Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[Dan H.]

Here are some of my thoughts 1) my market is down around 10% already but still up 11% YOY 2) I believe my markets is not at the bottom. 3) CRE loans typically are short term. A fairly large percentage of CRE loans expire each year.4) I suspect the higher CRE rates will cause cap rates to rise causing CRE MF values to fall. 5) If CRE MF values fall, I expect non CRE residential RE values to fall.6) seller financing can be more beneficial than in recent times.

Investors who are well positioned should be able to find RE at a good value.  They need to identify what RE assets present the Best Buy opportunity.  There are buy opportunities for smart, well positioned investors.  

[James Hamling]

Quote from @Chris John:

@James Hamling

Thank you for the respectful reply.  Very interesting.  I definitely agree that "Joe the plumber" isn't going to break BlackRock or anyone else.  However, if these depositors start demanding their money, it's going to force properties onto the market.  I think we can both agree that the article I referenced wasn't a perfect example of what I was saying (Europe, institutional players, etc.) but I believe it helps make my larger point.

In the end, you're extremely bright, well educated, and have some interesting points.  I'd be lying if I said I enjoyed being called out like I was though!  haha.

@Michael Wooldridge

I'm definitely NOT trying to say that BlackRock is in trouble.  Just using it as an example of how a slide can possibly begin, for sure.  It was just funny to me that the article came out right before I did a Google search looking for it.  In the end though, nothing is too big to fail under the right circumstances.

 I can assure with absolute certainty, Blackrock is in 0 risk of investors/depositors controlling the conditions of the portfolio compilation. In plain english, ain't nobody gonna make then do a dang thing they don't wanna do.  

A bit of a side item but, it does raise the question of at what point does a specific R.E. market become "monopolized" by a concentrated holder. Let's say, Blackrock, just for arguments sake, goes into say Des Moines IA. It's got some population but definently not a major market like San Diego. Let's say Blackrock acquires a 55% market share in residential rental units. Thus positioning them into a place to be, very literally, a "market maker". They can decide to press rents up, or down, at will. There size facilitates such to very literally control market directions. 

Would that be a form of monopolization? What is a monopoly in rental real estate look like, at what threshold is that achieved?  

We are coming into an age where these are real potentials. 

[Carlos Ptriawan]

Quote from @JD Martin:

Quote from @Eric Bilderback:

@JD Martin

Thats some solid push back.  I have no metrics.  But our trade deficit is very high, and I think there are some funny numbers going on (but if you pushed me I can't prove that).  I could be wrong here and I will look into this (because I won't shut up about it) LOL.  But everything in the stores, my home etc is made somewhere else.  In addition I wouldn't be surprised if many of the items in the manufactured index are inflated.  For instance a hammer in America is more than a hammer somewhere else because you can get more for it here.  I also believe that one of the big reasons Americans don't work is because our culture and society don't require it.  If could not bring in all the cheap crap that would change in a hurry.  

I agree with you on the facts are whats important and I have doubled down on this so much these facts may be unacceptable to yours truly!  LOL.  But I'll dig into it this because if I am right what is happening to the nation is a great tragedy/self sabotage, even if I do overstate the case.  

We're not really on opposite pages here. I think that a healthy internal manufacturing line is extremely important for all nations, including ours. Obviously there's things you cannot produce for yourself and thus have to trade with others, but failing to provide some of your own internal manufacturing on some items - pharmaceuticals, for example, or weaponry - is downright dangerous to national security. 

I was merely pointing out that we're far from dead as a manufacturing nation. If anything, more manufacturing has come back to the US as COVID exposed a lot of weaknesses of "just in time" and the global supply chain.

Yes but that doesn't matter as long as the USA is always on the negative side of the Balance of Trade.

The moment Saudi changes its oil money from USD to Rubble -- if that happens-- all this "American dream" that we have now may be cut in half instantly. 

What's funny is, to export more, we really need the interest rate to be low enough so our "Made in USA" product is more affordable to ROW,otherwise we could only trigger consumerism only. The last gov. act to create "Chip acts" is moving the country in the right direction.

But this discussion is more than my paygrade, this is more like Rome Civilization and such.

[James Hamling]

Quote from @Nick H.:

This misinformation is crazy. Here are some facts for anyone interested:

1) BlackRock has not been buying single family homes. Apparently this is a common misconception, and from googling, apparently they have a whole page dispelling this misconception: https://www.blackrock.com/us/i... Maybe this is a common misconception because you are all mistaking it for Blackstone, which is the largest real estate PE firm in the country, and has indeed set up funds to acquire SFHs. 

