Sweat the Details: Danushka Nanayakkara of the National Association of Home Builders

Sweat the Details Podcast by Nest Realty cooperation

Try Getting an Economist to Say Recession

Danushka Nanayakkara, Assistant Vice President of Forecasting and Analysis at the National Association of Home Builders, joined Jonathan, Keith, and Jim for a fantastic and wide ranging conversation—from the economic cycle to the impact of regulations on new construction, employment and employment cycles, women in construction, and a lot more. We hope you enjoy it.

You can listen to the podcast here, and subscribe to the podcast here.

Every good thing comes to an end, and the US Economy is in the longest sustained growth period in our history, but there are signs of slowing. This expansion has been driven over the last year by the effects of the 2018 tax reform and ongoing Fed involvement. In this podcast, we  cover a whole host of areas regarding the US economy.

Highlights include:

  • Discussion of the economic cycle
  • Regionality of the expansion and the slowdown. There is no national norm right now.
  • The important numbers to keep your eyes on, and how does the trade war impacts jobs and inflation.
  • Unemployment rates and job creation numbers.
  • Employment productivity in new construction and modular homes
  • Labor shortages, layoffs, and the future of construction jobs
  • Zoning change to drive housing policy

We hope you’ll join us for the next episode of Sweat the Details. View the full transcript below.  

TRANSCRIPT

Jim Duncan:
This is Jim Duncan with Sweat The Details. This time, Jonathan, Keith and I were joined by Danushka Nanayakkara, the Assistant Vice President of Forecasting and Analysis with the National Association of Home Builders (NAHB). We had a fantastic and wide-ranging conversation, from the economic cycle, the impact of regulations on new construction, employment and employment cycles, women in new construction, and a whole lot more. We hope you enjoy it, and I think we’re now at the point where we can start asking you all, if you like this podcast, please rate it wherever you get it.

Keith Davis:
We’re recording today from the Charlottesville Area Association of Realtors at their Annual Development and Economic Summit. Danushka, thank you so much for joining us today. We’re happy to have you with us.

Danushka Nanayakkara:
Thanks, Keith. I’m happy to be here.

Keith:
Would you kind of tell our listeners just a little about what you were speaking of earlier today? We just saw you hop off the stage, and we’d love to just kind of get a quick recap from you on what you were trying to get across to our realtors here.

Jim:
Let me interrupt you real quick, because that’s what I want to do today.

Keith:
That’s fine, yeah.

Jim:
What do you do?

Danushka:
I am the Associate Assistant Vice President for Forecasting and Analysis at the Association. I lead the macro team there, and we are responsible for putting together the forecast, a national forecast at a monthly level, and we put together a state forecast twice a year, and we do all these regional analysis. So that’s where my team is responsible for in a very broad sense.

Jim:
Okay. How long you been doing that?

Danushka:
I’ve been doing this for two years now.

Jim:
Having fun?

Danushka:
Yes, absolutely having fun. That’s why I’m still there.

Jim:
Back to Keith’s question, you were just talking about more local for the Charlottesville market. We were looking more of a national space. Where are we?

Danushka:
Right now, we are in a kind of a slowdown. We’ve had a really good growth in 2018. Economy was strong, mainly because of the boost from the tax reform. Now we are coming to the stage where it’s kind of like wrapping up and we are now at the end of the expansion. We are kind of seeing the slowdown in the next couple of years. At the very macro level, it is kind of normal. It’s nothing to be afraid of. The only question is, are we in ’98 or 2000? These are famous last words, it’s not going to be like 2008.

Keith:
We’re going to mark that down. Okay. Thank you very much. Talk to you in 18 months.

Danushka:
But I’m an economist, so don’t hold me to that.

Keith:
Well I think the best part is it. In 2008 everybody predicted exactly what would happen and how strongly. So this, this comes with great, great confidence, right? Good shape. Yeah.

Jim:
If you predict it right, you’ll probably get a movie.

