410 | Q3 2024 Jacksonville Real Estate Market Update

Join us for JWB's Q3 2024 Jacksonville Real Estate Market Update. We'll be joined by Gregg Cohen, Co-Founder of JWB Real Estate Capital.

Here's what we'll discuss:

• Current Jacksonville real estate market pricing, rents, and months of inventory (MOI)
* Interest rate expectations, and how they should affect buy or sell decisions
• JWB company stats and Key Performance Indicators

You won't want to miss this opportunity to spend some time with one of JWB's owners and learn more about how you can take advantage of the Jacksonville real estate market.

Join our real estate investor community LIVE: 
https://jwbrealestatecapital.com/nyai/

Schedule a Turnkey strategy call: 
https://jwbrealestatecapital.com/turnkey/ 

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Transcript

Pablo Gonzalez: 0:00

Today is the grand puba of them all. The biggest show of the quarter. Some might say the greatest show ever. When GC takes all of the data, puts in some perspective, and brings you the quarterly news. Market update. You

Gregg Cohen: 0:16

ready to

Pablo Gonzalez: 0:17

go?

Gregg Cohen: 0:17

Oh baby, I was born. Ready.

Pablo Gonzalez: 0:19

Let's go. Especially ready today. Let's go. Welcome everybody to your weekly edition of the Not Your Average Investor Show. I'm your host, Pablo Gonzalez. With me, as always, the guy that I affectionately like to call GC because of his genius concepts. Because you know how to generate cash. So we're going to talk about that today. And, uh, You're a great co host and your name's Greg Cohen. Say hello, Greg. Well, hello everybody. Fantastic to be with you today. Oh man. You know what? I don't have up here. I don't have the chat. And you know what? If I don't have the chat, you know what? It doesn't allow me to. Did you see what the roll call meeting? We got the Let's see. We got Joanna welcome and everybody in the house. She's our community manager. Reach out if you got any questions. We got the ring yesterday in the house through Barnhill. We got the MVP in the house. Lee Bishop. Lee Bishop sent me a text saying he's taken over a. masterminds podcast as a, as a host from now. And I can't wait to hear about that.

Gregg Cohen: 2:04

Is it like a hostile takeover? I come in and

Pablo Gonzalez: 2:07

he's just the MVP of it all. if like you can be hostile with bear hugs, all right. Who else we got in here? We got the gun. El grande amigo, Bill Shields. When I started as Bill Shields, good to have you. We got milady in the house. Good to have you back. Billy Green. Good morning from the figuratively literate mountains of Colorado. We got our leadoff hitter batting for today, John Henning, John Henning in the house. We got the early bird checking in Mr. Dean Curry. We got Chris Lee from Fernandina Beach. We got Laila Powell back in the house, Laila, Laila, Laila joins us for the big shows. Of course. Lots of Jada. We got, we got, uh, Jeffrey Bolton, Bolton.

Gregg Cohen: 2:50

Great to see you, Jeff.

Pablo Gonzalez: 2:51

From Brooklyn, California. We got Kyrie White fired up. Kyrie White. Kyrie, Kyrie. On our team. I was way off. Sorry,

Gregg Cohen: 2:59

Kyrie. Is here and making some noise. Appreciate the whole team being here.

Pablo Gonzalez: 3:02

Including Kaitlin Kitchens in the house. There you go. And our regulars, Gary and Rosalind Riley saying good morning, everyone from Murrieta, California, we regard you. We got Charity Graham is back. Good to have you, Charity. We got the Maven from the mountains of Denver, Ms.

Gregg Cohen: 3:19

Leslie

Pablo Gonzalez: 3:19

Wilson. We got Allie King, superstar of the Not Traverse Investors. You don't know what it is. today. It's Allie's birthday. Happy birthday. That's how we celebrate, baby. we got the shaman in the house, Nadeem Shah with a good morning. Good afternoon from the West coast. We got Tony D up in this house. Tony. Good to see you, buddy. Good to see you. Anthony did. Uh, we miss you, buddy. We got Eddie Harris from hot Atlanta. We got Mark Norman back in the house. Good to have you back, Mark. we got the patriarch and matriarch of the first family, Ken and Carolyn million. We salute you. We got Eugenio Maslowski saying, hola, Pablo. Hello, Greg. Eugenio was a star at our, at our meetup. We got our favorite name to pronounce Aaron O'Neill into the lights. Aaron. Love to say your name as always. We got Kevin O'Brien. Saying hello from Rhode Island. From Rhode Island. Rhode Island. Kevin, good to have you at the house. Good to you, Kevin. Luckily Irish to you, my friend. We got Kate, Kate Sutherland. All right. Love to have Kate here, instrumental to the building of the Not Your Avenue Investor Show and the community. GC these quarterly updates. Man, you're always prepping for these things. It is the best attended show that we have. It's the most downloaded on the podcast. You know, ahead of time, you're going to hear some news out here, some data with perspective, but you Generally like to kick off with a welcome for the team and everybody. And I'm going to let you let you do your thing.

Gregg Cohen: 4:40

Absolutely. You know, it is such a special blessing to be able to have the platform that we have, the community that we have to be able to share these thoughts. We now get to serve over 1600 investors. They come from all over the world, 49 States, 13 different countries. The only state out there that we don't have an investor is West Virginia, by the way. So if you know anybody in West Virginia but we're just so blessed and I always want to take a minute just to say, thank you. Thank you for you. Thank you for being here. Thank you for being a JWB client. My entire team is so motivated and thankful that we have the opportunity to serve you. And today is one of the ways we get to serve you by taking all the stuff that's going on and trying to make it easy to understand actionable so that you guys can make wise decisions to set yourself up financially.

Pablo Gonzalez: 5:28

all right, GC. So, Again, this is if you are a new client, right? If you are thinking about investing in jet in Jacksonville rental properties, this is very, very pertinent information for you. If you are like me or our hundreds of community members that have taken the leap or growing a portfolio Jacksonville, this is news that you want to hear. And, what we also know is on this call, we also get a bunch of people. Local Jacksonville sharps, the people that are active in the real estate market here in Jacksonville, the realtors, the flippers, the wholesalers the whole Jacksonville ecosystem tunes into this one. We got some, we got some news for you, Jacksonville ecosystem too. So we welcome you hope you, Make a habit out of this. do you see, we're ready to get started. Let's do it, baby. Let's do it. This is. The Jacksonville real estate market update. Go for it, bud.

Gregg Cohen: 6:14

All right. So, I always try to take a minute to think about what's going on in the world. What are we all thinking about? Because if I can help kind of take some of that noise and break it down, it's going to help. Everybody make better decisions. So that's really the focus of this presentation. And I did want to offer, if anybody would like a copy of this presentation if you're not a JWB client yet, just go to chat with JWB. com and you can request it from our team. If you're a current client, reach out to your JWB portfolio manager. We're going to make all this available for you so that you can digest it and continue to learn from it. So. But as I start to think about all these things that are going on in the world here, I'm thinking about headlines such as the election, right? What happens to housing in an election year? Then there's, there's noise on the Interest rates, interest rates have been higher than we all wanted. And that happened real quick and it stayed longer. So what does that mean about buying a house or investing in real estate? And the one that's making more and more noise over the last You know, a couple of months and what I would expect to see even more noise going forward is this sales slump that we're hearing about in real estate. And we're also hearing about inventory rising. And if I am sitting in the seat of a potential real estate investor, I am starting to get scared. This noise is creating fear. And I think that there is a lot of fear right now because of The amount of noise I've noticed that real estate seems to incite fear. These headlines start to incite fear as we've kind of delved into this over the last four years. But right now it just seems like a lot. And there's a great quote that I wanted to share with you. It is, if you want to be greedy, excuse me, you want to be greedy when others are fearful. You want to be fearful when others are greedy. It's that simple. And the man who said this was of course, Warren Buffett. Warren Buffett is the CEO of Berkshire Hathaway. Absolutely regarded as one of the best investors of all time, and his bank account would solidify that he's worth a cool hundred and thirty six billion.

