The Prof G Pod with Scott Galloway - State of Play: Real Estate Markets and Investing — with Dave Meyer

Episode Date: February 9, 2023

Dave Meyer, the VP of Data and Analytics at BiggerPockets, joins Scott to discuss the state of play of US residential and commercial real estate, how to think about investing in various real estate markets, and his predictions for the year ahead. Follow Dave on Instagram @thedatadeli. Scott opens with his thoughts on population decline, and how our nation needs to make it more appealing and affordable for people to have children.  Algebra of Happiness: check in with your friends. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 234. 234 is the area code serving northeastern ohio in 1934 bonnie and clyde were ambushed and shot by officers in louisiana and alcatraz became a federal prison did you hear about the psychic dwarf that escaped from alcatraz word is there's a small medium at large it's funny when you think about it go go go welcome to the 234th episode of the prop G pod in today's episode we speak with Dave Meyer the VP of data and analytics at bigger pockets a firm for learning

and succeeding in real estate investing. Clearly got that from them. Affirm learning and succeeding in real estate investing. Anyways, we discussed with Dave the state of play of U.S. residential and commercial real estate, how to think about investing in various real estate markets, and his predictions for the year ahead. I am fascinated by real estate. If I had to do all over again, I'm not sure I wouldn't just take every dollar I ever made and put it in real estate. That or vertical farming of cocaine. Anyways, what is happening? There is a TikTok trend about being a dinkwad couple, double income, no kids with a dog.

And it makes sense. Kids are expensive and getting more expensive. An August 2022 report by the Brookings Institute revealed that it can cost a married middle-income couple with two children more than $310,000 or an average of $18,000 a year to raise a younger child born in 2015 through age 17. I mean, that's just a shit ton of money, right? If you think about it, say you have three kids, which is the ultimate luxury item in New York. That's the way of saying, like, I don't really want three kids, but I thought about having a third such that I could communicate to my friends in Manhattan, Daddy's a baller! Anyway, probably not the reason to have kids. 18,000 a year, it's actually 18,271. Say you have three kids, that's 55,000 a year after tax.

What are we talking about? We're talking about 90 or 100K a year just to pay for your kids in top-line gross income? I mean, and what do you know? Population is declining. It has gotten crazy expensive to raise kids. That's up 9% from a calculation based on the inflation rate in 2020. Up 9% since just in the last few years. The median household income for families in 2021 was $91,000 and $42,000 for non-families.

A family household includes non-married couples. So while the Dinkwads have their fun on TikTok, this actually points to a larger trend that we've been paying attention to here at Prop G. And that is depopulation, or more specifically, what might happen if our nation continues on a trajectory where young people simply aren't having kids. Now, I want to go meta here or take the lens back. I like finding an issue where I think the data says something that other people or most people aren't talking about and also is controversial. I like waiting in or I should call it touching third rails. One, because I like the attention and controversy and provocation creates heat and attention. And two, if you like to think of it as you're a thought leader, and I know that's an arrogant label, but you're willing to go where the data takes you and catalyze a conversation, even if it creates controversy or, you know, you get some hate.

By the way, if you're saying something, I mean, if you're talking about your dogs and everyone loves it, okay, that's fine. But if you're talking about, if you have a viewpoint on any economic or societal issue and everyone agrees with you, it means you're not saying anything. You're not saying anything. Anyways, I think the next thing

we're thinking about talking about or trying to learn a lot about is depopulation or population decline. Depopulation sounds very scary. Population decline. And I think there's some really interesting trends. And it also triggers people. People find it very controversial. Why is that? We wrote about this the other week in our No Mercy, No Mouse newsletter, and it generated a major discussion in our comments section. I think the comments or the number of comments is sort of the indicator of what I look at in terms of success. And I would say

two-thirds of the comments were pretty negative or upset or saying that we got it wrong. And by the way, we get it wrong all the time. That's not impossible. Dozens of people chimed in regarding how it would be amoral to bring more people into the world when we haven't solved the climate crisis, or that the post is implying that the population decline lays at the feet of women who aren't pregnant all of the time. The former is a myth, and the latter is not true. So let's talk about climate change and population increases. It makes sense, and it's somewhat logical to think that the two are correlated, but it's not entirely true.

