Real Estate Show with Brad Bennington Builders Association

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Real Estate Show with Brad Bennington & Guy Giles

Alice Lema: [00:00:00] Well, hey, Southern Oregon, welcome back to the real estate show. So glad you could join us again today. We're going to have an absolutely great show. We're going to be interviewing not only Brad Bennington of Southern Oregon builders association, but also Guy Giles of Mutual Mortgage. It's going to be awesome to talk to both gentlemen at the same time.

We'll get to hear not only mortgage and economy information, but also Southern Oregon specific builder, new construction, and what's going on with our local housing situation. So Brad Bennington of the Builders Association of Southern Oregon and Guy Giles of Mutual Mortgage will both be on the show today.

In the meantime, let's take a quick peek at our local statistics. We do this every week. This is for single family homes. And let's start with Josephine County. Josephine County prices year over year are down 3% to an average $490,640. The number [00:01:00] of solds year over year in Josephine County are down 18%. The number of listings year over year in Josephine County are down 16%. Jackson County prices year over year are only down 1%. So that's about dead even. We've been waiting for that to happen. The average Jackson County, single family home will now cost you $557,075. The number of solds in Jackson County are down 21% year over year. And the number of listings year over year are down 24% in Jackson County.

Now Klamath Falls has a bit of good news. The prices year over year in Klamath County are up 16% to an average of $318,667. Now, that is the second week in a row that the prices in Klamath Falls show an uptick year over year. [00:02:00] The number of solds year over year in Klamath County are down 16%. The number of listings year over year in Klamath County are down 13%.

So folks, we see a little bit of light on the horizon. Nationally, prices did start going up a tad in late spring, early summer. We're just starting to see some of that happen in southern Oregon, but that's why we run the stats every week so that we can watch the micro trends turn into major trends.

So we're going to welcome our guests today. We've got Guy Giles of Mutual Mortgage and also Brad Bennington of Southern Oregon Builders Association. We do have to take a quick break and say thank you to our sponsors and then we'll welcome Guy and Brad shortly.

So with that in mind, thank you to John L. Scott, Ashland and Medford. Also thank you to our local Rogue Valley Association of Realtors and Guy Giles Mutual of Mortgage. We'll be right back. Don't touch that [00:03:00] dial.

Well, hey, Southern Oregon, welcome back to the Real Estate Show. And we have an outstanding show in store for you today. We not only have Guy Giles from Mutual Mortgage, we also have Brad Bennington from the Builders Association of Southern Oregon. Welcome gentlemen.

Brad Bennington: Howdy, howdy.

Guy Giles: Hey, thanks for having us back.

Alice Lema: So this is a real treat to have both of you. Guy, can you give us a quick synopsis of kind of what's happened this week? Because we did have some major earth shattering things happen in our economy.

Guy Giles: Well, yeah, really what it boils down to, I mean, is we got our, we got downgraded as a, as a nation, as far as our credit goes. But but, but really we went down from a triple A to a double A plus.

Alice Lema: So how big of a deal is that? Like, what does that mean exactly?

Guy Giles: Well, it's only the second time it's ever happened. It's, people say it's not a big deal. The [00:04:00] double a plus is, is really good, but the reality is there is zero fiscal responsibility. And you have that much debt you know, there's, it all has to do with the ability to repay it. And for us when when we're dealing with a lower credit score that that said, is it that big of a deal? You know, maybe not. Maybe it'll make people sit up and and have a little bit of fiscal responsibility and and this isn't all one sided, you know, everybody just signs off on on raising the debt ceiling because politically they have to at this point.

And so I don't I don't just blame one side on this. I mean, There's there's plenty to go around as far as that goes. But at the end of the day, this happened in 2012 after, you know, after this last crash, it's been about 12 years now, since this happened, we worked our way out of it before and I'm just hoping as people [00:05:00] vote that they look and see who might be fiscally responsible and maybe, maybe go down that road a little bit.

So we have jobs reports coming out this week, you know, that could help on our side as far as the home loan rates go. ADP reports came out on Wednesday, you know, right after, right after we got downgraded saying that we got double the jobs that we were supposed to get.

Alice Lema: Yeah, I saw that. Yeah. Does that help our cause or make it harder?