Pablo Gonzalez: 8:24

I've heard of him.

Gregg Cohen: 8:24

Yeah. Yeah. The Oracle of Omaha. He's actually a very generous man as well. And so when I hear that quote, I, To me, I don't want to be greedy. I want to learn from this man. But when he talks about you want to be greedy when others are fearful, what I take from that is you want to be ready to take action when others are fearful. Because we have to understand that fear creates Inactivity. That is the easiest thing to do when we're scared. And when we're hearing all of these headlines, we're hearing all of them largely at the same time right now, it's very easy. to go into this shell of inactivity. But what we have to realize and what I want to share with all of you is that there's a real opportunity cost to finding yourself in this inactivity place. And I also started to think, well, you know, I've been investing now for over 18 years. There have been other times when I've read headlines. So when else have we as real estate investors been fearful? When else maybe did we sit on the sidelines and how did that turn out? Well, there's this beautiful thing on Google, by the way, that I, you all, I found this like six, nine months ago, as I was starting to prepare for these presentations, you can actually go back and see what the headlines were on Google during a certain time period. So it comes in handy when you're starting to think about Topics like this. When have we been fearful? Well, it didn't take me too long to go back in the annals of Google to find another time where there was a headline of impending doom in the real estate all

Pablo Gonzalez: 10:05

the way seven months back,

Gregg Cohen: 10:07

December 14th of 2023, a real estate investor, our own kind warns of the U S is entering the greatest correction of his lifetime. And the correction will be at. Epic. Epic. Levels. Sounds like an average real estate investor. Well, yeah, you might say that because what actually happened since December 14th of 2023 is that Jacksonville home prices have gone up about 11, 000. We've appreciated 3. 1 percent as a market and that was supposed to be the greatest correction of all time. Epic. Epic proportions. Okay. So then I was like, well, let me go back again. Let's see another reputable. source of information and see what the headlines were. Well, I went back a year in 2022 Newsweek said, is the housing market following the same pattern as the 2008 crash? If you really want to create some fear reference, the 2008 crash, right?

Pablo Gonzalez: 11:04

Yeah.

Gregg Cohen: 11:05

Okay, so that, that happened then. Well, let's see how that one matured here. Well, Jacksonville home prices, of course, have gone up since then about 28, 000 for the median home sales price. That's 8. 4 percent home price appreciation since that prognostication.

Pablo Gonzalez: 11:22

What a, what a crash.

Gregg Cohen: 11:24

So, we won't stop there. Okay. Let's go back a year before and see where our headspace was. Well, guess what? Markets Insider said, Rich dad, poor dad. Author, author, Robert Kiyosaki. Fan favorite here on the Nosh Rap News Show. Who I credit with writing the book that changed my life. It's like, you know, Robert Kiyosaki and a lot of other. Folks out there expected a real estate market crash and an economic crisis. Well, let's just see how that one turned out. Since then, home prices have been up 42, 500 since then. 13 percent home price appreciation since 2021. So then I was like, okay, well, let me go back again. I know there was a lot of fear during the pandemic. Let me just see a headline, you know, March 17th of 2020. Yeah. Is a housing bubble on the horizon from National Mortgage Professional? Well, let me see how that one is aged. You guys kind of get the story now. Jacksonville home prices have been up 123, 000 since. 51 percent home price appreciation since March 17th of 2020. So pause for a second here because You're seeing all, listen, the pandemic has been a unique time and people have not been through that before and people didn't really know how to measure the real estate market during this time.

Pablo Gonzalez: 12:41

Yeah.

Gregg Cohen: 12:42

It, it wasn't easy to do.

Pablo Gonzalez: 12:44

Yeah.

Gregg Cohen: 12:44

It makes sense that they didn't know how to

Pablo Gonzalez: 12:45

call it post pandemic.

Gregg Cohen: 12:47

That's right. It was a natural, it's a natural thought to see home values going up before then thinking we're in a pandemic and then thinking that home values were going to go down. So I, I kind of understand it. So then I started digging a little bit more. Let's keep digging, baby. So then I went back to time when it was pre pandemic. September 24th of 2018. Realtor. com. Housing slowdown. Softening. Whatever you call it. It's real and it's here. It is real and here's what happened. Oh my gosh. So let's see how this one has aged. Not well. Not well. Jacksonville home prices are up 141, 000. 63 percent home price appreciation, you know, but it wasn't just 2018. I went back one more time. Can you guys start to see a trend that's developing here? Right. October 6th of 2015 CNBC writes an article housing today. A bubble larger than 2006. Again, tapping into those nerves. Tapping into the nerves, right? All Jacksonville home prices have done since then. It's gone up about 190, 000. They've over doubled. They've more than doubled here. And the, these numbers kind of like, Lose impact after a while, but think about how much a decision that might put an extra 30 or$40,000 in your financial wealth portfolio in one year can mean not just for that one year, but as that continues to grow for 5, 10, 20 years, these decisions. that were not made this inactivity that was not made really had big consequences.

Pablo Gonzalez: 14:24

Anybody that's been sitting on the sideline at any one of these moments thinking whether it is, I don't think it's time to invest yet. It's not the right time. Or they've been sitting on the side and renting thinking, I don't want to buy my home yet. It's not the right time. This has cost a lot of people. I was one of those people in 2014, 2016, 2018, listening to this. So you're talking about all this stuff. And I'm like, it's putting me right back into this moment of, of fear, less confidence, inactivity, right. And just sitting on the sidelines.

Gregg Cohen: 14:54

Absolutely. And what I can offer to all of you is a different approach. Instead of this approach, which we recognize there's a pattern of fear creating headlines. We, we realize that, listen, when you're trying to instill fear talking about a time that was really painful for our entire economy, the entire world was the 2008 real estate crash and the great recession, tagging it to those things creates a lot of fear. But what I can offer for everybody is a different approach and that's, that's based in data and perspective. It's become one of the themes of this show, because when you have data and perspective, you have less fear, you have more confidence and you're able to take action and taking action at a time when other people are fearful, according to the Oracle of Omaha, Warren Buffett. is a great strategy. And that's one that served our clients very, very well.

Pablo Gonzalez: 15:48

Cool. let's go fear by fear of what's happening on you. You mentioned the headlines today, right? So first one, I think top of everyone's mind, this idea of real estate values May or may not drop during election years. I was prayed to that one in, in a previous version of Pablo. So

Gregg Cohen: 16:04

what are we looking at GC? Well, so the common thought is that, listen, there's a lot of potential changes when there's a presidential election, our leadership in our country can change. Ideology strategy can change. People don't know where it's going to land. And the thought process, the myth out there is that You know, buying a home is a big decision, and the myth is that people will just stop making big decisions because they don't know how it's going to land. And if people stop buying houses, if they stop making a big decision, then that would lead to prices dropping. However, the data on this one could not be more contrarian to that myth. Right, so I'm showing here from the National Association of Realtors the data here shows that home prices have gone up after seven of the last eight presidential elections. The one election that prices did not go up the next year. Which one was that, Pablo? 2008, the economic crisis. 2008, the economic crisis, because real estate caused the Great Recession. And therefore real estate bore the brunt of the great recession. But what we are seeing year in and year out as real estate performs more like it has for the previous 40 years to that is that normal real estate, given a lengthy period of time goes up. In price. And you're seeing that as we get farther away from 2008, we're going to realize that it is more and more of an anomaly, not the norm for real estate.

Pablo Gonzalez: 17:32

Yeah. And as a Kyrie is very usefully pointing out here in the chat, national real estate is great. local real estate knowledge is what really moves the needle. So let's talk about Jacksonville.