When it comes to climate change, the lifestyle choices of the rich matter more when it comes to saving the planet, not a declining population. A report from Bloomberg explains how the wealthiest people in the world, as in the more than 60 million people earning $109,000 annual salary, are the greatest source of emissions. It's the lifestyle and energy choices of the wealthy, the 1% of the population that are driving climate change. Roughly 37% of this cohort lives in, wait for it, the United States. And globally, get this, the top 1% emits about 70 times more carbon compared to the bottom 50%. Where have we had the greatest population increases? In places like China and India. And guess what? On a per capita basis, they emit far less carbon. We like to demonize them and their reliance on coal.

And coal is definitely a culprit here. This is the car, as is things like beef, industrial production of beef, and all kinds of things that we need to do better. Actually, ships produce more carbon than I knew when I did a little bit of research here. So let's talk about population decline and its impact on the environment. Realistically, like what actually happens if we go into population decline? China is now in population decline, and they think at the current rates, by the turn of the century, it'll be 600 million people. I mean, literally population cut in half. India is on the verge, potentially, of going into population decline. What happens when you go into population decline? One, so far, everyone that goes into

population decline, their economy declines. Japan and Italy are two examples. Japan started going into population decline years ago, and guess what? They've been in about a 30-year flat to recessionary economy. Italy is not exactly doing well economically. There are only two ways to grow an economy. You either increase productivity or you increase population. And ideally, you have both. So what do you think is going to happen when we put pressure on these nations to move to renewable energy? The transfer or the arbitrage or the transition to renewables is expensive. I've never bought this notion that there's a free lunch here.

Fossil fuels are the gift that keeps on giving. They are cheap. And there's always going to be a lifestyle and economic arbitrage pulling the shit out of the ground and burning it and putting carbon into the air. I think it's a basic economic fact. And as much as we'd like to believe that we're going to get rich transitioning to renewables, and okay, wouldn't that be nice? It's going to be expensive. And unless we acknowledge that and make the requisite investments, I don't think we're ever going to get rich transitioning to renewables. And okay, wouldn't that be nice? It's going to be expensive. And unless we acknowledge that and make the requisite investments, I don't think we're ever going to get our arms around climate change.

Anyways, what do you think happens when China and India's economy go into a tailspin or go into a slow decline? Do you think they're really going to give a flying fuck about climate change? Do you think you're going to talk them into making the requisite investments in the transition to renewables when their economy goes into a tailspin. No, we need growth. We need more money to pay for the transition to renewables. And the correlation between population increase and climate change, I would argue, is a perfect example of correlation doesn't necessarily mean causation. We can have population

increases and also have the decarbonization or start to address thoughtfully, thoughtfully, the transition to renewables. What do we need to make that transition? We need economic growth. So putting aside climate change, what really needs to be the focal point when we talk about population is the fact that our country needs to make it more appealing for people to have children. Why? Because it's not only about population decline, it's about population denigration. What do I mean by that? And I realize that's a terrible word. Here's the bottom line. Productivity peaks at 40. About 40% of all government spending goes to the support of seniors. And what happens? Look at Japan. When there's not enough young people to pay for these programs, you have to cut investments in other social services. You have to cut investments in R&D. You have to cut investments

in infrastructure. You have to cut investments in economic growth. The reality is, and we don't like to say this because it's ageist, seniors are not as productive. And guess what? We have way more unproductive seniors than we used to have. So, what could we do? What could we do? We could retrain our seniors. We could move back Social Security payments. But even that means testing and extending the age at which you're eligible for Social Security. When you do the numbers, as our editor Jason Stavros pointed out, it really doesn't save a lot of money. We need to be less ageist. We need to better embrace and better accept and create more productive roles for our seniors in the workplace. But the reality is, if we are on this trajectory, what are we going to have? In the U.S., at the

turn of the century, we will have six times as many people over the age of 80, and we're going to have half as many kids under the age of five. And let's just give a nod to youth right now. Who wins Grammy Awards? Who are the greatest artists? What Nobel Prize winners in economics, what do they get their Nobel Prizes for? Almost universally, work they did in their PhD programs in their 20s. Who makes the greatest art typically? Who starts the most valuable companies in the world?

Who started Apple? Who started Microsoft? Who started the world? Who started Apple? Who started Microsoft? Who started Meta? Who started Google? Oh, wait, let me think. People in their 40s, 50s, 60s, no, people in their 20s. Who fights our wars? And quite frankly, who has babies?