Guy Giles: Well, it should. No, it doesn't help. It doesn't help. If it was accurate, then that would be great. But you have the ADP and the BLS numbers. BLS came in at 21,000, and ADP in at 232, 000. I mean, I don't know what the right number is, you know, our rates will come down and the good news, bad news about inflation, at least from a homeowner standpoint, is I have a couple of doctors that were moved into town yesterday that were a little bummed out about the, [00:06:00] you know, about rates where they are right now.

And I said, well, if they were a point lower, you know, 1 percentage point, would that make you happy? And they said, yeah, you know, and I said, well, that equates to about 500 a month. I have data everywhere from Kay Schiller to Zillow to just CoreLogic, everybody right now. And it hasn't been going that fast this year, but it's starting to accelerate as far as home prices go.

So on their particular scenario if I average out everybody where we think housing is going to go and this just speaks to me personally, what I do for a living and what you do for a living and what Brad does for a living, housing is going up. So it looks like 7. 4% is going to be where the average, if you average all them out.

So that means about 55, 000 of gain next year on their 750, 000 house. So that said, yes, you're [00:07:00] paying 500 more a month. That hurts. There's no doubt about it. But if you can afford it, it's good to get in there because they're going to be making about 4, 600 of, of appreciation on their house. And even though that's not income in your pocket, it's all part of your overall portfolio.

And I can't, I can't disprove the math. I keep trying as far as what can you do with your money, what can you do here or there, and I think you should be well rounded, and you should have money in the stock market, and you should have money in precious metals, and you should have money in some, I don't know, me, ammo, but at the end of the day, we need to To have housing as part of our portfolio. And it's just it's undeniable, you know, even if these higher rates because we are not going to charge bank fees to refinance you and rates do drop.

So, that doesn't mean you don't have your title but it'll be reduced. It's not going to be super expensive but get in the game now. These guys are able to negotiate some [00:08:00] closing costs and they are not paying full price for this house. So, a year ago, they would have been bidding 30, 000 over and praying to God they got it. And as soon as rates start dropping, unfortunately for my buyers, that's who I deal with, that's going to be the world they live in, so I think it's a good idea to just get in now. Pay your higher rate for a minute, it would take them nine years at 500 more a month to, to make up for what the appreciation in that house is well in one year.

Alice Lema: Well, and appreciation in Southern Oregon is usually pretty good wouldn't you say Brad.

Brad Bennington: Well, well, Alice I don't pretend to be a realtor. My, you know, I'm, a guy that spent a third of a century in the, on the construction side. So what, what I can tell you is, is that what Guy has stated is that the impact of credit affects our [00:09:00] everything we do right where we live. It affects everything.

Now, in our industry, the construction industry. The cost of credit ripples down and it gets stacked. So for instance you know, everything that we do in the construction industry is related to another sub industry. So whether it's creating lumber, whether it's creating concrete, whether it's creating roofing, whether it's creating a drywall, whether, whether it's creating hard goods like appliances. All of these things are related to each other. You know, for instance, every time the cost of fuel goes up, everything that we invest in someone's home, everything that we physically invest in someone's home during the construction process begins at one location and eventually gets delivered to the home.

All the workers transport themselves to the, to the home, you know, using, using vehicles. So the cost of fuel, every time these costs of fuel goes up, the impact of that increase in fuel ripples throughout all of those products, all of those contractors [00:10:00] and, and everything that we do to create that home for the consumer and not just the original creation, but anytime that there's a repair, you know, if we have to put a new roof on, if we have to repair wiring, whatever, whatever we have to do.

So the thing, the thing that I would like to hear Guy talk about a little bit is is okay so we're all kind of familiar with what's the increase impact of 1% if you're borrowing $400,000 to buy a 500, 000 home, we, you know, we can kind of cram that into our brain. Okay. But, but Guy, what happens when you're playing with a minor increase and you're talking about 30 trillion of debt. You want, you want to bite into that apple Guy.

Guy Giles: Okay. I didn't get my head wrapped around exactly what, what you're, you're asking as far as that goes. Yeah, I get what you mean. I mean, it's, it's not sustainable. And then when, when [00:11:00] we try to get a recovery to get out of this thing with, with something else that doesn't work.