Danushka:
That’s the good part, not get the big shot.

Jim:
So you say we’re, we’re slowing down. Is that, what does that driven by? Is that driven by demographics or is it driven by the economy, a mix of everything?

Danushka:
It’s mainly driven by the economy. It’s the slow down that we are going to see in consumption. The business investments, certainly the trade issues are not helping because at the end of the day then the investors are going to pull back. It’s kind of a vicious cycle too because if the universes are not going to have the confidence that the economy is going to be doing well in the next couple of years, they’re going to pull back and then the consumers on that side is going to hold back on their big, big ticket items. So this is kind of a, you know, in the news and I what, what makes us confident in the economy, right? So I’ve talked to so many realtors and builders and you know, I’d say they’re saying, you know, people are getting cold feet. They want, they find a house and they want a friend offer and they get cold feet and then they pull back. And so it’s, it’s a very, I think combination of issues right now. That’s why we are seeing and also it is not unusual too, we are at our longest expansion history. So the slow down is kind of any narrative ball thing too.

Keith:
Sure. And let me ask you, I mean this is, as you just said, this is the longest expansion we’ve seen. The expansion prior to this was the longest expansion before that. What is leading to kind of the greater stabilization? Obviously the growth in the last few years is not been as ramped up as we may have seen during the Gogo eighties but what, you know, what is changed that’s allowed our expansions to last longer and and be more smooth.

Danushka:
The the before there’s the longest expansion was in actually the 1990s that was the longest. And the reason is the expansion might be longer, but you can see that the growth rates are not as strong as what we’ve seen before the recession. The reason is for that the GDP was really high in the eighties nineties that was because women enter the labor force. So that is the, that was the main reason. But right now women are in the labor force and make almost half of the labor force right now. So it’s not unusual that we’re actually seeing slower growth, but we are actually like, you know this, this expansion has been sustained by in the last years tax reform to that kind of really boosted last year. Now we are seeing coming towards the tail end of that, but maybe you know the demographics are changing as well. That’s another reason that the millennials are the largest group of population right now. So they are now coming into the years where they are actually going to buy a house and they’re going to be like ready to spend, hopefully spend the money that they don’t have to spend on sort of lawns. I’m coming into like you know, more big ticket items. So consumption. But, that being said, we do anticipate in the the reduction in consumption in the next couple of years.

Jonathan Kauffmann:
Specifically I’m sure you work with and talk with a lot of builders that are out there. And this is a tough question because there’s small builders, there’s remodelers, there’s you know, giant publicly traded home builders. What’s the mentality of the builder in today’s world? Are you seeing that they’re starting to pull back on land purchases and and land deals and there’s maybe starting to stock some cash away or are they still continuing to plow and reinvest back in their businesses like, like they were a years ago? It depends

Danushka:
on where I am. I was in early in the early this year in like Asheville, like there’s no slow down there. I was in Raleigh, Raleigh is just booming. There’s no kind of end in sight for them. They can’t even keep up with the projects. And I was in West Palm beach in Freida and they actually now going to repurpose essentially golf courses. They’re buying them and developing them because there’s a huge demand. But I was also in Ohio where the builders there are struggling because you know, it’s the Midwest as a region. So it is very, very regional where you are. But I, that being said, even in North Carolina, areas like Wilmington, you know, some more aging population, there’s not much young people that are in that area. So their housing market is actually still, you know, just lagging behind if you compare to a place like Raleigh. So it’s very different sentiments on where you’re from. And when I was even presenting at IBS earlier this year, like guys talked a lot of remodelers and then,

Jim Duncan:
What’s IBS?

Danushka:
I’m sorry it’s the international builders show in Las Vegas. There they don’t see the slowdown that we see at the national level. They’re very local. They are saying to me that they can’t even keep up with the projects. They have so much work. But at the national level we look at the numbers, we see the slow down.

