19: David Childers
What we see right now across the US is a very normal market, a soft landing, if you will, for the housing market. And no signs that we see right now of it being a re-enactment of 2008.
About This Episode
David is the VP of Content and Marketing at Keeping Current Matters, which is a working real estate agent's personal research department. Beyond just keeping agents aware of market trends, Keeping Current Matters aims to equip agents with the knowledge they need to stay relevant to their clients, and to be better equipped to answer any question that comes their way.
For more information, visit KeepingCurrentMatters.com.
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JON: Hello and welcome to shop talk the real estate show. I'm Jon Forisha and joining me today is David Childers, VP of content and marketing and Keeping Current Matters.
DAVID: Thanks for inviting me.
JON: Yeah, thanks for being here. So for those who may be unfamiliar with you, what does Keeping Current Matters do?
DAVID: So at Keeping Current Matters, we really want to give agents the content and the tools that position themselves as the expert in their market. So everything we're doing is going out and finding out what's happening in the market, writing, researching, and delivering tools so that agents can then use those.
JON: Great. So you're kind of the research department for working agents.
DAVID: You know, some, some have said that. It's interesting, I was talking to a couple of agents two weeks ago and two things came up. One, we save on time or they don't have to go out and do all the research. And two, we take competing sources. So interesting fact of 2018 is the Webster dictionary word of the year was misinformation. That's the world that we live in. There's a lot of truth to that. What we're trying to do is cut through maybe some of the misinformation that's out in the market, to really give agents the tools they need. So one, they can position themselves as the expert but two, so the buyers and sellers they serve can feel confident when they make a decision.
JON: Great. So what was the career path that led you to Keeping Current Matters?
DAVID: Well, how much time do we have here? A few days?
JON: Yeah, we've got a few days.
DAVID: You know, it's, it's interesting. My story, I've always worked for authors and speakers, content providers and really the real estate mortgage and title business. In late 2005, I sold a business and then consulted for about five years. And in 2006 I met Steve Harney who is the founder of KCM, Keeping Current Matters. And uh, at that time he had just sold his 500 agent real estate company and wanted to find a way to give back to agents. As the next few years progressed. Obviously we went into a challenging time in the real estate market in this country, and that's where KCM was birthed. Really giving agents some of the answers to some of the questions based on the research of what they needed to go out and do. And now for the past 11 years has grown to thousands of agents that use us every day, whether they read the KCM blog or they're a member of KCM, uh, to communicate those, those facts too. You know, everybody, they're surfing.
JON: Wow, that's great. So what is it about real estate that you find interesting?
DAVID: Well, you know, the thing that I liked, I love it at its core is we get a chance to help people achieve the American dream. Right? Um, and so being a part of a, a business where we certainly as KCM, but we as agents are able to help people with that purchase. And, uh, you know, a bedroom for a son or a daughter, a first home for someone, uh, is a, is a powerful thing. Um, we also believe that in instantly it's backed up by any study that you read that that's the, the, the, the truest way to build wealth as you go along the life journey. So just being a part of that being a part of a company that, um, helps people learn, grow and get better is what I wanted to be a part of in my career path. And so for that in the intersection of real estate is something.
JON: Okay. So let's get into it. What are some of the latest findings at KCM?
DAVID: Well, you know, when we talk about latest finding, I think there, uh, there are a few things right now that we are looking at. One is just answering the question, how's the market, um, and, and what's happening with home prices, what will happen this year? I can tell you, you know, we're, we're on a podcast today, but if you go to the KCM site, you can see the surveys of the top leading forecasters, which are, you know, National Association of Realtors, the mortgage bankers association, Freddie Mac, Fannie Mae, you know, people that were looking at in, in everybody says, we're looking at this year, probably anywhere from the high twos to 4% appreciation. So that looks really good when we look at transaction volume that's forecasted for this year to be at or above 2018. So we see appreciation, we see volume growing or, or, or at the very least remaining where it's at. Um, and a very, a very healthful, healthy market, returning to somewhat of a normal market, uh, which is, uh, is a little bit of change from what we've been in the last few years, but, but certainly something that, um, I think a lot of folks have in the past one and now we're getting it.
JON: So it's becoming more of a normal market. And in the past few years it's been growing too fast, almost.
DAVID: Sure. I mean, I think the thing that we knew about the market in the last few years, the number one or two challenges at times have been inventory and the other has been just some quick appreciation, but leading a lot of people to say, are we, are we heading back into a bubble? What we're seeing is, is not appreciation going away, but appreciation, slowing and we're seeing more homes come on the market. So the things that we saw as challenges, you know, year or two ago are, are starting to turn a little bit and actually giving us what we, what we wanted then.