Gregg Cohen: 17:41

Well, Kyrie's where it was like, we're sharing the same brainwaves there. So what I wanted to do is take it from national and go Jacksonville based and all this data here shows you how Jacksonville real estate has appreciation. It has appreciated. From an election year to the year following, and it goes all the way back to 1984. And what you can see here is that in 10 of the last elections, Jacksonville home prices have gone up and the rate of appreciation is actually quite high. The average appreciation rate is 6. 8%. The historical average appreciation rate in Jacksonville is 4. 9%. So data plus perspective here, listen, the real estate markets are going to perform largely the way they were going to perform during that year. regardless if there's a presidential election or not. And the thought that home values would go down because of a presidential election is just not real, according to the data.

Pablo Gonzalez: 18:44

Got it. Something that was very real to me in my head in 2014, listening to those headlines, when I had first invested with JWB, got my first payout, decided to re up, decided to sit on the sideline and not continue to compound my interest. You have disproven this idea that, hey, not just does real estate go up during elections, but if you want to look at the data, it actually goes up higher than the average appreciation rate after the election. But that's not what you're saying. You're just saying, Hey, don't expect it to not go up during the election, even though everybody is paralyzed with game changing election forever.

Gregg Cohen: 19:20

Exactly. All right. So we can put that fear to rest. What's the next one you see? So the next fear that we're going to dive into is that high interest rates that we have been experiencing as a country for largely the last two years, high interest rates have led to a sharp sales volume decline. You're starting to read headlines like sales volume has fallen off a cliff. And what's going on here is This isn't the lack of data is the problem here. It's the wrong perspective because a lot of these articles are referencing sales volumes during the pandemic. They're comparing, let's say, the year 2021 of sales volumes to the year 2024 of sales volumes. And that's just the wrong perspective because in the pandemic. Everything was bonkers and home prices went way up, but so did sales volume. And so if you compare 2021 to 2024, on one hand, you're going to get these crazy percentage declines. like we're seeing on the slide here. In 2021, we had 22, 000 sales from January to July in Jacksonville. And in 2024, we have about 17, 000. So if you are writing a headline or thinking about a talking head that you want to be on, that's going to generate interest and eyeballs for your news program, you're probably going to reference this stat or something like it, which is that. Sales volume is down 23 percent from 2021 to 2024. But it's the wrong perspective because nothing was normal during the pandemic. What is more telling is to compare sales volume and other elements of the real estate market to pre pandemic times. That's why referencing the year 2019, is so important, and you'll see me do that a lot. It is more telling. And what is getting no headlines right now, and no talking heads are talking about it, is the fact that actually, in Jacksonville, Florida, sales are up. From 2019 to 2024 from January to July, it's about 2 percent up. But do you think a headline about 2 percent home sales growth would attract many eyeballs right now?

Pablo Gonzalez: 21:43

Probably not. Probably not getting a lot of clicks.

Gregg Cohen: 21:44

No, no. And I don't hold it against the media. These things, you need an expert who has been around to understand these things. But you can start to see what is convenient for narratives, the convenient narrative to be forthcoming versus what's reality. And I do think it's important to compare 2023 to 2024, and if we compare 2023 to 2024, you'll find that we're down about three and a half percent of sales volume from 2023 to 2024.

Pablo Gonzalez: 22:14

Okay.

Gregg Cohen: 22:14

Three and a half percent. Okay. Interesting. So that's a data point. We gotta think about this, get a little bit perspective, because what has been going on for the last two years?

Pablo Gonzalez: 22:25

Well, interest rates have. astronomically shot through the roof in a way that we haven't seen in our lifetime.

Gregg Cohen: 22:30

Exactly. And if interest rates shot up like they did at the fastest rate in the last 40 years, that's a shock to the system because interest rates affect monthly payments. And if all of a sudden your house becomes 30, 40 percent more of a cost because of interest rates, you would expect that people would take a pause and maybe not buy, right? Not only did interest rates do that two years ago, but they have stayed higher longer. And the longer interest rates stayed higher, you would have expected that would have had a dampening effect on sales volume. The more people stay on the sideline. Exactly. Exactly. What I didn't put in the stat here, which is really interesting is that Sales in July of this year, just this month, are actually higher than sales were in July of last year. Oh, go figure.

Pablo Gonzalez: 23:21

Yeah. Okay. So, what you would have assumed is that you would have, you would have seen that high interest rate environment start to really tamp down sales. Yeah. So, the right perspective here on this sales part of this is that sales have been incredibly resilient. at 7 percent plus interest rates for the last two years. And that, the fact that we're down three and a half percent to me screams resiliency, not fear. But then you might be saying, well, okay, we're down three and a half percent on the number of sales, Greg, to me, that doesn't line up with home values potentially going up. When would a time be where Home sales volume has gone down, but home prices have gone up. And as you see on the slide here, I didn't have to go back very far. You didn't have to use that way back machine. To find a time when that happened, because that happened last year. Just nobody was talking about it. Sales were actually down 15 percent last year, sales volume. But home prices in Jacksonville, Florida were up about 2 percent year over year. Might surprise some of you. So we don't need to be afraid that we're down three and a half percent for sales volume. Resiliency is actually what has been happening as far as sales in Jacksonville, Florida, and across the country. And I pulled stats just to give you again some perspective here on the number of home sales that we have each year, going all the way back to 2017. You'll see that we were on a trajectory of like 26, 000 26, 27, 000 bumped up to 29, 000, but you see sales explode 2020, 2021, right? You starting to see things retreat. And we all know that that wasn't real. It wasn't indicative of what sales volume really should have been there. so you're seeing now sales in 2023, we're about 28, 29, 000, and we'll be somewhere around there in 2024 as well. So the data plus perspective on this one, as far as this so called sales plummet falling off a cliff, is that sales volume has actually been very resilient. It's been resilient now for the last two years at 7 percent plus interest rates. And the best way to, to show the, the high floor that we have here in Jacksonville, because of population growth and because we have low supply of housing is to just look at what house prices have done year over year. House prices are up 5 percent from last year to this year. Pretty good. Nobody can figure this out. Nobody can figure out how. Home values still go, still continue to go up, but it Nobody, Greg? Nobody except the Not Your Average Investor community, right? Yeah. People are just, you even read the articles and they come strong and they're like, yeah, sales volume is down 23 percent and then the footnote, they're like, well, yeah, home prices are still up. You know, it's because home values don't care what happened in 2008. Home values are determined by supply and demand. And when you are in a environment where there's low housing supply and you're in a market like Jacksonville, where there's high demand by population growth, you're going to have a high floor and you have the opportunity for high upside for pricing going forward. Yeah. And just a couple of things to add here. It's, you know, we're talking a lot about Pricing, right? Like I think pricing, when I think of it as a, as an investor, somebody that owns these properties, I'm thinking, Hey, are my best times behind me? Do I want to continue to hold on? This is a good period in that time. And. What we preach time over time over and over again here is the idea that real estate investors make the majority of their wealth from home price appreciation, right? So if we're seeing pricing that continues to go up, we're going to want to continue to hold as long as the experience is what we're hoping it is, right? So this is the reason why so many of us get caught up in this, like, Cashflow dynamics, but whether you are in already or you're debating to get in, what you really want to be looking at is, is my home price appreciation safe? Am I going to continue to gain wealth, gain equity as we're doing this, which is why we're hitting so hard on pricing, which is one of these things that the headlines love to mess with. The second thing that I want to say is if you've been a part of these real estate market updates were normally taking questions throughout it, but we've learned that if we do that, we're going to be here for an hour and 45 minutes. So Greg is jamming through this thing. And I'm hoping that you use the Q and a function in the, in the zoom that allows you to it. Cause then I can keep track of it. And Greg will be done here in about 15 minutes and we can go through all the questions that you have. So. I'm hoping that Jag, for example, if you could do me the favor of putting that question about softness and rent in the Q and A, we'll hit that coming up here. She put it in. Milady, thank you so much. So let's keep going, GC. So this is now sales volume going down does not mean that prices are going to go down. In fact, the data has shown that during the biggest haymaker prices continue to go up. And now that it's stayed like these high interest rates have stayed high, This last year has been 5 percent because guess what? People still don't have enough houses, as many as they want in Jacksonville. Population continues to grow. The floor continues to be high because we happen to be sitting in one of the most underpriced, affordable, nice to live places in the United States. And that keeps it going. So let's talk about the next one.

