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Jack Ryan

lines on the record: 98
first: 2024-05-30
most recent: 2024-05-30
sittings or episodes: 1
sources: podcast

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“On it, make things a lot better when these huge fees go away. But there's also other issues having to do with NINVI and things like that, especially in California constrain the supply of housing. The issue about interest rates and housing prices is what's been debated by people, very talented like you, Jack, for a long time. You do a chapter on it and show what happens in interest rates and housing prices and volumes over time. And it's hard to find a great correlation between the two.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Kyle, it's so hard to predict. It's kind of like predicting the future of the stock market in many ways. In fact, in this book, we talk about how interest rates seem to have been uncorrelated over the last 40 years with how many homes get traded into housing prices. If you go back into the late 1970s during the Nixon Carter administration when rates were really high, it seemed like it didn't really affect home prices and the reverse sometimes rates were really low and it seemed like it affected home prices. It doesn't seem to be as correctly as one would think in the short term, of course, people locked in their low-term rates. They don't want to sell because they're locked in these long mortgage rates that cribs the supply and demand as high as ever. By the way, it's not just, you know, the brokerage fees. I don't want to give people unpressured too. It's a lot of these zoning rules that don't allow you to build multi-tenant buildings or don't allow you to build homes as quickly as you would like. I think brokerage has a big impact.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Housing market. And earlier we talked about long short traders, in your personal opinion, obviously not investment advice. Like, what do you think about the pricing power of homebuilders? In other words, is it going to be a strong market for housing or not?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Got it. The book is Bringing Adam Smith into the American Home. And it's been a pleasure speaking with you, Jack. My final question is not talking about brokerage at all. We've talked about that at length, but just the health of the housing market. In other words, demand being strong and demand being greater than supply and prices going up. I think many in the media and many economists and many in the housing industry, myself included in 2022 thought that rising interest rates would really put pressure on the housing market. Now, as we mentioned earlier, it put a lot of pressure on transactions. Transactions dropped like a rock. However, housing prices did not because there were very few sellers in the existing home market. So a lot of the buyers had to go to the new home market. So prices have moderated and they appear to be increasing now. How would you currently assess the health of the”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Of course, and you know the DOJ and other people and just, you know. I think it's just good for them to know what's going on and how beneficial would be if this were to go away first, not only the 120, 50 million Americans own homes, but all the renters in the U.S. too, it's a huge benefit. And this is for all the trade organizations, all the professionals who depend upon transactions, all the home builders, the knock-on effects are just absolutely huge. So what could they do? I think just be aware of it, make sure that, you know, if they have any interest with their local state attorneys generals and also the local National Association or the local DOJ people look into this, you know, see what's going on, write their op-eds. I mean, I think it's pretty clear what's happening here. I think we have great data and everyone's anecdotal experience, I think, winds up with what I'm sharing with them. No one's going to say that's not my experience, I don't think. So I guess that's what we could ask people to do.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Now, could they cut out the advertising expense? Could they cut out some of the stuff that they have, the $1.5 billion going to? Of course they can. They run their own P&Ls. They can divert any way they want. And so that's why I say, I think from what I can tell from the public filings, about 70 million or more goes to the federal lobbying, but there's still 1.4 billion out there. They can divert it to what they want to do, which I think is the best interest of the industry.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“But Jack, want to ask about that? Once again, for anyone in West ECM, I'm talking very big picture. Like, here's a good example, $1,000 per year, but they put out, well, how much goes to the NAR, how much goes to local association realtors, how much goes to the advertising campaign, like your local broker, your, you know, the ones you see, let's say NAR, your friend or whatever it says, I can't remember the ads what they say. But we'd have to line the item. But it is $1.5 billion in money going to the National Association of Realtors, the local association of realtors, the forums they put on about the industry where they have all the competitors show up and discuss the industry, all those things. So when I say 1.5 billion, I just don't want people to think that I'm saying 1.5 billion goes to NAR. I'm sure you'll get an angry email from NAR in a minute now. I'm not saying that. I'm saying it's 1.5 billion goes to dues. And then you can see by each MLS, each local association realtors how they break out those dues.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it seems like the $1,000 per year to your dues to the National Association of Realtors seems like a pretty good investment. The realtors are getting their money's worth and more. Sounds like it.