Power Players in the Housing Market: Dark Pools and Institutional Buyers

Mike Mills (Host) | 00:00:15 to 00:00:38

Hello, everybody. This is Mike Mills with Verity Mortgage. And this is the Texas Real Estate and Finance Podcast. And today I am bringing in my friend Amy Cronell. She is running for mayor, so I'm sure she has a lot of things that she wants to share with us today about why she's running for mayor, what made her decision, how it's impacting her life.

Mike Mills (Host) | 00:00:38 to 00:00:49

Because I can imagine it's pretty crazy and chaotic. So without further ado, let's bring in Miss Amy. We'll have a round of applause for you. I got all kinds of production value on this. Awesome.

Amy Cearnal (Guest) | 00:00:49 to 00:00:52

Awesome. Hey, Mike. Have have too much time on my hands. Probably is a problem. I don't know.

Mike Mills (Host) | 00:00:52 to 00:01:01

Well, speaking of time on their hands, I don't think you have any time on your hands these days. Would you say that's an understatement? Yeah, not right now. So we've got 17 days till the race, so we're in dead heat right now. Yes.

Mike Mills (Host) | 00:01:02 to 00:01:24

So just like right off the gate, what in the world made you decide to run for mayor? I mean, of all things, we've known each other for a little while now, and we've had different conversations about all kinds of stuff. You've never once mentioned anything about running for mayor. And I saw that, I was like, oh, my gosh, what happened there? Yeah, I had to start my kickoff rally with I'm sorry I lied to so many of you all and thought I would never, ever run for anything because here we are.

Amy Cearnal (Guest) | 00:01:24 to 00:02:10

And it really was more of that. This was a unique situation where we live in a town of 400,000 people and we did not have anybody willing to step up and challenge our incumbent. And that's just part of our electoral process, is that really, having good candidates to come forward so that the citizens feel like they have a choice is very important to us. I have done a lot of public service leading up to this point and so it is not a crazy thing to think that I would become mayor, but it also is really about that creating accountability and making sure that our current leadership understands that we are here and just watching and have ideas too of how things can change and get better. So what you're saying then is that don't get me wrong, the intent of running for mayor is to get elected.

Mike Mills (Host) | 00:02:10 to 00:02:24

Intent is one, yeah, absolutely. But if anything else, at bare minimum, it's just to put somebody else on the ballot to make sure that at least somebody's getting pushed. So it's not just you just get your job and walk right in the door, right? Yeah, that's correct. Yeah.

Amy Cearnal (Guest) | 00:02:24 to 00:02:49

I mean, you don't want to feel like as a citizen that you were kind of bullied into one decision. You didn't have anybody that was willing to step up. But it is a tough thing to have people step up to that position because it is a full time position for three years and for zero pay. Well, there's like a little bit of a credit but it's basically zero that's hard. Who can afford to do that?

Amy Cearnal (Guest) | 00:02:49 to 00:03:32

Who is willing to do that? And so it's not surprising that people aren't willing to step up but it is something that I just think is very important as we go forward. Well, it's funny when you look at just politics in general and I'm kind of at least a national politics enthusiast, I guess you would call it. I don't really put myself into either category per se because I think they're both messed up in many ways. But what's funny, I think, as a population, is that people, general, citizens, we pay close attention to guys like Mitch McConnell and Nancy Pelosi and President Biden and President Trump and all these other nationally or national level politicians, but we lose sight of the fact.

Mike Mills (Host) | 00:03:32 to 00:03:56

I think that the impact that has on our day to day lives is way more local than it is national. So the decisions and the people that run for school boards, that run for mayor, that run for city councils, it seems like those things have a direct impact on your life much greater than the national politics. But very few people tend to pay attention to that. Why do you think that is? They do.

Amy Cearnal (Guest) | 00:03:56 to 00:04:22

In fact, I'm kind of the opposite that I do pay more attention to the local side than on the national side. And really just because of what you said, there aren't enough people focusing on the local. And I'm like, well okay, everybody else is looking at national. Let me really try to help an impact on the local side and I really think it is one of those that you have a lot of opportunity to make impact if you choose. It's just a lot of people are just like it's just really a lot of work apathy.

Amy Cearnal (Guest) | 00:04:23 to 00:05:09

It's not that there's malice in it or trying not to know. It's just people just really don't know what's going on on the local level a lot of times and so they're not involved and engaged enough to even really be conversational about some of it and so they just tend to step back from it. And I hope that this encourages people too to say hey, it is not impossible to get involved at the local level and really be impactful on what the community does and says and how it continues to evolve across the country. We're all at this point in history of that things are moving forward at a quick clip and we've got to really make sure that our local jurisdictions are doing that at the right way and not just going off in directions just because it's the feeling of the political whim of some of that. Well, it's hard.

Mike Mills (Host) | 00:05:09 to 00:05:46

I think again, the average citizen, we have jobs, we have kids, we have sports, everything that fills your life up, right? And so you only have so much time outside of those necessities that you have to do to live to pay attention to other things, right? So if you're a sports fan, maybe you're watching the Rangers or the Mavericks or the Stars, which they tied up the series last night, but your attention is diverted in that direction and that's enjoyable, that's fun. That's something that brings you pleasure. And then you're like, hey, here's what's on the ballot for the city council next year.

Mike Mills (Host) | 00:05:47 to 00:06:15

And you're like, it's like, go to sleep because it's hard to keep people's interests. So how do you overcome that when you're going through something like that? I think some of it is just asking that sometimes it would be well, all the time it would be more fun and easier to focus on something like watching the Stars game instead of watching a city council meeting or something. Every single time, people would choose that. But for somebody saying, hey, I'd love for you to participate, know we have a need for this.

Amy Cearnal (Guest) | 00:06:15 to 00:06:33

You would be a great fit here. And helping people come along to mean I would not be sitting here if I hadn't been challenged by that, by people of saying, hey, Amy, we need somebody to run. You're a great person to do that based on what you have done in the past. Like, this is a natural progression. You should consider this.

Amy Cearnal (Guest) | 00:06:33 to 00:06:41

And my first answer was no. And then it was no. Again, no, actually, not me. No, thank you. That is really not me.

Amy Cearnal (Guest) | 00:06:41 to 00:07:02

But ultimately sometimes it is us and there isn't somebody else that's standing behind to say, okay, if she doesn't do it, then it's somebody else. There may not be somebody else. And so it really is that importance of being confident in asking friends and neighbors to join, but also in being comfortable in saying yes. So you actually had people coming to you saying, hey, you need to do this, you need to do this. Yeah.

Mike Mills (Host) | 00:07:02 to 00:07:08

And that was kind of the push that made it. Yes. It would not have been on my radar otherwise. Really? Well, I mean, that's good.

Mike Mills (Host) | 00:07:08 to 00:07:29

That means that there were people out there that were either looking for something different or feeling like you said, there needs to be another piece to the conversation other than just one side of things. And the fact that they looked at you and said, hey, would you help us do that? I mean, that's great. I think it seems like. And again, it's hard to judge the difference between national and local politics.

Mike Mills (Host) | 00:07:29 to 00:08:01

But you look sometimes at, say, national politics, for example, and one of the problems that I personally have in that realm is that there's so much money involved and there's so much outside influence into what decisions are made on a policy level. I mean, again, this is national. This is not local or at least. Yeah, I mean, it is a little. Bit on both, to my knowledge, but even to the point where you hear about bills that are written that are written by attorneys for super PACs that are coming out of that are presented to congressmen and senators and saying, here's the bill that we want you to present.

