Steve HarneyJosh is beyond excited to have Steve Harney, nationally recognized real estate expert on our show for this episode. He predicted the real estate bubble before others saw it coming. Steve has over 35 years experience in the real estate business and has been quoted in US News & World Report, MSN Money, the Chicago Times and LA Times. Tune in to hear Steve and Josh talk about:

    • Are we headed to another real estate meltdown?
    • Where he sees the market heading
    • Is real estate a wise investment in the current economic climate?
    • Are rents going to keep heading up or will they level off?
    • How to figure the actual return on your investment when your real estate appreciates
    • What simple question to ask to instantly know if a Realtor is the one you should keep

Josh Mettle: Welcome to the Physician Financial Success Podcast. My name is Josh Mettle, and this is the podcast dedicated to advising physicians how to avoid financial landmines.

As relocation season approaches, many of our listeners and clients have asked, “Where are we in the current real estate cycle and what markets might be approaching bubble levels?” I’m beyond excited as we have the perfect guest to answer those questions and more. Today, we’ll be talking with Steve Harney, Founder and Chief Content Creator at Keeping Current Matters. Steve has been a real estate expert for over 25 years and has been quoted in US News & World Report, MSN Money, the Chicago and LA Times to name just a few. Steve and his team at Keeping Current Matters have become the go-to experts that realtors across the country turn to when they need current market information.

Steve, I’m grateful for your time this morning. How are you?

Steve Harney: Really, really, really good, Josh. Thank you very much. It’s an honor to be on the call with you, the podcast with you.

Josh Mettle: And it’s an honor to have you. Let’s start with your beginnings and what you’re out there doing now. I first saw you live at a Todd Duncan real estate market presentation you were giving and honestly, I was just impressed, beyond impressed by your vast understanding of the national real estate market. So why don’t we just start off by giving folks a little bit of feel for what you and Keeping Current Matters and maybe what you’re focused on today.

Steve Harney: Sure. I’ve been in the real estate business for over 35 years actually now, even more than 25. It’s crazy how years go by. I started as an agent, then became a manager, then opened my own real estate company, which we grew to 13 offices and 550 agents in New York. We are one of the largest companies in the country. Back in 2004, I sold that company and retired or at least I thought I was going to retire. That’s when I realized I hadn’t been in real estate all those years- real estate was kind of pumping through my blood all those years. In 2006, I was retired, kind of just resting it out and I started seeing some numbers, but I was still very involved in research on real estate. I always still had that interest in it. I started seeing numbers that really frightened me. The number of people falling 90 days behind in their mortgage, the fact that 90 percent of those people were not able to recoup, I knew that we were heading into some crazy times.

So back then, I went out to my other friends who have large real estate companies across the country. I said, “Listen, these are what the numbers are showing right now. We have got to like regroup and figure how we’re going to handle this challenge that’s about to come upon us.” Then I became a little bit famous because I called that pretty early and I got on television shows, talked to businesses, and everything because of my call, and then helped the industry as best I could through the 2007 all the way through to 2010, 2011 when we started coming out of that mess. I was out on the road at the top real estate companies, top mortgage companies trying to help them navigate those treacherous waters.

Then out of that came a service because they wanted to keep up, so we didn’t went into that challenge again what was happening in the market every single month and that’s where Keeping Current Matters, KCM. It’s a service that I offer to mortgage professionals and real estate professionals across the country. We have 12,000 subscribers in 50 states and 13 different countries that subscribe to our service to keep abreast of what’s taking place in the real estate market.

Josh Mettle: That’s a great history, and I can attest probably around 2009 or 2010, I was introduced to your service. As we were going through those rough years, I was watching your monthly presentations and really helping me grapple with where we were in the market and that is a perfect setup for today because I think there is some trepidation out there in the market. And so, let me jump into the next question, which was I was recently attending a board meeting for a company called Doctors Only. I’m a member of the board on their company and in that meeting we asked the seven physician board members in attendance what their biggest fear with buying a new home would be today. I was actually surprised by far that the majority of the anxiety in the room was over the direction of where the real estate market is headed and now that we’re approaching levels that were similar in terms of evaluations to where we were in the bubble, are we headed to another 2006 type meltdown? That was the largest area of trepidation.

I would love you to speak to that and just tell us your opinion. Since you called the meltdown early, where are we today?