Young people. If we don't have at least population stability, we're going to have economic decline. And people immediately associate population growth with negative things. That, oh, this capitalist consumptive culture that you're talking about, Scott, or somehow advocating for an increase in population is somewhat misogynistic. No, it's not. Let me be clear. Nobody has an obligation to have kids.

You can be happy without kids, and you should get to make that choice. You have domain over your body. You have domain over these lifestyle choices. And also, I want to acknowledge, a lot of the studies show that people without kids are actually happier than people that have kids. What am I suggesting? I'm suggesting that as a government, as a society, if we see that youth is a key component of a productive society, and we also acknowledge what is happening here, that the ratio of young people to old people is going to create tremendous externalities and unintended consequences. And the question is, well, okay, we can't shame people. We can't mandate them into having children. Here's an idea. How do we make it more appealing if they decide to have kids

or if they decide to have more kids? What's one of the reasons I didn't have three kids, I had two, was because I was economically strained and anxious about the prospect of having another kid that was gonna cost me a third of a million dollars. So what do we need to do? One, I don't believe in universal basic income, but I do believe in universal basic child tax credits. And that is simply put, just as we did through the pandemic, we were able to eliminate 90 absolute crime. We need substantial child tax credits.

We need to make it easier for people to have kids. We need to make it affordable for people who decide that they want to have children. What else do we need to do? We need to give more opportunity to young people in the form of access to education, figure out a way to stop this nimbyist bullshit culture such that housing prices come down and offer more affordable mortgage rates to young people so they have a chance at actually buying a house. What else we need to do? Tax rate policy. It's skewed towards old people. What are the two biggest tax deductions? Mortgage interest rate and long-term capital gains. Why do old people like me who own stocks get to pay lower tax rates than young people who make all of their money actually working? We need

one tax rate similar to Reagan and we need to lower taxes specifically on young people. Why on earth is minimum wage not $25 an hour? Why on earth is anyone under who makes less than $50,000 paying any income taxes? In 2018, the New York Times surveyed more than 1,800 men and women ages 20 to 45 on why they're having fewer kids and their ideal number. And two-thirds cited that childcare is too expensive. For God's sakes, how can we not have like every goddamn mature nation in this world, inexpensive or affordable childcare? That doesn't make me a socialist. It makes me a fucking human that wants other people to have the option to have kids and has decided that kids shouldn't have higher blood pressure, which they do when they grow up in poverty. And 54% desperately want more time with

the children they already have. Of those who said they didn't want children or weren't sure, a third, or 36%, said they wanted more leisure time and 34% said it was because they hadn't found a partner. They hadn't found a partner. But the notion that somehow the future is terrible and you have some sort of moral obligation not to have kids, the notion that in fact the climate will only heal itself if we go into population decline, that's just bullshit. The data doesn't reveal that. More people, more innovation. If you have 10 kids, right, one or two end up being a drawn society, five or six are good citizens, and one or two come up with great ideas that make the world better for those 10 kids. Every innovation, if you look at prosperity, if you look at Nobel Prize winners, if you look at philanthropy, if you look at peace, if you look at a decline in the number of people who die at the hands of other humans, it's all correlated to one thing, population growth, innovation, communication,

empathy, and families who decide that life is worth a damn, that they build relationships. The elemental foundation of any society is relationships. We need to give young people more opportunity to find each other, fall in love, make mentors, and also should they desire, should they desire the opportunity to have a family? We'll be right back for our conversation with Dave Meyer. I just don't get it. I just wish someone could do the research on it. Can we figure this out?

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Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Welcome back. Here's our conversation with Dave Meyer, the VP of Data and Analytics at BiggerPockets. Dave, where does this podcast find you? In Amsterdam, where I live. Okay, so we're here to talk about real estate estate and it's weird to ask you questions about American real estate from Amsterdam. My understanding is you're very knowledgeable. So I love to just start off and I realize this is a difficult question because real estate is very market specific and we'll talk about markets, but give us the state of play in US residential real

estate. Yeah. I think what you said first is true, that everything will be really different. And the last few years where every housing market behaved in a singular way is very abnormal. And so we are probably going to return to this normal bifurcation of markets where some perform well, some don't perform that well. But on a national basis, what we're seeing is that all of the fundamental drivers of price appreciation over the last few years are now reverting a little bit, and we're entering a correction in the residential space. I'm deliberately not saying a crash because I don't believe that housing prices in the United States are going to crash on a national level.