Mike Mills (Host) | 00:08:01 to 00:08:25

And they barely read over it. They barely understand what's in there, and all they're doing is just checking the right box to make sure that they're doing what they're supposed to do. So that way the money keeps coming to their campaign. And that's a very difficult thing, I think, when you look at politics, to say, well, the people that you would most want to be in charge or at least have a say in where the direction of the city? Or the state or the national politics goes.

Mike Mills (Host) | 00:08:25 to 00:09:01

They're probably the ones that are least interested in doing it. Because either they're already relatively successful in their careers and they're just like, I'm going to keep doing this because that's a whole lot of headache. Or they don't want to get into that game because it feels dirty. Because it's just like, okay, well, who am I beholden to now in order to make sure that I can continue operating my campaign, So how do you navigate just the funds of dealing with you got to print can't. I know you work because you work all the time, but to say that doing this doesn't take away from you selling homes would be an understatement, right?

Amy Cearnal (Guest) | 00:09:01 to 00:09:23

I mean, that's what we've had to look at. What does that look like, amy working for free for the city for three years after election. But we've also had to look at what does that look like? To drop out some of our business during this time while we're going and doing all the things. And luckily, Spencer's there to kind of help come beside me and help with some of it.

Amy Cearnal (Guest) | 00:09:23 to 00:09:55

Our agents have been very understanding, but ultimately there definitely is some cost there on just the opportunity cost of what you could make in business by not participating in it. There's also what you said of the fundraising side of how to do it. And I will tell you, I'm such not the politician that that was the part that I had really always said, too, why would I ever want to do that? Why would I ever want to encourage someone to donate to my campaign to buy stupid things like signs or flyers or send out mailers? Like, what in the world that is such a waste.

Amy Cearnal (Guest) | 00:09:55 to 00:10:42

Why wouldn't they just contribute that to one of our favorite charities and really let that actually go to something good? What I have had to step back with is say, okay, if I am taking this so seriously that I am willing to put that working for free for three years on the table, then I also need to allow other people who love the city too, to come beside me and give dollars that they're not willing to give up that time, but they are willing to give those dollars to make that happen right now. To your point, too, I do want to make sure that those dollars are no strings attached dollars to and I've been very fortunate to have really candid conversations with our investors to say that's just not how I play. Sure, I'm a rookie at all of this and so I'm like, gosh, I don't know, maybe there was supposed to be some sort of pay to play. That's not what I do.

Amy Cearnal (Guest) | 00:10:42 to 00:11:14

So you all let me know if that's and really there's been a lot of grace with it. So I hope that that is encouraging for other people too, that want to get involved and want to consider that is that there is some opportunity to come beside candidates and really help make that all come together in a more genuine way. Have you been able to do a fair amount or decent amount of small donation stuff where because I don't know, what the campus crowdfunding what would it call? I don't know. I've gotten everything from $20 donations to multiple thousand dollars donations.

Amy Cearnal (Guest) | 00:11:14 to 00:11:36

And so it has been very helpful. Ultimately, we got into the race late, really, because we were hoping that another candidate would come forward. Candidly. I mean, we were every night like anybody yet, seriously, when there was another candidate that was going to run and when she decided not to, I said, man, I'm going to be praying for that next candidate. I am just really hopeful that that's going to come forward.

Amy Cearnal (Guest) | 00:11:36 to 00:11:58

And in no way did I think that was me. And so really, when then people were talking to me about me, I was like, oh my gosh, still there's got to be somebody else out there. We were refresh, refresh, refresh every night on the computer saying like, somebody else is hearing this call more than we are. Somebody else is more prepared. But ultimately, sometimes it is that God equips those who are called.

Amy Cearnal (Guest) | 00:11:58 to 00:12:38

And so we just step into it and say, all right, I'm here, here we go. Let me know what I can do and let's see how this goes. So anytime someone's running for office, everybody will say, okay, what makes you qualified to lead the direction of the city? Now, I know a lot of the things that you've been through, committees and boards and things you've been on, but just for anybody that would watch this, what do you feel like has put you in? What experiences have you had over the years that have put you in a position now where you feel like you could handle a job like this and be able to deal with all the stress and the problems that come with these kind of things and still be able to keep your sanity?

Amy Cearnal (Guest) | 00:12:38 to 00:12:51

Yeah, well, I haven't proven that is going to be successful yet on keeping the sanity. You're working on it. You're working on it. Yeah. But I do think it is this continued commitment to the community that has really helped with that for me.

Amy Cearnal (Guest) | 00:12:52 to 00:13:27

So when I started in real estate, one of the things that I took very personally was that if we're selling that community, we need to be invested in making that community great. And so as part of our business planning, every year I have 25% of the time that I would put towards the business as being put towards the community. And so that's just something I've always taken seriously. And so over those many years, there have been a lot of things that I've gotten the opportunity to do. So with professional organizations like the board of Realtors or the chamber of commerce, with nonprofits like the Aware board or Arlington Urban ministries.

Amy Cearnal (Guest) | 00:13:27 to 00:13:56

I've also done leadership arlington, I was chair of Downstairs Arlington Management corporation. I've done offices with the city as far not elected offices, but commissions and committees and those kind of things. And so it just is that breadth of time that gets passed where got relationships and have some institutional knowledge of what things are going on, and so then that leads to something else. Maybe I should have said no to some of those so that I wouldn't be here right now, but here we are. But here we are.

Mike Mills (Host) | 00:13:56 to 00:13:57

Here we are.

Mike Mills (Host) | 00:13:59 to 00:14:24

Okay, so let's go ahead and get on to obviously you're running for mayor, so you had to have some things in your head where you say, okay, if I were to get elected, here are a couple of things that I'd like to look at. Either reevaluating sometimes people say, I'm going to change this. And it's like, well, until you actually get in there and you see how it works, you get to see how the cake is made. You can't say that I'm going to make these. Well, you don't know.

Mike Mills (Host) | 00:14:24 to 00:14:43

I mean, you may get there and you may be like, oh, I guess I can. There's nothing I can do there. So what are some stuff that you would look at? Either reevaluating how the city does or even new initiatives, things that you feel like should at least have up for discussion on things that could be brought forth. Give me some ideas of your platform.

Amy Cearnal (Guest) | 00:14:43 to 00:15:36

Yeah, and I've been telling everybody I'm like, I'm a fairly terrible candidate at this because I don't have, like, it's one, two, three things, and if those aren't done, then we're not successful. Sure, because it is some of we've got to listen to what the residents say and then be able to bring that back to see what is possible and actually put some of that in action. And so that really is my motivator here, is really being a voice for what the citizens want and how can we work to take those things forward. What I'm hearing most in kind of this listening tour of meeting people and seeing some of this is that they are feeling a little frustrated in Arlington that there is this bright and shiny light on the entertainment district for our visitors but not as much on their neighborhoods and their commercial corridors that they're visiting on a regular basis. And so it is looking at then from a leadership perspective of how do we look at resources to see what resources we could devote in a different way to that.

Amy Cearnal (Guest) | 00:15:36 to 00:16:17

And so some of that is going back to my background of finance and management and pulling apart budgets and really looking at and asking some of the hard questions of where are some opportunities that we could devote some funding here to really make impact. That's really what I'm committed to do is come in and ask the hard questions, continue to fight for our residents and really make sure that they are getting what they need as a stakeholder in that community. Well, actually, that's a great point. I've always thought. And again, you're not going to be president, but anytime, whether it be president, whether it be mayor, whether it be governor, whether it be you're kind of the CEO of that entity, whatever it is, right.

Mike Mills (Host) | 00:16:17 to 00:16:37

And when you see these presidential debates and I'm sure Mayor, they have all these questions, well, what would you do about this situation? What would you do about this situation? And to have the expectation that one human is going to understand every facet of the city government is just insane. You can't there's no way. Right.

