SHOW TRANSCRIPT

 

[00:00:05] Speaker 1 Welcome to another episode of the Go with John Show. We have Michael Schnitzer, President Stanley Martin, Custom Homes back with us again today. Thanks, Mike.

 

[00:00:12] Speaker 2 Hey, John. Good to be with you.

 

[00:00:14] Speaker 1 Good. So, Michael, tell us we’re at the end, this kind of a special episode. So we are sitting here today right after Labor Day 2022. It’s been an interesting year and a lot of great things are happening at Stanley Martin Custom Homes and at Stanley Martin. So maybe, maybe give us a little bit of a market update. What’s going on? Sure. Yeah.

 

[00:00:37] Speaker 2 So I’ll just talk about our parent company for just probably 2 minutes. Sure. Whatever. But believe it or not, they’re hitting their goals in terms of starts and sales and settlements. They’re really focused on the manufacturing aspect and more about driving down cycle time, getting more efficiencies. So they they’re doing a little bit of a paradigm shift. And they tested a the construction of a house after the foundation was poured and were able to manufacture the house. Not a prefab, right, but manufactured the house within a closed environment and get it trade ready in one day. Wow. So that means they brought out cranes. The windows were already in the walls, blah, blah, blah, blah, blah. So it’s basically put on, put in the floors, put on the floors, put on the, you know, stand up the walls, roof trusses, stairs, windows, exterior doors, all in one day. Right.

 

[00:01:51] Speaker 1 So when you say drive down cycle time, you’re talking about the cycle from start to of construction to finish. Right?

 

[00:01:56] Speaker 2 So but that so it right. So it drives down cycle time. It’s from an environmental perspective, it’s less material waste. Right. From a cleanliness perspective. Right. When you’re nails and all that stuff out in the field. Right. Less debris, less waste. And there was something else I was going to say about that. Oh, and it’s in a closed environment, right? So you’re not getting rain. And, you know.

 

[00:02:28] Speaker 1 So basically the house is built in a factory and it’s delivered to the job site and then stood.

 

[00:02:33] Speaker 2 Up in components. Right. It’s not like, you know, you see up, what, a 40 foot wide house on a big semi driving down.

 

[00:02:43] Speaker 1 It’s not a double wide.

 

[00:02:44] Speaker 2 No, no, no, no. It’s it’s a full crane set up ever. So I think that’s coming to a theater near you in the next couple of years to customs. Right. We’re just going to have to figure out as it’s implemented. Okay, how do we get right away permits to, you know, on a smaller street? Can we close down the street, you know, for six or 8 hours and put the house up?

 

[00:03:13] Speaker 1 I would think that the neighbors on a street would love to have one day of noise and commotion versus three months.

 

[00:03:22] Speaker 2 Yeah, I think a wider streets, you know, it’s just flagman and whatever and just closing a portion of the street. Yeah. In a two directional. Sure. Yeah, sure, sure. Sure. Anyway, I think that’s coming to a theater near you. On the custom side, ironically, we’re. We’re keeping up with sales. Yeah, we’ve had a couple cans, but we have that all the time. Right. We’re still generating sales. I think because of our largesse and our stability. People feel comfortable, you know, working with Stanley Mart and Custom Homes and for a plethora of other reasons. Right. You know, we can certainly get into that. But interestingly, we are starting more houses this year than perhaps ever before. Mm hmm. You know, some of it may have had to do with helping a customer, getting subdivided, blah, blah, blah. But for a combination of reasons, we’ve had to bring in more project managers. Right. And get the back office to focus more in helping production.

 

[00:04:32] Speaker 1 Yeah.

 

[00:04:33] Speaker 2 Because we’re so busy. Yeah. Which is a you know, it’s a great problem to have.

