Remodeling Trends and Homeowner Motivations with Eric Finnigan

Welcome to the Construction Disruption Podcast, where we

uncover the future of design, building, and remodeling.

I'm Todd Miller of Isaiah Industries Manufacture,

specialty residential metal roofing and other building materials.

And today I am your host of Construction Disruption.

So we are into Season 2 at this point.

And once again, we are doing Challenge Words.

Where both the guest and myself Have been given a word that we

are challenged to work into the conversation as seamlessly as possible.

So you, the listener can be listening to see if you recognize our challenge word.

So, um, I got a couple of quick stories, uh, to tell our, our

audience here before we get started.

Um, first one, this was kind of cool.

So everyone's been familiar in recent years with the resurgence of vinyl records

and, and listening to records on vinyl.

Again, we get away from all the CDs and stuff.

Well, I saw this thing the other day that some.

Has come out with a record player that is entirely made of chocolate.

It sounds pretty sweet when you listen to it.

Okay.

So you'll have to, lets talk, think about that one a little bit.

So, one other story would you wanna share with you?

So, um, a few years ago, my wife and I started to enjoy going on hikes.

Um, we would just go to a local park.

We have a really beautiful one in our town, and, and we would just kind of

go on a nature walk sort of thing.

And, uh, I would oftentimes, um.

Kind of put together sort of a song mix for us to listen to as we walked.

And, uh, I, I really came up with a perfect, uh, song mix for our, our hikes.

Um, I would play some songs from the Peanuts movie from years ago.

Um, and then I would have some songs done by the Cranberries and I would

also have some songs by M and M.

Um, I called it our trail mix.

Okay, so let's just go ahead and just get started with the show here if that's okay.

So today I'm kind of excited.

We have a repeat offender on our show, a repeat guest.

Actually, I really couldn't be more excited.

It's been nearly a year and a half since Eric Finnegan was our guest and

during his first interview, I have to say he really opened my eyes to

some new views and insights into the construction and remodeling industry.

So Eric is the vice president of building products, research and demographics

with John Burns research and consulting.

Eric says, Eric has a master's degree in economics from Fordham university.

Um, I follow him especially on LinkedIn and he is, I tell you,

he's just a veritable cornucopia of information, data, statistics, and

insight into our great industry.

Um, if you want to know where things are going, Eric, in my opinion, is

one of the top guys that you really should be following in our industry.

Again, Eric Finnegan, as it says on his LinkedIn profile, his goal is to provide

demographics clarity for our industry.

Um, Eric, welcome to Construction Disruption.

It's great to have you back here today.

Yeah, glad to be here, Todd.

I've been looking forward to this all week.

Fantastic.

Well, you know, I think maybe a great place for you to start, because it has

been a year and a half since you've been on, um, is to give us an overview

of John Burns Research and Consulting.

Um, you guys have actually gone through a little bit of a name

change since the last time we talked.

Um, so tell us a little bit about that and things you guys

are involved in these days.

Sure.

So, John Burns Research and Consulting now.

It used to be John Burns Real Estate Consulting.

Uh, small change, but it sort of accurately captures or reflects that

we have a half of, about half of our business is research, research

analysis and insights for a broad, basically any company involved.

In the housing market, so that's building product manufacturers.

It's homebuilders.

It's apartment developers, um, investors in the space.

Uh, and then about half of our business is on development, consulting feasibility

studies, market studies for, uh, uh, maybe say a builder that wants to understand

demand in a very hyper local, uh, market or part of part of a sub market.

Basically anywhere in the country.

We work all over the country.

Uh, I really have over the last year.

So, um, what we try to do is, is distilled down.

We try to capture what's happening today.

It's based on all the resources that we can pull together market

market studies data out there.

We talked to our, uh, we talked to people out there in the market that are selling

homes, building homes and stuff like that.

Understand today really in service of planning and really understanding and

making decisions about the future.

So that's that's our that's our big focus.

I'd say, as a company, we maniacally focus on understanding today so

that we can help our clients.

Well, it's certainly good stuff and no doubt about it.

We are in such a huge industry that impacts really the whole nation and

economy and housing and all kinds of things to such a great degree

that I love what you guys are doing.

So that's kind of my feelings as far as, you know, why it's really

neat what you guys are doing and an important part of the industry.

I'm kind of curious for you personally, um, what really interests you about.

Construction and remodeling industries.

What, what kind of captures your, Hey, this is.

This is why I'm patient about this.

It's a good question.

I think there's a couple of different answers to that.

1 is I, I, uh, I'm a, I'm a data guy.

Um, I've, I've never built a home myself.

I, you know, we just, we just bought our 1st homes.

I actually haven't done any remodeling yet other than, um.