Gregg Cohen: 29:54

Let's do it. So then this next fear, and this is gaining some traction. And so I would imagine you'll start to see this more if you haven't. It's that inventory live levels are rising. And if inventory levels are rising at a very fast pace, this will lead to price declines. So for this one, we need to start off with the right perspective here and understand that as a country, we are severely undersupplied for homes. Realtor. com, the National Association of Realtors, put out a study saying that we were undersupplied by 7. 2 million homes. Yikes. That is a lot of homes. And I wanted to point out that the problem is growing. It's not getting better. In 2024 and in 2023, you started to see building ramp up. New home builders built a lot of inventory, but guess what? We didn't even keep pace with the number of household formations, meaning more new households were formed. then new homes were created. So the problem is still getting

Pablo Gonzalez: 31:02

worse. So the home deficit is rising. Exactly. It's not like we have this giant deficit and now we're building so much that we can start to chip away. We're not chipping away at even the growing, you know, catching up to the speed of growth.

Gregg Cohen: 31:16

Exactly. Got it. Exactly. You can start to see that in this graph. At one point in 2012 and 2013, we were at equilibrium what we would call a People call it a healthy housing market, meaning enough household formations and enough new builds. To support our, our citizens and to support the real estate market. But since then, over the last 10, 12 years, we just haven't built anything, figuratively speaking. And people are continuing to come to this country. People are continuing to be born and grow into new households. And so this is the perspective that this is the starting point for us when we're talking about inventory. And it's not a problem that gets solved very quickly. Inventory levels are rising, they're rising a lot, and guess what? It's okay. It is okay that inventory levels are rising. Saying it another way, we need this to happen. As real estate investors, we need this to happen because If this didn't happen, we would see much higher home price appreciation. And while that might make you happy because you own the property and that would be wealth in your pocketbook, it would be a bad thing for our economy. And it's not a, at some point the music would have to stop and it would be bad for all of us at some point. So inventory levels rising has been expected. It's, it's what we all should want. Now the level that they're rising is what they're talking about in all the headlines. Mm-Hmm. We started at such a low point of what inventory was that the percentages can be pretty scary. I think on the last slide there, it showed that inventory rose 62%. There we go, 62% from last year to this year. So to the untrained eye, you're, you can run a headline and you can talk about how inventories are up 62%, but without the perspective. They're going to draw the incorrect conclusions.

Pablo Gonzalez: 33:05

Let's inject some perspective, GC.

Gregg Cohen: 33:07

So the best thing to do here to understand if we have way too much inventory, if it's rising too fast, if it's like a runaway train is to look at a beautiful thing called months of inventory. MOI. We talk about it every quarterly update. and many times in between the quarterly updates. Yeah.

Pablo Gonzalez: 33:23

MOI is the Travis Kelsey to your Taylor Swift. You put MOI on the map, my friend.

Gregg Cohen: 33:30

It's good. You know, we've talked about Mahomes, how we put the most valuable bundles on there. Yeah. And now we're taking this to Kelsey now. We put MOI on the map. That's good. It's good. so months of inventory are the way to compare Inventory and sales because supply and demand are how pricing works. It's not just one end of the equation. And in months of inventory, track how many homes did we have on the market at a point in time and how many homes sold in the month prior. And history tells us that if we have between six to seven months of inventory, that would be a normal market, meaning that it would appreciate it. Normally, which in Jacksonville is 4. 9 percent home price appreciation, If you have over 7 MOI, that would be an indicator that you should see lower than normal home price appreciation, but not price declines, not depreciation. It might only go up 4. 2%, or 3. 2%, or 1%. The higher and higher you go above 7, the more we need to be paying attention about price declines. But when you're below 6, like we have been for the better part of a decade here, That wouldn't lead to higher than normal home price appreciation. And so, I put the data here for you to see. This is the MOIs that we have seen at different points in time here in Jacksonville and the corresponding home price appreciation. Since JWB has been in business. That is true. That is true. We actually have MOI dating back to 2006. And it's been really interesting to look back at those days because, guys, I know of you, a lot of you are just starting with your very first rental property. So, I think about the market that I bought my first rental property and what happened afterwards. And, you know, I didn't know what I know now. it was certainly a fearful time. I bought 40 rental properties in 2006 and then I watched market values go down 2007, 2008. and so. You know, what most people don't know about that is that those investments have turned out to be investments. I still own that, right? I own 400 other rental properties. And that's why I'm letting you know that I've been down this road before. And I want you guys to be able to act with confidence here. But 2007, we actually had 18 months of inventory. So I was 23 at that time. I had bought 40 rental properties. I didn't understand MOI in 2007 and I watched home values go down 13 percent the following year. Now the punchline there is that buying and holding works because Those same investment properties have turned out to be excellent investments, and it's hard to lose when you buy real estate and hold in the long run. But that's what a real declining market looks like in terms of MOI. 2008, we had 16 months of inventory, and we saw home values go down 9 percent the following year. But then things really started to change. Nobody built anything anymore. And we continue to have population growth. Sales increased. That inventory got burnt off. And from 2013 to 2016, we averaged under six months of inventory. We averaged four and a half months of inventory. And We saw about 9 percent home price appreciation on average through those years. 2017 to 2019, we averaged three and a half months of inventory, and we still saw over 7 percent home price appreciation. And then the pandemic happened. And in 2020, 2021, again, not normal to see 1. 9 months of inventory and not normal to see 18 percent home price appreciation on average over those years. What you've seen since then is that inventory levels have been rising and you've seen months of inventory starting to rise as well. So this doesn't surprise, this shouldn't surprise you, it doesn't surprise us. Right. This is normal. We actually need months of inventory to get to a more healthy equilibrium or else we're going to see runaway home price appreciation and lack of affordability and a lot of other problems. And so here in 2024, our average MOI has been 4. 1 months of inventory. We're continuing to go up. And again, our home price appreciation has been 5%. So the data with perspective on this one is we have to look at both sides of the equation here. And the best way to look at both supply and demand is MOI, months of inventory. Months of inventory is still well below six to seven months of inventory, way below any level that would indicate imminent price declines, not even on my radar. Inventory will continue to rise. And sales will continue to rise over the next year. And prices likely to continue normalizing. But I do see significant opportunities for home price appreciation, specifically in the Jacksonville, Florida market.

Pablo Gonzalez: 38:27

Got it. You see, you know, I love this chart because I think that there's been all these moments we point at MOI and it's been such a great indicator, right? Like you look at that 2020, 2021, 1. 9 and 18 percent increase. I remember when COVID broke out and all the headlines were saying, Real estate is going to crash. And you were pointing out this, like, 5, like, it's not going to crash. We do not see a crash. We see it, you know, either staying stable or going up. And look what happened. It ended up, you know, coming way down. Home price appreciation started going way up. But at the same time, you also in 2023 said it's 3. 5. Months of inventory, and I'm not going to say that it is going to behave like 2017 2019 because it's a full picture right to 2023. It was three months of inventory and historical rates of mortgage going up. Right. Interest rates going up, completely suppressing demand. And even under that crazy suppression of demand, prices still continue to go up, buoyed by MOI. Now, these rates have normalized, it's back, it's, it's increased even more, the MOI, but home price appreciation has actually gone up because True to form when it's below six, it's still you know, predicted to be above average home price appreciation, even in the weirdest of times. So, you know, like I love this. I love this kind of like systematic understanding the, the fear of elections. Hey, data shows that elections do not make real estate go down. In fact, they go up. Understand this fear of sales velocity going down. And hey, sales velocity in a vacuum doesn't make real estate prices goes up. Supply and demand makes it go up. Right. Understanding this idea that, hey, there is rising inventory. We've been pointing at MOI as like the big factor of, is it going to go up or down? And we still have a whole bunch of room before we even get to historically average MOI and average home price appreciation rates. So that's, you know, you've done a really good job of like taking all this fear that's in the system, giving us data plus perspective, allowing us to see through it, giving us the tools to take action. Now let's talk about what is the actual market look like today? Give me some, give me some not