Mike Mills (Host) | 00:16:37 to 00:16:57

So your job really is and the president's job and the governor's job and the mayor's job is to, like you said, ask questions about what's currently being done. Why are we doing it this way? Why is this being handled in this manner? Why is this money being allocated here? But then also to put people around you that you value their opinion, right?

Amy Cearnal (Guest) | 00:16:57 to 00:17:15

Absolutely. I value what you say. I value what you say and what you think because you understand the economics of how the water district works. You understand how the entertainment district is set up with all of the different entities and corporations involved in creating all these different buildings and facilities and how the city plays a role with taxes and all that stuff. Right.

Mike Mills (Host) | 00:17:15 to 00:17:52

You have to have people that understand those and be able to put people in position to give you good advice because you're not going to have all the answers. But that's why the whole idea of term limits comes into play, because I think you need a fresh set of eyes on things from time to time. And they say, well, the people that argue with term limits would say, well, it's a hard job and you have to be in there for a while to really understand it. And you got to go through it and I understand that sentiment. However, if there's plenty of positions within the city and within the state that are not elected, they are paid for and hired and they have a job.

Mike Mills (Host) | 00:17:52 to 00:18:20

Right? And so your responsibility as the leader of that entity is to make sure that those people are competent and understand their role. And you ask questions that they have to answer because, yeah, the last guy said this, but I don't think it feels that way. So here's what I want to see. So when you look at how government is structured in general, do you feel like that that is your role as a mayor is to come in and say, hey, my job is to evaluate how everything is put together?

Mike Mills (Host) | 00:18:20 to 00:18:55

No, I'm not an expert on every single facet of this, but I'm going to learn and I've gone through this type of management stuff before. Yes, I think 100% that is where it is. And I think there is that coupled responsibility of accountability to staff too. Right, so term limits did create a situation in Arlington anyway, where our city staff became very powerful because it's just a matter of time before there'll be another mayor and council and in some ways that is totally fine. I mean, they have done an excellent job in so many ways, but there's room for improvement on things.

Amy Cearnal (Guest) | 00:18:55 to 00:19:35

So we've got to be able to have those conversations and be able to come to the table and say, okay, yes, this might have been the way that we've done it, but we need to look at what's that? Next generation of idea. How are we going to move forward and really make sure that we are staying relevant and that we are doing the best thing and being most judicious with those resources that we have? So running for mayor and going through that process, I'm sure you had an idea of what it was going to be like, but the idea versus the reality are two very different things. So going through this process and doing all this, what are some things that you've learned that you're kind of like?

Mike Mills (Host) | 00:19:35 to 00:20:00

I didn't expect that and this is a new facet for me I wasn't ready for. Yeah, there's a lot of angry people out there and so that really is a little sad for me. I'm like I wish we could all just get along and figure some of that out. So I mean, I think that's really been my biggest concern with this race and that I really hope that post May 6 that there is a time to really create unity with that. Right.

Amy Cearnal (Guest) | 00:20:00 to 00:20:45

And that's my prayer really, whether Jim or I are in office, that this time is this kind of uncomfortable coming apart to make this decision, but then that there will be a coming back together, of being knit back together and really all working towards this common goal of making Arlington a great city. And so I think it feels right now in this coming apart that there just are so many people that are so frustrated one way or the other. And I just really hope that they can see the heart behind the goal is for this to be a better place and a more responsive and just genuinely better. I'm trying to think of a better word but better than what we've got now. And I think it's one of those that we've always got to be growing to.

Amy Cearnal (Guest) | 00:20:45 to 00:21:20

It's not something that even in three years, if I'm elected, I could sit down and say, okay, well, we're good. We're just going to stay on this exact same path. It's not that we've got to make sure that that path is always being refined and looking at how can we make sure that we are getting to where we need to be. Well, I think on the thread of dealing with angry folks, I would imagine it's not too dissimilar from running a business in that when you run a brokerage and deal with people buying homes all the time and these are very emotional transactions and there's a lot that goes on there. Me too.

Mike Mills (Host) | 00:21:21 to 00:21:36

And what we remember is if we say we close, I don't know, 30 or 40 you close 30 or 40 contracts in a year. Well, probably 90% of those went great. They were fantastic, right? 99. 99.

Mike Mills (Host) | 00:21:37 to 00:21:56

99%. Because things go beyond your control, right, that happen. But we remember and the loudest and the most impactful are those 1% or 10% that don't, right? Yes. So when you're in a city of how many people are in Arlington?

Amy Cearnal (Guest) | 00:21:56 to 00:22:20

400,000. 400,000. So in a city of 400,000, if 1% of that have a problem with something, right, that's a lot of people, that's a whole lot of people that are upset. And it seems like this is like overwhelming, but then when you take a step back and go, well wait a minute, it's still just a small percentage of the people that are upset about this. It's like that squeaky wheel gets the grease kind of thing, right?

Mike Mills (Host) | 00:22:20 to 00:23:02

And usually those that are most upset about something tend to bark the loudest. Right. Even though their opinion of the situation might be the minority opinion, they just have the loudest voice in the room. So how do you manage something like that when you're dealing with an individual that has this really strong passion and opinion about something, but then when you look on the whole and you go, I don't think everybody else feels that way, how do you balance that? Some of it for me is just listening and I think you too, as a business owner, and especially when you're managing other Los too, that there are times when the consumer just wants to be mad and we've just got to let that process be.

Amy Cearnal (Guest) | 00:23:02 to 00:23:17

And maybe that's important for mental health. And some of these things that we've got going on. And so really, that's really been the process. It's also helpful for me to hear all opinions, and so I'm like, yes, bring it. I want to hear both sides of this.

Amy Cearnal (Guest) | 00:23:17 to 00:23:34

And so that way then we can make appropriate decisions going forward. Because if it is just one side being presented, that's not a healthy way to go about it either. Right now, it's just a lot of listening, and I want to be there. I mean, my cell phone is on everything. I'm like, call me.

Amy Cearnal (Guest) | 00:23:34 to 00:23:44

I'm not trying to hide. I want to talk about it. You can be mad at me, that's fine. I want to talk to you about it. So that's really been the process up until this point.

Mike Mills (Host) | 00:23:45 to 00:24:03

How are Spencer and the kids handling all this fun stuff? They're good, I think when we talk to the boys about, hey, this is what we're considering, what do y'all think? They're like, yeah, okay, like, whatever. It's just, oh, you're doing another in. The in the line of what mom does, so it's no big.

Amy Cearnal (Guest) | 00:24:04 to 00:24:27

So they have been so supportive. It's been very helpful to have a partner in Spencer, to be able to help make sure that we've got everybody covered and that we're able to do everything. I had a campaign event Tuesday night. It was Davis's birthday, and he kind of, at the last minute, put together some friends to go to Topgolf. I'm like, I cannot go, but luckily your dad can.

Amy Cearnal (Guest) | 00:24:27 to 00:24:56

So we're able to play off each other and really make sure that we're covering everything well. I think that's the thing. Sometimes we may lose sight of the fact that when we have people that are really you're a public servant, right? When you're running for office, you're serving on student or student council. When you're serving on city council or whatever the case may be, you are giving your time, in most cases for no money whatsoever, for the betterment of the city and what you feel like is a benefit.

Mike Mills (Host) | 00:24:56 to 00:25:32

But in doing that, you are sacrificing another side of your life. And that's hard. I mean, it's a very difficult thing, especially because I know, obviously you've been running your brokerage for a long time, but the time commitment for that versus running for mayor is two very different things. And so you at least had opportunities previously to go to the baseball games and go to the cross country meets and all the stuff that you guys do as a family, and now you're having to be taken away from that. And I can imagine just for your soul, that hurts a little bit because you want to be with your family and spend time with them especially.