Steve Harney: All right, well since I did call the meltdown almost a decade ago, I can tell you we’re nowhere near that right now. As a matter of fact, we’re in an extremely healthy market right now. The challenge that we had back in 2005 and 2006 was the demand that was being created was artificially being created by mortgage programs that were pretty much ridiculous at that point in time. Basically and The Big Short they even covered this, I’ve been saying this for the last 10 years, but people didn’t agree with me until the movie, The Big Short, came out that they even addressed them in that movie.

Anyone can get a mortgage, including a dog. There were two dogs that were actually given mortgage but people filled out a mortgage application and used their dog as the purchaser and those two dogs had a mortgage. That’s how bad it was in 2000, going to 2005, 2006. It was just almost no rules and regulations, and there are a million reasons for that, from government policy all the way to some challenges on Wall Street. But that’s now how we do that.

That demand was artificially created. The demand we’re feeling right now is real. Okay, so prices are always based on supply and demand. Right now, in the market, it’s not mortgage. You can get a mortgage right now but you can’t get a mortgage the way you could in 2005. It’s not anywhere near that easy, so what’s happening with prices increasing right now it’s a normal supply and demand situation. The demand for real estate is very, very high and supply of what’s on the market right now is low. I’ll give you an example of that. On a normalized market, you’ll have 6 months of inventory. So let’s take a look into what that means. That means if you normally sell say 10 houses a month in a particular marketplace, you would want 60 houses always in inventory. Six months worth of inventory it means it’s going to be a normal market. Prices aren’t going to go flying up. They’re not going to come crashing down. It’s going to be normal.

In a market with over 7 months’ inventory, that means there’s too much inventory. That means every single seller has to compete with each other for that limited number of buyers that are out there, and the way sellers compete is they lower their price.

Josh Mettle: Right.

Steve Harney: That’s what took place with 9, 10 months’ inventory in 2009, 2010. Well, now we’re in the other category, if you have under 6 months’ inventory, then you’re in the seller’s market. That means that the demand out there is so great that the supply can’t keep up. There are not enough houses available for those purchasers to buy, so the purchasers fight with each other over the ones that are available kind of purchasers fight? The buyers raise their prices, their offers. So what’s taking place right now is nationally 3.9 months’ supply as of the last NOR report.

Josh Mettle: Wow.

Steve Harney: We’re well below the 6 months to with the recent prices increasing is a simple supply and demand situation, a normal supply and demand situation, all right. I don’t want them just to believe me, your listeners just to believe me. One of the things I like to do is I like to back up whatever I’m thinking and check it and make sure that I’m not way off what other people are saying. One of the reports that I like to look at on a quarterly basis that’s come out every 3 months is the Pulsenomics Home Price Expectations Survey. That’s a survey that they do where they survey a little over 100 economists, real estate experts, investment and banking strategists and ask them where do they think prices are going to be over the next 5 years.

The last of those quarterly reports that came out in December. Those 100 plus experts believe strongly that the market is going to stay pretty normal. We’re going to have a little bit above 3 percent appreciation over the next 5 years. But the interesting thing is cumulatively over those 5 years, they’re not expecting a crash, and these are the leading experts in the country. What they’re saying is that home prices will be up 21.6 percent cumulatively over the next 5 years.

The other thing I look at in that report is what are the bull things, what are the most optimistic, the top 25 percent of those a little over 100 experts say. They think over the next 5 years, home prices are going to be up cumulatively over 30 percent. Ready to invest? But then I always look at what do the negative people think, the people at the bottom 25 percent, the people that always see the glass half-empty instead of half-full. Those pessimists, what do they think? Even the most pessimistic of that report believes that cumulative house appreciation over the next 5 years is going to be over almost 14 percent, 13.8 percent.

Josh Mettle: Wow!

Steve Harney: So I believe pretty strongly that demand is going to be there and we’ll talk about that in a little bit and I know supply is limited, so I don’t think there’s any challenge. What they’re seeing in price increases right now is not what we saw in 2006. It’s not an artificial demand. It’s a real demand caused by household formations, which again we’ll probably talk about as we move forward.

Josh Mettle: That’s great. I loved the visual, so to speak, of before the crash, we had 9 months’ supply, so we had way too much supply for demand; healthy neutral is 6 and now we’re down around 3.9. That gives a real good fundamental overview of where the market is in terms of demand and what we have for supply. Now, the question that came out of that what would be the forces or what do you see either equalizing that market more towards a 6-month supply or driving further in a lack of supply, with less months’ supply. Where do you see that trend moving and why?