Gregg Cohen: 40:43

headline driven news. There you go. I like this too, because You guys who continue to tune in every single quarterly update, we see some of our friends in the, in the chat that don't get to make it every single week. I want you to just have this snapshot. So, you know, quarter over quarter, you can kind of benchmark yourself and benchmark us as far as the Jacksonville real estate market. So here's a snapshot you'll see on the, on the left here, that's where the, the, the chart is. So you kind of see where Jacksonville home prices are compared to what would be, you know, The predicted price, you, if home values went up at that average appreciation rate each year, they would be at that red line. And we're kind of messing around with the red line, the blue line, our actual prices. They're just kind of dancing, hitting that red line and going up. That's very normal. Sometimes the blue, the red line. Data points go under the red line, and sometimes they come above, right? But what you don't typically see are large swings up and large swings down. So this is exactly what we predicted a couple of years ago. And last year as well, we said, you know what? We expect prices to normalize. Normalizing means dancing around that red line in that graph. And that's exactly what's happening. Overall, here's just the, the, the stats of the actual real estate market as of July 2024. Median home sales price, 366, 000. Our home price appreciation is 5%, as we mentioned. Median days on market, 34 days on market. Not a lot. Contrary to what you might think from reading some of these headlines. 34 days is a, is a great market to buy and sell homes. I

Pablo Gonzalez: 42:14

mean, it makes sense. I, like, I, I get the sense that we've talked about this before. Sales velocity is down because there's not enough supply in the market. Exactly. We have to be on to that. So, so as soon as you put something for sale, it sells because people are, people need it, right? Like we're under supplied.

Gregg Cohen: 42:29

Exactly.

Pablo Gonzalez: 42:29

Yeah, exactly.

Gregg Cohen: 42:30

And so these are the real numbers. We have a little under 11, 000 homes in the Jacksonville real estate market as of August 1st. We had about 2, 500 sales in July. Gives you 4. 3 months of inventory. And of course the foreclosure rate's not even something to be concerned about, but people have asked in the past. A normal market has somewhere around 10 percent of sales as being foreclosures. We're at 2. 5%. Uh, So, and we've been pretty steady there this year. Got it. You

Pablo Gonzalez: 42:56

know, to me, the thing that really sticks out is as sitting on the seat here of the Natural Average Investor Show, co host with a great co host like yourself, GC 366, 000 medium home sales price. It's funny how my brain has shifted from having left Miami five years ago And five years ago, if you would have told me a median home sales price, it was 366, 000. I'd be like, Oh my God, give me four. Right. But like, the truth is that home median home sales price in the five years that I've been sitting in the seat has gone up significantly. So like when I peg it to like, Oh man, I feel like when I moved here, it was like 200, 000. And now it's gone up that much. It's almost shocking, but it's also just like, Tailor the times, but if I were to zoom out and think median home sales price, 366, 000, I think the median home sales price in the United States is north of that, right? It is.

Gregg Cohen: 43:45

Absolutely. Yeah.

Pablo Gonzalez: 43:46

So it's still, it's still like, as like I've put on like my lens of a local, but like I still think of that and I still think of like how much I would have killed in so many other markets to have a median home sales price of 366, 000 and it still seems shockingly affordable.

Gregg Cohen: 44:00

Well, and it's probably even easier for many who are listening right now to. see this as very undervalued because a lot of our clients come from California, New York, Virginia, these very high priced markets. You all probably look at 366 and that's one reason you started to reach out to JWB and say, Hey, listen, I want to invest here.

Pablo Gonzalez: 44:18

A hundred percent. Right. It's

Gregg Cohen: 44:19

affordable.

Pablo Gonzalez: 44:20

Yeah. All right. So now let's look at, you sent me some incredible stats the other day of, of just like, I told you to put these things on the presentation because people need to hear these.

Gregg Cohen: 44:27

Man, I've been in the lab lately and I've been comparing the Jacksonville real estate market to. every other market in the country. And there are some amazing claims that we can make as a Jacksonville real estate market that other markets in the country just don't have. And that word only to me is such a strong marketing word.

Pablo Gonzalez: 44:45

You know, you know, I like to be different. You

Gregg Cohen: 44:47

know, yeah. Jacksonville is the only real estate market in the country that has these four criteria. Prices below the U. S. median, Rent price appreciation above the U. S. average, home price appreciation above the U. S. average, and population growth above 2 percent over the last five years.

Pablo Gonzalez: 45:06

The only market in America that can say those four things at the same time.

Gregg Cohen: 45:09

Absolutely.

Pablo Gonzalez: 45:10

Underpriced. above average appreciation across rent, home price, and population growth. You

Gregg Cohen: 45:16

know it, baby. That's pretty good. That's Jacksonville.

Pablo Gonzalez: 45:18

Yeah.

Gregg Cohen: 45:19

So Jacksonville home prices are 13 percent below the U. S. median. Jacksonville has the fastest growing median incomes of any major city in Florida.

Pablo Gonzalez: 45:30

That's, that's awesome. They

Gregg Cohen: 45:31

didn't know

Pablo Gonzalez: 45:31

that. Yeah, because again, it adds to this like, sustainability of the, of the buoy, right? Exactly.

Gregg Cohen: 45:37

Exactly. We're the fastest growing population of any major city in Florida, and our population has grown over five times faster than the U. S. over the past five years. And this is before a lot of the stuff we spend time on the show talking about what's coming next and downtown Jacksonville and all of the great businesses that are moving here. This is just what's happened in the past five years and what's happening right now. So even more to get excited about going forward.

Pablo Gonzalez: 46:06

So great snapshot of a very, very healthy real estate ecosystem underpriced homes, above average rent appreciation, above average home price appreciation, above average growth along with all these like beautiful trailing indicators of, you know, where are we at in comparison to the median. The fastest growing median incomes, which to me is, you know, like adding to this like level of resiliency, the, the, the lifestyle is going to get to keep up with this and people is now we're not just betting on people coming from out of town, like Miami and Orlando, we are betting on people here, continuing to grow and continuing to demand more and more in home prices. So do you see what's, uh, what's the outlook, man?

Gregg Cohen: 46:47

Yeah. So just yeah. Sharing with you. I think Jacksonville real estate prices are likely to increase 15 to 20 grand next year. That is just based on normalizing of the market. That's taking our price right now and adding 4. 9%. so it's very likely that home prices are going to go up in 15 I think people need to hear that. Because that means the same property is likely to cost 15, next year, just like right now is 15, 000 to 20, 000 higher than what it was one year ago. So this is where we see the market going.

Pablo Gonzalez: 47:23

I mean, I buy a whole bunch of stuff on prime day because it's like 15 bucks off, right? Like this idea of, of understanding that this is going to go up 15 to 20 K and that being something that drives urgency, whether you are somebody like Venice who joins us was a young person that maybe she's thinking about buying a home in Jacksonville or an investor that, that is here either looking to expand their portfolio JWB or thinking about investing in their first portfolio JWB 15 to 20 K. price reduction versus what you would be doing next year. That's the first time that you've ever on one of these market updates shot a shot like that. Like, I don't think you've ever given like a, like a concrete number of like, how much do you think it's going to go up over the next year? So I think that's pretty telling you're a, you're a pretty conservative dude. And what I think of is like, okay, so there is. Yeah. Wait till next year is that, is that the full opportunity cost?