Uh, some, some light repairs, but I think with, oh, you will, it'll catch you.

I will.

Yeah, I'm looking forward to that actually.

Uh, but the thing that I would say I'm most passionate about

is the fact that the work that.

We do in this industry touches every single person in the country

every single day of their lives.

It's it's where they fall asleep at night.

Um, and, you know, you look at this, these, like, hire the

mezzles hierarchy of needs.

So it's the foundation is secure housing.

Right.

Many of us, we want to feel secure at our home.

We want to be proud of it.

It's a long term investment.

Um, I would say that there's, it's the biggest purchase that most

people make in their lives is their, their home or if they rent, it's

their biggest monthly expense.

And I think it's a, personally, it's a, it's a really exciting place to be.

I mean, I've moved around so many times since I was, you know, left my

house where I grew up to go to college.

It's crazy.

Um, just seeing the different, all the different kind of way I've lived over

the last, say, 20 years, way everyone else lives, you can really learn a

lot about people also by understanding what choices they make around housing.

So there's a lot of different answers to that, but I think

just the fact that we all.

Anyone listening to this has a home, right?

And it affects everyone.

Yeah, good, good stuff.

Well, you know, when we met before, um, and we were on the show, um, we

were still pretty much in the midst of coven, you know, at this point, now that

it's at least somewhat, we hope in our rear view mirror, um, how do you see

things shaking out since the pandemic?

Any, um, particularly maybe surprising permanent impacts

you think from, uh, coven?

Yeah, I remember when we just had it last time it was It was,

it was a little bit at the tail end and we were wondering a lot of stuff.

So much has changed since that, since, you know, the beginning of COVID, right?

Like house prices skyrocketed.

Um, people were, a lot of people working from home for the first

time, um, you know, moving further and further from their offices.

Uh, mortgage rates, you know, went down to record lows and then they

were, I think right in the middle of our conversation, they were

skyrocketing in a pretty big way.

Um, so right around then I remember thinking, we were thinking, what

does this do to housing, right?

Mortgage rates go from under 3 percent to ultimately over 8 percent at one point in

the span of about a year, year and a half.

And.

A couple of things have, I think, become more clear that, uh, by this,

by this point, one is that, um, about 30 percent of workdays, so let

me just say that again, because I'm trying not to speak like an economist.

Sometimes my mind thinks that way, uh, there's millions

of people working from home.

At least half of the week now, a third to a half of the week, right?

So I'm, I'm working from home right now.

I need a whole room in my house to, to, to do that.

Um, and I'm one of, like I said, millions of people.

So there's millions of extra rooms in homes being used today that

were not used five years ago.

So, just think of people need more space, uh, they need more privacy, if they

were living with roommates before, now they, uh, more, more of them are willing

to pay for an extra bedroom in their apartment so that they can work from home.

They're willing to move further out where they can afford larger homes.

Uh, so this work from home piece.

Has, I think, permanently shifted the housing market in a way that something

like the automobile affected the housing market, um, something like phones affected

the housing market, letting you live farther and farther away from your, the

place that you do business, or maybe some of your family, this work from home.

The technology has been there for 10 years or so to allow it to happen, but

it really took the drastic shift from COVID to actually have people realize

on a really mass scale, it can be done, it can be done really effectively.

So I would say this, the work from home.

Uh, phenomenon is a permanent shift.

Very interesting.

There's a few others too.

Like I would say, you know, when, when mortgage rates were record low,

uh, under 3 percent in many cases for people, um, millions and millions

of people refinance their mortgage.

So we have about, uh, three quarters to.

To 80 percent of outstanding mortgages today are under 5%.

So they're paying a rate that is much, that's pretty far under where they

would have to reset their rate if they go to refi or they go to move.

So it's just this, um, long term large financial incentive to just stay put.

So it's what we call, we've been calling the lock in effect.

It's pretty well known at this point.

Um, and the, The FHFA, which is a federal housing finance agency,

just came out with a study actually this week pointing out how much of

an impact that's had on housing.

It's, you know, responsible for hundreds of thousands of,

um, home sales not happening.

So like hundreds of thousands of households that would have moved

at this point, just haven't.

That's kept resale inventories low.

It's kept prices high.

Um, It's actually a really good piece for remodeling.

If you're in the remodeling industry, where instead of moving to a larger

home, a trade up home, for instance, or if you're a 65, 70 year old, and

maybe you think about trading down or moving somewhere else, it's a big

incentive to actually stay put and upgrade and improve your current home.

So we've seen that a lot in our remodeling surveys, actually.

Yeah,

you know, it's been interesting over the years.

I mean, we manufacture fairly high end riffing materials and we have

always seen and, and, and heavily focused on the remodeling market.