JON: So for the people who say that we're heading into another bubble, you are saying, no, we're slowing down to be more of a healthy growth.
DAVID: Right. Absolutely. Um, that's, that's a big question is the question we hear a lot of times is, hey, I hear that it's easier to get a loan today than it was 10 years ago. Um, and uh, you know, are in that what caused ultimately the down turn a 10 year, 10 or so years ago. And it's a question that's out there. There's, there's a lot of articles and media written about that I can tell you what we look at is the mortgage credit availability index. Um, and we're, we're here. Um, if I could show a slide I would, but it's nowhere near levels, uh, 2007, 2008, um, and uh, are a fraction of that. Now, certainly a pendulum in lending swung pretty wide, uh, of a correction following the downturn and it's come back to that. But, but the quick answer is we're nowhere near that. The other question that comes up is it's been reported the cashout refinances as a percentage of refunds in this country are at the levels they were back around 2007 and 2008, which as a percentage is correct. What I can tell you is the amount of cash that's taken out of homes, harvested equity is nowhere near what it was, uh, back in 2008, once again, a fraction of it. So what we see right now across the US is again, a very normal market, a soft landing, if you will, for the housing market. And no signs that we see right now that being a, you know, a re-enactment, if you will, of 2008.
JON: Yeah, that's welcome news.
DAVID: Absolutely. But the reality is, is as we talk about that more and more, the thing that is in buyers and sellers minds is the most recent recession or economic downturn. So we believe in the market today. That's a narrative that as agents, we need to be out in front of. We need to be telling that story versus, um, uh, you know, that being told for us in the media and, and the truth is regardless of where you stand politically coming into an election cycle, we believe both sides of the aisle. In that case, we'll use that information, uh, to, to try to, you know, give their candidate advantage regardless of what that means or if it is correct about our market.
JON: So are there any surprising markets right now? Anything out of the ordinary?
DAVID: Well, when we look across the country, uh, things, again, appreciation looks very normal. Um, we are starting to look at a couple of markets in California that could be different. And I don't think that's anything different than what historically has been a unique to California. Uh, San Diego is a market that we've looked at San one as well, that may at some point see, uh, some sort of slowed growth, uh, maybe, maybe even a transaction volumes slow. We don't believe right now that would be an indicator of what would happen across the country markets that, um, that are dealing with some of their own issues and exact point on.
JON: So how, how can you tell the difference between whether it's just sort of a weird outlier market, like maybe San Diego or San Francisco versus, yes, this is an indicator of a downturn?
DAVID: In a way it gets into another topic, but a large indicator of that is affordability. Um, and what does it take to buy a home? And we'll give us, um, predominantly across markets. And this is something that's been debated in the market. Um, and it's calculated in several different ways, by and large across the u s affordability is still, uh, still very good, uh, by, by the, the indicators that we look at. And when you look at a market, it could be slowing, affordability can be challenged and you take external forces in the market, meaning tax issues, things that are happening and you say that that could lead to something, um, to, to some consequences in that market that would be beyond, uh, you know, what may happen across the country. So I think you're looking at, at things and some of those markets that could be a perfect storm.
JON: Yeah. And to your point earlier about the market sort of cooling to more reasonable levels, and San Francisco and San Diego both, at least over the past decade or so, have had outrageous housing prices.
DAVID: Oh, sure. Yeah. That's a, that's, that's a challenge. But yeah, outside of anything in the market, challenging markets.
JON: Yeah. And here we're based in Denver. With the Denver market, I constantly hear about, oh, it's plateauing and wonder if it's, you know, going off the edge. But I think it's just the last few years we've gotten used to houses selling in less than a week, going for way above asking price, but that's not sustainable long term.
DAVID: Sure. I mean the market certainly is coming in for, like I said before, a softer landing we believe will carry out. I mean, when you take those predictions and carry them out over the next few years, we still show growth in the market, um, from appreciation and volume for the next 24, 18 months beyond that.
JON: Great. Yeah. So my next question was going to be how do you think an impending slowdown would affect today's market? But it sounds like, you know, more inventory and we're still seeing growth, so potentially not too bad.
