And in some parts of this country, there has been, or

there is an ongoing real estate, I believe, recession occurring.

So you mean that you don't believe the market is going to

crash and people should wait until the market crashes to buy a house?

There has been an enormous shift in Florida and Texas, and the main

reason that I want to talk about it.

Okay, welcome back to another episode of Millennia.

So we do not have a guest today, but we are recording side by

side for the first time, uh, not in person with just Seth and I.

And

why is that Jen?

Because my son is home sick.

That's why.

Running around like a ninja.

So reality of, yeah, reality of working from home.

So.

Welcome back.

So today, uh, we're going to go over a topic that is very near and dear to

Seth and he has been very excited to be talking about this and how he feels very

passionately about how the real estate market has gone in Florida and Texas.

So why do we care about this when we live in Pennsylvania and we've been

very open about the fact that we live in Pennsylvania and everything is different.

So why is it important that we're talking about what's

happening in Florida and Texas?

I'm glad you asked that, Jen.

Let me tell you exactly why.

Yes.

Uh, so basically there are a lot of economists, uh, who believe that, uh,

that Florida and Texas could potentially be a, uh, an indicator of what the

market will do across the country.

So I don't necessarily agree with that sentiment.

But there's also a lot of people from Pennsylvania.

There's a lot of wealth here.

Uh, although Pennsylvania is not really known for having a lot of

wealthy areas, but they do between Pittsburgh and Philadelphia.

There's a lot of people who move there, uh, or have moved there.

Uh, I know a handful of my clients who have relocated there.

Um, but it's really, it's, it's top of the news.

People talk about Florida and Texas all the time.

It's where a lot of people during COVID moved for various reasons,

whether it was for weather or it was for taxes or, um, you know, for jobs.

But there has been an enormous shift in Florida and Texas.

And the main reason that I want to talk about it is just because

it highlights the difference between markets across the country.

So you have 330 million people in this country across 52 metropolitan

markets, there's 145 million housing units in this country.

And it is completely unrealistic for people to assume that the market is.

The same across the entire country.

So the going back to the original point of the economists and thinking that

Florida and Texas could be first, could be giving us an indication of what

to look for and what for Pennsylvania buyers and sellers might want to see.

If they are looking for a market to kind of loosen up a little bit, not crash.

We're not going to be talking about how Pennsylvania is crashing because we

are very much on the record as saying that we don't believe that's the case.

So you mean that you don't believe that the market is going

to crash and people should wait until the market crashes to buy a house.

No, I know.

I know you're very much on the record.

I'm very much on the record.

Okay.

Yeah.

No, just sit and hope, sit, hope and wait for the market to

crash before you buy a house.

Okay.

Okay.

That's right.

Sure.

So I'm always reminded of that, that, that meme

of the millennial with the stick.

He was like, come on economy crash.

And people, and people, uh, you know, we all thought it was going to crash in 2020.

Everyone thought it was going to crash when interest rates went up.

And in some parts of this country, there has been, or there is an ongoing real

state, I believe recession occurring.

Um, so what's happening in Florida and Texas is that there

was an enormous amount of people.

Who moved in, moved down there.

There's a lot of people who acquired property there in the form of Airbnb.

Um, and now we are starting to look at the data and because I am a turbo nerd,

I watch data all across the country.

And frankly, I feel like as a team leader, it's my job.

And as a practitioner of real estate, it's my job to watch data.

Uh, not obsess

over it.

I'm a professional turbo nerd.

That's right.

But I also, I just feel like.

Not to be obsessive over it, but if it is going to be any indication of

what I should be looking for in a Pennsylvania market, or if there is

going to be a systemic like cascade effect across the country where it's

just as simple as Florida and Texas going first, I want to know about it well

ahead so I can advise my, my clients.

And I know you feel that way too.

Uh, although I do a lot more of this research, which is, you know, that's

the, that's, that's the nerd in me.

Jen's the pretty face.

Uh, You know, and so at the end of the day, I want to make sure that, um, I

want to make sure that I'm, I'm prepared.

So what's happening in Florida, Texas is everybody piled in down there.

The builders went very, very strong on building anything they could.