Steve Harney: All right, I think supply will increase. I don’t think there’s any question about that. Part of the reason supply was limited was people keep on talking about the prices going up over the last couple of years, they were. But you have to realize a lot of people lost value those few years before that.

Josh Mettle: Right.

Steve Harney: So they didn’t have a lot of equity. So now as people are gaining – sellers, they’re getting more and more homeowners, they’re getting more and more equity in their property, they’re freer to make a move to sell the house and move on to their dream house. They’re free to move from the house that they settled on in 2006 that backed up to let’s say to Wal-Mart and move around the corner to the house they always wanted that backs up to the golf course.

Josh Mettle: Got it.

Steve Harney: All right, but for years, they were trapped in the wrong house and that’s evidenced by for so many years, the average time that homeowners spent at a house was 6 years. That number over the last couple of years grew from 6 to 7, 7 to 8, 8 to 9 up to 10 years people were staying in a house. They were trapped in a house because there’s a lack of equity there. That number for the first time in the last 7 years dropped to 9 years. I do think it’s going to go back down to 6 years, meaning as people get more equity in their home and that frees them up and they’re able to sell their house without bringing cash to the table we’ll see more inventory coming into the market. So I do think they we’ll have an increased inventory. However, that being said the good news, and I do think this is good news, is the fact that demand is going to remain strong.

My staff, I have a research team back in New York, they read every single academic report, studies, survey, article written about real estate. Then they pick up the golden nuggets, which we share with our subscribers, which you all want. According to the Urban Land Institute’s most recent Emerging Trends in Real Estate report, which just came out, they are projecting that at an additional of 5.95 million almost 6 million additional households will be formed over the next 3 years. That means there’s going to be about 2 million a year, people coming into the market to either rent or buy, right? Some will rent, maybe even the majority will rent, but a big percentage of those people entering the market will purchase. So even though I think with the equity increasing, the number of people putting their house on the market will increase, I think that demand will match that increase in supply and I do think we’re going to have still a couple of years where we’re going to have, I won’t say robust, normal appreciation prior to the spike up and the spike down during the housing crisis, was 3.6 percent a year. That was annual appreciation historic.

I think we’re going to be a little bit ahead of that. We’ll probably be in the low 4’s over the next couple of years based on that supply and demand graphic. But it’s not going to be crazed prices flying through the roof. We’re going to have a very good return on any investment that you make in real estate, whether it’s your own home or a second home that you’re purchasing, and I think that those price increases won’t be at the level that will form like this, this bubble that people are afraid of.

We do a lot of research in my company and we have a million ways to prove there’s not a bubble, but I can’t discuss a million ways on the podcast. But I can tell you we strongly believe that we have enough evidence that there is no bubble forming. We’re recapturing a lot of the pricing or value that we lost in that 5-year period where we were losing value in homes.

Josh Mettle: Right.

Steve Harney: But we’re capturing that now, and that’s good news.

Josh Mettle: I want to point out just one thing, Steve, because we talked about appreciation in real estate and there’s a wrinkle in there that I just want to bring the light, make sure our listeners realize. So we talk about 3 to 4 percent appreciation rates as kind of the economist’s consensus over the next 5 years and compounded over a 5-year period 21.6 percent appreciation. Now let’s call it 20. What’s interesting and what I want to bring to light is let’s say you buy a $100,000 home and like most people, you don’t pay cash. Let’s say that you put down 10 percent or $10,000. If that $100,000 home appreciates by 4 percent or $4,000, your return on your investment is not 4 percent because your return on investment is $4,000. That’s your appreciation and you only invested $10,000. So if you have a 4 percent appreciation rate, then you’re putting 10 percent down on a home, then you made a 40 percent return on investment. You made a $4,000 gain on a $10,000 investment.

Now I know there’s other things to consider because you might have maintenance costs or this, that, or the other but I think it is an important piece to think through when you look at a piece of real estate appreciating from let’s say $100,000 to $120,000 over the next 5 years. If you put $10,000 down, that means you have a 200 percent return on investment and that’s when you talk about stocks or bonds, usually you’re talking about return on investment but that’s a little nuance in real estate that some people don’t realize.