And we have always seen that, um, we're, we kind of go the opposite of the economy.

Um, you know, when a new construction is down and people are

staying put, we tend to, to grow.

So I, I think.

It makes a lot of sense.

Well, I saw recently on LinkedIn where you had put a post out about recently

released 2023 census information and you know that information tends to not

necessarily have impact but show a lot happening that's going to affect housing.

What are some high points of that recently released information

that you can share with us?

Sure, so It's one of the most exciting days of my year, I

would say, and, uh, don't tell anyone that, because that, I'm just a huge

nerd, uh, so, I think there's a, there's a couple of different pieces.

One is that we know from, so the census basically estimated 2022 population

for every county across the country.

And what we found out was that, Um, like, like, before suburbs are the

growth engine of of the country's population and of the housing market.

Um, the suburbs grew about 1.

2M people last year.

If you include the excerpts, which are like this, the county is just

outside the suburbs and the outer rings of many of the larger cities.

Those grew an extra 200, 000.

So we can say about a 1.

5M.

People are going to have more people live in the suburbs and excerpts

versus a year ago, which is a pretty, which is substantial growth.

Right.

Um, and it makes sense because that's where there are homes to move into.

That's where people are moving from from cities out to the, to the suburbs.

That's where builders are delivering homes.

Uh, that's where there's, you know, good schools, et cetera.

One other key piece, though, is we actually saw early on in COVID that

people, a lot of people left cities, you know, whether it's small families

or young couples, they were like, we want to move out of the city and buy

a house because now is the best time we could possibly do that with a 2.

7 percent mortgage rate.

So we saw cities lose a huge chunk of population in 2020 and 2021.

That's actually now basically stopped.

So people that were in cities that were relieving before, it's more

likely that if someone's moving as a city dweller, they're moving

to somewhere else in the city.

So a different apartment or a smaller home, um, and it's actually pretty much

in line with what we've seen with, with rental demand over the last year or so,

we can, we can Basically capture a lot of the population movements through, uh,

market stats and where people are moving.

So we just really saw that the urban populations, urban, urban areas

stopped losing population suburbs and excerpts really drove the growth.

Um, and then in terms of regions of the country, which is, I think,

is also super interesting, is that.

Uh, the Southeast over sort of like the smile states, I guess it's sort of like

this shape of like from the Carolinas down to Florida, Georgia, uh, Texas, Arizona.

Those are the very strong growth markets, growth states across the country, and

those are still growing extremely fast.

Um, The only caveat there is that the growth instead of being

red hot, sort of record high growth, it's come down a tiny bit.

Okay.

It's because there's just fewer homes to move into.

So fewer, uh, opportunities for people from say the Northeast or

from the upper Midwest to move to a better climate, uh, or lower taxes.

So there's still people moving.

It's just a slightly lower volume.

And that means that.

States that are losing population like New York and California, Illinois, New Jersey.

They're losing fewer people though.

The, the, the movement of people is generally still to

the south and the southwest.

Um, it's just a little bit less than it was during cobit.

Very interesting.

Yeah, and what that means for housing is just

there's a ton of housing demand.

If you look at the nation as a whole, uh, you know, the population is growing, we

think really fast, but if you can look at where the, where it's growing, where it's

mostly growing, it's sort of eye popping.

What.

What it looks like there, like the U.

S.

is a substantially, uh, I would say U.

S.

is, I've tried to think about this.

The U.

S.

is a growth market.

It's the big, it's, I think it'd be the second biggest economy in the

world at this point, um, but it's growing extremely fast, especially

in certain areas like the Southeast, Texas, Arizona, places like that.

Very good.

Well, I like that when you talk to us about the Southeast as the smile

states, I never really, never really heard it that way or thought of

it, but I'm going to remember that because now I think of, okay, those

are the states where crocodiles live.

I never smiled at a crocodile, but actually alligators live there,

but still I'll make the connection.

I'll, I'll remember that.

So cool stuff.

So how do you see this population shifts and, um, shrinkage?

Um, I mean, I, I understand how it impacts.

Housing and demand, but how is it impacting remodeling and what's

happening with, um, you know, our housing stock and aging?

And what do you project going out with remodeling?

It seemed like, you know, last year, we kind of saw, um, especially in higher

end remodeling, a little bit of a soft year, um, in the higher end stuff a

little bit, you know, fairly strong.

You're still in a lot of other areas.

Um, what does remodeling look like?

You know, as you look out again here,

That, I mean, that's, that's good to hear.

It's consistent with what we've heard from our remodeler survey.

Uh, so we go out to the, to the market with, um, with a survey partner,

qualified remodeler and ask remodelers what they're seeing in their markets.

Uh, basically every quarter.

What do they expect for demand in the future?