Um, there's been, if we can talk about Florida for a second, Florida has,

um, Florida has essentially run into a collision course where there's an

enormous amount of supply of homes.

And then on top of that, it is getting crushed by a, an insurance crisis.

So there is, I won't go through all the mechanics.

Uh, you can research this.

It's very well documented, but basically insurance carriers that you see

during football games are pulling out.

You've got state farm, you know, farmers, you know, all state nationwide,

all the big carriers that you would know by name have largely pulled out

of Florida because it is too risky and all insurance is based on risk.

So, uh, you know, you see down there that the, the Hurricane Ian, uh, you have,

you know, they, I think there was areas down there a couple months ago that got

like, you know, two feet of rain in a day.

Well, yeah, the inlands are now flooding and

it's not just a coastal issue.

It's definitely not a coastal issue.

In fact, it's, it's the coast is more, uh, the coast gets the big storms, but

people don't realize when there's big storms, obviously Ian was like, Oh, I

shouldn't say once in a lifetime event.

It wasn't, but it's like a once, like a decade event for Florida.

Now weather's getting worse.

Water's warmer down there.

Strong, uh, storms are stronger, but.

People don't realize that when that, when those storms come on, on shore,

they push all that water onto the land.

And then what it does, that storm dumps two feet of rain on the

inside of that state and that water just has nowhere to go.

It's like basically just like.

You just shove all that water on land and then you dump two feet of rain on it.

And that, so the idea of you being on the middle of the state and you're not

like experiencing all the high winds and all the other stuff that can come

with these big storms, the flooding now in land is getting worse and worse.

Um, and so the insurance carriers are coming, uh, are getting wise to this.

Uh, so there is a, an insurance crisis where.

You need insurance in order to keep a loan and a mortgage, uh, and if you don't, if

you get dropped by your insurance carrier, a lot of people down there right now are

getting what's called forced coverage, which is you, you, your coverage laps,

your, your insurance agent says, no, I'm not going to insure you anymore.

The more in a mortgage document, the mortgage company can force, and it

doesn't matter what it costs to pay.

They can force you to get coverage regardless of the cost.

So, in the end, there is a, a, uh, it's becoming prohibitive to own there because

the cost of owning the home is going up, but on top of that, builders have gone

hog wild with, uh, Getting homes online, getting homes built, and now we are,

they're running into an oversupply issue.

This is a simple function of supply and demand, where you've got too many

houses, not enough buyers, you've got general housing costs going up.

And it's, it's not across all of Florida, but there are areas where

Uh, where, where these markets, like I, I talked to somebody who

wanted to move up from Florida.

They would move up today.

If they could, they had their house in Naples on a Naples is not

like the middle of, of Florida.

It is a very populated, there's lots of jobs and that kind of thing.

They had their property on the market for 50 at that time, 59 days.

They had two showings.

One of the showings was a mistake.

They booked the wrong thing.

So they really only had one showing in 60 days.

And I think people listening to this podcast, people listening to

this podcast or experiencing the Pennsylvania or the greater New Jersey

market would be like, that's nuts.

Yeah.

We're getting like two showings within the first five minutes that's going.

We listed.

Yeah, exactly.

So then, and then on top of that, so their, their agent did an analysis.

There are 53 homes within two and a half miles.

Of that listing that are within 10 percent of the purchase price they're asking for

and 10 percent of the square footage.

So that's a fancy way of saying there are 53 homes on the market

that are exactly like theirs.

And with one showing after 59 days, how long do you think it

will take to sell that house?

Talk about needing to actually hone in your skills as a

listing agent and market it and be able to show the value of your home when

you have 58 that look exactly like it.

That's right.

And so there's, but I mean, in fairness, Jen, like there's only so much a realtor

and a seller can do to market their house.

It is just structural.

And

I mean, and not to mention, I mean, we were talking to,

or I was talking to one of the agents that we know down in Naples and talking

about like, is this just an overbuild kind of problem that's happening?

And he said, I mean, it's a combination because between that

and people who own the homes down in Florida, I mean, some people are

like, you know, it's residential, they've stayed there long ago.

It's their second home.

And they don't really have any pain to be, to have to sell it.