Steve Harney: You are 100 percent right, Josh. As a matter of fact, Eric Belsky from The Joint Center of Housing Studies at Harvard University put out a paper, I guess it was 18 months ago, maybe now 2 years ago, that he talked about that exact situation. You have multipliers, very few people buy stock on launching, meaning they put up a small amount now as a down payment toward that stock. Most people can’t even get that option and most financial planners will tell you don’t do that. It’s risky. Well, in the housing market, that automatically happens. You still have a place to live in or a place to rent out because more and more smarter investors will and that’s already happening in investing in real estate. It’s second, third, fourth homes, all right.

But Eric Belsky himself from Harvard said, “Listen, there’s a multiplier there.” He explained it almost as well as you just did where he talked about you have to look at the return on your investment based on the cash in to that investment not the total investment and that’s exactly what you’re talking about, the down payment. As far as like you there’s maintenance costs definitely just those things occur. There’s also some great tax reductions.

Josh Mettle: That’s right.

Steve Harney: Tax advantages that far outweigh any maintenance issues and vacancy issues that you have.

Josh Mettle: That’s particularly relevant for our demographic of listeners. Anybody who’s outside of their initial training years, tax advantages are huge especially if you live someplace like California where you got a state tax on top of it.

Steve Harney: Right.

Josh Mettle: Hey, I want to circle back to one of the things that you said because I noticed your blog that came out this morning talked about these 6 million new households being formed, and I just want to touch on this real quick because I thought it was interesting. There has been this kind of pent-up new household formations with the next generation that’s kind of starting to come into the housing market. Would you just quickly touch on that real quickly because I think that is a key indicator of the future demand that we’ll continue to see over the next 5 years.

Steve Harney: Yeah, well study after study after study has shown that there has been a pent-up demand, as long as demand has been. There’s also a pent-up demand of what we like to talk about is college graduates moving back in with their parents and moving back into the same room they had in high school and a lot of that is true. People move back in with their family. Some people, not just even just college graduates, some people that had some really tough times during the housing crisis moved back in with family – brothers, sisters, aunts, and uncles. The household formation numbers, which you know again, we were hitting a point there where we were as low as 500,000 household formations forming a year. The normal is like 1.2 to 1.3 million forming a year, getting new people coming in either renting a house or buying a house and out there, the head of their household not moving into someone else’s. That’s what household formations are.

Well, over the next 3 years it’s projected that we’re going to have – not go back to normal but actually see normal numbers because again there’s a pent-up demand. That new demand coming in to all those kids moving out of the house and I know that’s happening because I own a four-bedroom colonial up in New York. That’s my primary residence, and I had two of those kids coming back from college in my house both of them just moved out, so I personally know that this is taking place. One of moved into a rental situation because he’s a college basketball coach and he’s an assistant coach, so he’s going to be a little bit more mobile. The other one bought a big, beautiful four-bedroom colonial that’s bigger than my house, but they both moved out. That’s the important thing.

That’s two different pieces of the puzzle. The first thing that does is it increases demand, either rental property and/or home for sale, depending on which way they go, and it also frees me up as a seller as we’re talking inventory coming into the market. Now I’m comfortable. My wife and I don’t need a four-bedroom colonial. I can now sell that house, and take some of my earnings or my investment from that house and reinvest that in other real estate.

Josh Mettle: Very interesting.

Steve Harney: And move into a smaller home or move into a condo where I live now because I also have a summer place down in Florence – a winter place down in Florence.

Josh Mettle: It really feels there is still a thawing of the real estate markets that are happening, right? As the prices move up, then more people can sell and move into other homes, more folks in the next generation are buying homes. It all leads to a very healthy kind of future for real estate.

Steve Harney: Yeah, I made my mark originally through the 1990s when real estate was doing really well. I became nationally famous in the next decade calling some really bad times and helping a lot of top companies. By helping a lot 17 of the top 25 companies in the country while my clients and still are my clients, so they helped tremendous numbers of families through a really bad time. Now I’m really excited about the fact that the next decade looks like it’s going to be very, very strong for real estate, very strong for real estate.

People keep on saying that the real estate market is not going to come back until the economy comes back. I’ve made that argument sitting on many panels against some of the top economists in the country, no, you got that reversed. The economy is not going to come back until the real estate market comes back, and the real estate market right now is coming back in big numbers and it’s going to help the economy, drive the economy.