Mike Mills (Host) | 00:25:32 to 00:25:48

I look at it right now. My daughter's 15, and my son is 13. And my wife and I talk about it on a pretty regular basis that she's only going to be living with us for, like, three. More years and then they're gone. And then it's like, you're like, what are we going to do?

Mike Mills (Host) | 00:25:49 to 00:26:11

What are we going to do after that? So I can imagine how are you dealing with just the emotional side of it, of being there with your family all the time and then having to be torn away? Because that's a lot that's a heavy weight to carry. Yeah. So we have been very intentional about making sure that we have time on the calendar for them first, so before we plan out any of the other events, it's like, okay, family dinners here, family dinners here.

Amy Cearnal (Guest) | 00:26:11 to 00:26:27

Really creating that intentionality, I think, helps. And then also creating some awareness with the boys of like, look, I'm going to be there for most, but I'm probably not going to be there for all. And so you all just need to be prepared for that. If that's a problem, let me know. And really, that really has been our story for part of this anyway.

Amy Cearnal (Guest) | 00:26:28 to 00:27:06

I mean, I have always been of that, that I really love going to a lot of the baseball games, but I am also not a mom that needs to sit at every single minute of every single play. Baseball can be a little slow sometimes. We have game changer and those kind of things. I think it is just this kind of family commitment of saying, hey, this is what this looks like going forward and also giving them a really cool opportunity to see what it looks like to live a life of service and to be invested in the community and to really put that yes on the table and say, hey, this is what we feel like is the right thing for right now. So we're going to go for it.

Amy Cearnal (Guest) | 00:27:06 to 00:27:37

And that does mean that we have to sacrifice some of these other things. Well, no, actually, that's a great point. I mean, you are setting an example, and I think especially these days with there's a lot of single parent households, there's a lot of kids that are growing up in some challenging situations. And to have both parents at home and the expectation that mom and dad are going to be at every single I mean, I don't know how it was when you were growing up. When I was growing up, I think my dad went to like I don't know, I played baseball, football, all the way from kindergarten to high school.

Mike Mills (Host) | 00:27:37 to 00:27:50

I think he went to like four games, maybe. I don't know. My mom was there a little bit more, but it was a different time, right? It was kind of like, listen, you have a roof, you have food, you have clothing. I never every day you're going to eat that's, right?

Mike Mills (Host) | 00:27:51 to 00:28:06

I didn't need for anything. I had all the things that I needed. So just because I wasn't getting a hug every single day, we survived, right. Luckily, my parents are in town central's parents are not far. We've got a great network of family, too, that comes around and supports them.

Mike Mills (Host) | 00:28:06 to 00:28:40

Too, but serving as an example to say, hey, look, if you care about your community and you care about what happens around you because it does impact you, it impacts your day to day life. And there's a guy, I won't say his name, people get upset about it, but he was giving a speech one time at a college, and there was a student that stood up, and she was asking questions about a book that he'd written because it was about these habits for life. And it was like, get up and make your bed. Get up and take care of yourself first and then worry about other things. And she was like, well, how can we do that when we have to worry about climate change and all these other stuff?

Mike Mills (Host) | 00:28:41 to 00:28:54

And his response was, it was like, well, here's the thing. How about you go to college? How about you become an attorney? How about you run for office? And then you can have an impact on that or become a billionaire, and then you can have a say on that.

Mike Mills (Host) | 00:28:54 to 00:29:39

But until then, get your own house in order, and then you can have an impact on those things that you're looking towards. So to have someone in your life as a child that says, hey, look, I care about the city, and you're practicing what you're preaching, you're saying, this is necessarily not at the top of my list of things to do, but there's a need, and I'm going to fill that need because I have a calling for it. And I think that's the type of stuff that makes your children grow into adults that look and value the people around them and their community and have a say on what impacts their life there. Hopefully, I think we are already starting to mourn the loss of Davis, being 17, about to leave school and some of that. But we are also, like, the fire is turned up on the accountability of that.

Amy Cearnal (Guest) | 00:29:39 to 00:30:21

We've got to make sure that he is this grown up adult and person that is going to be able to make good decisions going forward because we won't have as much impact later. And that's, I think, our bigger concern, that we really want to make sure that he's got all the tools necessary to be able to be that functioning member of society. So I'm curious about your opinion on this. I don't know how much you've dug into it because I didn't prep you with this one, but property taxes is a big deal right now all over the state, all over this area in particular, because people have seen their property values go through the roof, which is on one hand is great, right? Your house was worth you bought it for 300,005 years ago, and it's worth five.

Mike Mills (Host) | 00:30:21 to 00:30:49

Okay, that's fantastic. However, that also comes along with property taxes because in the state of Texas, we don't have state income tax. So a lot of our state revenue is collected through property taxes. So right now, I believe it got through the Senate where they're going to cap the amount that they can raise property taxes per year on current homeowners, because I think right now it's 10%. Across the world jurisdictionally.

Mike Mills (Host) | 00:30:49 to 00:31:08

Yeah, right. Yeah. And then they're also increasing the homestead exemption. And I think there was one other thing that I'm not remembering right now, but I've seen news articles about it all over the place. And with things like this, it always cracks me up because the Dallas Morning News will run an article and say, this is going through.

Mike Mills (Host) | 00:31:08 to 00:31:22

The Senate's approved it. Whatever. But then it's got to go to the House, and the House has to approve it as well. Well, the House may have different opinions on how they think this stuff should be managed. So number one is what do you think the likelihood of that actually passing is?

Mike Mills (Host) | 00:31:23 to 00:31:50

What's your opinion on it? How do you think it should be calculated or put together? And then is there anything that you think would be better and more beneficial when it comes to property taxes? That's not being addressed right now. So I did spend some time in Austin last month really talking to all of our local representatives to talk about really some of these topics, and property tax was definitely one of them that came up.

Amy Cearnal (Guest) | 00:31:50 to 00:32:05

I was hearing that really the bills out of the Senate were more favorable than the ones out of the House. And so hopefully that will go through and the House will adopt based on that. They even kind of saw some of the writing on the wall with that. Right. It's hard to know when you're just talking to a few.

Amy Cearnal (Guest) | 00:32:05 to 00:32:16

So maybe it won't go that way, but it is looking like that is a really good chance of happening on that. They all want to be able to put that feather in their cap. Got to get reelected. We load your taxes. Yes, for sure.

Amy Cearnal (Guest) | 00:32:16 to 00:32:41

Everybody's favorite. So there is something to be said for that locally. So in Arlington, the current council reduced the tax rate by two cent in this cycle. Real quick on that. In that case, and I may be misunderstood on this, so I always thought that the tax rate, because people get confused, you get taxed on the value of your home, and that's the one that moves it the most.

Mike Mills (Host) | 00:32:41 to 00:33:07

But the actual rate, I thought it had to be voted so the county can actually lower or the legislature or city council can actually lower it without a vote? Well, without an electoral vote, yes, they would control. And so this was the 2022 number that they came down on, and really, both city and ISD have impact on that. Okay, now, how the money is actually. Distributed and used that's a whole other argument.

Amy Cearnal (Guest) | 00:33:07 to 00:33:29

Yes, on that. My concern is, well, we went up 14% on our receipts over the last two years. That's a big increase. You mean the receipts as far as the money collected or as far as the bills that money collected, yeah. So we're getting in more property tax than we planned on because of exactly what you're saying.