 

[00:04:38] Speaker 1 It is. And you know, it reminds me back in 2006, 2007, when the market was crashing and everybody was having such a difficult time. Our business was booming and we seemed to do extremely well under challenging conditions. I think the more challenging the conditions are in the world, the more new homebuyers. Want to build with a reputable company that’s been around for a long time that has a huge corporation behind them. So Stanley Martin, Custom Homes, we’re building 30, 40, 50 homes a year. Right. But we’re a wholly owned subsidiary of Stanley Martin. That’s building thousands and thousands of. Right. Right. So, yeah, it really helps us in times.

 

[00:05:24] Speaker 2 Like certainly smaller builders that fit within our niche. Yeah, right. I mean, they got to work on the draw. They’ve got to make sure they’re funding their company right here. We’re just so well-heeled. It doesn’t.

 

[00:05:38] Speaker 1 Exactly.

 

[00:05:38] Speaker 2 I mean, it matters because we want to get paid, but it doesn’t matter in terms of, you know, when we get paid. Right.

 

[00:05:45] Speaker 1 Per se. Exactly. And you know what? I think it also helps with our with our back office. We have a team of folks that are managing the supply chain, which really is not so much of a challenge anymore. We have some challenges. You want to talk a little bit about that? I mean, I think.

 

[00:05:59] Speaker 2 I think it really depends on the product. I think for the most part were, you know, were out of the woods, so to speak. You know, Stanley Martin has a window not Stanley isn’t owned by Stanley Martin, but we partnered with the company. And so this company built a facility to only manufacture Stanley Martin Windows. Right. So we don’t have to worry about wind supply chain, blah, blah, blah, other builders trying to gobble up, you know, the manufacturing facility. So that certainly helps the but you know, we build production homes and we build custom homes. And depending on how far afield you go with your product selections, you could still run into supply chain and quality issues, but just much longer lead time. Lead time, right. So a normal window order. If you were building a Stanley Martin Companies house with their products would probably be three or four weeks. Right. So it’s really no big deal. You just order the windows when you’re getting ready to start.

 

[00:07:16] Speaker 1 And then and that’s because we have our own facility. Yeah, yeah. There’s a dedicated factory that only builds Stanley Martin windows.

 

[00:07:22] Speaker 2 Right. And then, but let’s say a customer just issues. Anderson It could be. PELA It could be whatever, right? But they’re we are more and they are more constrained, right? So it still could take four months for windows and or doors, depending on what type of manufacturer. But we know that. And so we plan accordingly. So right in a prototypical environment, we start construction and we order our materials in an environment where somebody is ordering a andreassen or some other type of window. We may have to preorder several months in advance of ever starting construction. Right. So we’re, you know, we we adapt to the environment, so to speak.

 

[00:08:10] Speaker 1 Right, right. Cool. So it’s good. It’s fun to be able to do that. So so what else do you see in the market right now? So if we just on the theme of the market update, what is your kind of I know it’s hard to predict the future. Impossible. But what do you see evolving here in the next three months, six months, nine months in our industry?

 

[00:08:31] Speaker 2 Well, you know, there’s macro and micro economics, so the DC market’s completely constrained, right. In terms of there is a lack of housing for the demand of buyers, right. I mean, you can see it just in how much rent is for apartments, right? Because it just keeps exploding. People don’t have they can’t find houses. And so there’s more demand on want to park and whatnot. So certainly there’s some challenges out there, but the fundamentals are still strong people. People have families. They need to live somewhere. They want to buy a house. They also say, oh, geez, well, boy, that rent is high. Maybe I should look at buying a house. So you still have that kind of interplay, right? Within yeah, within the within our environment.

 

[00:09:30] Speaker 1 Right. So and we’re, we’re busy. So we have a lot of folks that are coming in that are exploring building a home with us. And we have a lot of folks coming in that are actually going through our process. Right. And I think one of the number one questions that I’m getting right now is how long. And I know it varies in different jurisdictions, but people want to know if I sign up with you guys right now and I go through the process in a prototypical timeline, how long is it taking to before I move into my home? Sure.