I don't I don't know where that where that lands and and I apologize. I maybe I didn't grasp the whole thing. But if you're saying that on a on a small level, buying a house of 1%, how much does that affect everything? And then you magnify that by a world economy. I couldn't even venture a guess, but it's. It's not good. I mean, it'll eventually be good for me because throw us into a terrible recession. And guess what happens to rates? They go down and people will still work. So it'll be there will be there will be these rates going down. I just I just want to deal with reality. And that's not where we seem to be living these days.

And if you question anything at all, apparently I'll probably be a racist if I question it. So I don't know what to ask anymore. [00:12:00] It's just, it's weird. I mean, it's been weird before and I keep going back to one of my dear friends, Barbara Hedman. This, this old hippie chick that moved out here to just do that left her all of her money back east. And she just said, Guy, you know, this was years ago when, when the, that last crash happened and she said, you know, we're not building bomb shelters like we were when I was your age and well, it's Ukraine and Russia knows next week, I guess, but but still, you know, it's not as bad as it once was.

And we're always going to be going through something. And hopefully this will be some sort of a wake up call. You know, to everybody that that we do need to have some sort of fiscal responsibility in this in this country. And, you know, we always seem to pull ourself out of it somehow. And I just, you know, I still have faith in this country that we'll do it again.

Alice Lema: So that brings up another interesting point. And Brad, maybe you can [00:13:00] weigh in on this. The trickle, the trickle up or down, whatever you want to call it. I, of course, having an increase in fuel would do that, but I don't think homeowners and contractors, or maybe contractors prepare more for it, but I don't think the general public is aware how every one of those price increases affects the cost of a new home in Oregon.

Brad Bennington: Right, well, Alice you know, you've, you've heard me before state this statistic. Nationwide the economic impact of regulatory oversight continues to grow at a rate that's five times faster than the CPI.

Alice Lema: Really? Five times?

Brad Bennington: Yeah, so when you look at a home, when you look at a new home here in Oregon, you have to remember that 40% of the cost of that new, of that new home is regulatory compliant.

So, if you look, if you look at a 400, 000 home, if you can find one, I might be some 400, 000 homes out there somewhere, but I mean, or we'll just do [00:14:00] five when you look at that 500, 000 home. One of the things that a lot of people don't understand is that 40% or 200, 000 of that 500, 000 home is nothing more than regulatory compliance.

Alice Lema: Wow, it's shocking.

Brad Bennington: Yeah, and a lot of this is buried in the dirt because in the state of Oregon, Oregon is the most highly regulated state in the United States for land use. Right? So it takes our developers about three years to take a piece of land, and get all of the regulatory burdens satisfied to where we can create a product that we can actually sell to the public.

So we're so, for instance, we're now in 2023. So if one of our developers wanted to buy a piece of property that he wanted to do a subdivision with, unless all the infrastructure already in, and there aren't very many of those, let's say, one of our developers wanted to buy a piece of raw land, let's say it was in the urban growth boundary. [00:15:00] Let's give them that. Let's say that we have to do all the rest of it. They're going to buy that land in 2023, and by 2026, if they're lucky, they'll actually be able to have a product that they can sell to the public.

So just imagine if you were in a business, Alice, where you had to invest all of your capital and all of your capitalized costs. And couldn't begin getting a return on them for three years down the road. That's the, that's the industry that our developers live in. And I'll tell you, it's dangerous and it's tough and it's bare knuckles. And this is where, when we have our conversations with our regulators and our legislators, this is the message that we bring to them. If you want to help us create more housing, please help us lower these regulatory barriers because these regulatory barriers are costing us one thing that money can't fix. And that's time. Our biggest enemies [00:16:00] in our industry are the calendar and the clock. And every time our friends in the legislature think about the, you know, the latest, greatest idea, we remind them that it's going to cost somebody money to do your idea, please, please, please remember that Mr. Legislator and Mr. Regulator.

Alice Lema: Those are great points. Brad Bennington from Builders Association of Southern Oregon, Guy Giles, Mutual Mortgage. Folks, we'll be right back with more conversation. Do not go away.