So not only is the usually in a market where there's supply and demand issue,

where there's too much supply for the demand, you know, then the prices will

start dropping and that's what everybody hopes will happen once the market starts.

Crashing.

Correcting really.

But the thing is he's saying that like, while there is so much supply

and not enough demand, this owners are not actually lowering the

price because they don't want to.

And they think they can still ride out the high wave of the market.

And so these other houses are staying on the market so long because they can

and they don't want to lower the prices.

That's right.

So, I mean, in Florida and historically it has been largely,

you know, it's a lot of second homes.

But as boomers pass, kids won't want the condo.

They won't want the house down there.

They're gonna, they'll try to sell it, liquidate it, that type of thing.

Um, the other thing that a lot of people don't talk about in Texas

and Florida is the massive, and this is also applicable for Phoenix.

Uh, and Arizona, uh, like Sedona, Arizona, and in Tennessee, uh, there

are towns, uh, uh, of like 10, 000 people in Tennessee that have like

an enormous amount of Airbnbs.

And so, uh, people ran to real estate that was cheap and there was an

expectation that there was, uh, an unlimited supply of people that wanted

to travel to these destinations.

But as the market tightens up, if people lose jobs, people feel less safe.

They're not going to be as well, uh, equipped to, uh, to, uh, to be able to

afford the flight and the Airbnb bookings.

And that has gone, uh, Airbnb is generally, um, there's a, a diversion.

So Airbnb listings, new Airbnb listings is up 23 percent year

over year across the country.

So that's a lot of units, a lot of people who bought in 2022, 2023, who

are like bringing their, you know, they renovated, brought their property online.

So there is a lot of, of homes.

Do you

think, is it people who have bought and made it into

Airbnb or people who have already owned and converted to Airbnb?

No, there's, there has been so much speculation in the Airbnb space

where now some of those people who bought in 21 and 22, they can't cashflow it.

They can't, they can't get it to work.

And they can't afford and like this whole, like, you know, passive income from

Seattle or passive income from New York.

And it's like, you just buy a house and people book and

there's a management company.

Like a lot of the music is stopping in these areas in Tennessee being like, you

can imagine like shit, like the, the, the Smoky Mountains and Nashville and.

Phoenix and Sedona and, you know, Dallas and Austin.

Uh, obviously Florida is, is, is, is an obvious choice for a lot of people

to want to go into Airbnb there.

Now people are turning around and selling them because they can't,

or the municipalities are changing the rules on what That's what I

was going to say is I think that, and this is going to

end up being its own topic in and of itself is talking about short term

rentals, Airbnbs, and all of that.

But I think that as Airbnb starts growing, and I think that they're going to start

seeing, it's starting to take market, take homes out of the market for actual

homeowners, and that they'll have to start regulating policies around short

term rentals, that's going to end up curbing things and getting people to

want to sell them and let go of them.

Yeah, so there

is the book.

There is the political lever that people can pull on.

I, I actually, I watched an interview, uh, of a woman.

She is blowing the whistle.

She's now become known in Florida as blowing the whistle on

people who have illegal Airbnbs.

And she said that there are anywhere.

So she's, she's basically anonymously blowing the whistle on all these

landlords and there's 60 to 70 landlords having to go to these council meetings

to defend like their usage of their property when it's not allowed, when

these Airbnbs are aren't allowed.

So.

If let's say half of those people lose and they bought a property based on

Airbnb numbers and they can't do it anymore and they got to go to long

term, which is generally less money.

They're probably going to end up selling that house or trying to

liquidate it rather than running it at a loss with a long term rental.

And they're, they're, they're not moving into the house because

it was never the intention.

It was all for this like passive income investment thing.

So all of these areas have experienced a huge swell of, of investment.

And it is, and it sucks because there's a lot of mom and pops and a lot of

families who've been shut out from housing across these areas because there

is a, um, because there's cash buyers, there's rich, rich people from, you

know, uh, you know, from New York and Connecticut and Boston and Philly and

all these, all these affluent areas.

And that's, that's the thing where people are like, well, you

know, Oh, we got a cash offer.

And it's really just an investor who's buying it just, just to Airbnb it.

So, uh, you know, that's just one piece.

I think Florida in particular has a very, very big problem

on its hands with insurance.