Um, and last year was definitely a softer year reset after this massive

boom during COVID, when everyone was, you know, pulling out homeowners basically

took out 250 billion of cash out of their home equity and spent it a lot

on remodeling also, you know, big RVs and things like that, but a lot of,

a lot of money spent on remodeling.

So if you could look at, You know, the, the trend and spending, you could see a

huge shift upward in 2020, 21, 22, uh, up above over and above what it was a

normal trend, you know, um, in 23, it's, it's, it fell below the long term trend.

So, uh, as sort of a give back, it's, you know, projects that would have happened.

Uh, in 23, did they just happened earlier?

Uh, we think that this, it sort of catches back up to the, to the trend

going, you know, going forward.

So, one is that.

A couple of pieces driving that one is that if the Federal Reserve starts

lowering interest rates this year, that makes home equity loans, um, home

equity lines of credit are directly tied to that federal funds rate.

Uh, so those are going to come down and, uh, one of the things actually a year and

a half ago is we were really uncertain about where home values would end up.

Uh, some markets, uh, like, like in Austin, Texas, for instance,

have really seen home prices fall pretty significantly, but for

most of the country, home prices didn't go down at all, and actually

they're starting to rise again.

So, I think I said this on our last, last interview, but it's, it's worth repeating,

which is that you want to look at the trend in, uh, Remodeling, especially

high end remodeling and big projects.

Just look at what home home values are doing in your local market.

And for most markets in most of the country, they're going up again.

Uh, so we think there's a real turnaround coming in, in remodeling.

It's starting to see a base and, you know, from our remodeler survey.

So we think 2024 is going to be a return to growth for, for remodeling.

Um, and then in terms of the parts of the country.

I would say it's two, two factors.

One is that, what is the age of the housing stock, right?

So we've, we've, we've identified this.

period of time, sort of 20 years after the home is finished, uh,

that most of the major systems and most of the major components of

the house, um, are now obsolete.

They require replacement or upgrading.

Um, so it's, it's 20 to sort of call it 39, but 20 to 40 years, that 20 year

window, most of the home gets upgraded.

And this is true across the country, um, and across time.

So it's a pretty predictable, uh, upgrade cycle.

So if you could look at where a lot of the homes are of that age, you can

predict, okay, here's where a lot of homes are going to need remodeling.

Um, and then a layer on top of that, again, thinking like an economist here,

but just, just follow me for a second.

Okay.

So you can find where homes are.

20 to 40 years old and where the area, the income of the area is high.

That sort of sets up a really, a real ripeness for that's there's a high

likelihood that that home is going to get a big remodeling project.

So, um, a team, a member of our team, Ian Kennedy is, is just a

wizard with maps and the census data.

He's put together a map that I can't show it on this podcast, but, uh,

I can, we can maybe post it later or something, but you can look at.

Every county in the country and see where, where, where do you find

this intersection of 20 to 40 year old homes and very high income.

And it turns out there's actually most, most cities, most major

cities in the country have a lot of these sort of ripe areas.

So.

From, you know, I'm looking at the map right now, but it's all across

down the Eastern seaboard from Boston to, um, New Jersey is a big

area all the way down to call it DC.

And then there's pockets in Atlanta, Houston, Dallas, Austin, lots in Florida.

It's really almost everywhere.

The country, I would say is going to.

Um, benefit from, from this sort of prime remodeling, uh, remodeling waves call it,

well, that makes a lot of sense.

I mean, even as I look at my own neighborhood, we're kind of now in that,

in that 40 year plus range, as far as age.

And, you know, during that 20 to 40 years, I saw a lot of people

doing replacement products, new kitchens, new refs, new siding.

Um, but now I'm also seeing people starting this, this

new phase doing more like.

Whole home remodels and major additions and those types of things.

So, uh, makes a lot of sense.

And yeah, we will definitely want to get that link, uh, to Ian's map,

uh, so that we can put it in the show notes because, uh, that sounds

like something of great interest to both, uh, remodeling contractors and

architects and designers, uh, as well.

Um, no, very interesting stuff.

Uh, good, good information.

Thank you.

Um, Yeah, I'm kind of curious and I think you've kind of already

give queued this up pretty good.

But, um, you know, if you were someone today, a contractor, just entering

construction or remodeling market, um, it kind of sounds like maybe that mid

to upper end remodeling would be an awfully good market for you to enter if

those types of homes were in your area.

And like you said, there's pockets of them every place.

Yeah.

So I think there, there's a couple of reasons why is it sort of the bottom

half of the market or the, maybe the bottom two thirds of the market.

So like a lot of people that do small projects or sort of the middle,

middle range of income people that are really splurging for their kitchen

upgrade or, uh, bathroom remodel, the demand cycles go up and down there.