Well, hey everybody, welcome back to the Real Estate Show. We're talking to Brad Bennington of the Builders Association of Southern Oregon and Guy Giles, Mutual Mortgage. Brad, how about before we pick up again, you tell folks who you are and a little bit about what the Builders Association does.

Oh, thank, thank, thank you. I was Alice. Great. Great to see you.

Brad Bennington: And I always, always enjoy hanging out with you guys. So, my name is Brad Bennington. I'm the executive officer of the builders Association, Southern Oregon. We are a self funding nonprofit that provides [00:17:00] education, advocacy and policy support to our communities and to the building industry. Our mission is to create housing policy that is safe, sustainable and affordable, and especially in support of affordable housing, which is so much in need here in Southern Oregon.

Alice Lema: Yeah. Well, we appreciate you being on the show again. We always learn a ton. So before the break, we were talking a little bit about the burden of the regulatory part of construction, e and you were saying it's per home. That's really shocking.

Brad Bennington: You look at a new home an family, detached departme different, condominiums different. But but on average, when you look at a new home here in Southern Oregon, the regulatory impact is about 40%. So if you're, if you're looking at a, at a 500, 000 home, 40% of a 500, 000 home is 200, 000. Most of that, [00:18:00] most of that is in the dirt. The dirt is the most expensive component of any home. And also the dirt is what takes the longest to get satisfied as far as regulatory compliance.

For instance, or in Oregon, we have a tremendous burden as developers on meeting just wetland requirements. I can show you a subdivision that 1 of our builders developed in Eagle Point back in the 1940s, it was, it was some, some land that was outside of the Eagle Point urban growth boundary. Because, well, there was no there was no urban growth boundary in 1940. We didn't have land use planning until 1973. But the farm that had it at the time put in a pond, put in a pond. So many, many years later, it's in the urban growth boundary. It's been platted. Our, our developer buys it and he wants to, and again, it's already been platted. That's a technical term. [00:19:00] What that means to your listeners is that it had already been through the review process by by the local authorities and and approved for construction. So that was the condition when our developer bought it. But then the, the Oregon, Oregon D. E. Q. and Oregon there's a whole bunch of alphabet agencies, I'm not going to name them all, but I'll just say this. Because of this pond that was built back in the 1940s, right? So there's there's no creek that runs through this. There's no river that runs through this. This was a pond that was man made back in the 1940s, but it's declared as a wetland. This pond that was built in the 1940s is declared a wetland.

It takes that contractor. three and a half years and half a million dollars of reports and fees and mitigation to where he can build any of those lots that he bought when he bought this subdivision. And that subdivision had already been platted and approved for [00:20:00] construction, but it took this contractor.

He actually, he actually at the end appealed to our congressman at the time was Greg Walden. And Greg Walden actually had to get involved with the Army Corps of Engineers to get a result. That's, that, that was where this thing went. And this was a relatively small 75 lot subdivision. So that just gives your listeners just kind of an idea of some of the regulatory burdens that we have to overcome to provide the housing that our community needs.

Alice Lema: Well, and it's interesting because they are allowing more the technical term is fill in town, so you can start adding cottages and more units to larger lots in town, but there's still a lot of hoops to jump through and it's still super expensive. But I understand that new construction is even worse. How are our local builders doing this year 2023 here we are kind of mid year, are we do we still have some new [00:21:00] construction happening. Thank you.

Brad Bennington: We have a housing crisis. Our new governor, Tina Kotech, when, when she was sworn into office, she, one of the first things she immediately did was declare housing emergency. She's actually working with us to try to make sense of this. She established a goal of 36, 000 houses a year for Oregon. Down here in Jackson County, we have about 5% of the state's population. So, 5% 36, 000, but about 1800 houses a year would be our goal and the current data that we have running wide open after the Alameda fire 2021, we produced almost 400 new homes and then I think we did about 460 last year.

So, you and I can agree that there's, there's, and let's just go ahead and wrap it up to 500. It's not 500, but we'll just full pretend. So running wide open with every resource that we had, pedal to the metal. [00:22:00] Last year, we were able to create 500 homes in Jackson County. That's a little bit short of the 1800 home goal.

And that doesn't even really contemplate all the, all the, you know, the thousands of housing units that we lost September 8, 2020. So the answer to your question is, is Alice, is this, our contractors are facing higher and higher escalatory pressures and in labor management, in the products that we buy, in oversight on our processes.