Gregg Cohen: 48:17

That's a very good point. Because if we started where we started in this presentation in the beginning, it was about fear leading to inactivity, leading to opportunity costs. So I want to define what the opportunity cost is of one year of inactivity in the Jacksonville real estate market. And it's not just that 15 or 20K, what we have to understand is you're not only missing out because the same property likely will cost at least 15 to 20K more, you're also missing out on the equity gain that you would have had if you had made that decision one year earlier. So the opportunity cost actually is 30 to 40, 000 of inactivity in one year. If you like this whole data and perspective way of thinking. And that's a lot. 30, 000 to 40, 000 making that decision to, to put that into your portfolio today and holding onto that for 10 years, 20 years, maybe making multiple decisions and adding multiple properties to your portfolio. That may be the difference between retiring comfortably or maybe not retiring comfortably or having to come up with backup plans to retire comfortably. So 30 to 40 thousands is a lot and I want, and I've just spent so much time on the side, maybe this is why I'm getting a little bit more vocal about it now, is I've been investing for 18 years. And throughout that time, there have been times when my business partners and us here at JWB have felt very differently about how the market was going to perform maybe over the next one year, three years, five years. And we haven't always been loud about it. And I have seen investors make other decisions that didn't make a whole lot of sense. And after now helping thousands of investors, we have generated over 300 million for our clients. Those who listened to us, they might've had to listen a little closer back in the day. It wasn't so loud, but those who have listened to us have set themselves up financially to a place where they've built a better retirement account. They're sending their kids to college. They're able to give to charity like they want. They're able to have time like they want. I've seen all of this. And so helping people step away from the fear. Ask the inactivity, taking action at a time here where data and perspective would lead you to a certain way of acting is something that I want to help all of you do. And. By doing this, I think you're going to make a decision that's going to help you take strong steps towards financial success. The only thing it's not going to help you with is explaining it to the rest of the world. But I've learned in my journey that when I started my company, people called me crazy. And as we've been successful over the last 18 years, they've never called me smart for many years. Only somebody here calls you genius all the time. You call me genius. But for many years, all people called me was lucky. If you're looking for people to call you smart it's probably not going to happen if you're listening to the general public. So that's my way of thinking here. that a decision today can set yourself up financially and the data and the perspective is really, really telling.

Pablo Gonzalez: 51:20

It's an interesting, it's interesting to think of it as opportunity costs, right? Because if I was to say my same example as before, I'm already seeing as faulty because if I'm like, Oh man, if I can get like 200 bucks off of a TV on Amazon. You know, that's 200 bucks in my pocket, but that TV is not going to go up by another 200 bucks the next year. So it really is just that, right? So this idea of like, not getting in now, 15 to 20k below, and, and the fact that you actually gained that 15 to 20k. Doubles the opportunity cost is very, very real. But I think you have even more to this GC. It's not, it's not about being lucky. This isn't like a guess. You have some real thinking about this of like we haven't even spoken about interest rates going down, which the fed has all but tattooed it on their foreheads.

Gregg Cohen: 52:05

It's a very good point. And we as a country don't know how to act in an environment where interest rates are high. And the fed has said they're coming down. There is a huge opportunity as an investor to make smart, wise financial decisions. that will put you in the driver's seat taking advantage of this, but we just don't know it. We just, it's been 40 years since that happened and people aren't thinking about it, but that's the place that we're at right now. Talk us through how you think about it. Well, so I started to put some numbers to this and I'm, what we have to realize is that people make decisions in real estate based on monthly payments. Okay. So when your price is one thing, your interest rate goes up, your monthly payment then goes up. And if we have already seen that we've had roughly 28, 000 sales that will happen here in 2024, to me, that is verifying that people in Jacksonville are comfortable with that monthly payment. And the people who are buying in July largely locked in their interest rate in April, in May. And at that time, those interest rates were six and three quarters, maybe closer to 7%. That's what they were thinking at the time they either put their house under contract or started to get into the house buying process. They started to run their numbers based on those interest rates. Well, that payment at that time was enough. It was affordable enough for people to make the decision to buy a house. So if we start to think about what interest rates can do on a marketplace when they go down and you already have all of this data to show that people are buying at a certain payment, I started to run the numbers and I'm saying, okay, well, what if, you know, interest rates, while they were 6. 75 percent for those folks who were buying in July, what if they came down to 6. 25%? How much could the purchase price rise and keep the monthly payment the same? And home prices could go up significantly then. And I said, well, what if they go down to 5. 75%? How much can home prices rise with the monthly payment being the same? Because people make decisions on monthly payments. And it comes out to another 11%. So, even if you put all this other good news that I've shared with you off to the sidelines, and you just said, apples for apples, how much could home prices rise if interest rates come down?

Pablo Gonzalez: 54:33

Home prices could rise another 11%. On top of the 5 percent that you already expect.

Gregg Cohen: 54:37

Well, I mean, it could, I don't know how much they're going to go up. I'm just saying that I'm expecting at a bare minimum, I feel really good about telling you guys that I see the market normalizing. And normalizing to, if you actually break down the numbers is prices are going to be another 15 to 20 grand or more next year. And then on top of this, this is another thing to consider. You know me, I'm always conservative. Yeah. That's why, that's why. Yeah. Yeah. Yeah.

Pablo Gonzalez: 55:02

That's why. So I'm

Gregg Cohen: 55:03

lumping on like all of the other big things that could be happening that could make 000 of growth actually be more, you know?

Pablo Gonzalez: 55:13

And in your philosophy of under promise, over deliver. I know that. You're what you're thinking to yourself is like, if I'm going to say 15 or 20, I'm going to expect more than this because I sure as hell want 15 to 20 to happen. So you're just kind of like peeking behind the curtain of it's not just normalized, there's also more positive forces that could get it to overperform and therefore you're kind of like showing behind the curtain.

Gregg Cohen: 55:36

I know you guys are going to hold me accountable on this number. And I'm excited about it.

Pablo Gonzalez: 55:40

Yeah.

Gregg Cohen: 55:41

So that's another 40, 000 of potential equity game for homeowners who bought a house today.

Pablo Gonzalez: 55:47

That's a big deal, man. So. give us some advice, GC. You've been coming strong all day. I want you to land the plane

Gregg Cohen: 55:52

forcefully here. Here we go. Here's, here's the deal. Many people are asking, should I invest now or should I wait? You should invest now, right? You've seen the data. You've seen the perspective. We are likely having lower purchase prices today than we would in the future. 15, 000 to 20, 000 of appreciation would be normal from this point till next year. There's a lot of reasons to believe that it could even be higher than that based on the market that you're investing in and based on what interest rates have already been signaled to do. They have been signaled to come down. We would expect them to come down at some point. Properties are already rented with JWB. They are cash flow positive. Almost without exception, you'd be buying an asset that is already rented, has a long term lease in place, and is cash flow positive from day one. It's paying for itself. And then JWB is still doing these incentives. We did incentives in July and we held it over for the next 20 contracts here until those, until 20 properties go under contract and it's still available for those who want to take action. But long story short, JWB is buying down your interest rate so you can buy today with tomorrow's interest rate, which we would expect to come down. Recent JWB clients have been closing at around five and a quarter percent interest. For their JWB investment properties. And I don't want to gloss over this maintenance incentive that we are still honoring. This is four to 6, 000 of maintenance costs are covered by JWB. If you buy three properties, there's three properties there that we would receive, call it. 000 each of us covering your maintenance costs for you. All of these incentives are a factor of interest rates being higher than we all want. And so these incentives are not going to last. As you see interest rates start to come down, you're going to see these incentives go down as well.

Pablo Gonzalez: 57:43

So

Gregg Cohen: 57:44

for all of the reasons that we talked about today, if you are considering investing in a property, today is a great day to do it. If you're not a client yet, go to chatwithjwb. com. If you're a current client, just reach out to your portfolio manager, now's a great time to make a decision. I know you'll be happy you did it.

Pablo Gonzalez: 58:01

Talk up to the decision a little bit more clearly here at GC. This is a current available property, purchase price 225, 000. Are we thinking about like a 30, 35 percent down payment here?

Gregg Cohen: 58:10

Yeah, absolutely.