But the simplest fact is that housing has become unaffordable. We're at about a 40-year low in terms of housing affordability, and that's not sustainable. So one way that affordability can improve is housing prices come down, and we're already starting to see that happen nationwide. What markets are being hit the hardest? Generally speaking, the pandemic darlings, you know, the markets that grew as quickly, the fastest during the pandemic, are the ones that are coming down the most. So Austin, Reno, Las Vegas, Seattle, Boise are some of the hottest markets, were some of the hottest markets during the pandemic, and they're coming down the most. And on the other side, some of the markets that

were pretty slow and steady or were growing in a more traditional pattern over the last few years are still performing pretty well. Those are markets like Chicago and Boston and Philadelphia. So let me outline, let me give you a thesis and you tell me where I've got it right or wrong. And that is, so I'm a real estate investor and I'm really excited to buy real estate because it's, I bought a bunch in 2010 and 2011 for investment purposes and that's worked out really well. And I'm waiting, not for a crash, but for, you know, a rationalization. And the way I would describe the market right now, or my impression of the market, is that sellers haven't gotten the memo. And that is, there's a

bit of a standoff. And that is, okay, so you have interest rates go up 300 bps, which makes a couple looking for a house, they used to be able to afford a $750,000 house in terms of monthly payments, now they can afford 450. I mean, there's some real headwinds, but people always anchor off the highs. They say, okay, Bob sold his house down the road for X, so I should get X. And they realize now at some point they're going to realize the market's changed dramatically. But I think the market's going to get much better for buyers and much worse for sellers in the next six months. Where do I have that wrong? I think on a national level, you have that pretty close to spot on. I think there are a lot of areas where sellers are not willing to accept lower prices or they're just avoiding putting their

house on the market altogether. We're seeing this phenomenon where new listings, basically the amount of homes that are put on to the MLS for sale, are down 20% year over year. And people just don't want to sell into this environment. And that has sort of created this environment where prices aren't falling as fast as they probably would be in a different type of environment. But I do think eventually sellers will get the memo. And despite all the media attention to investors and Wall Street entering the real estate market, about 70% of homes are owned by homeowners, just people who are living in their primary residence.

And eventually people, they sell, they move, they do it for reasons that are not purely financially motivated. And I think we're starting to see that now where people are accepting rates in the 6% and 7%. And I do think eventually people are going to resume their lives. They can't hold off on selling forever. And that will probably push inventory up, it will push days on market up, and that will eventually lead to declines in prices. And do you predict that back half of 23? Is it already happening? What's the timing? I realize no one has a crystal ball here, but what would you guess? What would be your best guess as to when this happens?

Yeah, I think the first half of 23 is going to be a lot of the same. I just think there's too much uncertainty in Fed policy and mortgage rates right now for anyone to really do anything definitively. Depending on what happens with mortgage rates, I do think we could see the second half of the year see a bit of a slide, but I still don't think it's going to be anything worse than, let's say, three to 8% declines on a seasonally adjusted basis for the country as a whole. And right now, we're actually seeing mortgage rates have dropped a lot, and that's actually picked up activity in the housing market. So it's actually probably slowed down the eventuality of prices going down just by a few more months.

So say it happens in the latter half of the year. Let's talk about markets. What markets do you think offer the best opportunities for long-term cash flow and appreciation? Yeah, so I think they're actually opposite. So if you look at historical patterns, let's say from the Great Recession to the beginning of the pandemic, there are basically two types of markets. There are markets that traditionally offer great cash flow, and then there are markets that traditionally appreciate faster than others. And if you look at outliers, like the outliers for great appreciation are outliers for poor cash flow. If you think of San Francisco or Seattle or Denver, where I primarily invest, those are places that have

exploded in terms of appreciation and property prices. But in terms of cash flow, they're towards the bottom. Whereas the other side of the equation is some markets that might have declining population or less rapid economic growth, you see better cash flow. Those are markets often in the Midwest. Cities like Indianapolis or Columbus, Ohio come to mind, offer great cash flow over the long run, but probably don't offer those appreciation potential. As investors, we often look for things, what I call like a hybrid city, which offers a little bit of both. And for those, I do think they're primarily located in the Southwest right now. You look at markets, a lot of them in Florida, Tampa, for example,