There's a whole thing called climate friendly equitable communities rulemaking that just came out out of DLCD last year. That's having a huge impact on our, on our industry and their margins are shrinking. So, the short answer to your question is this, our builders are working harder for less money. And the further we go down the timeline, the higher their costs are, and the smaller their margins are. So, that that's where our industry is right now.

Alice Lema: So, did [00:23:00] governor, the new governor as part of the housing emergency did she remove any of the burdens. Or give some relief to the cost aspect of new construction.

Brad Bennington: She, she did not, but what she did allow us to do is, is she directed the creation of a housing and development committee and, and there's about 30 people on that committee. And about two thirds of the chair of the sub chairs on that committee are actually from our industry.

Alice Lema: Oh, good.

Brad Bennington: So, so we, we, we've been participating with a discussion, discussion with the governor's staff and, and other people and trying to help them understand what things look like on, on our side. The reality is, is you like when, when, when I was a young guy growing up here in Oregon, the the average wage in the state of Oregon in the 50s, 60s, and even into the early 70s was [00:24:00] 18% higher than the national average, right?

That's the Oregon I grew up in. So you're not going to move into my town and buy a house out from under me. Why? Because I make more money than you do. I make a lot more money than you do. But what's happened is, is Oregon, especially Southern Oregon has experienced a lot of, I'm just going to call it manufactured poverty because of you know, we lost our timber industry, our farming industry.

So all of the things that we used to do in rural industry are becoming more and more problematic because of federal regulation, federal regulation, state regulation. But Southern Oregon has become a very attractive area for people that are relocating from other States. One of those States might have a big C in front of it and have maybe about 40 million people in it.

So what that, so what that gives them the ability to do is, is they can sell their home for an average of, of a 1. 2 million, retire an average debt of about half a million. You got about a hundred thousand dollars cost of sales, which leaves them about half [00:25:00] a million dollars cash. Plus their savings, plus their pension, plus what have you to come up here.

And in Southern Oregon, there, there's an awful lot of products you can buy for half a million dollars and they can just pay cash for it. There's no, you know whereas our young people that were born in to compete with these people that are, that are relocating. And so this is, this is what people like me and people like I, and people like you are concerned about is, is if we're spending all of, all of this All of this capital, right? So the state of Oregon spends about 18, 000 per student per year.

So we do our very best to give our young people every advantage that we can possibly provide for them. But once they get out of either high school or college. If they can't find a place that's affordable [00:26:00] for them to live in, what are they going to do? They're going to leave. And they're going to take all that and they're do. And they are, and they're taking all of that. They're taking all their education. They're taking all that talent. They're taking all of that ability that we did everything that we could to build into them. And they're taking it to another community. And most of them are going to another state.

Because Oregon, Oregon has become a state that's very expensive to live in. So we can't do anything about that. We're not, you know, we're not on the economic side, we're on the housing side, but this is just me saying to you and your listeners that that Guy and I are on the same page when it comes to being very concerned about working for a way for our young people, the young people that were born and raised here to have affordable housing that they can live in so that they can stay here.

Alice Lema: Yep. Guy, how many young folks do you see coming through your door trying to buy houses, the [00:27:00] tenants, current tenants trying to become first time homebuyers?

Guy Giles: Actually, there's a probably a bigger portion of that lately, to be honest, and then then it's normal for me. Historically, it was a whole bunch of people moving here from all over, all over the place, but the people that I've dealt with actually this morning already, a couple leads from Friday night. Okay. Were both young people, first time homebuyers. I'm closing on a couple of them right now. So all that part's nice, but I just, it's so funny to go back to what Brad had said a few minutes ago. I

actually pulled up, I have a construction, a new construction that I'm working on right now. And 48, 900, it's, it's under pre construction. So it's permitting fees, it's all that. And, and so, you know, let's definitely fight to have, you know, some less regulatory things so that we can actually afford to have these kids stay [00:28:00] here and move in. And I'm, you know, I'm really hoping that, you know, these two, I haven't got their applications yet, I just spoke with them this morning. They'll come in over the weekend here. You know, I'm hoping that they do. But I'm actually, I have had a lot more people that are younger, that are, that are really interested in trying to do the right thing to get into a house.