Josh Mettle: I agree. Well obviously, Steve, you are a data-driven guy and so if there was one indicator or two indicators that our listeners could kind of tune in going forward, that they can kind of tune into, what would those indicators be that would tell you, the main indicators that would tell you which direction the market is headed?

Steve Harney: What I look at and that’s simply because we had that challenge years ago and that sort of bit me and it’s never going to bite me again that I see it all coming is be aware of delinquency rates, how many people are falling 90 days behind their mortgage payment, and that number is shrinking. It’s shrinking dramatically. As a matter of fact, probably within the next 6 months, will be at a number at lower than it was before the craziness of the housing market in the mid 2000s.

Josh Mettle: Good.

Steve Harney: That number is very, very healthy. The number of people who do fall 3 months behind that can recoup, it’s called the cure rate that can somehow make up that 3 months. That number is increasing dramatically, which is a good thing. Meaning if a family does fall 3 months behind, they find a way to make it up and get back on schedule with their mortgage payments. So I look at those two numbers. Again, that’s just because of what happened before. Are we getting too crazy with the lending – are people who are not supposed to get a mortgage are getting a mortgage? There is no evidence of that. Delinquency rates are falling, cure rates are increasing, so those two things are exciting.

I always look at demand. A lot of people projecting household formation to be going forward because, especially in today’s market, either they’re going to buy a house or they’re going to rent a house and one thing that almost nobody is reporting on even the renters more and more are picking single-family residences to move into. The number of renters in single-family residences versus apartment building, multiunit is increasing dramatically. As a matter of fact, it’s almost a separate category now. Builders are building developments for renters with single-family homes. The need or the desire to have a place of your own in that is increased pretty dramatically.

When you look at all of those numbers, demand is up and it’s going to continue to be up because prices have risen, supply is going to be there, I think we’re going to have a relatively normal market. Now I think short term over the next 2 years, demand is going to still outpace supply.

Josh Mettle: Right.

Steve Harney: And that means that we’re going to have healthy appreciation, not out-of-the-world-crazy appreciation, but healthy appreciation, a little bit over historic norms. Then the pendulum will swing back to historic norms in a couple of years.

Josh Mettle: I want to just make mention that all of those indicators that you just mentioned can be simply put into Google and you can Google those. People can find those and see reports on those and get kind of live-time updates if anybody wants to track with those indicators because I think those are great ones to watch.

Steve Harney: Right.

Josh Mettle: So, Steve, let’s talk about kind of a common occurrence among physicians and that’s called the relocation season. Every year, I estimate there’s 100,000 plus residents, fellows, and attending physicians that plan to buy a home. Many of them are relocating across the country with limited information or knowledge about the areas that they’re buying in. Now this relocation seasons tends to be between May and August, which is when most employment contracts start and then those employment contracts are typically 1, 2, 3 years in duration. We’re approaching that period right now.

Steve Harney: Okay.

Josh Mettle: With this season approaching, what advice do you give these relocating docs that are moving to an area that they’re potentially very unfamiliar with, you know, “I went to med school in Wisconsin and I got a job in Tucson, Arizona.” What advice would you give them to research and to find out local information about where they’re moving?

Steve Harney: Well, they’re going to handle it in two different pieces, Josh. (1) I think you gave plenty of advice on the Google partthat they can Google the live stats, and they can even Google their stats from a state level and they can bring it down from that in some cases. But I also want everyone on this program to understand that Josh is a member, does subscribe to our service. Josh, I’m letting you know that the quarterly magazines we put out on things to consider when buying a house and things to consider when selling a house, you have both of those reports that we, again we put out on a quarterly basis. It has a lot of the information we’re discussing now and a lot of people information.

So if you can get in touch with Josh, I’m sure he can put you on some sort of email list where you can get those magazines out to you on a quarterly basis so you don’t actually have to do the research. You can worry about what you do as a doctor, a dentist, medical professional and he can get that information to you. I don’t mean to inundate you with emails, Josh, but you have that at your fingertips and that’s even better than trying to Google it themselves.

But now getting back to your question, the second part of the piece in that question is number 1 they should look at, they should be prepared for sticker shock one way or the other. If they’re moving from Toledo, Ohio, to San Francisco, they better understand what the prices, the difference in prices are right from the beginning. Probably the best source from a statewide point is CoreLogic does a great job of projecting where prices will be a year from now. As a matter of fact, we put one of those in in those quarterly magazines we do, so if they do get your quarterly magazine, they’ll have that on a quarterly basis once they look at the update.