 

[00:10:00] Speaker 2 So, you know, I think we’re back. To our standard kind of spiel, if you will. Right. So from the time we get a permit to move in, I would say nominally six months, maybe it’s seven, maybe it’s eight. And part of it is how big is the house. Right. Currently building some huge houses. Right. That just take a little bit longer than the house. Right. So a 10,000 square foot house I’m just using currently isn’t necessarily going to take you twice as long as a 5000 square foot house, but it is going to take you a little longer. Right. So I would say still mentally think six months, it could be seven or eight months, right on the permitting side, which is what you were kind of hedging a little bit, the discussion, I still say from the time a customer removes their contingency until we get a permit plan on 4 to 6 months. Right. Four I would see would be the absolute earliest and perhaps almost like a 10% chance. Right. It’s it’s not going to happen often. Right. But could it be more than six months? Absolutely right. I know that, for instance, both Fairfax and Montgomery Counties, they’re slammed right now and they’re short staffed. Right. So it’s a labor shortage market. So if you’re working as a, for instance, a reviewer at the county making X, but you can get a different job making X plus, you may leave the county maybe two for the private sector. Right. So we are seeing some latency or some. Yeah, a little bit of an increase uptick on how long it’s taking to get permits permits out of the county. Right.

 

[00:11:57] Speaker 1 So roughly could be one year.

 

[00:12:00] Speaker 2 Yeah. I would say one year would be your rough. Yeah. I would say always and we’ve said this all along budget a year and a half.

 

[00:12:09] Speaker 1 Right.

 

[00:12:10] Speaker 2 But there are jobs where it could take two years. Right.

 

[00:12:13] Speaker 1 So and a lot of that, too, depends on the customer. Right. Right. Because there are a larger home that has a lot of custom changes in it is going to take some.

 

[00:12:22] Speaker 2 Longer to develop the plan. Right. And to work through new selections.

 

[00:12:28] Speaker 1 Yeah. Selections and.

 

[00:12:29] Speaker 2 Nuances. So we have some customers that will have a meeting with us to pick their finishes and can basically do it in a day. Right. Right. Because it’s, you know, here is our here are our light fixtures and here are our plumbing fixtures, blah, blah, blah. Right. And so we kind of consolidate everything down and typically they’ll leave that meeting with, Oh, I like this package or I like this package. I just need to marinate and then I’ll be ready to sign. Right. But then we have other customers where one meeting just may be on the tip of the iceberg. Yet the kitchen layout. Right. May have several iterations after just that one meeting. Right. So it’s it can be soup to nuts. Yeah. And yet, yes, it’s the customer’s experience. Right. And what they want to do.

 

[00:13:21] Speaker 1 Exactly. So let’s touch a little on price stability. What is going on in the pricing market? Because our prices have gone up. They’ve come down. They’ve gone up. They’ve come down. So what are you seeing right now? So we’ve got our prices posted online. We’re going to we’re going to take a break in a minute. Then when we come back, we’re going to talk about the free rec room incentive and things that we’re doing there. But what do you see in from a pricing perspective in the market now?

 

[00:13:47] Speaker 2 My hope I’m going to knock on wood is that we’ve hit the apex of inflation as it relates to building products. And that’s my hope. Right. And hopefully we’re starting to turn down or at least stabilized. Right. So maybe it’s not. So from a labor perspective, the labor market is still very tight.

 

[00:14:16] Speaker 1 Yeah. And so so so once a company raises.

 

[00:14:20] Speaker 2 Their salaries.

 

[00:14:21] Speaker 1 Or salaries, you can’t give people a pay cut. Not in this environment.

 

[00:14:25] Speaker 2 No way. Right? No way. There’s too many companies chasing too few people. Yeah. So, so. So the labor element, I would say, I don’t even know if it plateaus. It could still go up just based on inflation.

 

[00:14:42] Speaker 1 Right?