So there's, there's some volatility.

So if you're, if you're entering the business for the first time,

I think one of the hardest things.

I can speak as a former.

Business owner, myself, the hardest thing is not being able to predict

what's going to happen next year.

So I would look at what are some areas of the market that are going

to be strong, very long term.

And there might be a little bit of ups and downs every year, but really strong long

term demand over the next 10, 20 years.

And we think that the.

Baby boom population or the people say over the over 60, uh, they're, they're

going to live if, if once they reach 60, their life expectancy at that

point is another 25 to almost 30 years.

So they're prepping to sort of stay in their home long term.

And I can tell the story about my, my mom here.

She's, she's getting up there and age and she's retired now for a handful of years.

Um, she owns a small home in our hometown, and we had a conversation with her last

year about where does she want to live?

Where does she want to actually grow old?

Is it the home she's in now, or does she want to figure out a situation

that, you know, maybe she doesn't want to maintain a home and replace the

roof, or, you know, Do figure out how to get the grass mowed every week.

Um, we had a conversation with her and she has a, she's like, I want to go somewhere

where I can take care of a garden.

I can have my cats.

Um, I can have privacy and thinking like, that's, that's really hard

to do in a condo or, uh, you know, a townhome or something like that.

So she's, she's like, I'm going to, I want to stay where I am.

I'm, I'm willing to make, you know, put a bunch of money into the

house to make it comfortable and make it accessible for what I'm.

Older, much and much older.

So I think there's a lot of that happening and we've, it's again,

borne out in a lot of our surveys that older people are prepping to

stay in their homes for a long time.

And this idea that they're, they're going to move to nursing homes

and active adult communities.

That's certainly happening on some level, but the baby boom population,

you got to think about them.

They were fiercely independent.

Much more so than their parents.

So they have just maintained that sort of streak of independence into old age

and they are postponing and putting off moving into sort of nursing home

type situations, the long term care facilities as long as they possibly can.

So that means they're going to stay where they are.

And the, the baby boom population as a whole has about 72

trillion of net worth today.

So.

It's not split evenly across the population.

The median is somewhere between three and five hundred thousand for the baby

boomers, but they have money to spend and they can't take it with them.

So they are actually a lot of them are spending it now and remodeling

their home or they're helping their adult children buy and rent homes.

We think that really that part of the market that's serving baby

boomers, especially at the high end, is a very strong market.

And will be for the next 10 years, 20 years.

Very interesting.

You know, you've touched on it already.

You've talked a little bit about, you know, baby boomers,

maybe even moving into Gen X.

As we look at the younger generations, we look at, you know, millennials

and Gen Y and those types of things.

Are you seeing any real different trends from them in terms of what

they want in terms of housing?

Now, uh, my son is, I guess, kind of on the young edge of

millennials, but honestly, he wants nothing to do with homeownership.

I don't know if that is typical of his age or if he's just the

outlier, which he probably is, but are there any trends you're seeing

in those younger generations?

So, yeah, so it makes sense that your son at the

younger end of millennial is not thinking about home ownership.

Um, I would say I'm at the other end of the millennial.

I'm just turned 40.

Uh, so I was born in 83, which is, you know, in the first few years

of the millennial generation.

The question about 10 years ago when I was in this space was the

same kind of question like our millennials gonna, uh, buy homes

and it's this big question, right?

So we graduated college, uh, enter the job market in the worst financial

crisis, the worst recession since 19 thirties and hundreds of student debt.

And it was, you know, this whole.

The idea that nobody wanted to own anything.

So we were, we would take Ubers everywhere and rent apartments and, and

get, you know, dinners delivered from, you know, all these apps and whatever.

And it's, it's a big shift from what came before and certainly some of that

happened, but it turns out over the last 10 years, you get to see the leading

edge of the millennial generation.

Uh, entered homeownership just a little bit later, just a couple of

years later than the people that came before them, the Gen Xers.

So the median age of first time homebuyers today is 35.

So that means by the time, um, if you look at 35 year olds today, half of them

are homeowners, half of them aren't.

And the general trend is that Uh, by the time people reach, you know, the

average of 45 50 55, there's a massive increase in the number of people that

owned homes and we don't have the data yet to point to the millennials doing that.

But they are following the exact shape of the increase in homeownership that the Gen

Xers did and that the baby boomers did.

So it's happening.

It's just a little bit.

A little bit delayed, right?

So and I think that the thing was with home ownership doesn't

make sense until it does.

And then one day or over the span of a year, like I could just tell from

my own personal experience that I was so against, not against owning, but

it just did not make sense for me.

I was moving occasionally.

I left New York city in 2015 and came out to Colorado.

I lived in Breckenridge.