2) To point above, Blackstone is a real estate private equity firm (and the largest one). Typically how large private equity funds work is, they will raise funds (in the billions of dollars), from institutions (limited partners, like endowments, pensions, UHNW, etc) who write very large checks. These funds have agreements on the profit split between the LPs and the GP (Blackstone), management fees, acquisition fees, etc along with the duration of the fund (let's say on average 10 years for real estate private equity). The limited partners cannot call capital and just tell Blackstone they have to liquidate. Blackstone starts liquidating their fund around the 10 year mark, or whatever is agreed to in the fund docs. 

So for a fund or multiple funds that Blackstone has set up and raised LP $'s for over the past couple years to acquire large swaths of single family homes, those investors (LPs) cannot just call capital and force Blackstone to sell. Blackstone sells in accordance with the expectations of the fund docs (usually around the 10 year mark, so likely toward the end of this decade). 

[John Carbone]

Quote from @James Hamling:

Quote from @Chris John:

@James Hamling

Thank you for the respectful reply.  Very interesting.  I definitely agree that "Joe the plumber" isn't going to break BlackRock or anyone else.  However, if these depositors start demanding their money, it's going to force properties onto the market.  I think we can both agree that the article I referenced wasn't a perfect example of what I was saying (Europe, institutional players, etc.) but I believe it helps make my larger point.

In the end, you're extremely bright, well educated, and have some interesting points.  I'd be lying if I said I enjoyed being called out like I was though!  haha.

@Michael Wooldridge

I'm definitely NOT trying to say that BlackRock is in trouble.  Just using it as an example of how a slide can possibly begin, for sure.  It was just funny to me that the article came out right before I did a Google search looking for it.  In the end though, nothing is too big to fail under the right circumstances.

 I can assure with absolute certainty, Blackrock is in 0 risk of investors/depositors controlling the conditions of the portfolio compilation. In plain english, ain't nobody gonna make then do a dang thing they don't wanna do.  

A bit of a side item but, it does raise the question of at what point does a specific R.E. market become "monopolized" by a concentrated holder. Let's say, Blackrock, just for arguments sake, goes into say Des Moines IA. It's got some population but definently not a major market like San Diego. Let's say Blackrock acquires a 55% market share in residential rental units. Thus positioning them into a place to be, very literally, a "market maker". They can decide to press rents up, or down, at will. There size facilitates such to very literally control market directions. 

Would that be a form of monopolization? What is a monopoly in rental real estate look like, at what threshold is that achieved?  

We are coming into an age where these are real potentials. 

One thing is for certain, it is not a good thing. You want organic ownership from owner occupied and local investors. When big players are involved, it increases volatility, which is not something to be seeked in real estate investing. For example, let’s say a strategy was to take over Des Moines, using your example, a well capitalized fund, could lower prices just for the heck of it, to squeeze out the small players and force them to “lose money”…and someone like blackstone or whoever just does this in different cycles, maybe a few separate markets a year, they force the “little guy” by lowering prices and it brings down values for them to buy more. There’s virtually no regulation with this. This is what companies like Amazon and drug companies do to start ups who try to compete with them. They will take loses on products if it means their competition is also losing, and the deep pockets can take the segmented loses and use profits elsewhere to offset. 

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Chris John:

@James Hamling

Would that be a form of monopolization? What is a monopoly in rental real estate look like, at what threshold is that achieved?  

We are coming into an age where these are real potentials. 

It's already happening, James.  In the survival of the fittest only big players could survive. Take a look at Class A MF Investors in Bay Area , it's only possible to be owned/executed by REIT or class A MF company (like MLG/MG) ; not a typical pop and mom investor in Cleveland Ohio.

Or take a look at this professional flipper company like OpenDoor, they may control 10% of the Las Vegas market, although their business plan doesn't make sense for a regular business guys as they are losing money, but they can survive because they're funded by wall street.

[James Hamling]

Quote from @Michael Wooldridge:

Blackrock in trouble? Everybody does realize how many assets they have under management right? They started at 10 trillion in assets under management at the start of the year. A lot of firms are down but BR is far from in trouble and in a must have liquidate scenario. 

Disagreements over direction of housing is one thing but saying BR is in trouble is a whole other level. 

 But no, you don't get it, this is now "The BP Zone", those are just facts and math, no no no, people "feel" things are going to just "poof" so that doesn't matter......  Can you read my seething sarcasm..... 

Look, people are talking about a private fund being "forced" into a fire-sale situation because "some people want to remove there money". The off-ramp from reality was some time ago...... I believe we are now somewhere near where Kim j. found all those unicorns. 