 

[00:14:43] Speaker 2 Right. Right. The material element, I hope, has a pest. Yeah. And plateaued. Now, certainly, commodities like lumber can go up or down, but we’ve seen a precipitous drop in lumber and lumber and shipping and. Whatever. And so that’s reflected in our pricing. And hopefully, you know, as as the world economy stabilizes, you know, commodity prices stabilize.

 

[00:15:14] Speaker 1 Right. So so let’s talk a little bit about the customization fee. You know, we’ve always given our customers the ability to customize. And we have very affordable pricing. And I think our our subcontractors are raising their prices to us on on customizing. So what does it now take if somebody wants to customize a home? Right. How does the program work?

 

[00:15:39] Speaker 2 So let me just back up and say and you’re absolutely right, we were saying why is the how can we offer a house, right. A stately Martin home still give a customer great experience, but do it more in a more use or production, but in a builder production builder mindset.

 

[00:16:03] Speaker 1 Right following that our following this daily Martin program. Yeah their policies and procedures.

 

[00:16:08] Speaker 2 Yes so when we build a custom home, we have so many different meetings and reviews and it’s just it’s enormous just gathering pricing and information and cut sheets and whatever. And so we said, well, how can we trim the fat, if you will, from a at least an overhead perspective, phase one. Right. And we said, okay, let’s offer these homes in a more stately Martin production mentality. And what does that do to the price? Right. Right. And so that’s reflected in our current pricing because we have stripped all the overhead that would be really geared to a custom customer. Right. Right. So just a selections, right? Yeah. So instead of maybe one or two selections, a custom customer could have ten and 15. Yeah. Right. Instead of in a production environment where you really don’t have nonstandard options for a custom customer, we may have hundreds. Mm hmm. Right. And that’s. I mean, we got to. We got it.

 

[00:17:19] Speaker 1 It costs money.

 

[00:17:20] Speaker 2 Burden on the company, which we’re happy to do. Right. But we also mean we have unit cost. But a lot of times these custom changes are custom features. Right. So now we have to enter, you know, we have interplay with our all of our trades. Right. And that takes some time. Right. And so I would say, you know, generally speaking, there is now a adder roughly if you want to customize of tens of thousands of dollars. Right. You know, versus for a long time we didn’t charge anything before.

 

[00:17:58] Speaker 1 It was a $5,000 fee, which really in the scheme of things, it.

 

[00:18:01] Speaker 2 Was actually. Yeah, nothing. So, so, so at the highest level, how can we offer our product at the most affordable price? And certainly this was a absolute great way. Right. And somewhat of a paradigm shift because we’ve been operating under the same principle for so long.

 

[00:18:18] Speaker 1 Right.

 

[00:18:20] Speaker 2 But in this environment, right where we want to drive pricing down, it was certainly a way to do.

 

[00:18:26] Speaker 1 Yeah, we want to drive pricing down and we want to drive the cycle time down. Right. So that for our homeowner.

 

[00:18:32] Speaker 2 Yeah. So and I wasn’t even thinking about that. So that’s almost like unintended consequences, which is if you’re not having to make all these. So if you can take a thousand decisions and turn it into ten. Right, right, right. The the velocity of going through the my call it the startup phase is exponentially shorter, right?

 

[00:18:54] Speaker 1 So the startup phase is shorter and the build cycle is short.

 

[00:18:57] Speaker 2 Right. And that gets into the second element, which is if a trade is going out and we’ll just use the framer analogy. Right. A framer has built house X. I’m exaggerating a thousand times, but it could be hundreds and hundreds. Right. So the framer, you know, they know the house.

 

[00:19:15] Speaker 1 Inside.

 

[00:19:16] Speaker 2 Their mind. Yeah. So they can go in, build the house, frame the house and get out very quickly. Mm hmm. Right. Let’s just pick an, you know, three days, whatever. Right. And they really don’t have to come back except for doing some punch out at the end, which is part of the building industry.

 

[00:19:32] Speaker 1 Mm hmm. Mm hmm.