Atlanta, Nashville, places in North Carolina are still relatively affordable. And I think affordability is really going to drive real estate prices over the next couple of years. They're relatively affordable, but the rent to price ratio, which is basically a proxy for cash flow, basically how much rent can you buy for your price, is still pretty reasonable in those areas. And I think given the population growth in those markets, you'll probably see that continue into the future. So give me your two or three markets you're most bullish on. And what are the factors that make them attractive markets? I think Tampa is one of them. You just see a lot of businesses relocating to Tampa right now and

bringing really high paid jobs and a diversified economy that isn't as rollercoaster as somewhere like Las Vegas or some of these markets that are all dependent on a single industry. Tampa has strong healthcare. It has strong finance. The population is exploding. And so I think that's a really good area. We also just see that people tend to like to live in nice places. That's been one of the big trends in terms of migration patterns over the last couple of years. I really like Charlotte, North Carolina, as well as a really strong market because it also has strong banking, strong insurance, finance sectors, well-diversified economy. When it comes to real estate investing, it's not the same as

stock investing where you're looking at all these complex things. It's really not that complicated. You want to look for wage growth. You want to look for job growth and population growth. It's just trying to identify an imbalance in supply and demand. And so you look at Tampa, you look at Charlotte. I think those are good ones. Atlanta. And then I'll just give some smaller markets like Columbia, South Carolina is also one that stands out. So let's just a quick left turn. It feels like there's a lot more dislocation and stress and possibly opportunity in commercial. Have you given any thoughts to investing in commercial real estate? Oh, yeah. I invest quite a lot in commercial real estate. I think commercial real estate is poised for a very significant decline. Or I said in residential real estate,

which I'll categorize as anything four units or below. That's basically how it's categorized in terms of financing. If you look at commercial real estate, which is valued in a totally different way than residential real estate, it is very likely, in my opinion, that it's going to decline. And that's because commercial real estate is valued like a business, right? You're looking at how much cash flow you're essentially buying. And for years, commercial real estate, the way it's been trading has been at very, very high valuations. Cap rates are extremely low.

But if you look at the traditional spread between cap rates and interest rates, it suggests that cap rates need to increase pretty dramatically, maybe 100, 150 basis points. And that doesn't sound like a lot because cap rates right now are at about 5%. But if they go up, let's say 100 basis points to 6%, that means it's a 20% decline in commercial real estate values. And that applies to multifamily, that applies to office, to industrial. So I do think that there is going to be a bit of a reckoning in commercial real estate over the next year or so. And buying opportunities will probably be very abundant in the next, you know, probably about a year from now.

What do you think, can anything be done with these huge buildings and urban centers? What can be done? It's a great question. And I actually had someone on our podcast recently to talk about this. And it's so tempting, right? You drive around and you see these commercial buildings that are just empty. But unfortunately, I had an estimate recently from a guest on our podcast. It's the CEO of Fundrise, Ben Miller. He said about maybe 10% of office spaces could be repurposed into residential. Did you say 10? It's just the floor plan. Yeah, it's just not that good because plumbing apparently is the big issue because unless people want to go into a college dorm style and share a bathroom, you know, it's just not set up the way that you would need to for a lot of residential. And the zoning is different. I do think one thing that might change is municipalities might

be willing to work with developers to change the zoning in case that we need this because it is just seems like a logical thing to do. There is a lack of affordable housing. There's a housing shortage in the United States. Yet at the same time, we have all this vacant commercial space. It just seems prime for redevelopment. Not my area of expertise, but it seems harder than I would wish it would be. Let's shift to interest rates. To understand real estate, you have to have some insight or viewpoint on interest rates. What do you think happens to mortgage rates over the next year? Yeah, they've actually fallen quite a lot. They peaked back in November for now at about 7%. Now they're down to about 6%. I think it's really interesting. And there's basically two scenarios that can happen. And one is if the economy avoids a