I lived, I was like snowboarding every day for a year.

Took a, you know, took a year off to sort of reset.

It just didn't make sense to, to own a home at that point.

But then, it was like into my later 30s.

I got, I got married.

We got a dog.

There's, my wife has a stepdaughter, or I have a stepdaughter.

My wife has a daughter.

Um, and.

Suddenly renting is like, this doesn't make sense anymore.

I actually want a place of permanence.

I want to, I want to enjoy the stillness of home ownership in this,

in the security and the stability and the predictability of ownership.

And it finally made sense.

And it, um, and I think there's a, uh, I, I would say that story doesn't need

to be generalized to everyone, but it's a general trend that people at some

point in their thirties will realize they want to buy a house and then go do it.

So I would say, give your son a few years, maybe five or ten, he

might, he might change his mind.

So I think we've touched on that on the show before that maybe

it doesn't so much have to do with the generation as it does just age and those

things do, do come with age a little bit.

Exactly.

And just the millennial generation.

I just want to talk about the size for a second.

So there's 68 million baby boomers today.

Some of them, um, the population is starting to shrink and some

of them are, uh, are reaching old age and the end of their lives.

But the millennials are 74 million of us.

Wow.

And.

Uh, so we're actually much, we're actually bigger than the baby Google.

Um, and then Gen Z is behind us.

There's 71 million of them today.

But when you think about immigration, people generally come to the

country in that sort of twenties to early thirties timeframe.

Or late teens to come, come for, come for college or anything like that.

So the Gen X population is still growing.

So within a couple of years, uh, there there's going to be

more Gen Z's than millennials.

So there's just a, it's just a massive, massive tailwind

of people that are aging into.

Renting their first home, um, moving into their, um, home into

homeownership and trading up.

There's a big wave of people coming.

So we, that's why one of the things we've been talking about is just

stable, long term demand for housing.

Very interesting.

Good stuff.

Well, let's switch gears and talk about building materials a little bit.

Any growth or shrinkage, shrinkage trends in particular building material

products or product types that you're seeing out there that may have an impact.

Yeah, so I think two ways to think about this would be,

what is, what's the cycle of demand for different products right now?

And you can see that, um, one is that, yeah, demand for certain

products and the trend is the other one is just overall different.

Changes within product categories.

So, uh, for instance, single family builders are ramping up

production in 2024 and they were in the 2nd half of 2023 as well.

And we can start.

We can really see from our stats that.

Demand for materials that are used early on in the construction cycle have really

turned up at where a year ago, or when we were recording our last interview,

there was a real softening because builders were pulling back, slowing down.

So the demand for lumber demand for, um, certain other, uh, roof trusses, things

like that were, were Falling now that's actually growing pretty significantly

and because it was a big slowdown a year ago, the demand for materials that

are used at the end, the tail end of a single family home, uh, being built

and developed, those are actually pretty slow or slower right today.

So things like wall board or, uh.

Landscaping materials, things like that.

So we can kind of look at through, look through the cycle there, but

the other, I think there's other more interesting sort of longer term

shifts within product categories.

Look at like, what, what, where are they, where's the innovation happening today?

What kinds of innovations are taking off?

One is, uh, I like to think of what's the, what's the sort of innovation space today?

Like why, why innovate?

One is this is a massive labor shortage in the construction industry.

So what you'll see is that even though there's demand for homes, it's

really hard for builders to ramp up construction really quickly because

they just don't have the labor for it.

They don't have the skilled skills to do it.

Skilled labor to do framing or to do the skilled trades.

So you're fine.

You're seeing that, uh, building product manufacturers are innovating

through creating products that are easier and more efficient to install.

So actually requires less labor to install.

So some of our team members went to the International Builders Show, um,

IBS, KBiz, uh, end of last month.

Yeah, three or four weeks ago.

It seems like a while ago.

Uh, but one of them pointed out that, that, uh, uh, Pella, which is a window

manufacturer, uh, they came up with a new installation system that lets someone

install a window three times faster.

Wow.

And it's just, just one person versus the standard two person installation.

So again, just think about the labor savings there.

If you take that one window and put in, you know, a couple

dozen windows in a house.

So that's an example of labor saving that we're really on the lookout for.

I think it's really going to hopefully ease some of the productivity

issues in construction and let's builders ramp up production, even

though there's this labor shortage.

Another one is things like energy efficiency or efficiency with using

resources like There's a bunch of new like leak detection systems where if

there's a solid system in your house and if there's a water leak somewhere,

it just shuts off the main water valve.

So you're not wasting water.

It's going to be, I think, really important for places

that are for, that are really constrained on the water supply.

Right.

And then there's another one I saw that was kind of interesting and, and had me

think of a little bit about, uh, how that would but they seem to have developed a

system where you can recycle shower water.