 

[00:19:33] Speaker 2 Now, take a house that may be a derivative of that house, right where we customize. We blew it out with Balboa. So now the framers have to study the plan. They know that there could be some anomalies. Right. Because it’s really becomes a one of a kind. Yes. Right. It’s a one off. So there’s there’s more labor. There’s more return trips.

 

[00:19:57] Speaker 1 Yep.

 

[00:19:57] Speaker 2 So now I’ll take that and multiply it through all of the. Trades. And now you start to see, you know, the added costs. Forget the product costs, just the added labor costs. Right, right, right. And that’s you know, we’ve done the same thing when we talk about labor. There’s the labor physically of hammering nails into wood. Right. But there’s also the labor of. Oh, well, what’s the cost or the price of X, right? So from a framer analogy, if we’re building house X, they don’t have to price anything out. We already have all the pricing. Right? Right. If it’s a different house now, they got to get their estimate are involved and they got rates and now they’ve got more overhead. So it’s all about trying to trim the fat out of the process to lower the price.

 

[00:20:49] Speaker 1 Right. And the cycle time.

 

[00:20:50] Speaker 2 And cycle time. Yeah.

 

[00:20:52] Speaker 1 Good, good, good, good. All right. So we’re going to take a quick break, Michael. Great information. Thanks for coming in. We will be right back. More with Michael Schnitzels, president of Stanley Martin Custom Homes. I remember who he is. All right. Welcome back. We still have Michael Snitzer with us, president of Stanley Martin, Custom Home.

 

[00:21:16] Speaker 2 Hey, John.

 

[00:21:16] Speaker 1 So so, Mike, we are busy. We have lots and lots of people coming in and wanting new homes. So tell us, who are our customers?

 

[00:21:27] Speaker 2 Good question. Yeah, I’m trying to figure that out now. Just guess. So I would say if I were to kind of take a pie and cut it, right, that probably just three quarters of the pie are people that either need to age in place. Right. Need to have a space for potentially an in-law or an elderly parent to in the future move in to right to take care of. And then we have a whole different segment of people who are multigenerational. Right. Right. And so, I mean, it’s a it just keeps growing every year. Right? Maybe it’s not 75% of our customers, but it is a big slice of our cost.

 

[00:22:17] Speaker 1 Right. And we have a huge, I think, group of people who are families that are growing out of their homes. Right. That you have you have a couple who bought a home maybe in North Arlington, and it’s a 1100 square foot rambler.

 

[00:22:32] Speaker 2 And now they have three or four.

 

[00:22:34] Speaker 1 Kids in there. And they literally call us and they say, John and Mike, we have got to do something.

 

[00:22:40] Speaker 2 We are living in our closet.

 

[00:22:41] Speaker 1 Exactly right. Right. We people tell us that they’ve got their office in their closet. Yeah, yeah, it’s great. So you’ve got that. You’ve got two families that are just literally growing out of their houses. They love their neighborhood. Right. They hate the home. Right. And they need a new house. We have the multi gen families where you have two or three generations living in one home. Absolutely. They all need their own space and they want a great living space where they can all come together and meet as a family and have dinner and all of that. And then we and then we have the aging in place, folks who are maybe in their fifties or sixties and they say, Hey, I want to build a new house. We don’t want to have to move out of this because we’re 75. Right. We want to we want to stay here. Right, right. Right. So let’s let’s let’s kind of hit on this real quick.

 

[00:23:24] Speaker 2 So well, so and the other thing is just the new work from home, whether it’s full time or part time. So there’s got to be space for for home office or home offices. Right. And in some cases, it needs to be kind of like a quiet area or separated. So you’ve got all this, you know, multi gen, multi aging, blah, blah, blah family you got working at home. And we, you know, we’re hearing and we recognize that it’s I mean, it’s great to have a nice kitchen, morning room and a great dining room or family room. But there’s so much activity. People need to they want a larger area to congregate right when they want to come together as a family unit. Right. And they also want an area that’s maybe a little bit separate. So if they are congregating but not everyone. Right. You know Mr. and.