[Carlos Ptriawan]

Quote from @Chris John:

@James Hamling

Thank you for the respectful reply.  Very interesting.  I definitely agree that "Joe the plumber" isn't going to break BlackRock or anyone else.  However, if these depositors start demanding their money, it's going to force properties onto the market.  I think we can both agree that the article I referenced wasn't a perfect example of what I was saying (Europe, institutional players, etc.) but I believe it helps make my larger point.

In the end, you're extremely bright, well educated, and have some interesting points.  I'd be lying if I said I enjoyed being called out like I was though!  haha.

@Michael Wooldridge

I'm definitely NOT trying to say that BlackRock is in trouble.  Just using it as an example of how a slide can possibly begin, for sure.  It was just funny to me that the article came out right before I did a Google search looking for it.  In the end though, nothing is too big to fail under the right circumstances.

 If you want the exact number of money that Blackstone or Blackrock manage I can tell, but I'd rather didn't.

These kind of investment company could survive any negative economic growth as they have an unlimited supply of money, perhaps even more than the Fed LOL :)  

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @Chris John:

@James Hamling

Thank you for the respectful reply.  Very interesting.  I definitely agree that "Joe the plumber" isn't going to break BlackRock or anyone else.  However, if these depositors start demanding their money, it's going to force properties onto the market.  I think we can both agree that the article I referenced wasn't a perfect example of what I was saying (Europe, institutional players, etc.) but I believe it helps make my larger point.

In the end, you're extremely bright, well educated, and have some interesting points.  I'd be lying if I said I enjoyed being called out like I was though!  haha.

@Michael Wooldridge

I'm definitely NOT trying to say that BlackRock is in trouble.  Just using it as an example of how a slide can possibly begin, for sure.  It was just funny to me that the article came out right before I did a Google search looking for it.  In the end though, nothing is too big to fail under the right circumstances.

 If you want the exact number of money that Blackstone or Blackrock manage I can tell, but I'd rather didn't.

These kind of investment company could survive any negative economic growth as they have an unlimited supply of money, perhaps even more than the Fed LOL :)  

They are fine right now, but if markets reverse lower and these companies are down 60-70 percent, there will be pain especially if they don’t have cheap fed money to bail them out. This isn’t likely, but they aren’t immune. 

[Carlos Ptriawan]

Right. This is a very interesting discussion, lets's use a real-world example that I've seen:

a. Seller A is selling a house in Vegas for $345k
b. Opendoor purchase it for $320k, paid with Cash (Opendoor bought using Trust btw)
c. Opendoor then repaint the entire house, make it "nicer".
d. Then they listed this property on their website with their special buy program,etc;, also Zillow,  for $380k 
e. The average DOM for Opendoor is 60 days or longer, but they don't care as they can survive that long without real need money. How come? because they're funded by Wall st Investor
 

And actually, there're more institutional buyers these days, like Roofstock, Flocks, Arrival Homes(Jeff Bezos funded),etc,etc....there're many that are not in our radar.

[Carlos Ptriawan]

They are fine right now, but if markets reverse lower and these companies are down 60-70 percent, there will be pain especially if they don’t have cheap fed money to bail them out. This isn’t likely, but they aren’t immune. 

These kinds of  company is the happiest when hey see the market down as they will squeeze and buy all these distressed properties.

One thing I'm pretty sure, even if there's a crash (if there's any), the bottom will be quick, there will be a quick rebound because this big guy will squeeze the market from the bottom.

[John Carbone]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nick H.:

@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.

In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.

 https://moneymarketadvisor.com...

Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding. 

It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James . 

https://www.realtor.com/news/t...

james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?

 Did you read the article? 

“Zandi believes home prices will fall about 10% nationally over the next 12 to 18 months if the country avoids a recession. If one happens, he anticipates price declines could approach 20% from peak to trough in 2024.”

IT also said don’t expect foreclosures. Don’t expect more homes to go up for sale - essentially reduced prices which is what a lot of us have been saying.

But hey I’ve been saying 10-20% depending on a few factors :). So I’m not opposed to your article. @carlos 

https://amp.cnn.com/cnn/2022/1...

How will we even know when it’s a recession? We no longer use the definition that we always used in the past. is there a new official definition? I know it’s related to unemployment, but what’s the official metric? 
 

[Steve Porter]

Phenomenal article! Thank you for sharing! 

[Jay Hinrichs]

Quote from @Todd Dexheimer:

@Jay Hinrichs 1 in 5 houses bought in 2022 sold to investors. Investors don't own 1 out of 5 houses.