And actually use it use the same water in the shower.

So the disinfected they obviously take out any kind of like any You

know hair or anything like that.

It's that's all filtered out, but it comes back into the showerhead as

clean water and Uh, so you're using a lot less water even though if you like

Like me, you like hot, long showers in the in the morning or at night.

So less, less water usage, I think, which is really interesting.

And then a big one is just for people are needing homes that are

affordable, which means builders having to build smaller homes and mean

space is sort of like the constraint space is at a premium, which means.

But if you can put a washer and a dryer, say, in the same unit, that's

a, that's a great selling point.

So we're starting to see some of those where it's taking, you know, large

appliances and shrinking them down.

Those are some very interesting trends.

I wish I would have gone to the Home Builder Show this year.

I did not.

But, uh, always a great place to see some of those things that are happening.

Um, well, Eric, this has been a great talk.

Um, thank you so much.

Always very interesting information.

We're close to wrapping up what we call the business end of things.

Is there anything, uh, that we haven't covered today that you'd like to

share with our audience or maybe just words of advice for folks out there?

Yeah, I think I'm like you.

I could talk about this stuff for hours.

So, um, and I often do so you can follow me on, on the internet somewhere.

I can post on LinkedIn.

I post on Twitter.

Um, I think it's just stuff that I find interesting and, um, kind of what

it means for the, for the industry.

So, yeah, there's a lot of stuff we didn't cover today that I'm,

I like to think about and track in terms of terms of advice.

That's, that's great.

That's a good, good question.

I don't know that I have really good advice for people.

I think it's more just like, uh, maybe the advice is don't take

my advice or don't take advice.

Figure it out for yourself.

Right?

There you go.

Which I think is natural for people in this industry.

There is like a natural proclivity to, for, you know, Independence,

self sufficiency, figuring out problems, creativity in some ways.

Um, I see lean, lean into what you're good at and, and, and, and follow that.

And, you know, maybe early on in the, in the career that you have to kind of like

work with what you're given, like work in the lane that you, you're, you're given.

Uh, but there's always opportunities, even with that, even within the

constraints that you have to express their creativity or express it,

really follow and notice what you're, Passionate about because that's going

to inform everything else later on.

Well, and I think you even talked a lot about some trends

and things that, Hey, you know, some might catch someone's interest.

Say, I want to hop on that and see what I can do to help that situation.

Um, good stuff.

So last time you were on the show, you were a little nervous, but you did

participate in our rapid fire questions.

Uh, we have a whole new set of rapid fire questions for you.

This show, are you up to it?

I'm still ready.

Very good.

So, um, here we go.

These are different questions from what you got asked before.

Um, and you have no idea what we're about to ask.

What is a product or service that you have bought or used recently

that was a real game changer for you?

Sort of a, where have you been all my life situation?

Oh yeah, this is a, this is an easy one.

I use it every day.

It costs less than 15, but it's a book light that is like

colored, it puts out red light.

So if you're reading at night, which I often do, and I'm a little bit neurotic

about not getting super bright lights in my eyes at night because of sleeping wise.

So I put this on the back of a book and it just gives you.

Great light to read at night.

Wow.

It's a game changer.

That is cool.

Good stuff.

Okay, question number three.

What is your favorite sushi roll?

Sushi

roll.

I love, uh, I love when they have like little crispy pieces of I guess tempura

or something on the outside of the Um, it's kind of sprinkled on top with uh,

but it's like I'm easy to please with sushi as long as it has like a salmon

or a tuna or a, uh, avocado in it.

I love sushi.

It's hard to stop eating.

It's really hard for me to stop eating sushi.

I don't know if you have that problem, but it's like, These

little bites, how do you get full on little like little pieces like that?

You just like little snacks

Good stuff.

Well, my wife and I ate at a ramen restaurant the other day and they

had something called a crab rangoon roll And uh, it was incredible.

So if you ever any place has a crab rangoon roll, you got to

try that one Okay, next one.

Who was your favorite teacher in school?

And what do you remember them for?

Um, I had a math teacher in 12th grade, Mr.

Tishka.

He was so excited.

He seemed really passionate about calculus and it was matching my own sort

of like interest in math at the time.

And somehow the leap from pre calc to calculus was just mind blowing to me.

It was sort of had a magical quality to it.

You went from this sort of like, Finite space.

You're adding up things, you know, these little like basically coming up

with these, you know, ways to add up a lot of things all at once to calculus,

which is like, okay, now you add up an infinite number of things all at once.

And you take the slope of a line at a point.

Like, how do you do that?

It just blew my mind.

And it had this like magical, imaginative quality to it.

And it was, he made learning it so fun.