Amy Cearnal (Guest) | 00:33:29 to 00:33:55

Increased values are happening. And so we gave back this little bit on the rate to try to compensate for that. And I understand the mentality of that and I understand some of that is feathering cap type stuff, too, of saying, hey, we've got to do something to help. But you still have create more attainable housing options, make sure that families are not feeling so much of the pinch. Where my concern is that I really want to make sure that we have a sustainable funding mechanism.

Amy Cearnal (Guest) | 00:33:55 to 00:34:20

And at the same time, we also have a bond on our current ballot for another $278,000,000, which is a five part bond, most of it being in roads, but in some other public things. And again, more capital expense. I get it that that's not super fun to budget for in your regular budget, right. But we have to in our household, right? You have to in your household.

Amy Cearnal (Guest) | 00:34:20 to 00:34:47

And so at some point, we can't just keep bond, bond, bond, bond. We've really got to figure out that sustainability on the budget side. Now, that is a huge ask and that's not something we've done before. So I am personally supporting all five sections of the current bond that are on the ballot because we're in a situation where we can't afford to not you need it. We've got to at this point, then we can start looking at how can we be a little more sustainable on it?

Amy Cearnal (Guest) | 00:34:47 to 00:35:15

But there's a lot of people that don't love that, that I wouldn't have reduced taxes, but ultimately I wouldn't have reduced taxes if we still needed those dollars. And to me, if you're asking for more money over here, then we still needed those dollars. Well, and that's the thing again, because people don't always pay attention to this stuff because I personally too am a like, you have to pay the bills, right? The bills have to be paid. So there has to be a way to collect revenue for the city in order to pay the bills.

Mike Mills (Host) | 00:35:15 to 00:35:44

And where we think is people think about taxes. Taxes bad, bad. But taxes pay for police officers, taxes pay for firefighters, taxes pay for roads, taxes pay for schools, taxes pay for a lot of things. And if you continually cut, cut, then those things move more so into the private sector, which in some cases is good, okay, but in a lot of cases do you want the police department run by the private sector for profit? I don't think you do, right?

Mike Mills (Host) | 00:35:44 to 00:36:23

So you got to figure out how to balance that, right? Yeah, and we can't trade resources on some of that. It's not like we're spending a dollar and saving this many lives or whatever with police. But at some point there is this thought of that you've got to have those resources in order to spend to make sure that we are impacting some of these metrics that we need to make sure are moving in the right direction on a lot of this. And so it's not to say I think it's a hard thing for somebody coming outside that has not been behind the curtain of what's happening on the finance side to be able to say anything with 100% certainty, but it is saying, like, hey, I want to know, I want to ask questions.

Amy Cearnal (Guest) | 00:36:23 to 00:37:17

I want to cause that accountability to staff and want to say are there resources that we can pull off of here to be in another way? Our current police budget is strong in a good way, really, but we've also got to make sure that we're getting the most out of that as we can. Well, in recent years, over the last and this is where on the side of police officers, it's really tough for them because, let's say the last 20 years, right, we have gone from having police officers be what we perceive as what a police officer's job is to also now they're settling domestic disputes and they're going out and being counselors to people when they're having and they're having to go pull people off the streets because they don't have a place to live. And there's somewhat of a homeless issue in certain parts. So you have all of these things that come into play and our police officers are the ones that are having to deal with this and, oh, by the way, we're trying not to pay them as much at the same time.

Mike Mills (Host) | 00:37:17 to 00:37:37

So it's like, okay, well, you can't ask them to do all of these things and then not give them not only the pay, but the training to do this stuff as well, equipment and. All those things, too. Yes, all that kind of stuff. And it's so difficult because, again, the average citizen is tax bad, tax bad, tax bad. But this stuff pays for so much.

Mike Mills (Host) | 00:37:37 to 00:38:11

That same person is upset that there's a pothole in their street that's been there for six months that they bust an axle on all the time. And it's like there's a give and take here and until you can have and that's always been my biggest frustration with politics in general is that everything's always black and white, right? Tax bad or tax all or take my guns all or give everything. And it's like, no, there is a reasonable spectrum of a place to land and it doesn't have to be black and white. It can be somewhere in the middle.

Mike Mills (Host) | 00:38:12 to 00:38:45

The argument or the discourse comes in figuring out what that balance is and that's why it is important to have red and blue on both sides because you want to have disagreements on subjects, because that's how you come to a compromise, right? Absolutely. Yeah. And that gives that equity and representation of making sure that all parties are heard and that they are able to bring to the table the ideas that are coming from their background and their scope of what it is. So I'm excited to hear from all and welcome that as it goes in.

Mike Mills (Host) | 00:38:45 to 00:38:54

So let's fast forward to May 6, right? Election day, may 6. If you're not, what day is that? On Saturday to Saturday. Oh, well, that's good.

Mike Mills (Host) | 00:38:54 to 00:39:09

We're finally figuring out how to put election days on days where people don't have to work in May anyway. Yes. Well, in May, I still think whenever we have election days, they should be national holidays. But that's just my opinion because more people get access to vote. We want more people saying things.

Mike Mills (Host) | 00:39:10 to 00:39:28

But when do you get into office? We're going to project into the future. When you get into there, what do you think in your mind? And again, once you show up, things change. There's always a joke about when Obama was president, about how he had Hope and Change and all these things.

Mike Mills (Host) | 00:39:28 to 00:39:50

And then he shows up the first day and they're like, all right, Hope and Change, come in here. We're going to show you a couple of things and see why this Hope and change work. So when you show up on the first day, things could change, but let's just assume it goes the way you plan. What do you think the first 25, 5100 days in office look like for you as far as the things that you want to try to dig into first and learn the most about right away? Yeah.

Amy Cearnal (Guest) | 00:39:51 to 00:40:17

So budget being probably number one is really looking at that and then really just hearing from other groups over that first bit to get to where I'm as conversational about where they are and their goals and objectives as we go forward. And I say that even city committees, but also outside committees that were really just coming alongside and saying, catch me up, kind of on where we go so that that way we can start working together towards some common goals.

Amy Cearnal (Guest) | 00:40:19 to 00:40:58

The council normally takes off in July, and so it's like we've got this awkward May June time and then July. And so I'm really hopeful by the end of July that I really will be more 100% ready to go. Well, that's something where I think when you first show up, I mean, it's really important to start building relationships, right? Like, you have to get to know the city council members. You have to get to know all the department heads and everything within the city because in order for you to get your opinion listened to and felt and whatever, then you have to have relationships with these people so they know that you're coming from a place of, hey, look, I'm caring about this for the right reasons.

Mike Mills (Host) | 00:40:58 to 00:41:31

It's not just because I have an ego and I'm in charge now and I get to make the decisions. But I think those first couple of months will probably be really important for you to sit down and get to know each one of these individuals because you guys are going to be working together for what, the next three years, right? Yeah. So that's really my thought, is that that gives that ramp time to really come in and look, the nice thing is I sit on so many boards now and really am involved and have a lot of those relationships already. So it's not starting from zero, it's starting from some sort of base, but then growing from there.

Mike Mills (Host) | 00:41:32 to 00:41:52

So getting into real estate a little bit because these things do overlap to some degree. Affordable housing is a real issue right now. It's an issue all across the country, but especially here. I bought my house in my first house in 2004 or three, something like that, 20 years ago. It was in Arlington.

Mike Mills (Host) | 00:41:52 to 00:42:12

It was right off of Shorewood Drive, right off in Lake Arlington, right in that nice great area neighborhood. It was fantastic. We paid $130,000 for that house, and my interest rate at time was six and a half percent, but I had like, I think it was like $1,100 payment, taxes were low. It was great. And it was a starter house for me and my wife.