But right now, they’re projecting price increases in all 50 states. There is no question about that, but let’s assume that you just graduated from a place, for argument’s sake, Tennessee, which projected prices are going to go up 2.7 percent over the next year and you’re moving to California where prices are projected to go up 10 percent. You should know that.

Josh Mettle: Right.

Steve Harney: You should also know what values are. So you should get a feel for it in a general way. Now when you’re looking more local like the example your moving into Tucson, you want to find a realtor in Tucson that can do four things. This is the way you judge a realtor. (1) When you’re talking to them, do they know what’s happening in the market? Do they know why it’s happening in the market? Do they understand what that means to a consumer? The way you can judge that, do they know what’s happening in the market, why it’s happening, and whether or not they understand the impact it has on the consumer is the last thing. Can they simply and effectively, when they sit down with you, explain to you exactly what’s taking place in the marketplace and why it’s a good idea or not for you to buy a particular property or a particular type of property, or what the timing is on that property.

If they sit down and they get what I call the peacock syndrome, where they’re bragging about themselves and they’re bragging about their company, that’s not the realtor you want. You don’t want a realtor that came from the place of being a salesman. You want a realtor that’s come from the place of being a teacher. You want a realtor that, again understands what’s happening, why it’s happening, and understands impact on the consumer. The way to judge that, when they sit down with you, can they simply and effectively explain to you what’s happening in the current market, explain to you how that differs from the national market, how that differs from the market you came from.

If they’re sitting there, not trying to sell you something but trying to give you the best advice so you and your family can make the best decision on the move, that’s the realtor you want to lock into. There’s nobody better than a great local real estate professional to make sure you make the best decision for you and your family when you move into a market. But again, the way to judge that person is not necessarily in the number of houses they’ve sold it’s whether or not they can sit down at a table with you and your spouse, you and your family, or you alone and really go through this is what’s taking place, this is what you have to be a little bit concerned about, this is what you don’t have to be concerned about, this is what he national market is, this is what’s happening here in Tucson. All right, if you find that realtor, don’t let them go.

Josh Mettle: That is perfect. I love it – the heart of a teacher, not the heart of a salesman. That is well said, well said. Okay, Steve, I know we’ve had a great interview when I get to the end and we still have questions, but I can’t let you go until we do just this last question —

Steve Harney: Sure.

Josh Mettle: Which you touched on a moment ago. One of the most common questions I get from the docs we work with and even members on the board is asking advice around if they should invest in real estate as a means of diversifying their retirement strategy and having cash flow long-term. Now we’ve already heard your thoughts on where real estate values are heading, but tell us a little bit more about any insights you might have in regards to where rents are headed over the next few years and why.

Steve Harney: Well, the simple answer to that is up. Where rents are headed? Up. All right, and again I’m a stats guy. I have a research team that again there is not a study or survey or academic paper that doesn’t get published that we’re not into reading, pull out the golden nuggets. The 2015 Rental Market Report, which was released at the end of 2015, their report, their survey showed that 68 percent of property managers, the rental rates have been increased by an average of 8 percent this year.

Josh Mettle: Wow.

Steve Harney: All right, so I think that what is taking place is some people are projecting 5 percent, some people are projecting as high as 9 percent, that particular survey is projecting 8, I think we’re going to see very nice appreciation in rental rates that are going to continue to go up over the next couple of years. But again let’s talk about the basics, why would that be, what substantiates somebody thinking that.

Let’s go back that there’s going to be 2 million people looking for a place to live this year, 2 million additional people. Some of them are going to buy homes; some of them are not. The ones that are not going to buy homes, they’re going to move into either a rental home or an apartment. That demand is still going to outpace the supply that’s there.

Josh Mettle: Right.

Steve Harney: The vacancy rates are almost zero and now there is new construction being built for that, for that need but the reason there’s new construction being built for the need that people with a tremendous amount of money realize there is a need there, so they’re going to build to meet that need. So I think that the big money in the real estate market is they’re all guessing that the rental market is going to be very, very strong for years coming, moving forward, both from a rental rate number and a vacancy or non-vacancy rate is the better way to put that.

Josh Mettle: Well – go ahead. Sorry.