Alice Lema: Well, that's that's encouraging, but it is hard. It's so expensive. And I think people don't understand the dynamics of the laws and the planning and the permits and all that. And then that adds so much cost, so much cost that it almost makes it a barrier for the first time homebuyer. They have to either stay renters or like Brad said they have to leave the area.

Guy Giles: Yeah, well thank goodness it'll be free to haul the building materials cross country once we're all electric, so we're gonna be good.

Alice Lema: Ha ha ha. Well the future is unknown that's for sure. Yep, we just [00:29:00] have one minute left. Go ahead.

Brad Bennington: Yeah, I just want to briefly say this. This is this is why this matters. This is why the work that you and Guy are doing matters is because when our young people become homeowners, the younger they are, when they become a homeowner, the more that that equity that gets built into that home, becomes part of their wealth. And that's why what you're doing is so important. The earlier that our young people can become homeowners, the more that that equity can help build their wealth.

Alice Lema: And we desperately need that. That generation is in danger of not owning a home, right? So folks, we're talking to Brad Bennington, Builders Association of Southern Oregon, and Guy Giles, Mutual Mortgage. We do have to take a quick break to say thank you to John L. Scott, Ashland, Medford, thank you to Guy Giles Mutual Mortgage, and thank you to our local Rogue Valley Association of Realtors. Do not touch that dial. We'll be right back with Brad Bennington and Guy Giles in a quick second.

Well, hey, Southern Oregon. Welcome back to the real estate show. I'm Alice Lema. [00:30:00] I'm a broker at John L. Scott real estate. And just want to remind you that this broadcast will be repeated tomorrow at six o'clock. That's Sunday, six o'clock on the same station. KCMX. Radio FM 99. 5 talking to Brad Bennington and Guy Giles Brad, let's since we just have one segment left, let's talk about any recent statewide builders changes, association changes, what's going on with that.

Brad Bennington: Right. Yeah. So we just got done with the, with a long session. We got, got, got the short session coming up. We had we had a bill 3414, that would have been really helpful in land development that went down by, by one vote. So, so that, that was kind of, kind of a tough one. But we had some other we had some other good things happen with things that we stopped.

So I, and when I, when I say we, I'm talking about our [00:31:00] organization at the state level. Thank you. We have, we are the only outfit, so at the state level, it's the Oregon Home Builders Association, and that's the only association that's working on home construction issues, code, policy, all of those things.

So, realtors work on real estate stuff, chamber works on chamber stuff, but when it comes to actually working on housing stuff, and I'm really excited to be able to tell you and Guy and your listeners, that as of 2023 and 24, our state president is right here in Southern Oregon, Tim Alvarez of Alvarez construction and restoration.

Now that's a big deal. It's a big deal because he literally has the ability from that position to talk to the governor to talk to the governor's staff to interface with all of the significant policymakers that we have here in our state. And because he's from here, he, you know, born and raised here, his perspective is really spot on this.

This is a guy that [00:32:00] actually wore a tool belt. He knows how to build and he's right there representing the interest of, what he's representing all Oregonians, but his perspective is really, really local. For instance, he can talk very knowledgeably about all the damage that was done during during the Alameda fire.

His company restored over 40 of those homes that burned. So, so this, this is a young man that I'm really excited about seeing what he's doing for all Oregonians and for our industry from this position of being the president of the Oregon Home Builders Association.

Alice Lema: How exciting. How exciting. Well, maybe he can help convince the governor to loosen the the burden that we have on our builders and on the construction business. And you know, I wanted to ask you about wages and how that's affecting our local building, because aren't there wage changes happening.

Brad Bennington: There are a lot of changes when you talk wages you're talking bully, [00:33:00] bureau of Labor and Industry. So our people in our industry are paid well, well above minimum wage. But we have a situation where we have an extreme shortage of skilled labor. We only have 40% of the skilled labor that we had 15 years ago. So that's a problem.