It was also where I was like, this is something I'm passionate, I'm

passionate about this somehow.

I don't know how or why, but I'm really interested in, in, in math.

So I would say that informed a lot of what I did in college and

kind of after he, Sort of changed, changed how I think about math.

Good stuff.

I had a couple of late high school teachers who did something very

similar to me, but, but with words.

Um, yeah, calculus ended up being lost on me in the end.

But, um, yeah, great, great memories.

Uh, what?

Okay.

Next question.

What would you like to be remembered for at the end of your days?

I would like to be remembered for, I'd love to be remembered

as being, like, having a lot of integrity, whether that's I'm doing what I say,

like things I say I'll do, I actually do it, you know, who I am in the

world matches who I am inside, right?

Like, that you get the same person that I, Know myself to be internally that

to me is I think people can pick up on that if there's like a fundamental

congruence or incongruence between the interior and the exterior and what

someone's thinking how they're feeling versus how they're interacting with you.

I want to be remembered as like a guy who's just.

I love it.

That's great.

Sounds like authenticity just to a large degree.

Exactly.

Next to last question.

How would you describe your job to a three year old?

I would say, Hey, you see those, see those

construction workers out there.

You see those people building that house, people hammering the nails

and, uh, laying the foundation.

I help them think about how about the net about tomorrow, what

they're going to do tomorrow.

So they, they know what they're doing today.

They're, they're focused on building that house and laying that foundation.

Um, I help them decide what to do tomorrow.

Good answer.

Last rapid fire question.

Tell us a weird fact that you just happened to know.

I just saw this last night.

So, uh, I, so I have a fun fact is that I have a book right on my

bookshelf called 2, 201 Fascinating Facts.

It was my favorite book as a young kid.

And I don't remember anything from that book right now.

But what I remember is I read this, this fact last night that, uh, the

word helicopter, the word helicopter.

So it's these two syllables, hella, or maybe it's three, helicopter, right?

Three syllables.

And it sort of naturally splits between heli and copter, right?

But the root of it, the sort of like, etymology I think is the, yeah, the

etymology of it is, it's, The second half P T E R is its own sort of like word, so

it means sort of wing, it's like the same word of like pterodactyl, P T E R, right?

Yeah.

Yeah, so it sort of like has its own meaning to it.

And, so I, I, for some reason I thought helio was one and then copter

was the other word, but it's actually splits at P T E R, helio, helioc.

And it's

very interesting.

Thank you.

You're welcome.

Well, thank you again, Eric.

So why don't you remind us for folks who want to follow you?

Maybe I'm getting in touch with you.

How can they best do that?

So you can follow me on if you're on Twitter or it's X,

whatever they're calling it these days.

It's just my first and last name.

Eric Finnegan.

Um, you can find me on LinkedIn as well.

There's actually another person involved in real estate with my same exact name.

And we both have beards and we book, we look around the same age.

So it's not that person.

So it's Eric Finnegan from Colorado.

Uh, I work at, I work at John Burns Research and Consulting.

Um, you can, our, our website is jbrec.

com.

Um, you can find me there.

We have a huge team.

So anything I've talked about today is informed by a lot of

the work our team team has done.

Um, it's just a all star really set of all stars here.

So John Burris Research and Consulting, JBREC.

com.

Awesome.

I give shout outs to you folks all the time because of the

great information you provide.

It's, it's really good.

Fantastic.

Appreciate that, Todd.

Thank you.

Well, thank you again for being on the show.

We appreciate it.

We were both successful with our challenge words.

Um, Eric had the word maniacal.

Yeah.

It's easy for me to say maniacal, which he worked in very early on.

And I had the word crocodile, which I got squeezed in there eventually as well.

So congratulations.

Thank you.

Yes, I'm, I'm, I'm glad to have, have, have beat the challenge this time.

I totally failed the last time.

So I made sure to work it in early.

You did it.

Thank you.

That may have been the first time we ever did it with your previous episode.

I'm not even sure, but so thank you again.

And I'd like to thank our audience for tuning into this very special

episode of Construction Disruption.

With Eric Finnegan, F I N N I G A N of John Burns Research and Consulting.

Uh, look for his contact information also in the show notes for this episode.

So don't forget to watch for future episodes of our podcast.

We're always blessed with great guests.

Please leave a review on Apple podcasts or YouTube.

Um, until the next time we're together, keep on disrupting and

challenging and looking for new and better ways of doing things.

And don't forget to have a positive impact on everyone you encounter.

Make them smile, encourage them simple yet powerful things you can

do to change the world for somebody.

So God bless and take care.

This is Isaiah industry signing off until the next episode

of construction disruption.

This podcast is produced by Isaiah industries, manufacturer of specialty

metal roofing and other building products.