Steve Harney: The best way I can tell you on that just to give you personal proof of that, I’m probably not going to sell my four-bedroom colonial. I’m going to move. I’m going to rent it out. My son who just moved out bought a really nice three bedroom home down in Richmond, Virginia, and he was there a little bit and he didn’t really like the neighborhood. He didn’t really like the – so he decided to move into a beautiful, like I told you before, a four-bedroom colonial bigger than the house I have. But he didn’t sell the three bedroom home that he originally got there. He’s renting that out. The Harney family, in my family right now is let’s acquire real estate, let’s keep and and let’s rent it out, you know where I think the rental market is going to be in the next couple of years.

Josh Mettle: Well, let me just piggyback one note on that. My mother and my grandmother before her and my wife and I have been investing in real estate here locally, my mother and I for the last 20 years. So we’ve acquired about 100 doors in the Salt Lake Valley.

Steve Harney: Congratulations!

Josh Mettle: Yeah, thank you. It’s been a great family business. It’s been wonderful to stay connected to my wife and my mother in a way that keeps us communicating every day. You should do that with your wife by the way. You should talk to her at least once a day, but we’ve enjoyed the family business very much. In that 20 year span, we have never seen a vacancy rate as low as we have today. In fact, we have people calling us, asking us if we have properties ready to show and we’ll say, “No, no. We just have somebody moving out, but it’s a mess. We have to do a full renovation,” and they’re insisting to be the first ones to come look at the property before we can even renovate them because the market is so tight. So I’m feeling that here in little Salt Lake City, Utah, but it’s nice to hear your perspective from a national standpoint as well.

Steve Harney: There’s almost no market in the country that is not experiencing exactly what you’re experiencing there. And for your listeners on the podcast, it’s like sitting in line to get to the best restaurant in town. They don’t accept reservations online and you’re looking to get in, they can’t clear the table fast enough that you want to sit down. “You don’t have to worry about clearing the table. I’ll sit here. You can clear it after I sit down. Just give me a menu, so I can look at it while you’re clearing the table.” That’s the way the real estate market is exactly the way you describe it, Josh.

Josh Mettle: Yeah.

Steve Harney: Nobody wants to wait. Everyone wants to go now.

Josh Mettle: Yeah. And that just shows there is obviously way more demand than supply. So, hey, Steve, I appreciate your time. I know you’re a busy man and you fit us in. I’m grateful for your time this morning. If our listeners want to find out more about you and the services you offer, where can we find that information or contact you?

Steve Harney: If they’re looking on a daily basis for the best information that you can get on the housing market, we have a free blog. It’s called Keeping Current Matters dot com forward slash blog,; sorry for it being so long, We do a daily blog Monday through Friday and we talk about the housing market and different aspects of the housing market. You can search it; on the right-hand column, it gives you different categories if you’re looking about prices or you’re looking about vacancies, whatever. You can search it and get the best most recent blogs you put on that.

But, Josh, to be frank with you, I think that probably the best place for your listeners to go to is, you have what we put together every single quarter is this single most important group of information for buyers and sellers, we put it in a 20-page magazine that really highlights everything. We put out some charts and visuals. You’ve been so good at sharing information through the podcast and through other things you do to help people make the right decisions both for their primary residence and for investments. You have that magazine once a quarter.

I urge the people on this call to get in contact with Josh and let him know that you’d love to get that magazine on a quarterly basis because it’s beautifully laid out. You’ll enjoy reading it. You’ll enjoy sharing it with your family, but much more important than that, it’s going to give you the information you really need to proceed forward with confidence and that’s really what’s Josh’s goal is. He talks to me privately. He’s a great person. He’s not interested in himself as much as he wants to make sure that every family feels confident when they’re buying or selling a house and he wants to help that in any way that he possibly can. He’s picked the medical profession because you guys are busy. There is no question you guys are busy doing what you need to do in your field right now you have – arrows are coming from every single direction.

Josh Mettle: That’s right.

Steve Harney: Josh has that information readily available for you in a simple slide version and he wants to help you, and that’s one of the reasons I did take the time to go on a call with Josh. He’s special people.

Josh Mettle: Well, Steve, I’m honored and appreciative of your kind words and I would be more than happy to share that quarterly magazine with anybody who wants to contact me. Again, Steve, thank you so much for your time and we really look forward with connecting with you again soon and wish you the absolute best.

Steve Harney: Okay, thank you very much, Josh, and it was an honor to be on the call. I appreciate you giving me that opportunity.

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