Jim:
So we were talking earlier about some, from a prep perspective, you know, two questions are I guess for you, you know, what are some of the more important data points that you, that you look at or you think that realtors should be looking at. And the second part of that question is, what are some data points that people look at commonly that really have no impact? [inaudible] clutters up the stream, if you will.

Danushka:
I think something that people literally like, you know, the CPI, that’s the inflation rate. You know, people pay attention to that. It’s in the headline news and okay, inflation has been around 2% less than 2% for the last few years because the fed always mentions that every month essentially. I don’t think people are going to really care that much unless these trade issues get so escalated. The fact that all the toys and everything’s going to get really expensive, but that might not happen if they’re, if Trump can bring China back to the table, then talk about these issues. But what do we do? Pay attention is a job creations. It is. If you have a job, if you can create jobs in your area, that means that you know, people are going to need more homes, more schools, and the money needs to get invested in this area. So job creation is the biggest thing that we look at labor market. And other than that, you know, and on a housing perspective it is permits. The issuing of permits and essentially the survey of construction, the data that the sober that they put out by the census Bureau, those housing starts which regions are doing better, which regions are lagging behind. Then they do the permits as well. Then just to see like you know the data that they, so we pay a lot of attention to the housing starts and new home sales data.

Keith:
Danushka, let me ask you a question. You mentioned job creation, obviously they’re very interrelated, but is it more important in a community to have a low unemployment rate or to have new job creation? Is it, are they, how closely tied are they in… Is it, is it always the same importance level or are different?

Danushka:
I think job creation is more important because unemployment rate, it doesn’t really capture everybody who’s unemployed in the area. It just captures people who are actively looking for the, looking for a job in their tie specific time period. That’s called the U6 rate. Yeah.

Keith:
And and is, does job creation tend to then kind of alleviate some of the underemployment questions? Is that one of the, I mean is that part of the importance of the new job creation?

Danushka:
Yes, because it actually, you know, if it. If you’re like under employed then you’re able to actually more out find a better job and if you only part time and if you want a full time job and if there’s new jobs in the area, people can actually migrate between jobs easily. That’s where I pay attention to job creation as opposed to the unemployment rate

Keith:
Is the number of people who are choosing to not look for look for work is that increased, decreased, stable?

Danushka:
Longterm under unemployed? So that is the, the law that the Bureau of Labor Statistics measures that too. And that has also been steadily going down, but it is much higher than the unemployment rate that we kind of talk about on a monthly basis.

Keith:
From a, from a labor perspective, you know we were talking about the construction, we’re always talking about labor immigration, but where, I mean, and again, you may or may not have an insight into this, but from a longterm labor perspective, do y’all talk about automation? And robots coming into the construction trades.

Danushka:
We talk about that in a more modular construction and panelized construction where you can get productivity gains. Other than that, productivity is lagging in the construction sector. You know overall economy. Since the 1990s productivity has been up like 30% but in construction it’s only been up 3% so it’s like…

Keith:
Say that again.

Danushka:
So the productivity for the overall economy has been up 30% since the 1990s but in construction trade it’s only up 3% so we do have to get up…

Keith:
Which, which makes sense. I mean houses are built the same way that they have been built for years. You, you bring in a fate framing crew and you stick build a house. Whereas if when we look at some of the larger construction operations that are doing SIPPS construction or other panelized modular piece, you can do it in a factory where you have much higher productivity. This seems like a remarkable opportunity to increase efficiency. Absolutely.

Danushka:
Yes, absolutely. But the the market share for module and panelize is like less than 4%.

Keith:
But is is that a shipping and transportation issue more than it is labor?

Danushka:
I think it’s also the stigma? Right.

Keith:
I was going to say politically the people [inaudible] the word except except that we have so many builders. Even in the Charlottesville market we have plenty of people who are doing SIPPS construction or panelized construction. It may not be the full blown modular that that some of any… Here’s the reality is that you look back over the last century, the people who have been trying to do kit houses going back, I mean the Sears craftsman home with the 1920s it was, you know, one of the original kit homes or I guess they were not the original, but there were several companies out there at that time that just hasn’t taken off. But we’re seeing more and more construction operations using regional, you know, firms to put together their, their side panels or walls. I mean that’s, that is increasing. We’re just not seeing it everywhere yet.