So, um, a house that I own.

That's about a 2, 100 insurance premium on it a year.

If I picked up this house and put it in Florida, it would be 13, 000.

So between flooding my roof age, you know, the, uh, wind damage,

riders, all that good stuff.

So people are finding that like, you know, that that goes into it too.

It's like, forget about municipality telling you, you can't buy a house.

You can't use it for what you bought it for.

Imagine also being like, Oh, yeah, by the way, your insurance is being canceled

and you're getting forced coverage from your mortgage, you know, your

mortgage, uh, uh, you know, uh, company.

And so that raises it even more.

So it's really important for people to understand if you are

looking to invest down there.

There are, and I want to be fair, there are some great areas of these states.

It's not like everything is crumbling, but like Austin is the number one after Boise,

Idaho, the number one correcting market.

And it's super important for people to understand like why that is.

Like everybody wanted to move to Austin.

Like Elon Musk was going to set up and you know, Bezos was going to set up Amazon.

There's gonna be all these jobs, but people don't realize that like

those jobs aren't like There's not a lot of them, you know, 2, 500

jobs in Austin, Texas, a big deal.

25, 000.

That's a lot of, that's a lot of people moving in.

And look how big the state is.

Ten to five hundred is nothing.

And that's the thing, like, you know, when these big

corporations move in, a lot of times it's, it's, it's C level employees,

it's people like it's headquarters.

It's not, you know, Amazon headquarters isn't the same as a,

you know, uh, the manufacturing plant and distribution center.

Like warehouses and

warehouses.

Yeah.

And the reason that they're out in the middle of nowhere is because first of all,

land is cheap and also wages are lower.

Right.

Like you put a distribution center in the middle of Manhattan.

People's expectation of their in compensation is going to be totally

different than if you put it in.

Cause the living is way higher there.

Then the living

is way higher.

So like when a lot of times it's like Amazon's moving or Tesla's

moving, Oracle's moving, you know, Hewlett Packard is moving a lot of

times it's, it's, it's sea level.

It's it's corporate, it's, it's higher level white collar jobs.

And yeah, there's more income there.

There's more jobs moving in or there's more income and disposable income

moving in, but 2, 500 into a metropolis or 2, 500 jobs into a metropolis.

It's just not, it's not, uh, something that's gonna move the needle,

but makes for a damn good job.

It's nice

to say, because saying that there's going to be new jobs

anywhere is going to be like, Oh wow, but they're bringing so many jobs.

Like.

Yeah,

it makes for a great Yahoo or Google News article headline and

it makes it great for the politicians.

They're like, yeah, we attracted like we've got this great area.

We attracted this huge corporation, but there have been multiple occasions

where they've announced it and then builders start building because

they were, and then the corporation said, no, we're not doing it.

Florida's got another problem and uh, and then we can wrap this up.

Um, their economy is not really designed for all these people moving in.

One thing that people don't talk about with the Florida market either is

that the, the industry, the industry and the economy really isn't set up

for the people that have moved there.

There's a lot of consultants that move there who can like

kind of work from anywhere.

But, um, Florida is largely based on, is largely based on tourism.

That's, you know, you go to California, this is one thing Texas has got.

They've got a ton of, of industry, Texas by itself.

If you picked it up and made it its own country, it has the seventh

largest economy in the world.

California has the fifth largest.

So that just gives you an idea of how large those economies are.

Florida is largely based on hospitality and old people.

I hate to say it, but it's really, it's geriatric care and retirement.

And as the largest generation in the history of the world, uh, retires

and, uh, and moves there and passes away that there's going to be a

constriction in that market because the gen X, you know, who are in their,

you know, in their fifties or, you know, they're next, but it's not nearly

as large of a, of a, of an industry.

There will be a massive constriction of the health care and hot and

geriatric care industry there.

So there's a couple head.

There's a few headwinds.

Um, I know every time that there's a hurricane in the tropics that are

like, Oh, God, please, like, just go safely up to see, you know, because

of the insurance on top of that.

There's been a massive amounts of construction and

new construction companies.

They do not like homebuilders.

They don't really accurately disclose how much inventory they have.

The other thing is too, they do not speak to each other.