 

[00:24:29] Speaker 1 Mrs. Multi gen right now.

 

[00:24:31] Speaker 2 Yeah. Well could be multi gen or you know at some level, you know, could be something our customer has for kids and blah blah blah blah blah age and they’re coming over to play and but he or she is working from home. And so, so we recognize that this is a growing trend. And one of the things that that that we looked at is how do we incorporate this and incentivize our customers to really take a close look at Stanley Martin? And so there’s a limited time for this. But we we worked with our trades and came up with a way to include the lower level rec room as part of the base price. Right. So you call it a free rec room, whatever. But we realized the trend. We realized that people being cooped up. Yes. And are bursting. So they need more space. So this just, you know, it was just kind of a no brainer for us to do. And, you know, like you were saying, love our neighborhood, hate our house. You know, in some cases, you know, people are also building finished attics because the house with especially for whether it’s Bethesda or or Arlington or wherever, may only be 30 feet wide. Right, right. Right. And they, you know, yes, they’re maximizing their space, but they still need more space. Right. So I guess you and. I get I don’t know how many inquiries a week where people just star, you know, I looked at, you know, maybe renovating or, you know, something out or looking for a new house and none of it seems feasible. And they come to us. And those are obviously our easiest customers because they’re bursting at the seams and they have to do something right and they recognize that renovation just doesn’t get them there. It’s not a good return on investment and it’s costly.

 

[00:26:39] Speaker 1 Right. So if we’re going to just run through some really quick things because we we’ve we have another episode where you and I spoke at length about floorplans and choosing the right plan. So folks that want to hear that can go find that episode. But, you know, highest level, most of the folks that come in, if we were to if we were to break up a pie chart, I think the largest segment, they want some sort of an office or a bedroom on the main level. That could be a combination room with a full bath, right? Mm hmm. That’s right. Yeah. So. So you want your living space on the main level, and you don’t necessarily want the owner’s bedroom, but you want some sort of a space that can be used as a bedroom and maybe some folks will use it as an office.

 

[00:27:19] Speaker 2 Well, John, it also depends on the customer profile, right, because some customers who are, you know, have younger kids. They want to live well if they want to sleep on the second floor, owner’s bedroom, blah, blah, blah. But then we have other customers where the owner’s suite is on the first floor. Right. Right. Because they’re I don’t see elderly, but they’re in their sixties are like, oh, my knees are given out or whatever.

 

[00:27:43] Speaker 1 So you want to walk up the stairs and. Right, yeah. Yeah. I was actually I was actually head in that direction. Oh, yeah. All right. So so we’ve got plans organically from Stanley Martin that have a main level bedroom and it’s not a custom change. You can buy a house with a main level bedroom because there’s such a strong market demand for that type of product. We listen to our customers, we have it. So then we have the first floor owner’s suite. We have lots of four players. We only have a few online, but we have other floor plans that are not online, right, that are first floor owner’s suite. So for that buyer profile, we have organic floor plans that don’t need custom changes that you can buy that hit that first floor owner’s need for those buyers. Right. And then we have the multi gen homes. We have two great homes that are really popular, Morgan model and we have our Travis which are great for multichannel.

 

[00:28:39] Speaker 2 Our Russell.

 

[00:28:40] Speaker 1 And our Russell model, correct? Yeah. So we have that. We have actually.

 

[00:28:43] Speaker 2 We have more than that. We even have some 42 wides that are multichannel.

 

[00:28:46] Speaker 1 Right. But I don’t think they’re online. So I think they’re offline. Maybe online. Maybe.

 

[00:28:51] Speaker 2 I think they’re online. I think maybe the thin or okay so it’s but there’s.