Danushka:
Yeah. I think a, we think that the Pacific region, because you know, because of the constraints that they have is actually much more higher than the rest of the country. We think that the, the growth can be in that area, but right now, you know, we don’t really see a much bigger market share increasing in the, in the near future.

Jonathan:
Interesting. Excuse me. Interesting. That’s, you know, clearly there’s a, in every industry, even in real estate or, or, or housing or housing or new construction or remodeling, there’s always kind of pressures right now on innovation in front of pushing forward. So clearly it sounds like the home building and remodeling industry has a challenge at its hand and they’re not being quite as efficient as they as they could be. What other challenges, big challenges are out there that these builders are looking at on a regular basis? You know, and obviously we’ve got labor and materials and zoning and things like that. What are the, what are the big challenges that you’re seeing that, that, that are affecting the industry?

Danushka:
The biggest is labor. Labor is the biggest issue because you know, right now we have like over 350,000 jobs opening in construction. So and…

Keith:
On a nationwide basis, not here. Well but he could have been stayed or how, how broad of a region. But the 350,000 open positions that general contractors would say they are looking to fill at any given moment.

Danushka:
That includes residential and nonresidential. Yes.

Jim:
So how does that get solved?

Danushka.:
That’s the problem and the issues, the reason being, you know, the biggest thing is the fact that you know, it’s an aging labor force right now. The median age for a construction worker is like in the forties, so young people are not coming into the trades. So at the local level you need to encourage these young people to go to trade schools and you know, like kind of tell them that, you know, construction is actually, can be a lucrative career too. And so after the great recession, managers left the labor force for good. They’re like completely discouraged and women in construction is only 9% when women make up almost half the labor force. And the final thing is they’d been the immigration cap down. I was also kind of choked off new labor supply. So these are the issues that will take a while to get solved. So that’s everything, that labor is the biggest issue that the construction side phase.

Jonathan:
And then obviously leads to you know shortage of production and rising housing costs. Is that right?

Danushka:
Yes, yes. Because it will push up the labor costs. So and then the building material component has also increased, up 9% since 2017 and that is just all building materials. Our regulatory fees as a big issue at the local level too. It’s almost a quarter of the share of a home price right now. So which is really expensive.

Jim:
And how do you, how do you calculate that?

Danushka:
This is actually done with a 18 hour housing policies group. They actually do the calculations and have all the data. So at the national level we have the numbers and then we kind of did partnered with the multifamily association and did the, that’s why the share of the costs for a multifamily development is actually one more than the single family. It’s at 32% average is because of regulatory fees.

Jonathan:
And that regulation fee. Is that part of, is that, that’s going through zoning, that’s you know, hiring people, hiring.

Danushka:
all the [inaudible 00:16:26] do everything.

Jim:
Everything take it to kind of, wow. That’s, I mean if you could send me the, is it podcast you can’t see, but the looks on our faces around the table. We’re kind of, we’re all incredulous that the numbers are being thrown out here. It’s the regulatory costs are a phenomenal number.

Danushka:
Yes.

Jim:
Oof. How do we fix that?

Danushka:
It’s tough for the politicians.

Jim:
Yeah, right. That’s the way to go.

Keith:
I mean on the, on the labor force. I mean I, you know, it’s something, I’ve got a 15 year old daughter and you know what, I wouldn’t mind that she went into construction cause I think it’s a, the concept of having a career where you start at eight o’clock, seven or eight o’clock and you finish it two or three kind of sounds amazing. You know, you can make a real career to that. Is that, do you have any sense as to whether that’s an American trend or is that worldwide where the labor, labor around the world is diminishing?

Danushka:
Oh, we haven’t looked at the worldwide.

