5050. But I don’t see homeownership shooting back up to 68% 69% anytime soon.
Jason Hartman 29:51
And you know what, Chris? I think that’s fine. I there’s nothing wrong with that. I think that’s healthy. And you know what changed my opinion on this and I’ve been saying For years, I can’t remember when the article came out. But you I’m sure you’re familiar with it. It was on the cover of I think, Newsweek, or maybe time. And it talked about how homeownership, the whole issue was like dedicated to this. How homeownership was not the panacea. We thought it was, and how actually, when the homeownership rates are high in certain cities or neighborhoods, it stifles growth. And for 10 years, I’ve been saying the best thing you can have on a resume is mobility, to be able to move to where the jobs are. And I’ve also been saying that I think the ideal homeownership rate, and I’m admittedly, this is not very data driven. It’s just my impression is about 55%. That’s what it should be. I think, and, you know, you hear anybody in real estate say that and they think it’s blasphemy, but like, Why does everyone need to own a house? It’s crazy george bush idea did. It doesn’t make any sense. It makes people Mobile, you know, if you can move to where better opportunities are to another city or across town? That’s a good thing.
Chris Porter 31:08
I would agree. Yeah. Yeah. And I think you know, the fact that we did have such high homeownership rates, I mean, people, homeowners are less likely to move and renters we know that it’s stifling its time. So when you look at the overall mobility in the country, I mean, it’s been going down for decades. And partially, that’s partially driven by the fact that we’re really pushing homeownership. And we just know that people are less likely to move once they own a home. So it shouldn’t come as any surprise to us that overall mobility is slowing, because we’ve had just such high homeownership rates. Yeah,
Jason Hartman 31:36
absolutely. That’s a great point. I’m glad we agree on that. One last thing before you go, Chris, when john burns spoke at our event, a year and a half ago, one of our conferences, he talked about how in the book that you co wrote with him about how you don’t look at the demographic cohorts the same way most demographers Do you know, they’ll say millennials Gen X, I’m a Gen X or baby boomer etc, and then you know, Gen Z coming up, right? You take it in the decade by decade, which I think is a much more precise way to look at it. And john, when he was on stage gave the example of I think his daughter and Mark Zuckerberg, and they’re both millennials, but they’re completely different, you know, people, right, exactly. And do you just want to speak to that a little bit? Because everybody’s throwing around millennials, baby boomers, it’s really not precise enough, is it?
Chris Porter 32:27
It’s not so for that very reason. I example I always use is my dad who was born at the beginning of the baby boom, and, and George Clooney, who was born at the end of the baby boom, and they’ve, they’ve had very different lives based on the events that occurred, you know, from their early childhood to their adulthood today, my dad’s retired, George Clooney is still out there working and you know, making movies and TV shows and all that. So you’re right. I mean, it just will take the boomers, for example, 1946 to 1964. That’s pretty widely agreed upon. But that’s 19 years of people and you just can’t make a comparison. It’s not a meaningful conversation. We talked about boomers as one big collective group. So we did break down the the generations into the nice 10 year increments really based on the decade you’re born in, it makes the analysis really easy for us because I can divide by 10, or multiply by 10. Right. But really what it does is it allows us to see, which are the groups that really shifted the needle, either they accelerated some of the trends, or they reverse some of the trends as well. For example, we could look at the group one in the 1960s. We call them the equalizers. That was the first generation for which more women graduated from college than men. Now, we can say, you know, that was the group born in the 1960s. It doesn’t have quite the same impact. If you say, well, it was the late boomers and the early Gen X, you know, that really made the shift. I think we can pinpoint and say it was the group born in the 60s. Yeah.
Jason Hartman 33:45
It’s much easier to quantify who those people are because hey, you know, if you were born in the 60s or not,
Chris Porter 33:51
exactly, everybody knows where they’re born. And it’s just it’s nice, easy to manage definitions. And I always give this example of how do you define a million Neil, and I’ve got articles from the press that show, you know, the earliest millennials starting in 1975. And the latest of them being born in 2010, excuse me, 2000. It’s too hard to manage a group of that size and nobody can agree on on the definition of the group. So we said, let’s just make it easy. And based on the decade people were born in,
Jason Hartman 34:17
yeah, that’s it. That’s a much better thing. much better, much better way to go. I wish it was more widely adopted. But hopefully you guys will change the way people look at this that we
Chris Porter 34:27
open, maybe this maybe this podcast will inspire somebody to think that way too. So hopefully,
Jason Hartman 34:31
there are a lot of other demographers listening, who will start speaking in this way, Chris, give out your website.
Chris Porter 34:38
Sure. It’s real estate consulting. com. We also have a website, big shifts. ahead.com is the website for the book for the book. And
Jason Hartman 34:44
the book is great, by the way. I think we we gave them out at our event. And I’ve still got a little a few left here. I give them out once in a while to over again, leftover from the event. So Chris Porter, thanks again for joining us. It’s always good to have you on the show. Thanks, Jason. Thank you so much. much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.