recession, which a few months ago, I didn't really think was all that likely, but is now looking more and more plausible that this, you know, quote unquote labor market, might continue to raise rates. And we might see a federal funds rate above 5%. The terminal rate might end up at 5.5. And the traditional spread between the federal- Can you describe what the terminal rate is for our listeners? Sure, yeah. So the terminal rate is basically where the Federal Reserve will keep their federal funds rate before eventually either raising it again or pausing it. But the Fed basically releases something called the Summary of Economic Projections. And for the last couple of months, they've been saying they think they're going to pause around 5%. Given where things are going, if inflation picks back up or the economy remains

super hot, the Fed might go higher than that, and that could push mortgage rates back up. The other scenario is that we enter a recession. And that actually would probably be the best thing for mortgage rates, if you're hoping for mortgage rates to go down. I know that's sort of a subjective thing. But what I think a lot of people don't realize is that mortgage rates are not tied to the federal funds rate. It is tied to most closely to the yield on a 10-year U.S. treasury. They move in lockstep. They almost have a perfect correlation. And although the yields on bonds have gone up this year, when you enter a recession, it puts downward pressure on bond yields. People globally flock to the safety of the U.S. dollar.

That pushes downward pressure on yields, and that brings mortgage rates down. And so if we enter a recession, which I'm not an economist, but 70% of economists say that we are likely to enter a recession this year. If that happens, it will push mortgage rates down, which I think will probably cause the housing market to bottom and then pick up activity, which could actually bring the U.S. out of a recession. We'll be right back. Hello, I'm Esther Perel, psychotherapist and host of the podcast, Where Should We Begin?, which delves into the multiple layers of relationships, mostly romantic. But in this special series, I focus on our relationships with our colleagues, business partners, and managers.

Listen in as I talk to co-workers facing their own challenges with one another and get the real work done. Tune into Housework, a special series from Where Should We Begin, sponsored by Klaviyo. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you? And what privacy issues should you ultimately watch out for. And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics, How and When to Use AI, a special series from Pivot

sponsored by AWS, wherever you get your podcasts. I'm curious about what you think of the high-end luxury, what's considered kind of a vacation market. So I'll give you an example, Aspen and Nantucket, Napa. What do you think of the durability there? I think they're going to come down if I had to guess. And I know every one of those markets is going to be different, but I think particularly in the COVID era, we saw those markets go up so fast in a way that was even faster than metropolitan areas. There's a stat that second home demand went up 90% during the pandemic. And there's a couple of reasons for this. One is people just wanted to get out of big cities, right?

They didn't want to be in New York or San Francisco. They wanted to go to the nice area where there's a lot of room. But also, you just saw that the wealthy class were so rich during this time. I mean, the stock market was going crazy. People who invested in cryptocurrency were taking money out and rolling it into real estate. Now, we've seen that second home demand is down below pre-pandemic levels. So if you just believe in supply and demand, you have to think that that's coming down. The other thing is that real estate investors do play a role in these markets,

probably more than they do in small markets because short-term rental investing has exploded in popularity. And some of these markets are attractive to real estate investors and have brought in a lot of people who don't actually have any interest in staying or living there. And we're seeing an oversupply in a lot of short-term rental markets as well. So I think we're going to see a pullback on demand from both investors and second home buyers in these luxury markets. I don't think they're going to go down probably not to pre-pandemic levels, but I do think they're likely to see more significant declines than you see on a national average. What about Miami?

Miami's weird. It's like a really weird market where it's holding up particularly well, probably because everyone in New York, I'm from New York originally, everyone from New York with a finance business is just moving to Miami right now. And so there's a ton of money, private equity money moving down there. And although it's one of the least affordable, most rent burden cities in the entire country, it's holding up right now. I do think it will go down a bit, but for major metro areas, it's one of the strongest relative housing markets right now. Talk a little bit about the California market, Los Angeles and the Bay Area. Yeah, so both of them are coming down. Bay Area is actually leading the way in terms of price declines.

Year-over-year price declines right now in San Jose and San Francisco. That's a complicated one. I think a lot of it has to do with remote work there. People used to bear those incredibly high rents and incredibly high home prices because they needed to be near the economic engine that is San Francisco and Silicon Valley. Now, a lot of these tech companies have said that they could stay away and people are saying, I'll take my San Francisco salary and I'll move to Nashville and I'll basically get a 40% raise. So I think the San Francisco area is going to be really interesting. And California in general has just seen people, I think, over-exaggerate it, but it has seen a

pretty significant decline in population over the last couple of years, which is strange. It's had a net population loss of like 300,000 people, which doesn't bode well for a quick recovery. But I also kind of think people always bet against New York City. They always bet against San Francisco and California, and those cities always come back. So I think eventually they will, but they probably might take a longer time to rebound than some of the other major metros. So, and I promise this will be my last question, but you live in Europe.