Jim:
Okay.

Danushka:
But you know, when we look at the education levels to know more people that are going to traditional four year colleges. So I think that is a trend across the world too, because we are part of the international housing association and when we get together and talk about the issues, it is remarkably, very, very similar. We all face the same challenges. So labor is also one of their things that in how do you bring in more people to actually build these homes. So we haven’t looked at the numbers specifically, but, but I know from this conversation that this is an issue that we are very like, you know, it’s very common for a lot of the developed countries too.

Keith:
Well and I think one of the other interesting pieces, and you said it just a moment ago with that many people left the, the construction workforce when the great recession happened. And I think there’s such volatility and always has been within the general construction business that lots of people find themselves laid off when there’s, when there’s any movement of recession, it’s one of the most quickly, you know, impacted areas. And I think that is a hard thing as a 20-30 year old to kind of get your hands on that I’m going to be in this job and there may be a shortage period where the work is, is wanting.

Danushka :
Absolutely. I mean speaking from personal experience, I graduated right at the recession and I know how difficult it was to find a job.

Keith:
Yeah.

Danushka:
So and it terrifies me if I have to be in a job where you know what I might get laid off in a few years if the economy is not doing well, that is a risk that I’m not willing to take.

Jonathan:
Do you think that’s still as much of a concern with the fact there’s 350,000 jobs that are, we’re short, so maybe it takes longer to get to the point where our current labor force and construction is laid off, or do you think that that’s not not the case?

Danushka:
I don’t think that’s the case simply because of the shortage in labor. It’s just remember like, you know, it just probably going to be like, you know, where is this shortage of labor, right? In which region and if it’s in the Midwest, people could get laid off much quicker than somebody in the South or the West. So…

Jonathan:
Shifting topics a bit, you know, looking at the zoning. We were talking earlier about how Minneapolis is, has gotten rid of, or they’re discouraging single family zoning and Portland or Oregon, Oregon. Is that, are those the only two places that are doing it? Is it, is that, is that a good thing, a bad thing?

Danushka:
That’s the only place that I’ve heard of in the news that Oregon is very, very strict with their zoning. But I know for a fact that even Washington state is very strict about that. I know when I was in a meeting with the single family build at the same one County, you know with their sprinkler system is completely different to the next County. So regulatory fees is a real issue. When we had the home building association meetings, these are like the biggest issues for them because you know like you know, builders build across the state and if one County is more strict than the other County, you know, where do they go, where do they build?

Keith:
There’s a negative incentive to work with that County. Yes, absolutely.

Jonathan:
Well we have, you know, off topic a little bit, but we’ve got issues where we are in 12 markets right now and dealing with multiple MLS in every market and just the, you know, the, the, the resources it takes for us to expand our operations into a new market with a different MLS and different rules and a different data feed and different processes and different fee structures. It’s amazing. I mean it’s, it’s months for us to, to get up and running in a new market. So the inefficiencies are definitely there. You know, we, we see them from in our business too. So quick side note.

Keith:
Just leading in to that, I mean to enter that to the question that Jim is bringing up of of kind of the, the regular, the availability of homes and the shortage of, of contractors right now. Do you guys track, is there a way to track kind of what your average membership has in terms of outstanding contracts and how far home builders are out ahead of, of their contract curve, if you will? I mean we have, we have builders here who will be signing contracts to deliver homes 12 to 15 months down the road and, and a lot of that is shortages of, of labor. They know what their maximum capacities. Do you guys track that at all in terms of how far out these contracts are written?

Danushka:
No, I’m not really familiar with that.

Keith:
Then we should take the last minute out of no, I mean, yeah, we might take it out, but I remember when, when the, just actually after the crash a local home builders was, he was writing contracts 15-18 months out. Right. And after the crash with his sales rep said when we were doing that, I knew there was a problem. Hmm. If you have me, if you’re projecting out that you’re going to be still stable in 18 months, which I think a lot of people can’t do.