DAVID: Yeah. I think the, we talk about a couple of things in that. One is when we talk about the slowdown, really the word that scares is a recession, uh, the technical definition of a recession is two consecutive quarters with slowing or negative GDP. And so when you talk about an economic slowdown versus a recession, people think about two different things. When you say recession today, people go back mentally, the 2008, right? When you say economic, slow down, um, people go, okay, they're economy is going to slow down. Now. Um, there's a couple of things about that we would recommend the agents, you use the term economic slowdowns, not in a way to sugar coat or to be misrepresentative of the facts, but to be accurate and understand when someone hears recession, you can't control what they think. The second thing would be. When you talk about, um, economic slow down from what we see, we don't see that impact. It would impact values and no doubt we don't see homes or a real estate in this country losing value in. To that end, we went back and we looked at the last five recessions in this country. Going back to the, to the 80s, um, three out of the five have positive appreciation and home values. One had the slight dip in value of about 1%, right at, you know, almost even. And then we'll obviously get 2008 where we have a significant reduction of home values. So we believe that, uh, that, that if your history is an indicator of what's coming is that it probably will not have a negative impact on home values. But people believe it will. Um, and uh, and so we want to get out of the front of that and use the information to educate buyers and sellers in the market of, of what, you know, what's actually out there.
JON: I think that's great advice.
DAVID: Yeah, it's interesting when you get into it and you know, the interesting thing too with the talk of recession is ultimately, you know, what, you know, how many homes are going to sell, what were interest rates going to do? And we don't have a crystal ball. We don't know that. But everything that we can see is that it will be favorable. It economists are predicting that we will come into an economic slowdown here most we've got the research to back it up with say now in sometime in 2020 the leading indicator that they give for that are things around economic policy things or you know, kind of geopolitically out of our control on some level. Um, the housing market in the, in the most recent survey ranked in number nine, meaning they don't see that as a leading indicator of what would cause that. And the reason there's talk of it today is that we are in the one of the longest prolong economic cycles of the US and so we're saying what we're reading is it's going to happen because we haven't had one recently. So that's an interesting fact. I'm not saying that they're wrong or they're right, but that's the basis of their argument.
JON: What would you say to an agent who might be nervous about a slow down based on these geopolitical decisions that are completely out of their control? You know what I mean? If somebody is just so disturbed by what's going on with politics that it's affecting their job or maybe their outlook of their job. I mean, what do you do?
DAVID: I wish I had some words in that case. All I can say is if you were, what we tend to do in this business is we tend to think this is what's going to happen. Uh, we, we all have a uncle that we go to a, you know, a family celebration out and they've got everything that's going to happen in the real estate market. They're going to tell you what, what the deal is going to be right now. If you're going to believe what experts are saying and they say there's one on the horizon. So we're saying we're going to believe that. Okay, and that's bothering you. What you also have to believe is that those same experts said it will not be caused by the housing market. You have to then go and say which we've done the work for you. What happened in previous recessions? Okay, I understand that. And I just went over that and then to what are experts saying about 2019 or 2020 and 2021 which again, we've done the research for you. All of those show growth so you cannot, well, what we tend to do is people, and I do this, all of us do it and in every area of our lives we take an element of information and we hang onto it, but we don't pick our eyes up to see the broader picture. And if we want to, you know, if we're up, you know, afraid about things are outside of our control. It could affect the economy. That's a losing battle. But if we're willing to take a look at what is all the information that I can gather, and I think it it, it goes back to the first question you asked me, what do we believe as KCM? We believe the educated and informed agent wins in any market. We're not going to give you information every day and every week with rose colored glasses. If we need to tell people, hey, it might not be the right time for you to buy a home. We want to say that. But if we want to also say, hey, here are the facts about the market, we're going to say those as well. And right now from what we can see, if it does happen and you know, experts, you know, say it's coming, we don't believe it will be something that it's caused by the housing market or has anywhere near some type of effective 2008 but we all have to realize it in the more important thing is, is if an agent is crippled by that, I'm going to use the word cripple. You didn't use that. But as you're thinking about what buyers and sellers should making, our job is to get out in front of that narrative and help them to see that. Because another question comes up is, what if my buyers and sellers aren't asking me? Do I bring it up right on? Folks would say, I don't know that. I want to bring that up. We believe you should in the sense, of helping to show them, hey, here's what it is, you know, I'll bring you the latest information. Here's what's coming up.
JON: Okay. So I'm going to pivot now. We've sort of covered the market. Today's market. Let's get in to visuals. Why are visuals so important for communication?
DAVID: Oh Gosh. So I'll give you a quick scenario. Sure. Cool. There's an old story about, um, around clean figure who the boundaries consistent appoints equidistant from a fixed point. You know what that is? You ever heard that story? I have not around playing figure who's boundary consist of points equally distant from a fixed point around mathematically inclined. Yeah.
JON: Oh Geez. I didn't know we were getting into math.
DAVID: but I can tell you that that's a definition of an object that you see every day and it's a circle.