Pablo Gonzalez: 58:11

is what Jack is asking, like, what is, what is the down payment these days that, that makes a cashflow positive?

Gregg Cohen: 58:15

For each client, it's a, it's a, something we'll work on with you. Many clients are putting 35 percent down. For this incentive, you can actually put 25 percent down and make the numbers work to be cash flow positive as well. How have you not said this before, GC? Keep a little, keep a little, keep a

Pablo Gonzalez: 58:30

little close to the vet. People to get on the phones and be excited. So with that, that's right, under promise, so do it. So with the incentive right now, 25 percent makes a cash flow positive year one.

Gregg Cohen: 58:38

Yeah.

Pablo Gonzalez: 58:39

That's hot.

Gregg Cohen: 58:40

Yeah. So, lot of reasons to, to take advantage of that. So this is a great way. I want to, sometimes we talk big picture here. This is what you'd be investing in. Yeah. either a new construction property like I've shown here. We also have renovated homes. Either way, what you're getting is a return of maybe nine and a half to maybe 10 and a half percent for your rate of return, cashflow positive. You can see the breakdown here of your different profit centers, but over a 10 year hold, what you'll find like every other JWB client that has experienced this is that the largest part of your wealth pie will be home appreciation. That's why it's so important to invest with the right team. Who can help you see what it feels like to own a property for 10 years or longer than that, so you can take advantage of it. And of course, invest in the right market, which is what we've talked a lot about today.

Pablo Gonzalez: 59:30

Love it. Joanna put in the chat here. If you're just like, Oh my God, I got to tell my wife about this. My husband about this. I got to tell my mom, my father, my cousin about this. My friends we're doing a replay tonight. We're doing an encore, not a replay on encore. We're going live. We're about to get into live Q and a right now. We're going to go through all your questions right now. We still have over 80 people here with us. This has been awesome so far. But Joanna put in the chat, there's a registration link. If we just scroll up a little bit, you can get there and it'll be at 9 p. m. Eastern 6 p. m. Pacific at Casa de Pablo. Can't wait. We'll be doing it from my home studio there. But, you know, this is what we're looking at. If you want to go, if you want to get in on this, if you believe this ideas of seeing through the fear and taking action when there's an opportunity, we hope that we've helped you do that. And the next step would be to go to chat with jwb. com or shoot an email out to info at jwbcompanies. com. And of course. If you want a copy of this fine presentation with all the data and all the perspective from GC himself, go to chat with JWB. com and request it from the team. If you're a new client, if you're a current client, just email your portfolio manager like Fritz. I know he's on here right now. And be a part of it and this is your first time joining us. We do this every Tuesday at 1230 tons of information, but you know, go to nyais. com and register or subscribe to the podcast, send it to a friend, but let's get into questions GC. We've got a bunch of good ones here. Let's start with me lady, Jack Chata. She's got a couple of good questions here in queue. First one is, are you seeing softer

Gregg Cohen: 1:00:58

rents? So overall rents are up a year over year in Jacksonville. Rents are up, I think about 2%. Last time I looked at the data. It's a matter of perspective. Are we seeing softer rents than we saw two years ago? Absolutely. Because rents were on fire two years ago,

Pablo Gonzalez: 1:01:12

like 12%, 20%.

Gregg Cohen: 1:01:14

Yeah. Rents were exactly.

Pablo Gonzalez: 1:01:15

Yeah.

Gregg Cohen: 1:01:15

So, you know, a little bit of this feels like things are softer because we became kind of conditioned to see rent price appreciation 5%, 10 percent per year. It's not normal rent price appreciation on average. is 3. 6 percent here in Jacksonville. You go back all the way from 1985. So rents are, rents are normalizing, like home prices normalizing.

Pablo Gonzalez: 1:01:38

Got it. Jen's got a question about she says she's freaked out about the changing weather patterns. How do you, how do you want to answer that? Right? Like, are you worried about climate and weather patterns and everything that's going on affecting real estate in Jacksonville?

Gregg Cohen: 1:01:52

Well, I think it's something to be aware of. And many people have different viewpoints on all of that. So I'm gonna let that be, but here's what I think of as a real estate investor, right? The, my proximity to water would dictate how important it is. And, and then of course there's insurance to cover that. And so for your JWB investment properties, These are not next to water sources, right? We are 30, 40 miles inland. You do have Jacksonville Beach here, but you will not see Jacksonville Beach in any of your in the streets, or the, or the neighborhoods of your properties. And so we are investing in neighborhoods that have been built largely in the 50s and 60s, they are not near you know, significant water sources. They're not downtown. Downtown has a river that goes through downtown. We're not, you know, there's not single family housing downtown. and we're not near the water. So, overall as a real estate investor, I am aware of it, but it doesn't define my decisions. The next thing I look at is insurance. And we actually just had some really great news that we shared on the show as far as the positive trends in the insurance market in Jacksonville and in the state of Florida. But even if you didn't have that,

Pablo Gonzalez: 1:03:06

well, the positive trends being there's new insurance companies coming into Florida. There's more competition. Insurance companies are eager to do business here in a way that they haven't been for a long time. So that's good for the consumer.

Gregg Cohen: 1:03:18

And I also, I want to, I want to give some framework on that too, because let's say that that's the positive things hasn't haven't been happening. Every one of our clients can get insurance on their turnkey rental properties. It was never a place. Sometimes you hear of like on the ocean or on the beach, you can't get insurance, right? Nobody had to worry about that. The insurance market in Florida. for our type of investment properties was still robust. People didn't have to worry about not getting insurance. It was more expensive than we all wanted. So now again, it's a, still a robust insurance market and we're hopefully starting to see some price declines coming in future years.

Pablo Gonzalez: 1:03:53

Yeah. And Jack, I'll say this as somebody who has actually made life decisions based on changing climate patterns specifically moving from Miami to Jacksonville, What I, how I see it is there is the climate is changing. Like there's no, there's no doubt about that in my mind for whatever it's worth. The climate is changing all over the world, right? So California fires are becoming more intense. Canada is having fires, right? Right. Like I think that there's every region in the United States has its own weather pattern that is increasing risk on real estate et al. The unique risk of Florida and waterfront property is truly, truly unique in South Florida. And let me explain. Below Lake Okeechobee, land sits in a, above a porous aquifer where when tides are rising, when sea level is rising due to warming, Then you're not just getting the seas rise from the coasts, but it's also starting to bubble up from under the ground because it's like over a Swiss cheese thing, and you're starting to see sunny day flooding 10 miles inland when it's not raining. It has stuff like that hasn't happened. That stuff used to never happen. It's now happening semi regularly. When storms are coming in down there you know, they've had multiple what you call 200 year storms, which essentially just means there's a 0. 5 percent chance of it happening every year have happened once a year for the last three years. Or two years, at least if don't get me wrong, that is really, really unique. To down there because of that poor soccer for once you get above the Lake Okeechobee. Now, you're on solid ground, right? Like there may not be a lot of elevation But you're on solid ground and you don't have that issue and we have learned to live that way in cities across the world New Orleans learned to live that way Amsterdam's been living that way for a very long time. We have the technology to stop the water from coming in off the coast. We don't have the technology to seal the floor and not allow it to like bubble up from underneath like a zombie in a thriller video. Right? So that is the stuff that nobody can really, really fix. Everything else is kind of like, Same for everybody else. Manhattan has the same risk. All coastal areas have that same, have that same kind of like risk and they're going to have to invest in infrastructure. And then to boot what Greg is saying, right? Like these workforce neighborhoods are not coastal neighborhoods. You're not sitting on waterfront property. Your address doesn't have beach. You are not first in line for this thing. So it is a derivative of a derivative of things that will affect. It just so happens that it's really exaggerated in South Florida. And I like, I would not buy that stuff. Myself personally, it's a reason why I left my hometown. So for whatever, that's a check. All right. Ed Lowry's got a question regarding the importance of localized info. Is there an accurate source of appreciation broken down by Jack's area zip codes?