Mike Mills (Host) | 00:42:13 to 00:42:37

We lived there for six or seven years now. That was right before the crash happened, but we still sold our house for the same thing that we bought it for even after the crash. That house is now a unicorn. And even that particular house, when we bought it for 130, I looked the other day or a while back, and I think it sold most recently for like 310 or something like that. Right.

Amy Cearnal (Guest) | 00:42:37 to 00:42:41

Not my shocked face because, yeah, that's. Probably about right over there.

Mike Mills (Host) | 00:42:43 to 00:43:12

This is something I talk about all the time when I get on these, is I care about people's ability to be able to buy a home and it's not mean, yeah, I like to do loans, loans are know, all that stuff. But that's how we build wealth in the United States is through equity and real estate. And it's been that way for a very long time. And I have a very big concern that my children, when they go buy a home now, my kids will probably be okay because they got dad and mom to help them and we can give them some money for the down payment. That's right.

Mike Mills (Host) | 00:43:13 to 00:43:32

We've been fortunate and we'll be able to pass that to them. But there's a whole lot of people that don't have that. And so what happens to the next generation of homeowners when all we see, even right now that are being built. The single family starts are unbelievably low as to what they should be. We're still at record low inventory.

Mike Mills (Host) | 00:43:32 to 00:43:45

Even with rates at 8%, they're not there anymore. They're like in the sixes now. But even then everybody's like, housing crash, housing crash. The crash didn't happen. It's not going to happen because they're not building more homes.

Mike Mills (Host) | 00:43:45 to 00:44:03

People aren't selling their houses because they have a 3% interest rate. So they're not going anywhere. So what do we do about the next generation for housing? And are there any good answers to try to solve that problem? Yeah, so I'm not going to tell you like, oh, I have it all figured out, it's actually going to be this.

Amy Cearnal (Guest) | 00:44:03 to 00:44:39

But it definitely is something that we've got to start having some conversation about. I will tell you one of the things that is just as on my heart. Just because that's been my professional career has been homeownership. And you're right, what difference does that make for the generation that has the benefit of that homeownership? It is just so huge that I don't think we can take our foot off the gas on some of that doesn't mean that I'm not sensitive to national trends of saying that there is some trending towards people wanting to have more flexibility in their housing and be able to rent for periods of time in their life.

Amy Cearnal (Guest) | 00:44:40 to 00:45:09

I just personally don't think that's every time in their life. So the only thing I give you pushback on that one is I've seen that too, where they say, well, the next generation, they like communal living and they want to move and be flexible. There is a certain amount of statistics that show that. But I think the only thing that lags on that is that once somebody turns because we got married when I was 20, I don't know, 21, 22 years old, we had kids before we were in our thirty s. Okay, so household formation has been delayed.

Mike Mills (Host) | 00:45:09 to 00:45:40

People are having families later, they're forming families later on. I've seen many situations where, yeah, when someone's 32 and under, yeah, they want to move, they want to live in the city, they want to do all the fun things that you do when you don't have a family and kids and responsibilities. But as soon as they get married and as soon as they have kids, they're trying to get out of all that. And so, yes, there is a generation of people that are in their late twenty s and thirty s that are saying, yeah, we like this, but then they're very quickly moving over into, well, I liked it then, but I don't like that anymore. I want my single family.

Amy Cearnal (Guest) | 00:45:40 to 00:46:03

I need to grow up into a more sustainable living source to protect me and my family for that next 30 years or more on that. And so that's where my concern is, just specifically speaking into Arlington as a jurisdiction. We're sitting right now at a 46% tenancy ratio with what has already gone through PNZ and Council will likely what does that mean? I'm sorry? 50% tenant, 50% owner.

Mike Mills (Host) | 00:46:03 to 00:46:38

Occupant, I got you. Okay. And so there has not been a focus from Council to really advocate for ownership model to come from a development community. And so that's where I think some of it has to start, is looking at how can we really encourage the developers to come in and build products that will fit for us so that we can help have some diversity in housing and make sure that we're meeting needs on the whole spectrum? People from their 20s coming into a first home to then senior housing, too.

Amy Cearnal (Guest) | 00:46:38 to 00:46:59

It's all important, but it is also, in my opinion, important to have it not just on a rental model, but also on an ownership model. So you're talking about, like, incentivizing builders somehow, some way. I mean, we incentivize the Cowboys to build a $20 billion team. I'm sure we could figure out how to incentivize some builders when you look. At it from a developer standpoint.

Amy Cearnal (Guest) | 00:46:59 to 00:47:31

Well, okay, if I'm not really getting any pushback and I can go and buy this land and I can put on whether it's an apartment complex or what, we're seeing more now of this horizontal multifamily. So it looks like a cute little starter neighborhood, but it is not individually platted. It is really all owned by one entity, and they are leasing it more like an apartment based model. Why, if I'm a developer, why am I not going to want to do that? Because if I was just selling them as a single family or money, I'm only going to make money one time on it.

Mike Mills (Host) | 00:47:31 to 00:47:53

Absolutely. If I sell it over here and have this for the next 50 years, I'm making the money on the back of those tenants for the next 50 years. And in my opinion, creating more working poor for our community. That really because those rents are just going to go up and up and up for that property as the property declines. Well, there's a reason that the blackrocks of the world and all these people have gotten into this is because it's profitable.

Mike Mills (Host) | 00:47:53 to 00:48:17

There's a lot of money in it. So you have to figure out how to move the profit from the multifamily rental model and try to get it more so into the single family model to have that. Yeah. So from an attainable housing perspective, we're going to need some multifamily. I can't sit here and say I would never go for any sort of multifamily, but ultimately we've got to figure out how to draw out some of that ownership model and some of that other diversity in housing.

Amy Cearnal (Guest) | 00:48:17 to 00:48:59

Otherwise we're not going to continue to move forward. We're going to get, in my opinion, farther back with a resident mix that is more of a user base than a feeding in base. And so there's just some of that line that we've really got to make sure that our residents, whether they're a tenant, northern, owner, occupants, that they feel committed to our community and that they're here to really be a part of it and not feel like they're just at a stopping point on the way to their next place. Do you think with your experience talking to the current city management and even on the state level, I know they're aware of it. Do you think that this is a point of focus for them?

Mike Mills (Host) | 00:48:59 to 00:49:31

Because ODS are if you're running for council or you're doing whatever, you probably have a decent income lifestyle that you've lived and so you probably own your home and whatever. So that isn't impacting them personally on a day to day basis. So is it a focus of the people in office right now or the people in those positions to even want to try to figure out how to fix that issue? I think it is. I just think it's the lens of how you're looking through it on and how to make sure that we're just going in the right direction on it.

Amy Cearnal (Guest) | 00:49:31 to 00:50:03

And I will tell you, it was one of the things that did motivate me to come to this with some of that was that I served on, which has gotten a super bad rap in Arlington. But this residential infill committee where our goal was to look at our current zoning laws or ordinances and say, okay, is there room to bring that a little more into modern time to help entice development to come in? Just with pure zoning changes. Not ed dollars, not anything of that. But are we losing developers because they're looking at opportunities and saying the zoning doesn't work there?

Amy Cearnal (Guest) | 00:50:03 to 00:50:38

I'm going to go somewhere else. Right? And some of those conversations didn't go anywhere with Marin Council currently because for whatever reason and so that's where I do think there is some opportunity to really cause some light to come on that and say we've got to figure out housing, we've got to make it grow in a different way. And not in really for Arlington anyway, not in a way that we're really looking to up the population growth all that much, but we are looking to make sure that we are taking care of the people that are here and that they're in the appropriate size and priced home that they should be. Do you think there might be any opportunity?