So they just, it's all just like a musical chairs.

Like it, they just build, build, build until the music stops and

they all scrounge for a chair.

Uh, and then on top of that is that the industry and the, uh, the, the

economy there is not necessarily suited for all the population growth.

So it should be interesting to see what happens there.

Texas has got the same problem.

I mean, I think insurance is going to be an issue there as well.

They also have like power grid problems.

Well, I think it's an important point to bring up that you

had already made is that, you know, if you were getting forced into different

policies for insurance, um, and they on paper see, oh, but it's so much

cheaper to live down there in Florida or Texas, or even to see somewhere down

South, uh, what they are not realizing.

And we mentioned this a lot is what goes into a mortgage payment.

And it's not just the cost of the house and just insurance or, um, Or an unjust

interest, but you know, if you're getting a quote on what your mortgage is going

to be based off of your debt to income ratios and everything like that, and you

have an unexpected, like it could impact you by multiple hundred dollars a month in

an insurance policy that you didn't have any say over, it's going to screw you.

So it might look like it's going to be so much cheaper to live down

there because the house prices might be a little bit lower.

But everything else is just going to end up going up and you're

gonna get into paying more and be in and lose value on your house.

That's true.

And like.

We've talked a lot about Florida and Texas and some of our areas, but another

state that is very much dealing with this is like California with like wildfires.

So insurance companies are tapping out of that market to where people are

just self insuring, which is basically saying we don't have insurance.

And then if we lose our home, we'll rebuild it or just move on.

But here at the end of the final like nail in the coffin for these

areas would be like what happens if.

No carriers will cover those homes.

That means that you can't get a mortgage for the house.

So then you're waiting for a cash buyer.

So imagine that house in Naples we talked about.

Yeah, this is

definitely the economy to be able to just have hundreds of

thousands of dollars of cash on hand.

Oh, yeah, totally.

I

totally the and definitely the generations to be

able to have all of this disposable cash just hanging out in the bank.

Yeah.

So, you know, I follow a lot of people online and I'm very careful with like who

I like led into like my world in my mind.

But there's just an overwhelming, um, statistical and like data, uh, you

know, data set here that, you know, you can see inventories climbing

in a ton of these markets now.

Uh, it's not hard to find at this point.

They're not hiding that data.

Uh, you can go and look at these, um, these markets and you can see that the,

everything is, they're, they're not only going back to like pre COVID levels, but

they're, they're like, the trajectory is like this, they're blasting right

past that, which then would put it back towards like the two, 2013, 2012, 2011,

when a lot of foreclosures happened.

So it should be interesting to see what happens, but I guess the

message to our audience is that.

If you watch other markets, it can be a precursor of what would come here.

The difference here is that we have so little supply that, and

we still have so many buyers.

We,

we have so many, so much demand.

And the other thing is too, is people don't really think

about, we have better schools.

We've got, um, uh, more jobs.

We have more of what's called meds and eds.

We have better access to hospitals.

We have better access to higher education.

We have, um, uh, generally, uh, we, uh, like Philadelphia is a safer area.

Like Florida, like people don't talk about this with Florida and Texas.

Like there's some like very, really kind of unsafe, uh, you know, uh, regions

of the, of those, of those States.

So that's the same for like Atlanta to Boston, like that 95 corridor of the

country is going to be the last domino to fall if it falls at all, just because.

Of all the things I just mentioned.

So.

Uh, but that's what our job is, is to watch all the data, make sure we, uh,

you know, make sure that we give all the best information out to our clients.

And, um, yeah, there's a little, there's a little off brand, a little off topic,

but I, I felt like it was something that would be of interest to our listeners.

And I hope you learned something, Jen.

After outside of all the lecturing I do on our calls.

I mean, I've heard all of this before.

This wasn't new to me.

All

right.

Well, that sounds good guys.

We'll, uh, we'll catch you on the next one.

If you guys have any questions about any market, if you're thinking about

moving across the country, I have access to an app that, um, does a very

good job of tracking all that data.

We also have agents everywhere.

So if you want to do at least call and get perspective on what's going on in that

local market, that's what we're here for.

And we're happy to help.

All right.

Until next time.

See you guys.