I could see that there are certain zip codes (ones for sure where i fund flippers) that over 90% of the transactions are to investors. but those are normally the bottom tier price points of a given cash flow metro. And you take a city like Memphis I believe and its been this way for decades 40% of all SFRs are owned by investors. U take other metros like here in Portland where we work and less than 10% of all SFR's are owned by investors numbers don't work in the higher price point markets for SFR IE median home price 500k and above for the metro area. With the very rare exception all the new builds we have done in the last 10 years have gone to owner occs and of course we are small time that only equates to 300 or so homes built in 3 markets. Then of course you have the south TX OK GA FLA where whole subdivisions of new builds are going to investors. These are areas were land prices and price to build is the lowest in the country.

[Gabriel Kinser]

If Blackstone's people are reading this and thinking about monopolizing Des Moines... just know the houses here all suck. You probably wouldn't like them, they are all D class at best. Nobody here pays rent. Everybody chain smokes cigs, breeds pit bulls & cooks meth in their apartments- it's just a local cultural thing. Better to try Omaha or Little Rock ;)

[Joshua Moore]

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford.  We heard stories of cleaning ladies buying multiple million dollar homes.  When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity.  They couldn't sell and get out.  We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  Appraisals have not been keeping up with prices and lenders won't lend above appraised value.  We sold a house in 2021 and in one day had 20 offers.  Several of them had acceleration clauses stating they would pay more than anyone else up to $X.  Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering.  They had to make up the difference with cash.  Those people have a ton of equity in their homes.  If they had to sell, they might take a haircut, but they aren't going to get foreclosed. 

There is no  house of cards here to come tumbling down.

The house of cards is the one you can't see. Let's say prior to 2008, you had an obvious situation where people couldn't afford their investments. In 2022, you have a situation where the economic landscape provides for those who qualified for loans legitimately who will soon be unable to carry those loans out to term. It might not be as dramatic, but I tend to disagree with you. A crash is coming for those who don't have a sizable rainy day fund to carry them through. 

[Bud Gaffney]

No crash is coming...maybe a correction as we are seeing.

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nick H.:

@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.

In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.

 https://moneymarketadvisor.com...

Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding. 

It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James . 

https://www.realtor.com/news/t...

james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?

 Did you read the article? 

“Zandi believes home prices will fall about 10% nationally over the next 12 to 18 months if the country avoids a recession. If one happens, he anticipates price declines could approach 20% from peak to trough in 2024.”

IT also said don’t expect foreclosures. Don’t expect more homes to go up for sale - essentially reduced prices which is what a lot of us have been saying.

But hey I’ve been saying 10-20% depending on a few factors :). So I’m not opposed to your article. @Carlos Ptriawan 

https://amp.cnn.com/cnn/2022/1...

How will we even know when it’s a recession? We no longer use the definition that we always used in the past. is there a new official definition? I know it’s related to unemployment, but what’s the official metric? 
 

@John Carbone Wow you fix the article link but not on the post where I called out that it’s probably the KPMG CEO Survey? You gave no indication in your original post except that it was hot off the presses (it wasn’t). I also made several comments this week that the Fortune 500 were planning lay offs. That you’d see many announced in q4 (some already have since those comments) more will. 

It’s not news or surprising. It’s something factor into my numbers. Numbers you seeem to skip over by not commenting also on other 08 factors like unemployment, labor rate participation and subprime crisis that led us to a 28% market shift. Mean while unemployment that is the lowest it’s been in history, high wages, and no subprime crisis but somehow we will end up at 25%+ price changes.

I’ve been saying 10-20% shift since day 1. You post an article as a resource to pricing changes from realtor.com - that literally says the same thing. 

BTW Blackrock isn’t ever going to fail. If blackrock fails it means the entire world collapsed. IF you are predicting that please let us know. You need to go revisit where I explain how many assets there are or to @Carlos Ptriawan point whose assets those involve.

[Ben Einspahr]

@Greg R.

My simple answer is economics 101. Supply vs demand. Recession, very possible. Crash, not likely.

[Michael Wooldridge]

Quote from @Ben Einspahr:

@Greg R.

My simple answer is economics 101. Supply vs demand. Recession, very possible. Crash, not likely.

Spot on. Not ot mention if we looked at that for what they build for 2022 or 20223. That gap is going to widen.  

[Chris John]

It does make me laugh that some of you think that it's literally impossible for either BlackRock or BlackStone (or whoever ) to fail.  Again, I'm not saying I think it's going to happen as I have NO IDEA what they're finances are.  However, Rome fell, so sure as heck a financial investment company can.