Mike Mills (Host) | 00:50:38 to 00:51:04

One of the things that I've noticed recently, at least in the news, and we'll see, because I don't think it's been fully played out yet, but there's a lot of concern on commercial real estate right now, that if there is any type of real estate bubble, that that's probably the place that it is, because you have multiple different factors. The work from home, the COVID issues that happened. There's no need for. The office necessarily. I think warehouses and whatnot are still doing good because of all the goods and stuff being shipped.

Mike Mills (Host) | 00:51:05 to 00:51:35

But even apartment complexes because they built, I think people forget if you're going to build a $20 million apartment complex, that's a four or five year project. That's not something that just happens in six months, at least from what I understand. And so you contracted to get everything in place to build this place three or four years ago, get all your permits and everything through. Now you're starting construction and now all of a sudden it's like, wait a minute, now we've got apartments everywhere, we've got office buildings everywhere. So do you think that there's any opportunity in that area?

Mike Mills (Host) | 00:51:35 to 00:52:09

Because there may be a downturn in that market with less and less people renewing their commercial leases to where either you can take commercial buildings and reuse them and put them in more of a residential type of situation or even tear them down and use the land because that's the big cost, especially Arlington. Mansfield is there's not a lot of land. There's no land. Yeah. So we've actually talked about this like us looking for office space and trying to figure out what the right thing is on that and it is in Arlington anyway, we are still seeing a pretty low vacancy rate from an office perspective.

Amy Cearnal (Guest) | 00:52:10 to 00:52:38

There are some retail and those kind of things that have a little bit higher vacancy. Ultimately my concern of Arlington is that we are tired in some of those commercial corridors too. And so it may be some necessary things to have happen of some of those properties to look at a way to rebirth into something. Former our former Mayor Williams had said that Arlington was under demolished. And there definitely are some places in Arlington that are under demolished.

Amy Cearnal (Guest) | 00:52:38 to 00:53:10

And so some of that is and this may be where then there are some more public private partnerships that are options of being able to come and say, how can we prep this land to get it ready for what we believe is the next generation for this land to be? And really helping to get to a place where then developers are really more enticed and looking at, okay, that is something that's interesting to me because they're not having to do there's not as much hair on that deal kind of thing right. That they're seeing that they're going to have to deal with. Right. So we're almost at an hour here.

Mike Mills (Host) | 00:53:10 to 00:53:40

So I want to ask you one more thing because I know you got, I'm sure you've got 7 million other things you got to get to. So I'll get you out of here. But I want to get your thoughts on what you think where the economy is kind of headed just in general because just like real estate economies are local, they're not always national. But there's a lot of stuff in the news right now about either we're already in a recession or we're headed that direction and it could be very harsh. Or I see both sides see people say, oh no, we're kind of bouncing back.

Mike Mills (Host) | 00:53:40 to 00:53:58

It's on the upside. And then I see people like, no, this is the dead cat bounce. This is the dead cat bounce that's about to change and that's not going to continue going forward. Just for your own personal opinion, where do you think all this stuff is headed? Yeah, I think we're kind of okay.

Amy Cearnal (Guest) | 00:53:58 to 00:54:14

I think housing is tough right now. It's something that we're going to struggle with these interest rates and really having a lot of mobility happening. But I don't think we're so hamstrung that there's nothing happening. But I'd actually be interested to hear what you have to say on that.

Mike Mills (Host) | 00:54:16 to 00:54:47

Had to if I had to put money on it, if I was in Vegas and I was putting money on it, I would say that we are probably headed towards a pretty good downturn. I think it's going to happen, or I think it's more likely to happen, I should say, just because there's a lot more issues in the banking sector than I think people understand. And I don't know, chase bank and bank of America. They're going to be fine, okay? They're always going to be fine because they've got Fed dollars in their back pocket that they can always get to if they ever need to because they can't fail because they're not allowed to because it would cause complete havoc.

Mike Mills (Host) | 00:54:48 to 00:55:28

But I think there's so many things that are happening right now between the war in Ukraine, which is causing a big strain globally on all kinds of issues with supply chain and everything else, energy prices getting more and more expensive. I also think that you're seeing, or we were going to start to see corporate earnings when those start coming out because we just remember we're just out of Q One, just barely out of Q One. So you're starting to see more and more of these earnings pop up, and those are starting to get worse. And the projections for where they're going to go are getting worse and worse and worse. And that's kind of whenever the money supply shrinks because you have higher interest rates, less people borrowing, then there's less mobility.

Mike Mills (Host) | 00:55:28 to 00:55:48

So the economy just isn't kind of churning at the same rate that it always does. And that's when you start to see layoffs. And that's when you look, if you're a publicly traded company and your job to your shareholders is to show a profit, then that's your job. And if sales go down, then one of the easiest, best, quickest ways to solve that problem is by laying people off. And we experienced it.

Mike Mills (Host) | 00:55:49 to 00:56:54

I joke that the mortgage industry in this situation was kind of like the canary in the coal mine because we've already gone through that. We went through that over the last eight or nine months, where we had to contract pretty heavily because we went from the craziest, most high flowing market that we've had in the history of real estate because rates were at two and 3% to they just slammed the brakes on and everybody went flying out of the car because that's what happened. We experienced that and we're kind of now starting to go on the uptrend, but I don't think the rest of the economy has felt that. And my biggest thing is that we as a society, especially now, because social media is so big and all of our attention is our attention spans are like this, right? So when you see something on the news that says, oh, the crash is coming, and then a week or two goes by and you're like, nothing happened, I'm still working, I'm still doing my thing, everything's fine, we lose sight of when you go back and look through history, these things don't happen overnight.

Mike Mills (Host) | 00:56:54 to 00:57:11

There's a slow crawl down. There can be big events that cause things to go, but for the most part it's a slow trend downward. And then you look back and you go, oh, wait a minute, we were over there, now we're down here. And you feel it. But because our attention spans are so short, we just like, we're fine, you know what I mean?

Amy Cearnal (Guest) | 00:57:11 to 00:57:52

Well, and I think that real estate, especially on the residential side, but even the commercial side too, that we're feeling that even more because the Fed is starting to really use that rate as the lever that they're using to control. And that doesn't bode well for us long term. I mean when I started hearing more and more of that, that does make me more nervous about what does that do for homeownership and what does that do for kind of the reputation of homeownership on some of that too. If people are like, well man, I'm done with that, they're going to keep doing that and messing around with me of, okay, maybe it's 2% and then maybe it's 8% the next time I come in. And then it just is too much volatility in that.

Amy Cearnal (Guest) | 00:57:52 to 00:58:25

So I'm concerned about what that looks like for the industry. Well, we should, we have a CPI report that will come out in early May. And the expectation just in everything that I follow is that it's actually going to be pretty good because I understand it to a certain extent, but I still get a little confused because it has to do with how rents roll over. But there's always a lag in rents on the inflation data and so there's usually like something crazy like six months. And again, I think it's how leases turn over and when we get that data in.

Mike Mills (Host) | 00:58:25 to 00:58:53

And so for a long time or the last six or eight months, rentals have been high. The rental market and the price, it was something like I want to say it was like 30 or 40% that made up that boost the higher level of the inflation data. And so this is the first month where the trend for that will be the data will come down. So the expectation is that the inflation data should be lower. Well, when that happens, then the Fed more often than not will start to slow their rate increases.