Jim:
Financing can fall through. A lot of, lot of details can fall through labor cut.

Keith:
Many labor costs go up and construction costs go up. I mean someone’s going to eat that cost.

Jonathan:
Going back to this, this like low every, you know, everything’s local concept. I’d love to get some just insight from you and your team about how you, how you pull and compile data points like housing starts and housing permits. Like can you, can you like.

Keith:
Where that raw data comes from?

Jonathan:
That data comes from and what’s the process of that? I’d love to hear about that.

Danushka:
Mainly it comes from census.

Jonathan:
Okay.

Danushka:
Census does a great job of doing all this. So is and permits is the biggest driver. So when we do the forecast for housing starts, and that’s one of the biggest things we look at. Then we look at household formations, we look at employment, we look at population in the area. So we bring all of these things together from the different government sources and put it into our model essentially. And then we kind of, and also there needs to be intuition to, to kind of get a sense of like what we think is honestly happening. So we kind of tweak the model a little bit, especially when we think that, you know, the monetary policy, Fed rate cuts, it’s always a guess, but they’re going to do until they actually have the meeting. And when we build it into the model, we kind of like really kind of read a lot of news to see what’s happening. And you’re like, okay, I think next week it’s going to happen. You think October it is a possibility. You think maybe the first quarter is a possibility. So we build that into the model and you know what? Sometimes we are right. Sometimes we are not. So that’s maybe go back and kind of redo the forecast again next month

Jim:
We might have to cut this. Has it gotten harder for to do your job in the last 12-18 months with the lack of uncertainty as it we each day being different? Certainly

Danushka:
Absolutely, it’s been really hard because last year, when we were running the forecast we thought this is going to be more rate increases this year. So if you look at our forecast last year we actually built in rate increases and we thought the mortgage rate was going to be around five and a half, five to five and a half. But look at it now. This week, the 30 year mortgage is at 3.5%. So it is a learning process. We are continuously changing our model because of everything that’s around us. We pay attention to the news. You pay attention to what’s going on in the stock market.

Jim:
Well I will say just early, early on…

Keith:
What this one would cause? What happens if the census data gets corrupted? I mean, you know, if it’s, if it’s not as accurate as we is, it’s been the last thirty years?

Danushka:
So the census actually goes back and revises the state [inaudible 00:24:40] .

Jim:
What if they don’t?

Danushka:
They do. They…

Keith:
You mean historically they have.

Danushka:
Yeah, they have. Yeah. So like prime example is when the government was shut down earlier this year. So we had to run the forecast with all data essentially. And that was a huge challenge for us to kind of, we didn’t have the, the, the most recent stats numbers. So it’s always intuition and yeah, it’s a, it’s a challenge for sure.

Keith:
So early on in this conversation, you had said that last, the, the last long sustained growth in part was due to women entering the workforce and there were other kind of, I’ll call them natural causes that were just demographically driven or, or other business driven. Whereas the current one, the current expansion has been driven in part recently, at least by the tax reform. We’re now seeing it as you, as you just said, you all had predicted a year ago that we’d be in the five and a half range. We’re 2% below that right now. You also said that there’s a chance that the Fed will lower rates yet again. How much of our current sustained growth is due to kind of forced effective government versus the natural. This really is a growth period that we’re in and not just continued intervention to insist upon a growth that that may not really be deserved.

Danushka:
So before the new tax law came in, we thought that the slow down was going to happen this year and end of last year can of, you know, kind of coming to the tail end or the expansion. Then the tax law got passed that really boosted the business investments and that made it like 2018 to be a very strong year. And now we’re like, okay, 2019 people are going to file the taxes. You know, they’ve been filing taxes for the first time with the new tax law and now we’re like, okay, and all coming to the, and so it’s always like a yes, there was kind of boosted by the tax reform and I don’t think… You don’t foresee anything like that coming it happening to boost it again in the next year or so.