Also, I've already linked an article where they're slowing withdrawals to remain liquid.  That must mean that it's possible to get withdrawals, no?  Otherwise people wouldn't have theirs slowed.  Again, not saying that they're on their way to failure, but sheesh, people want more money back than they can accommodate at the moment.  Is that not EXACTLY what we're talking about?

Finally, none of these financial institutions really has their own money.  They're investing on behalf of others.  It's all institutional pension money?  Fine.  Those institutional pensions don't really have their own money either.  It always tracks back to the guy buying the insurance each year, depositing money into a retirement account each month, etc.  If enough of those guys change their mind, the seas will ABSOLUTELY change.  It would be impossible not to.

Again, I'm not saying this is likely.  I don't know the exact mechanisms behind how it would happen, etc.  But ultimately, there has to be money on the other side of a sale.  If institutional investors decide to sell, are forced to sell, whatever, someone has to be on the other side of that transaction with money and that's hard to do if enough houses are brought to market.

[Michael Wooldridge]

Quote from @Chris John:

It does make me laugh that some of you think that it's literally impossible for either BlackRock or BlackStone (or whoever ) to fail.  Again, I'm not saying I think it's going to happen as I have NO IDEA what they're finances are.  However, Rome fell, so sure as heck a financial investment company can.

Also, I've already linked an article where they're slowing withdrawals to remain liquid.  That must mean that it's possible to get withdrawals, no?  Otherwise people wouldn't have theirs slowed.  Again, not saying that they're on their way to failure, but sheesh, people want more money back than they can accommodate at the moment.  Is that not EXACTLY what we're talking about?

Finally, none of these financial institutions really has their own money.  They're investing on behalf of others.  It's all institutional pension money?  Fine.  Those institutional pensions don't really have their own money either.  It always tracks back to the guy buying the insurance each year, depositing money into a retirement account each month, etc.  If enough of those guys change their mind, the seas will ABSOLUTELY change.  It would be impossible not to.

Again, I'm not saying this is likely.  I don't know the exact mechanisms behind how it would happen, etc.  But ultimately, there has to be money on the other side of a sale.  If institutional investors decide to sell, are forced to sell, whatever, someone has to be on the other side of that transaction with money and that's hard to do if enough houses are brought to market.

You are missing the point. For blackrock to fail it means the US has failed. It means it's been a complete world collapse. I'm saying worrying about them failing is a pointless activity. You need to look at what's invested in them, how much and how much they dwarf everybody. 

IF they fail it means everything has collapsed. So it's not worth worrying about. 

[Carlos Ptriawan]

Quote from @Jay Hinrichs:

Quote from @Todd Dexheimer:

@Jay Hinrichs 1 in 5 houses bought in 2022 sold to investors. Investors don't own 1 out of 5 houses.

 I could see that there are certain zip codes (ones for sure where i fund flippers) that over 90% of the transactions are to investors. but those are normally the bottom tier price points of a given cash flow metro.  And you take a city like Memphis I believe and its been this way for decades

This thing needs more investigation. From what I know some metro market has 35-40% of investors purchasing during Q3 2021 (NOT 1:5 but almost 1:2). Market like Bay Area for example, 40% of buyers are investors.

So if there's anecdotal research outthere saying 1 out 5 homes are owned by investor/non-owner-occupant/institution , I'm not that surprised.
In this subject, even the gov. itself got it wrong.

[Carlos Ptriawan]

Quote from @Gabriel Kinser:

If Blackstone's people are reading this and thinking about monopolizing Des Moines... just know the houses here all suck. You probably wouldn't like them, they are all D class at best. Nobody here pays rent. Everybody chain smokes cigs, breeds pit bulls & cooks meth in their apartments- it's just a local cultural thing. Better to try Omaha or Little Rock ;)

 haha, they only have taste for modern 2000-something built-in Class A neighborhoods.

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Ben Einspahr:

@Greg R.

My simple answer is economics 101. Supply vs demand. Recession, very possible. Crash, not likely.

Spot on. Not ot mention if we looked at that for what they build for 2022 or 20223. That gap is going to widen.  

 Do you know that demand has its elasticity factor? Demand is not constant.

Elastic demand is one in which the change in quantity demanded due to a change in price is large.

That happened during the recession, as the price is too expensive, people prefer to save money and not buy mortgage because the mortgage is more than rent right now, so the demand could pretty much collapse during mortgage hikes. This is especially true in low cap rate market like CA/WA (James will say that's your specific market issue LOL)

The simple economic 101 only works in normal environment. We are entering an abnormal phase of economic activity. We don't need those supply of houses and as a result, rent growth is already reducing.