Mike Mills (Host) | 00:58:53 to 00:59:23

So what the market thinks is that we'll have a good CPI data in May, then the Fed will still raise rates one more time in their May meeting, probably a quarter of a point. Right. And then the next one, which I think is not until July, maybe that the expectation in the market is that there will probably be a pause. Okay. But then where everybody thinks is that by the end of the year, they think the Fed's going to turn the knob back down to start doing QE.

Mike Mills (Host) | 00:59:23 to 00:59:43

And I don't think that's going to happen. I think they're going to stay paused for a while until they get at least close. Because what happens with inflation is it sticks. Like once you get to a certain point, you can bring it down, but then it gets real little sticky and you got to let it play out a little bit. And I think that's where the trend, the downtrend in the market will start to occur because the money will contract.

Mike Mills (Host) | 00:59:43 to 01:00:05

People will think, oh no, it's going to be good. And then the Fed will come out in the middle of May and go, no, we're raising rates again. And then I think the market's going to go because they're going to like, well, this is what we were expecting. Do you think general market or housing market or both? I'm still seeing a lot of cash on the sidelines on the housing too, that people are willing to come in and throw towards property.

Amy Cearnal (Guest) | 01:00:06 to 01:00:33

And so that to me is helping to make sure that or helping to not get our prices where they're deflating in a significant way. Well, the problem with houses, inventory and inventory, yeah, we still have less than two months of inventory. Now. The problem is with real estate because people read more national news than they read local news. So when you see stuff california is having a hard time with real estate, but that's because half the state moved out of California and moved to Texas and Tennessee and Florida and everywhere else.

Mike Mills (Host) | 01:00:33 to 01:00:49

And, oh, by the way, all of Silicon Valley and all of the tech industry took a huge hit and laid off hundreds of thousands of people. So yes, that market is having a hard time. We are not experiencing that in Texas. We haven't. And there was only maybe three or four months, I would say less velocity.

Amy Cearnal (Guest) | 01:00:50 to 01:01:17

In the housing market, but definitely not pricing at all. It hasn't changed because I talk to people about this every day. So until they say, well, I'm going to wait for pricing to come down. Well, it's not, because the minute that rates do come down, which the expectation is within the next, say, twelve to 24 months, we might be into the fours and fives again, okay? It's not getting the twos and threes unless there's just a massive crash and Fed starts buying mortgage backed securities again.

Mike Mills (Host) | 01:01:17 to 01:01:41

But even at fours and fives, all of the people that have been sitting on the sideline going, well, I'm just going to wait, they're all going to come flooding back in. And so the two months of housing inventory that we barely have right now, if that happens and it doesn't improve between now and then, it's going to be next to nothing. Right. And like you said, the cash is still coming in, the investors are still buying. I mean, I read the other day, and again, this is in Dallas Morning News.

Mike Mills (Host) | 01:01:41 to 01:01:59

So in 2022 in Tarrant County, 50% of the homes sold were sold to companies and investors. Yeah, I saw that, too. That's insane. I know. I did question that with Nar to see if they could get us real data on it, but I'm sure they're right.

Amy Cearnal (Guest) | 01:01:59 to 01:02:22

It's just one of those that or. Even if it's close to 40% close. Yeah, because I'm not seeing that as much on a real time basis just. From anecdotal the stuff that the transactions. That you because I'm seeing every transaction that our company is doing, and I'm not seeing those kind of institutional buyers, but they could be coming in and buying REIT blocks where that is what's impacting it.

Mike Mills (Host) | 01:02:22 to 01:02:41

Well, they're probably not using a realtor really? I mean, if you've got $2 million in an investment fund, you're just going to the seller and you're saying, hey, I'm going to pay this much and. Be done with it. And that's what I just am interested to see what that mix is of pure residential versus some of the multifamily and how some of that goes. Because I think it's a really interesting question.

Amy Cearnal (Guest) | 01:02:41 to 01:03:00

And if that is really happening, we are in a totally different point in our history of how housing has gone well. The problem is that this is a situation where housing has always been a big driver for GDP. It's always been a big driver for American citizens. Wealth creation. Right.

Mike Mills (Host) | 01:03:00 to 01:03:05

And if that dries up and goes away, okay, the businesses get it instead.

Mike Mills (Host) | 01:03:08 to 01:03:31

That's my biggest fear, honestly. And I don't know if it's ten or 15 years, I mean, even for our industry, right. What happens if all the residential market, not because of contraction of the economy, but just because of the nature of that, letting us have these commercial interests come into this industry and take over? There's no need for loan officers. I mean, look, BlackRock isn't calling me to get their FHA mortgage for that house, right.

Mike Mills (Host) | 01:03:31 to 01:03:33

And they're not calling you to list it.

Mike Mills (Host) | 01:03:35 to 01:03:49

Look at the stock market. Stock market is a great example. Right now, in the stock market, there's Something Called dark pools. Have you ever heard of this? So if I buy Tesla stock, I put an order in With Vanguard to buy Tesla stock for, let's say, $120 A share.

Mike Mills (Host) | 01:03:49 to 01:04:11

Right? Well, when that order is placed, it goes into a dark pool. And this dark pool now is selling not I'm not buying Tesla. I'm buying from Tesla. I'm buying from A set of investors that get to decide what price they want to sell to me or buy from before it actually goes To The open market to, like, if I Was buying Your stock and you were selling, because that's how It works, right?

Mike Mills (Host) | 01:04:11 to 01:04:23

I buy yours, you buy mine. So it gets put to the side first. This is where Robinhood got into a bunch of trouble because Robinhood was taking all their trading and they were just offsetting it by, like, a penny. Right? Two pennies.

Mike Mills (Host) | 01:04:23 to 01:04:48

It was very small fraction Of A penny. But that's billions of dollars when you have trillions of dollars moving through the market. Right. So what happens if that model gets into housing to Where BlackRock says or Blackstone or Vanguard, whoever? I don't mean to pick on them, but even though I should but what happens when they have a pool of 100 homes that they want to move, but it doesn't make it to the market?

Mike Mills (Host) | 01:04:48 to 01:05:27

It gets offered on the quiet commercial market first if there's any takers, and then that's how everything Gets transacted and the individual consumer is left completely out of that metric. I mean, that's the place we could go in not A really long period of time. Yeah. And in some ways, that may not be the worst thing for the consumer if they have an opportunity at Purchase of it. I went To Some training on NFT and Blockchain and how that Relates To real estate, which is, like, we could talk for hours, but there are some ways that we can pull some transactional cost out of that to potentially be A benefit to the consumer.

Amy Cearnal (Guest) | 01:05:27 to 01:05:52

But not in this way. Not in a way where we have these massive entities that are really trading these huge blocks of rental properties and leaving so many of our residents in those rental communities that are just going up and up on their rent prices per demand. Yeah. I don't know the solution to it. My hope is people just keep Talking About it and keep trying to figure out how to solve the problem.

Mike Mills (Host) | 01:05:52 to 01:06:13

I mean, there isn't a way out of it right now. And unfortunately, when the little guys competing against millions and billions of dollars, more Often Than not, they don't win. But that's why we need really conscientious people like you in office to be able to at least call that stuff out and Make It A focus right. Bringing it all back. We'll see what we can do.

Mike Mills (Host) | 01:06:13 to 01:06:27

Well, I appreciate you coming in. Like I said, I know you're a busy lady and you got a lot of stuff on your plate, so I thank you for stopping by with me for an hour to talk about all this stuff. I'm sure we just solved all the problems, so everything's fixed, and the world's great. Absolutely. But thanks for coming.

Mike Mills (Host) | 01:06:27 to 01:06:33

And once you win, I'll have you come back in and we'll talk about that. Thanks, everybody that stuck around, and we'll see you next time. Bye.