DAVID: Okay. So do you think about that? If I want to communicate something to you, I can give you the definition or I can look to use something that helps me simply enough effectively accomplish what I'm talking about. I can see, and again, more on a podcast here today, but, but if anybody wants to go to keeping current matters.com we can grab all these slides, see them, but I can tell you, hey, here's what we've seen in the last five recessions. I can give you a slide to put in front of your clients. It'll blow them away where it's easy to understand. So we believe that as we build concepts and topics, we want to be able to simply and effectively communicate those visuals, help us do that. And in the world will be in,
JON: So basically a picture is worth a thousand words, right?
DAVID: Absolutely. Yeah.
JON: So how, how can real estate agents use that in their business?
DAVID: We provide a lot of tools to do that. And I think by and large, I'll talk about one area where I think that agents can do something different to get a better result. We believe most agents that are qualified by the time we sit down at the kitchen table and they're talking about, you know, potential buyer seller, some of them putting their home on the market. Um, if we have an organized presentation visually and certainly we provide those for you. If you don't have that, they will do very well. They're organized at that point. Now the area of this today is what I'm going to talk about in a pre-appointment appointment, let's call it that. Let's say you're at a basketball game or you're at a function in, somebody asks you a question, do you have information on your phone that you could pull up? Maybe a slide that I just referenced and somebody says, Gosh, I don't know what. I just wrote an article saying, know this market's going to tank and you mentioned the Denver market. We'll do, I have the information quickly in today's world to be able to show them, you know what, I hear that a lot, but let me give you the truth about that and show that to them. So I think using imagery with technology and listen, we can put everything we want on our phones, so they wouldn't have any problem putting pictures of dogs and cats and what we ate last night and everything on a phone. And we ought to start doing that as well.
JON: So design is unfortunately not a strong suit of a lot of agents. Even though design tools are more accessible than ever.
JON: How would you advise an agent to honestly evaluate the quality of their visuals?
DAVID: Wow. You know, I think, I think for any of us you have to look at it and say, what are as an agent, what am I going to stake my claim on my claim on design? Um, most agents, unless you understand, you know, Adobe or, or some particular, um, program and you mentioned the ones that are, you know, that are accessible are probably not going to base their worth on that. And nor am I arguing they should. Um, but no doubt it helps make an impact on the market. So we believe that that, again, I'll go back to the educated, informed agent winds and have a great design partner, whether that be things you're getting an organization, things that you get from us. And we provide all this design for $24 a month. I mean, I look at it and if people don't use that, it's not because it's not affordable, but you get all of that. So I would say whether it's us or someone else have something or a resource that you trust that gives you that great design.
JON: Okay. So you sort of talked a little bit about what KCM actually offers. You want to give us a rundown of it?
DAVID: Sure. So, um, we, there's two elements to KCM, sir. We have the membership but we talked about, um, and that is comprised of a number of different things that I'll, I'll talk about in just a second. But we also have the KCM blog. So you don't have to be a member of KCM to sign up for the blog today. You can go in and a and get that post in your email box every single morning we were at it. Write a blog that's written by, I mean it's read by tens of thousands of agents every day. Probably the most widely read real estate blog out there. If there's one more widely read, I just don't know about it. Inside the membership. You get the ability not only to share the KCM blog, but all the other tools personalized to you. So one thing that we realized is you may share an article on Facebook and somebody goes to CNBC or another new shorts to read that article. KCM brings that person onto your site to read that article. We provide quarterly buyer and seller guides for open houses, leave behinds and she can use, we do a monthly market report. A lot of the things we've talked about today are contained in our agent facing monthly market report, what's happening across the US so that you can answer the questions when they come up simply and effectively. Um, where we, each week we create a video that summarizes a quick element of the market or what's happening that you can share again on any platform that you have on social media or website. Uh, anyway, uh, that you like. So we're building tools and resources to communicate current elements of the market and a lot of different ways.
JON: And how does your team decide what to write about?
DAVID: So we have a team of three writers and researchers that we meet weekly and look at everything that's out there and we can ask a couple of questions. One, what do we need to talk about right now? What's most important for an agent? Um, you know, with, with the, with the members that we have, we hear a lot of people, I'm getting this question or this is coming up. And so we use a lot of that. Um, but we also look at what's, what's happening and what do we need to talk about? Um, and so you can go back and, and again look at KCM blog and just see kind of a mixture of, of things that are out there that we want to give, um, uh, agents, uh, the setup with their clients so that they can share great information that then sparks a conversation they might be able to have with that buyer or seller or somebody was contemplating doing that in the future.
JON: Great. This next question is when I asked all of my guests, if you could go back to the beginning of your career, what's one thing you would have done differently?