The other thing is that recent regulatory OSHA. OSHA is Occupational Safety Administration. They came out with a bunch of smoke and temperature restrictions last year. And because they're administrative, they didn't go through the legislature. But now if you're if you're working outside, if the temperature is up to 80 degrees, you're mostly okay. If it's between 80 and 90 degrees, you have a whole system of protocols that you have to observe. And if it's over 90 degrees and you're working outside, you almost can't work at all.

So, you know, my personal background, you know, again, I, I signed the front of a check in this industry for a third of the century. And I can't tell you how many roofs I was on you know, built building buildings when it [00:34:00] was 90 degrees outside and we just did it. But now it's going to change the labor component. It's going to change the compliance the compliance part for our construction people. But, but, but again, yeah the biggest challenge that our contractors and builders are facing, Alice, is we just don't have anywhere and nearly enough skilled laborers for the demand that our community needs to have met.

And that's why we're engaging on a program that we call Building the Future. And Building the Future is a new outreach that we created to, to bring the opportunities in the construction industry to our young people.

Alice Lema: That's exciting. And is that something the Builders Association is involved in?

Brad Bennington: Yes, yes, yes it is. And we had an example of it at our Southern Oregon, Southern Oregon Home Show that we did in May. We had our Building the Future project. So [00:35:00] we took about a dozen high school students from our local schools and we built a project. We framed it all up. And then we have given custody of that project to the Phoenix high school. And, and starting this school year, they're going to complete that structure fully. You know, windows, doors, insulation, everything. And then we're going to donate it to a local nonprofit. And then once that's done, we're going to do it again. So we're just, we're we're really excited.

Well, the reality is, is, is the wages in our, in our industry now started started 40, 000 a year. So 40, 000 a year, that's that's the starting point and then raises immediately follow. And a lot of our young people are saying, well, gosh, here's something I can do right out of high school and I can make 40 grand a year as opposed to borrowing 20 to 30, 000 a year for the next six years to get a college degree that may or may not get me a job.

[00:36:00] So we're really excited about young people finding a renewed interest in the opportunities in the construction industry.

Alice Lema: Well, that is so exciting. So we only have a couple of minutes left, but I wanted to ask you about that building the future project. What was the turnout like from the, the students? How much participation did you have?

Brad Bennington: Well, we, we limited it to it to a total of a dozen students because the size of the project that we had, if you tried to get, get more young people involved in that, it would be problematic. But, but Par Lumber, Par Lumber provided the all the, all the material and also the supervision to do it, yeah.

And Spencer Weeks, who is the son of Mel Weeks, who's the regional manager for Par Lumber, he is a, he is a working contractor, and he donated his time to work with the students and, and help show them how to, how to do what they did. The students had a fantastic time. They had oh, [00:37:00] they just, they, they loved it. And the students that are going to be finishing the project at Phoenix High School, they're very, very excited about completing this project.

Alice Lema: Well, that's, that's wonderful. And they probably have a pretty good chance of getting a job, I would think.

Brad Bennington: Oh my yes, oh my yes, yes they will.

That's awesome. Well, we want to have you back on later in the year.

Alice Lema: Brad Bennington, the Builders Association of Southern Oregon, we'd like to hear more about how the Building the Future project is going and how our local contractors are faring with the economic conditions of the building industry.

Brad Bennington: Thank You've been happy to come back anytime, Alice.

Alice Lema: That would be awesome. Guy before we wrap up do you have any more insights into kind of what happened this week with the economic downrating and interest rates in general?

Guy Giles: Well, I'm just, honestly, my mind's on something else right now. I carried HOD for a lot of years, meaning just carrying bricks and [00:38:00] making cement and worked on a lot of roofs, loading them. We never had any heat thing as far as we were able to do anything, but maybe spray ourself with a hose at break. But I do think there's, as far as my job here goes that I don't know when, but they're going to crash this thing enough where we should have some pretty decent rates coming soon.

Alice Lema: Well, we're going to have you back on again for sure. Thank you, Guy Giles and Brad Bennington. Appreciate you both so much. So folks, that wraps up our show for the week. You again can repeat the episode tomorrow on the same station KCMX radio 95. 5 now on FM. And thank you again to the Rogue Valley Association of Realtors. Thank you Guy Giles Mutual Mortgage and thank you John L. Scott, Ashland and Medford. Have a beautiful Southern Oregon weekend folks. We'll see you next time. Bye now.