Gregg Cohen: 1:06:44

You could get that on the multiple listing service. So if you're a real estate agent or if you have access to that you could do that. It'd be a lot of work for your real estate agent putting that out there, but. you know, the, the best data that we use is from our consultant, which is John Burns, real estate consulting, and it's not broken down by zip code level. So, but, but that I would start first with the question that you're trying to answer because the solution that you have there is. It's the information's out there, but somebody's gonna have to do a lot of work to get it. So maybe there's a different way to get the answer for you. It's not so much work for asking a real estate friend of yours.

Pablo Gonzalez: 1:07:18

There you go. Right along Raj, my right along buddy. He's asking Any improvement in construction costs? What's the average construction costs per square foot these days?

Gregg Cohen: 1:07:26

Oh man, way too much, way too much. No, we, we haven't seen any relief in our construction costs for, JWB properties. I see it every single month. I sit down in our sales cards meeting where we go over the profit and sale of every house that we sell. And It's like Mike Tyson, just sitting in the ring with you, just punching you left and right, right hook and left jab. So no, we haven't seen any, decrease in pricing or any relief. Keep hearing about how it should be happening. Maybe it's happening for everybody else who builds four in our houses a year, but hasn't happened for us.

Pablo Gonzalez: 1:07:56

One of these days, buddy. One of these days. Venus I talked about her earlier. So young person moved here is excited about real estate in Jacksonville. She's asking, Hey, Pablo and Greg, quick question. Have there been any new regulations in Jacksonville in the past few months that will, that positively will fully impact the real estate market? Regulations as anything, does anything change in Jacksonville? I mean, I can think of the regulation that allowed me to buy my duplex Venice, right? Like, I know that they changed mortgage regulations so that now you can buy a small multifamily up to four units, right? With a 5 percent conventional loan, as opposed to having to come up with 20%. That was the case that allowed my wife and I. to buy a duplex in an area that we wouldn't have been able to buy a single family home based on our budget. But because we found the duplex that had one place moving ready, the other one was rented out. It allow us to move a little closer to GC. There we

Gregg Cohen: 1:08:51

go.

Pablo Gonzalez: 1:08:51

Yeah. So that's, that's one regulation. Have you heard of anything else?

Gregg Cohen: 1:08:55

There have been some regulations to help increase density. So to reduce red tape for building I don't have them off the top of my head. So maybe I'll find out exactly what those are. So that's been some positive, positive signs. But nothing noteworthy that would really change the investment vehicle. Cool.

Pablo Gonzalez: 1:09:12

Patron Santorio says, Greg, do your MOI numbers include condos or just single family homes?

Gregg Cohen: 1:09:19

We took out condos in this data. When we started to track it back in 2013 is when we started to track it monthly. And if we started to track it all the way back in 2006, we took condos out because they were starting to distort the data there. So there is not condo information in the data that I'm sharing with you. It's single family homes, including townhomes, but just not.

Pablo Gonzalez: 1:09:44

Got it. Jag is asking, are you making the CXR calculator? I think that's what it's called available again. It would help. I don't know if Jag is talking about the C3X or the new calculator that you created recently, the portfolio calculator.

Gregg Cohen: 1:09:55

Absolutely. Jag's probably talking about the C3X calculator, which is a great way for you to see how to strategically pay down your mortgages to really, increase your positive cash flow and get you to your financial goals sooner. That is always available, Jag. Just reach out to your portfolio manager and we'll make sure that you can jump on the phone with, your portfolio managers to be able to kind of help you Think about the effective pay down of those loans. So that's available for all of our clients as well. So the C3X calculator helps you do that. We also created a new profit calculator. That's a little bit less complex, a little bit less intense. It's great for newer investors who are trying to see what their money is going to grow, like by making a decision to invest in Jacksonville real estate. And that's free for everybody to use. You can go to JWB real estate, capital. com slash profits.

Pablo Gonzalez: 1:10:48

Let's go. Gerard Wendling. Gerard, good to see you, bud. Says, good day, gentlemen. Can the data be broken down to workforce housing? I think Gerard knows our favorite asset class around here.

Gregg Cohen: 1:10:58

I love me some workforce housing. We have some of the data that is broken down into workforce housing neighborhoods. Not all the data can be broken down that way. A lot of this is from our consultant and unfortunately they don't break it down into workforce housing. But One data point I can share with you is we run. How much JWB neighborhoods, which are workforce housing neighborhoods, appreciate each year? We compare it to what the average Jacksonville appreciation rate is. And what we've seen since 2013, JWB neighborhoods, workforce housing neighborhoods, have appreciated 77 percent more than the average Jacksonville neighborhood. And the average Jacksonville neighborhood as appreciated a lot more than the U. S. average as well. So, uh, a little bit of JWB knowledge, perspective, expertise. consistency in these neighborhoods. We continue to bring these neighborhoods up and it's one of the net results is that home prices continue to grow there because they become more desirable.

Pablo Gonzalez: 1:11:59

Fair to say that if we were to break it out in workforce house neighborhoods, everything that we just shared would be at least as good if not a little bit better.

Gregg Cohen: 1:12:07

Sure, I don't have the data in front of me. You know, you're trying to get me to say something that I don't have the data to verify. So you know, this is right.

Pablo Gonzalez: 1:12:17

This feels right. All right. Eugenio Maslowski asked the question, actual rent rates in Jacksonville versus other markets are low according to certain developers. This is why they are not paying 20, 20 K per door, 20 to 30 K per door. For new land to develop new rental building or housing. Do you find the same trend?

Gregg Cohen: 1:12:36

No, don't. Jacksonville construction is really high right now, especially the multifamily space, the apartment space. There are a ton of apartments being built right now especially over the last couple of years. So our rates. are not what rates are rental rates are not what they would be in. I'll just say New York. But what you have in Jacksonville, you can, you can win in other ways. You win with lower costs of acquisition. You win with the availability of a lot of land. You you win a number of different ways. So, I just, I'm not seeing what those other developers are saying. People are developing a lot, especially multi multifamily and single family. Keep it good stuff

Pablo Gonzalez: 1:13:21

for the locals, baby. Let's go. All right. Patron Santorio's has one final point here. He says, Greg, this is not financial advice, but I want to remind everyone who is currently heavily invested in the stock market to do their homework on what typically happens when the fed pivots. lowers rates. For example, in 2019, the market dropped 35 percent in 2007, it dropped 58 percent and in 2000, it dropped 51 percent not financial advice, just friendly advice from your patron Santorios of the natural average industrial community, Michael Santorios,

Gregg Cohen: 1:13:53

good information, good information. I appreciate it there, Michael Santorios.

Pablo Gonzalez: 1:13:57

We did it, buddy. I loved how you really took a stand this time. I really enjoyed this presentation. I liked this idea of just attacking the fear, attacking the noise, cutting through that thing with a machete, going through the jungle and just clearing the path for people that want to make smart decisions. Do you see, we had over 90 folks here. We still have about 70. Leftover really, really appreciate you all showing up. You make this thing fun for us. You make it significant for us and you add great perspective of your own with your questions, with the context that you need and you make it easy for us. So thank you for taking time out of your day to be here. Tell your friends about the encore tonight. If you're bored at nine o'clock, if you rather not Netflix and chill, but you want to real estate and learn. Join us tonight, 9pm from Casa Pablo. Do you see any final words here?

Gregg Cohen: 1:14:46

No, just a lot of thanks for giving us this opportunity. Thank you for the trust that you put in me and my team. We are just real excited about what is to come here in Casa Pablo. Jacksonville real estate, especially for our JWB clients. Jack wants to know when the next meetup is, GC.

Pablo Gonzalez: 1:15:00

What are we doing? We're working on that, Jack. Working on it, Jack. We're working on it, Jack. It's going to be awesome. It's going to happen. But from now until the encore tonight, not a lot to ask. But just one thing, GC, tell them. Don't be average. See you next time.