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“I don't want to speak about an individual, but once someone say, hey, we're with you. We're with you on this vice. We can't, you know, it was 1.5 million of them. How many is that per congressional district? By the way, the top 20% make a lot of money. Their job is to work the PTA and to work the football games and the churches and the synagogues and slapbacks and all that. It's the last door-to-door sales first in the US. There's $70 million in federal lobbying at the federal level. That's just the federal level. And the ones that you are in those forms they fill out. You really want me to take these guys on. Is that what you're asking? Just have a hearing. Can we just have a hearing? We'll think about it.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Wow. Yeah, I've heard it said that the real estate industry is a huge contributor to DC, but I never pinpointed it that it's not so much landlords. It is the brokerage industry that is the biggest computer contributor. And that's maybe why we have the system that we do.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“None. There's been headlines about this as a cartel now for eight months and no hearings. Really? You are at a loss for words. Really? Did you not see me at the last? Hearings.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“All right, by the way, in terms of the filings, the filings themselves, you have added up both teachers unions to get to the number that the NAR spends on federal law. They give you a sense for the size of this group. Okay, so why is it? I'm just going to give you a thought experiment here. There's antitrust subcommittees in the House and in the Senate. They are holding hearings on Google and Amazon and pick your company, right? Facebook for anti-competitive behaviors. Have thought experiment for you. Are there any scheduled hearings? This issue at the National Association of Realtors.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“They all see it in my way. I have to say. Is the curious case the dog that didn't bark in case you're at Sherlock Holmes fan. So one other thing the way they create the cartel is one of the rule is that if one person joins the NATR in your firm, everybody must join the NAR. What does that mean as the force roundup of dues? So if there's 1.5 million NAR members and local associated groups from members, they'll pay collectively $1,000 a year in dues. I'm big picture again. This is a big picture. It's 1.5 billion dollars if I did the math right. And guess who's the largest trade group lobbyist in Washington, D.C. You only get one guess, Jack?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“And what's the sentiment in Washington? I imagine, I mean, if you were to get in front of every senator and congressperson, you were making a passion case. I mean, are a lot of them aligned with the National Association of Realtors? How many of them kind of see it your way? Or is the answer not many?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“So, anyway, to answer your question, the FTC, for instance, detect the Zillow Trule combination of their ambit, and then DOJ got this topic, which is the broker industry itself, not just the Angators under their eat IGIS. So the DOJ has this one right now. They do have this one, period, unless something bizarre happens.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Well, you know, this is an issue of debate in Washington, DC. There's these two different agencies. There's been a long debate. FTC has some jurisdiction over some of the issues. The DOJ has some jurisdiction. This is why some people in Congress are saying that we should just merge these two agencies together. So they're not fighting against each other. Interestingly, it was the FTC that allowed Zillow and Trulia to merge in 2014 or something like that. At the time, I was like, what? It's shocking. But the second thing is the DOJ has antitrust division has jurisdiction over these issues. And they usually think this is his big picture. This is really without knowing. I think oftentimes when the industry falls into a gap between the two of them, they meet and figure out who's going to cover what and they debate who should be taking this or that issue.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Every state and local government has a transfer tax that's funding these big deficits they run right now at those state and local levels, will this ameliorates that quite a bit because all of a sudden these transfer taxes go way up two or three times up? So I just can't imagine that given it's a win, win, win, win, win everywhere, and this is, we're not saying anything should happen differently than has happened in the stockbroker's business or travel agencies or pick, use furniture on eBay or whatever, I just can't imagine that it stays the way it is. It's not good for American public, American consumer, American economy, it's not good for anybody, but for realtors. I can't imagine it would stay this way.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Still charging 5.5% to trade homes? I just can't get my head around that. And seeing all the damage to so many people, I mean, not just a homeowners and sellers. By the way, we talk about this win-win-win to talk about, hey, GDP growth goes up probably permanently. I don't know if it's quite 1% or probably 2%. You free up this part of the economy. This is so big. CPI goes down, right? And then there's all these derivatives benefits to all these people, whether they're carpenters or plumbers or architects or lawyers who help you buy and sell homes, things like that. But also, many states have a transfer tax when you sell a home, like 0.01% or something. The funds fire department, first responders, teachers. And so when you have these transactions choked by this 5% fee, who else is getting hurt?