Lu:
I’ll talk about some obvious, but then I want to play a game with you Dave, if you don’t mind putting a little statistics game on the show.
Dave:
Oh, put me on the spot, this will be
Lu:
Fine. So people have been talking about Sunbelt, right? Yeah, I think that’s the big obvious. If I say well over the past at least one or two years, a lot of the supply increases was highly accumulated in the Sunbelt region. You wouldn’t be surprised. So that’s the reality. And the reason we are seeing this interesting dynamics going on in the Sunbelt was also because there’s a strong demographic factor backing that supply chain, right? So if you look at the domestic migration, if you look at the job gains, a lot of that has been very active in the Sunbelt for various reasons. It could be because of the local policy which has been supporting the job growth. It could be because of the weather is more welcoming for the primates workers and also retirees. And there could be family, friends reason and people are moving closer to where their families are located and based on. But this is a very interesting economic phenomenon. Whenever you see some places or some industry has been eking up above average game and most likely you will see this mean reversion, which will play a big important role in driving that trend downwards. So you ended up having this bigger swing thinking of the radial waves. So if you have a higher spike and you have a much lower trough,
So that is essentially putting everybody at the end of the day to that average line. So you’ll come back together and that is exactly happening to the sunbelt over the past year and a half. So we are seeing a lot of those places, including all major metros in Texas, including Greenville, Jacksonville, a lot of those big names during the construction boom. They will see a great moderation coming the second half of this year, which will pull down their inventory growth from way above average to way below average. So that’s the reality. So on the net run growth level we are seeing while a lot of those earlier gain will be compensated by this moderation in some cases might be moderate decline. The reason I say moderate decline because you’d seldom see a large drag on the run growth even during some of the construction boom in the multifamily market. So there will be some moderation in some cases moderate decline because of the supply side pressure, but that’ll also be salvaged by this steady demand factor over the next few years. So that is what we are seeing especially happening in the Sunbelt. But now the game time Dave, if you don’t mind.
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