Give us a couple of cities in Europe that you're bullish on, a couple of cities you're bearish on and why. It's really not my area of expertise. I don't study it the same way, but I just love Portugal. I'm just going to say Portugal in general, Lisbon, great city, very affordable. They have made it very favorable for expats,

your other Europeans and Americans to invest there. So you're seeing a lot of money. They have something called the golden visa program where you can basically buy an EU passport over the course of five years. And so you see money specifically to invest in real estate. And so you see a lot of capital flying into Portugal. Dave Meyer is the VP of data and analytics at BiggerPockets, the host of the On the Market podcast and the author of Real Estate by the Numbers. He joins us from his home in Amsterdam. Dave, I love talking about this. Appreciate your time. Absolutely. Thanks for having me, Scott. Algebra of happiness.

So I just want to be honest here. This is going to involve some serious name dropping, but I drop names because I'm desperate for your approval. Last night, I'm in New York. I came from Miami or came from London via Miami. Still a little bit jet lag, feeling a little bit down. I don't know why. I think I talked about it last week.

But anyways, enough about my mild depression. And I went on my podcast co-host from Pivot, Kara Swisher was here, and we went on Stephanie Ruhl last night. I was going to go on Stephanie's show, The 11th Hour, which I really like, and I'm a huge fan of Stephanie. I would call her a friend. I was going to go on later this week to talk about economics, and Kara said, let's go on together. We've been doing more stuff together. And the episode was on State of the Union. I know fucking nothing about the State of the Union, and not only that, I don't care. I think I've watched maybe three of them in my lifetime, but they wanted to have a panel.

And I was awful. I had nothing to say. I mean, I had literally nothing to say. And on the way home, I'm beating myself up because I'm usually good on TV. I know my shit usually, and I usually can twist a phrase or turn a phrase. I'm like, fuck. I was just angry at myself. Just like really going inward and like, Jesus Christ, why did you do this, you idiot?

And it was fine. I watched the episode. It was fine. It wasn't that bad. And here's the thing. It goes back to the whole notion of, I mean, by today, no one even remembers seeing it. It doesn't really matter. And I'm finally at a point in my life where I get over stuff faster because, you know what?

It's just not. You're going to have so many more opportunities to do things. And everyone that saw the program has forgotten about it. I have forgotten about it, but that's not what this is about. Stephanie ruled a host the 11th hour. This is like 1245 in the morning. I get a call from Stephanie at 1245 and I pick it up and she says, I got the sense you're not doing well. Are you all right? And I said, yeah, I'm fine. I'm just a little bit jet lagged and a little bit distracted. And also I was embarrassed. I didn't really have anything interesting to say. And she said, okay, I'm just checking in.

And we had just a two-minute conversation. But reaching out to people when you sense that they're not doing well or they might be upset, it just makes you feel much closer to that person. It forces you to take pause and say, am I doing all right? And the honest answer is, yeah, I'm just a little bit jet lagged. But it's such a wonderful expression of concern or care or that I'm thinking about you and I have the confidence to call you. I just would never have done that until I was a much older person. But when you register that someone isn't doing well, even if you're getting false signals, to reach out to them just real quick and say,

are you doing okay? I think that's such a wonderful way to increase the bond of friendship. It reflects a lot of confidence on your part. It reflects empathy. And the fastest way to get someone to like you, the fastest way to get someone to care about you is to care about them. And a lot of us do care about people, but we don't express it. And an easy way to express it is if you sense that someone isn't on their game

or isn't doing as well, just to reach out a quick call, even if it's at 1230 at night and say, are you doing all right? It'll make you feel closer to them. This episode was produced by Caroline Chagrin. Our associate producer is Jennifer Sanchez. Drew Burrows is our technical director. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prof G Pod from the Vox Media

Podcast Network. We will catch you on Saturday with No Mercy, No Malice as read by George Hahn and on Monday with our weekly market show. Daddy's getting in trouble. Daddy's getting in trouble. Daddy's getting in trouble. Okay. What software do you use at work? The answer to that question is probably more complicated than you want it to be.

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