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Operating like every other intermediary. Right. So I have to say that that thing called observation bias, Jack, may exist. But even when I take myself out of myself and look at it, could it really be that in 2030?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“I would be shocked if this industry still behaves in the 1990s kind of way, looking five years out. Why wouldn't it behave in the same way tax dispatchers, stockbrokers, think of every other intermediary, the brokerage intermediary, and what the internet has done to affect the business, like the internet's become intermediary with a full transparency and flow of information driving the transaction costs way down, it'd be hard, is it possible that this group would still be able to enforce these fees that no other intermediary charges in the US that I can think of? Maybe there's some group I can't think of one that's large that would unfathom to me, but maybe, you know, this could be, you know, me because I look at this industry nine years ago and saying, why isn't this?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Is right there on the rules, the NAR rules where you must segregate listings. So we never got in front of a jury. The jury was out for two hours in the Citzer case. Usually juries are out for days or something, considering a civil case or criminal case in the sister case. They're out for two hours and return to the 1.7 billion dollar verdict against the NAR.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and I'm just summarizing things really at very high level for your listeners. You know, those things are public. They can pull the documents. They can pull the filings and they can hopefully they'll be able to see soon the issues upon which you're feeling in more detail. To make their own judgments about whether we're successful or not.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Being right about the direction. I've found out the hard way many, many years ago. Yes. There's these four losses, these four avenues that they should keep track of. The sellers seem to be done unless the DOJ and our beans and says that settlement is farcical and you should not approve this to the local federal judge. There's the buy side seat that is still active. There's our suit and then the DOJ's own two feet. And I think the resolution for buyers and us, I think the next year people should know whether we've been successful or the buyers have been successful or whether this settlement with the seller stands up. And then I would, I don't know, I really can't opine the bot when the DOJ may or may not.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“So we are on appeal in the circuit court, which makes up a Washington, Oregon and Northern California. We didn't get to trial in the district court. We got kicked out on summary judgment because the judge said there wasn't an agreement here in agreement here. But as we all know, the agreements don't have to be in writing. They make explicit, as we said, could be to offer an acceptance. So we're appealing that and we should be filing sometime soon. And then that's where things stand. USDOJ, they're very professional. No one's going to know about them until they actually file something if they do. And then the third is, yeah, their buyer suits are out there. So for purposes of your listeners, if you wanted to think about, okay, not only do I want to go long, short, but when do I want to do these things, right? Being right about timing is important.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“So there's case against the sellers, which was settled for $418 million, case for the buyers as a plaintiff is still extant. The U.S. department that is going on and being sued by the U.S., that's a tough business. And then you are the... Fourth Avenue Rex versus Truly and Nar, what is the current state of your lawsuit, Jack”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Nationwide. Suddenly. Then there's lawsuits on behalf of buyers, which are still extant. Then there's the U.S. Department of Justice. You might have seen two months ago that they got approval from the Court of Appeals in Washington, D.C. to launch their own investigation. And they're on behalf of all the people, the U.S. Department of Justice is the U.S. V someone, right? It's people of America versus someone. Say you broke a law. And they have standing for everything. We only have recently standing on our issues. So there's Department of Justice. And the fourth avenue, legal avenue is Rex. And we're on behalf of competitors. So there was a sellers and the buyers who got hurt by this price fix. And then there's these rules also hurt or put out of business, a competitor. And that's Rex. And we have our lawsuit in Northwest area of the US.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“You don't need to have written documentation. We all agree to it. We all know what happened. I mean, so I think that's pretty easy. But I think what might be more interesting to your listeners is, you know, there's four ways that this could impact their long, short positions or their macro positions. Okay, so there's four different ways super high fees go away with the result that we've talked about who's going to benefit, who's going to get hurt by this. One is there's a lawsuit on behalf of sellers, Jack, that was settled for $415 or $450 million or so, right? And by the way, that was in Missouri, the Sitzer case, and they won a jury for $1.7 billion before tripling, which would be $5 billion. And somehow they decided to sell those for $450 million. But that size of the second as to how that happened, why that happened? Seems like a bad trade to me. But that's on behalf of sellers. And then they had.