Keith:
Except for artificially low interest rates that, you know, we’re seeing negative interest rates in Denmark and…

Danushka:
Yes.

Keith:
Right. I mean the, but these are things that are absolutely happening and they’re government intervention for doing well.

Danushka:
We don’t anticipate the Fed to do, do negative interest rates. Like…

Jim:
So, so I’ll, I’ll take that question and then we got to, yep. So, so what we’re saying is two things. One is, is this a sort of a sugar rush for the, for our economy sort of forced and two, I’m glad that I tell my clients when they asked me how is the market, I say, I’ll tell you in 18 months I don’t envy what you do.

Danushka:
Yeah, it is. It’s definitely a challenge. I mean I, right now, yes, the Fed is trying to keep the sustaining the expansion and not let it really slow it come to a halt. That’s why the Fed is reacting really quickly. Especially because you know the earlier last year, earlier this year and end of last year, that consumer confidence went, kind of dipped really low and you know the Fed was holding the rate steady. July Def did the first card we undisputed and at one next week. So yes, the Fed is being supportive of the expansion that in they did realize they do realize now they can’t increase the rates because that would really bring the expansion to a halt essentially.

Jim:
Which is bad.

Keith:
I would say is, I don’t think that this is necessarily a bad thing. I think as we started, this is bad.

Jim:
I think a halt is bad.

Jonathan:
We started to slow down as conversation with this as a natural ebb and flow of a business cycle and of the national growth. The reality is we cannot just say, Oh, we don’t want to see a an expansion come to an end. Therefore we will make interest rates for housing three and a half percent. The reality is this is going to impact every single purchasing decision for everybody who owns a home who has a three and a half percent rate, who can never move again in the future. When we’re at seven and a half percent interest rates, you’re not going to have people taking equity out cause there’s not going to be equity to be taken.

Keith:
…really bad.

Jonathan:
We’ve run the course. But speaking of impacting I, I’d say that, you know, just for me it’s amazing the amount of data and variables and information that you and your team are digesting on a regular basis. And really the, the, the forecast that you’re making and information you’re putting out there has huge impacts and how many hundreds of millions of dollars are invested in the economy. And so, I mean it’s really, you know, it’s, it’s really just, I mean we would, we admire what, what you’re doing. So kudos to you. That being said, you know, you deal with a lot of details and this podcast is ‘Sweat the Details’. So what’s one detail that you and your team are really intently focused on on a regular basis? Whether it’s a statistic or whether it’s something that you’re, that you can work with within your team. But I’d love to hear your thoughts on that.

Danushka:
I think the biggest issue that we are actually focused on is affordability. That across the board, across the country, you know, that is an issue. I mean, I live in Washington DC Metro area and I am in the market to buy a house right now and I’m just flabbergasted like how much like expensive it is there and for you know, for most people who has good incomes and if they can’t afford a home, I think there’s something really sad like you know, really upsetting about that. Right? I mean you, everybody, people are go to college, get a job and they’re still cannot if they can water their parents’ basements and get married and have children and get to buy a house, I think affordability is the biggest thing.

Danushka:
If you do actually track it at the national level and right now, you know, it’s like half the housing stock is affordable to somebody who’s making the median income at the local levels. It is like, it is a staggering figure, right? So it’s like how do we make these homes more affordable? It’s a question that we continue to ask and it’s, there’s no easy answers to that. You know, in regions such as the West, like San Francisco, like if you’re making $120,000 you are at the poverty level, which is crazy. And then people in that area, it’s like, you know, there might have to be renting lifetime renters and not be able to afford a house there. So affordability is, I think the biggest thing that we actually really focused on this year and in the next few years.

Jim Duncan:
Well, I’ll say thank you so much for taking the time. It’s been a phenomenal conversation, really enjoyed it, depressed me a little bit, but you know, I learned an immense amount. So thank you so much for your time.

Danushka:
It’s been a pleasure.

Jim:
Thank you, Danushka. I appreciate it.

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