DAVID: Well, easy. I would've, I would've applied myself more in school, no doubt. I, um, I was not a, um, a star student growing up. Matter of fact, I tell my kids a lot at a meeting one time with a teacher when I was in middle school and I told this teacher, I said, you know, I'm really gonna Hunker down right now. I'm turning over a new leaf and start doing my homework and to start taking this seriously. And she said, David, at this point you need to turn over to the tree, the leaf to, uh, to, to get that right and say it's always as always stuck with me. But, but no doubt I would've, I would've applied myself earlier.
JON: Do you think it would have changed your career trajectory?
DAVID: I would hope so. I think the, um, the interesting thing is you'd asked me earlier about career path. You know, as I went through school and then in college, subsequently I went to Georgia State University and, um, and coming out of school, my wife and I had got married and I went to work for an author, leadership author named John Maxwell. And, um, uh, it was kind of ironic that I struggled in school and now I'm working for this author, but we're really inside of that birth, the passion for me for growth and development and a, and I learned that I could apply the learnings that I had. And I see it, you know, certainly not about this, but I think school today, one of the things I struggle with and I think kids struggle with is how am I going to use what I'm being taught? And, uh, and I hope that if I could've realized that earlier, I could have made different decisions.
JON: Yeah. It's an interesting topic that actually keeps coming up on episodes of this show, which is kind of where is education headed. And it seems almost like that generalized learning, the, you know, the classic, all the kids in calculus wondering are we ever going to use this in life? I wonder if that's going to be a thing of the past, if it's going to be more specialized, to learn exactly what you need for your career and become very, very good at it.
DAVID: Right, right. I think the, I'm sure everybody, I know a lot of people have a lot of opinions on that and probably well, much more well informed than I am on it. I can tell you as a father of three children, um, that my wife and I have raised, I would say fairly similarly. They each have their own unique needs. Um, my oldest is, um, really got his head down and he does everything he needs to do. And you know, he's, he's the typical student that school was built for him. Um, and does that, our youngest son is different in that way, has different gifts, different, uh, different ways that he's been wired. Um, and, and needs to pay attention a little bit more. You know, and, and it has some things that he needs to work on. Um, but I think this is no different then what we do every day and on our teams is can we match people where they're gifted to where, what we need to have happen. And the same thing happens with school and our youngest, she's coming up and I think it's a mix of the, of the first two, but it at the end of the day, we have a solution in education that's supposed to each one of those, uh, types of personalities. And I think there's a lot of people that are realizing, you know, maybe something different, you know, for my son or daughter going up today.
JON: Definitely. And I mean, here at The CE Shop, that's something we often struggle with is how do we build a course that can appeal to everyone because people do learn differently. So, yeah, no, no doubt. All right. So if anyone would like to learn more about Keeping Current Matters, what should they do?
DAVID: Good. Try kcm.com you get a free 14 day trial. You don't have to, um, uh, you know, start a subscription or become a member of, you can check everything out. I did not cost you a dime. You can sign up for the blog, you can go to KCM blog and get the blog in your email box every morning. And that's free that by, yeah, absolutely. That by itself will help you understand everything that we're talking about. And, and I would say whether it's, if you don't subscribe to the KCM blog, you don't become a KCM number. Find somewhere that you're getting your information from, uh, and, and make sure that, again, going back to what we talked about before, the word of the year in 2018 being this information, make sure you're getting it from an accurate source.
JON: What would you say to the agent who thinks they don't need a source like that? You know, they think they're so well informed they don't need someone else telling them what's going on in the market.
DAVID: Well, I don't know that I'm equipped to tell them what they need to do. I'd say ask your customers, where do you get your real estate information from? I can tell you what they would answer and it's going to be the news at night. It's going to be from their friends to me from from you know, outlets they read their consumer facing. That's where the majority overwhelming majority of consumers we get our information. So what we're really geared toward the, the tools and resources that we build are written to the consumer. And really you get down to a philosophical point here that we believe agent should position a lot of those resources as, hey, you don't have to just hear it from me, look at what experts are saying, read this article that says this, but let's look at what research shows us and then make your own decision. And then, oh, by the way, we work in, in, you know, data and inflammation, the macro level across the US. Um, we believe that a power play there is combining that with local information. Like you said, the market in Denver. So, here's what we see happening across the country, we believe is going to happen in Denver over the next, you know, whatever it is, eight or nine months or merely awesome.
JON: Well, great, David, thank you for joining me.
DAVID: You got it. Jon, I'm glad that you invited us on and we're grateful for all that you guys do to help folks stay educated in the market.