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Well, it's a very standard antitrust claim, which is that NAR and Zillow work together to, as NAR has done for years, to prop up fees in this industry and combine forces to hurt competitors who weren't abiding by the existing fee structure. I think it's hard to understand how it could not be that NAR has an offer out there all the time saying, join the NAR. And if you join the NAR, you have to enforce these rules. That's an offer. And then someone says, okay, I'll join. That's an acceptance. I think it's pretty to me, it's pretty clear that if there's an offer and acceptance, you have a deal. Just this sounds horrible, but it's just the same thing as agging up with three other people and say, hey, let's go at Jack Farley, then we do it.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Well, two things happened. One is that for the second quarter, they dropped off dramatically. It was like, Holy Toledo, no one can be in places, people's place of residence or close to others. There was an exception for home brokers as an essential business. A lot of people just have not a good time to list my home, not good time to go vis people in their homes. So second quarter was really bad. The rates are coming down. Third and fourth quarter are pretty good. But I think for the year, maybe the industry was up two or three percent. I think the first and second quarter were down third and fourth were up a lot when you put it all together, I think. And Jack, you'll know better than I. I think the industry was up maybe two or three percent that year, but we were up 60%. It was not just two, three, four, five standard deviations away. It was 500 standard deviations away from the industry growth rate.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Pandemic not only didn't slow you, it accelerated everyone in the home transaction business, right? Because as interest rates fell, there was a frenzy for housing. And I mean, mortgage transactions was very high in 2020.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Oh my gosh. We grew 100% every single year kind of like an Uber or a Robin Hood. And then even the COVID year, we grew at 60%. We opened only one city. So it wasn't like we were just opening new cities. We opened one city in 2012 with 2020 during the COVID year and we grew at 60%. So that gives you cents for same store sales, so to speak. And then Zillow joined our was like, okay, that could do it.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Based on our understanding of tech and marketing and we're tech marketing from when we saw the deployment, we're like, holy Toledo, this could be bad. And then, of course, every day we look at the data where we are data centered company. And as they rolled out across the cities, we would see it dropping, dropping. And we tried a lot of things to fix it. Only you can fix this. And we tried everything we could to fix it. But I think the conclusion is what we just described. We might have ways to fix it for a while, but in the end, the numbers, we look at numbers every day. We're digital. We are data center company.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I don't think I help. I appreciate the lower fee, but I really do want to sell this home. Now, we eat a lot of things with AI, I have to say, that would try to predict who a buyer would be, just like the way Citadel or Goldman tries to say who is the most likely buyer for these shares. But it's necessary to do that, to really sell a home well, but it's not sufficient. You need to be on the deep platforms, right? for credibility reasons as well as eyeballs. You can't always predict who's going to sometimes you can predict pretty well sometimes to sell them depends on the market, but you really have to be able to those platforms. So of course it hurt our business. We didn't realize we knew it would be bad until they deployed it. They were telling to us, at least by email, that, hey, you shouldn't see any diminution in your views. We were like, I don't know, it doesn't feel like that's going to happen.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and so what happened to us, of course, is two things. One is sellers think that who are selling their home think that we're not agents because they go to Zillow to look it up. We say they're agents. They go, no, Zillow doesn't say it says you're not an agent. So, you know, when you're making your case of first oppression, it's pretty hard to say, you know, Willow's just got it all wrong. Really? Zillow's it all wrong? Yes, they do. Number two is they say, well, if I list with you, then my home's getting pushed into this other tab, which looks like it's like all the refuse of the brokerage industry. And furthermore, I don't want to be viewed as refuse. And how many lust views do I get if I'm on the back page of Zillow or this other page not in the page where 95% of the listings are or 98% listings are? Well, honestly, probably 80% less based upon the data we got from Zillow and other in our own data. Maybe 90%.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I just want to make sure that your listeners are talking at very big picture level, Jack, but they want to come back in more detail. I'm glad to come back on your show. But I think, you know, effectively, I kind of said, well, they joined in February. I think they actually joined three months prior to that or five months prior to that, but they didn't make the change to their display page until January or February, at least in the cities that we are in. I'm just in purposes of getting clarity with your listeners. I'm conflating some events just so it's easy to explain. So I'm going into detail. I think everyone's going to get lost. Right.