 

[00:28:56] Speaker 1 So we have them. Yeah so so here you’ve got the owner suite on the main level, you’ve got an option for a second owner’s suite on the second level. So if you have a multi jen situation may look like, you know, mom and dad who are the grandparents. Right. Living in the main level. Then you have one of their kids who’s married and has kids living on the second floor of the home. And then you may have a brother or sister or some other family member living in the lower level, sometimes even more so. You’ve got the grandparents, you’ve got the kids, you’ve got their kids and maybe a sibling all living under one roof. So our mortgage model fits the bill for that right out of the book.

 

[00:29:38] Speaker 2 Absolutely. Yeah, yeah, yeah, yeah. And I think there’s all kinds of derivations from that. But the I think one thing that you spoke about and maybe peripherally just was the the fact that we started to get feedback that we just kept putting more plans and plans and plans online. Yes. And we always are concerned about fatigue.

 

[00:30:03] Speaker 1 Yes.

 

[00:30:04] Speaker 2 By or fire.

 

[00:30:04] Speaker 1 Fatigue.

 

[00:30:05] Speaker 2 Yes. Right. So what we said is let’s limit the plans. We have a huge library of plans. So at least whet your appetite. And, you know, many popular plans are online, but we have many more plans. Right. And once we listen to our customers needs, we may say, hey, migrate from plan X to plan Y because it better fit your needs.

 

[00:30:31] Speaker 1 Right. Exactly.

 

[00:30:32] Speaker 2 You know, we’re not going to not speak about that in our meetings.

 

[00:30:36] Speaker 1 Exactly. So the point of our meeting is we meet, we talk. What is it you like about the house? What is it you don’t like about the house? And if there’s another model that works better, right? Well, we’ll migrate.

 

[00:30:45] Speaker 2 And then just what are your needs? Right. You and I’d be like, Oh, they need this, this and this. Oh, well, there’s that house. But you know what? There’s these two other houses that they don’t even know about. Right? And we pull them up.

 

[00:30:56] Speaker 1 Exactly. Exactly. So great. So so let’s talk about the free rec room. Right. And let’s talk about so you mentioned it earlier, we’ve worked with our trades to include that in in the base price. So how. How does that work and what’s going on with that?

 

[00:31:13] Speaker 2 Good question. Yes. So we’ve so we’ve negotiated with our trades to incorporate their same basic unit costs for the lower level rec room. Mm hmm. And, you know, finagle some things here and there and said let’s just go ahead and put that into the cost of the base house. Right. For a limited time. So it’s it’s not transferable. Right. So it’s almost like trying to think if you built, like you said, the Morgan and you had a first and a second floor. Oh, well, we don’t really want the second floor. It’s like, well, you wouldn’t build the. Morgan Right.

 

[00:32:01] Speaker 1 So the question we’re getting is, can I take the rec room out and use that money somewhere else? And we can’t.

 

[00:32:06] Speaker 2 No, it’s it’s a rec room incentive for those that appreciate the space.

 

[00:32:11] Speaker 1 Right. Can configured with our trade. Right.

 

[00:32:14] Speaker 2 And I would say 80% of our buyers want and or select the rec room. So we’re not doing something that isn’t popular. Right. Right. We’re listening to our customers and responding.

 

[00:32:26] Speaker 1 Yeah. Yeah. Okay. And so we don’t know how long that’s going to last, but we’ve worked it out with our trades. We have it at least through at this point at the time of this conversation around Halloween. So we’ll figure out what happens after that. But I think it’s a nice incentive. People need the space and we appreciate our trade partners working with us on that.

 

[00:32:47] Speaker 2 And it takes some pressure off of our customer. It does price pressure. So where everything else seems to be going up, we’re trying to bend in the other.

 

[00:32:54] Speaker 1 Direction, actually. Exactly. Great. Well, Mike, thanks for coming in again. We appreciate your time. And this concludes another episode of the Go with John Show. Go out there and build something extraordinary.

 

[00:33:05] Speaker 2 There you go. Go, John.

 

[00:33:07] Speaker 1 See ya. All right. See?