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Yes, the excess profits are all go to the agents, not the brokerage services where the agents hang their hat because they have to compete for that agents. Jack, I just want to go back to 2021 when you're going to list Rex homes. I believe you said you were targeting a date in July and to the best of your recollection. It was in February when Zillow made that change. They joined the National Association of Realtors. And then they put your listed homes in the other section and not in agents, which one might say that kind of implies that you're not agents, even though you are agents. I'm not going to ask what was the effect of that Zillow move on your business because that would put you in a position of making a claim about a causes B. I'm not asking you about A causes B. We know A happened, but just what happened to B? So I'm not asking you about Zillow at all. But after Zillow did this, what happened to your business? What happened to your list?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“But this is why there are many of them at the top 10, 23% trying really fancy cars and tripping really big houses. And there's TV shows about them because the excess profits are being driven at 6% fee or let's say 90% is going to the really good agent in Malibu or Rye or something and 10% is going to the brokerage firm. So that's how the industry works. It's kind of like Avon or they're all competing for that door or salesperson. And whoever's the best at it, they'll pay more of the payout would have ever earned that door-door salesperson.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Where are the excess profits? I don't see it. I don't see this super high ROI. Well, so it's a very competitive business, the brokerage side in this sense. They all compete with each other in a free market to pay off their point of indifference for the agent. They'll say, I'll give you 80%, 90%, sometimes 100% of whatever you bring in, why 100% because they want that standard bearer in Malibu or something so they get most of the vot and people think they should use dispermant malibu. All right, so the excess profits as you may not surprise people once I say this reside at the agent level, not at the brokerage firm level, because they're all saying, look, if you want me to join Compass or Carlo Banker or REMAX, whatever, what are you going to pay me? Right. And so they all bid up to their fair market point of indifference and they don't see excess profits. In fact, because the industry churned so fast, sometimes you see less than excess profits in the brokerage business.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Point still stands. Okay, this is how this kind of used to work in the stock brokerage business at Goldman and other places circa 1990 in terms of how do these brokerage firms work. Well, I'm signing these fees are fixed and they're super high, et cetera. And then you look at the ROIs, the brokerage firms, you go, hey, where are the excess profits, smart Alec? That's true.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Oh my gosh, yeah, I'll tell you about that. That's really interesting. By the way, you made this great point on inflation and what happens to it. And I just want to, you know, we're talking at a big picture level and there'll be some people where economists are listening. Maybe we'll say, well, Jack, it's not that all 5% that go back to the homeowner. It's kind of like the instance of a tax analysis. What's the elasticity or inelasticity of demand and blah, blah, blah. I want to acknowledge that that's true. But for purpose of simplicity, I'm saying the price level goes down by 5% and we have this huge increase in homes built because the margins go up by 30 to 70 percent depending on who you are and where you live. Okay, I just want to put that kind of star next to it because some smart guy is saying, well, it's not completely 5% goes back. But on the other side of that story is that then, okay, the owner retains more of the profits and then that owner will deploy those profits and investment or other things will in turn stimulate the economy.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Be very good for title services, carpenters, and home builders, and good for GDP, good for the economy, and negative for inflation, sort of very, very bullish for real growth, but it would be bad for real estate agents and real estate brokers. So let's take Zillow or Redfin or Compass Group. These online real estate brokers services because again, they're not agents. They just provide services to agents describe that type of business to me because you're right. Like we still live in this system of unofficially fixed prices. Again, I'm saying that not yours. And yet these real estate brokerage companies have collapsed in value. Why? Well, part of it is because transactions have fallen off a cliff because mortgage rates now are so much higher.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Right, I don't have the exact figures, but shelter, which includes rent as an owner occupied rent, is somewhere between 30 to 40 percent of the US inflation metric CPI consumer price index. So for example, the CPI right now is 3.4% year over year, having fallen from close to 9%, whereas the shelter component is still at 5.5%. As such, All items in the CPI minus shelter wants to once you take out shelter is at 2.2%. So only 20 basis points away from the feds, 2% inflation target, but it is that shelter cost that has remained very, very sticky. And you're saying that part of that is housing would be a lot cheaper if you didn't pay these owner, if homeowners and home buyers and home sellers didn't pay these owners fees. And you said if that was locked as a long short idea,”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Move quickly from San Francisco to Austin because they can more narrowly match their skill set with the need of the person in Austin, Texas, right? I mean, this is just Adam Smith. By the way, Jack. I wrote a book about this. It came out a month ago called Bringing Adam Smith into the American Home with a brilliant guy named John Tamney about how the cartel create the cartel and how what's going to happen in the aftermath if we're successful in getting rid of it. Not as specific as these ideas though, Jack. Your listeners are getting much more information than they get from the book, but they want to leave, like, I know I'm spewing a lot of stuff really fast at people and kind of is mind-blowing because I think you'll kind of figure it out. This is always going to exist this way. But I don't think it's going to. It doesn't make any sense that it would. And there's going to be a lot of winners and losers when this 125-year industry suddenly gets morphed into a 21st century one.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“We'd have to be successful to be successful, but I wouldn't think that relying on biaside agents would be a good read upon which to lean if I were. I'm sure there's not anything insightful to the people running so low, but they have to make a transition, which always means higher risk premium. And then if you're a macro guy, what happens to GDP growth? I think GDP growth has a permanent increase as far as the eye can see for successful why because home building and all the attached services are depending on what you think. You see different analyses are 15 to 20 percent of GDP. And then also what happens when Jack can move to as high as the best use easily. It's really free. Jack to move around the country, Southwest Airlines. Now free move up the country. Now you're really free, Jack to move around the country. And how much more are things benefited by some person who's good at AI being able to?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, you know, they'd have to, you have to look at their market caps, they've all gotten hit pretty hard, that'd probably not help. And then, you know, the other aggregators, I'm not saying they can't, they may come up with better ways, different ways to make money, but I don't, I wouldn't think.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Transactions, guess what? There's three times the amount of title services needed. Same with escrow services. Who could be hurt? The brokers, their market caps will come way down, but can they go down further? The brokers being remaxed anybody or anywhere, I'm sorry, anywhere. I'm so sorry. That's the order of Corville Banker Compass, those firms, the brokerage firms.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Mortgage companies, The Rockets of the World, right? More transactions occur, the more transactions they do, a lot of the money is made by placing the mortgage, not the ongoing management of the mortgage. That would help solicit your mortgage companies. Look at your Angie's list, those that think about, by the way, the wages and the employment of carpenters, plumbers, electricians, painters, architects, they go way up because their jobs are tied to the trading of homes. You do most of your work when someone buys a home and fixes it up for their use, not because the toilet broke this week. That's useful to them, but that's not the big business. And then same with getting great home ready to sell. So think about the industries. Put aside, I know that I think Joe Biden mentioned recently or President Biden mentioned recently that he's looking at these title fees, which are also way too high. But, you know, if there's three times the amount of”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“They go down by 90%. I think it's arithmetic. I don't think it's geometric. I don't think it's arithmetic linear. That's what happened at Goldman. When prices came down by 80%, went up by 20 fold in terms of the volume. So if you're a buyer, a seller of individual stocks and you want to take individual positions, who gets out asked? Who gets benefited by an increase in the volume of homes traded by two or three times, right? And if you want to go long short because you want to keep a neutral position, you go along the company on housing. You go along the companies that are enhanced by volume of homes traded.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“I mentioned that the volume of sheriff traded was the $100 million to $2 billion when the fees dropped by 90%. There was a study in Toronto when they added a 1% fee to a property. It was like a transfer fee, the volume of transactions in Toronto went down by 15 to 20 percent. What happens when the fees go down by 5%? Of course we know that transactions go up when transaction costs go down.”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT
“Well, show me the bigger one. Standard oil in 1911, maybe, I don't know, wasn't as advanced in terms of the use of gasoline back then. But it affects CPI, it affects the price of homes. If it impacts Jack, just people moving to their highest and best use. I assume that you're in New York, and if you decide that, you know, you got this great opportunity for your skills and your family that's better in Austin, Texas where I am right now, it's better if it can move quickly to where their talents are most appreciated, what does that do to productivity? And by the way, homes are the launching point for a lot of other industries. Carpenters, electricians, plumbers, Angie's list, if you're, you know, you want to know about stocks, those transactions for those kind of services cluster on the purchase and sale of homes. When the fees go from 5%, 6% to zero or one, what's the volume of homes traded?”
2024-05-30 · Forward Guidance · Jack Ryan on The Housing Cartel That's Stifling The American Economy · IDENTIFIED FROM THE TRANSCRIPT