March 31, 2022

What’s Behind Low Housing Inventory and the Wild Real Estate Market?

“Maybe home ownership isn’t the end all be all.”

Spring is usually peak season for home buying, but there’s a chance that low housing inventories and rising mortgage rates will cool down the market. So what does this mean for housing prices? Nora and Scott chat with Annie Lowrey, staff writer for The Atlantic and the author of the book Give People Money, for some insight on the volatile, rapidly changing housing market. 

Hosts: Nora Ali & Scott Rogowsky
Producer: Bella Hutchins
Production, Mixing & Sound Design: Daniel Markus
Music: Daniel Markus & Breakmaster Cylinder
Senior Producer: Katherine Milsop
Director of Audio: Alan Haburchak
VP, Head of Multimedia: Sarah Singer


Full transcript for this episode below. 


Annie Lowrey: If you think about 50 years from now, we would expect there to be millions and millions more Americans, and we would want them to live where they want to live. And so right now we're pushing them out to these kind of outlying suburbs and they're commuting really long distances and it's terrible for the environment. And it would be better if they could live in places like San Francisco, but that might mean that an apartment in San Francisco is not the world's greatest investment. And maybe you could have put that money elsewhere into starting a business or investing in some other way. And so I think that it's a matter of social expectation also. And people buy homes expecting them to appreciate, but I do think that we want to back away from home ownership as being the end-all-be-all and sort of say, let's just get rents and mortgage costs down everywhere for everybody such that you wouldn't be spending so much on your mortgage, but also you wouldn't be expecting appreciation of this asset in the way that you might have.

Nora Ali: From Morning Brew, this is Business Casual. The podcast that reveals the unexpected business story behind everything. I'm Nora Ali.

Scott Rogowsky: And I'm Scott Rogowsky. Nora and I are here for your ears, bringing you conversations with creators, thinkers, and innovators who can tell us what it all means and why we should care. Now let's get down to business.

Nora Ali: Scott.

Scott Rogowsky: Yeah.

Nora Ali: We're talking about housing and buying housing and you have had firsthand experience. How'd it go?

Scott Rogowsky: Yes. Well, I tried to buy a not quite house. I don't have house money. I was going to try to buy-

Nora Ali: A home.

Scott Rogowsky: ... a very modest, a condo studioish. What is it called when you can't see the bedroom when you open the door, but there is no door to the bedroom?

Nora Ali: Oh, a little... a room, a studio.

Scott Rogowsky: It's like a studio, but I don't know. I'm going to call it a studio plus. Tried to buy it just a few months ago. End of December and had a really nice interest rate. It was like 3% and went through the whole process, the escrow, deposit, the escrow, and had the inspector come and had the appraise and all that stuff and turns out, wow, the owner was actually offering a discount, 50,000 less than the asking price, which as we know, and as we learn more about in this episode, this frothy market is anything but discount laden. There are people outbidding, overbidding, overpaying. So this deal seemed too good to be true and wouldn't you know it Nora, it was.

Nora Ali: Oh, no.

Scott Rogowsky: I couldn't get a loan and the whole deal fell apart because turns out my building that I was trying to buy into is on Fannie and Freddie's list of Do Not Loan.

Nora Ali: What?

Scott Rogowsky: So it turns out that following the Surfside condo collapse, if you recall, in Miami, following that collapse, Fannie and Freddie Mae looked at their portfolio and put 1,200 properties on the Do Not Lend list for deferred maintenance issues. And my building, built in 1968 and apparently not up to date with its maintenance-

Nora Ali: Wow.

Scott Rogowsky: ... is on that list. So I couldn't get a loan. I could have paid in cash, which obviously I couldn't have, or I could have gotten some shady third-party, non-federally backed loan with a much higher interest rate, which I did not want to do. So instead I didn't buy it and lost about a thousand bucks in the whole process. It sucked.

Nora Ali: That does suck. And you are not alone in this. Housing is a basic human need, but it is one of the most complicated and challenging things to navigate as a human being. And the housing market has been wild, especially for the past couple of years. And recent data even suggests that low housing inventories and rising mortgage rates will lead to a cooling of the market this spring. But a decline in home sales doesn't necessarily translate to a decline in home prices and writer Chris Morris reported in Fortune that a quote, "Recent forecast from Zillow predicts a year over year rate of home price growth will hit 22% in May. That would represent an acceleration in home price growth." So the big question is how did we get here? To give us some context on the volatile, rapidly changing housing market, we spoke with Annie Lowrey, staff writer for the Atlantic and the author of the book, Give People Money. Here's our conversation with Annie. Annie, let's rewind a little bit to start. A couple of years ago in February 2020, you published a piece in the Atlantic that went viral. It was called, "The Great Affordability Crisis Breaking America." And we are thinking a lot about the affordability crisis today, particularly when it comes to housing. So your article looked at the economic legacy of the 2010s and you wrote that Americans' confidence in the economy was at its quote, "Highest point since 2000, right before the dot-com bubble burst and the headline economic numbers looked good, if not great." But you pointed out that this apparent prosperity was not the reality for millions of Americans. What was their situation at the time?

Annie Lowrey: So there has been this longstanding problem in American life, which is that the cost of essentials for working families are really, really high. And so I kind of talked about four big buckets and in a lot of ways, I think all four have at least not gotten better and it maybe got worse. So student loans, it's actually kind of a mixed picture. The Biden administration has delayed a lot of folks' student loan payments, and there's a lot of effort to increase student loan forgiveness programs. But nevertheless, it's true that we still have a trillion dollars of student loan debt sitting on the backs of mostly young people. And that student loan debt notably has different effects for different families based on their intergenerational wealth. Black students who are going to college, who are much more likely to be the first people in their family going to college, they tend to take out more money and it tends to be really harder for them to pay it off. So there's absolutely a racial justice component there. And this contributes to intergenerational differences in wealth between Black families, white families, Latino families, and also other racial and ethnic groups. So there's that. Child care is a nightmare. A ton of child care providers shut down during the pandemic, because it was a hard business to keep open. Parents pulled their kids because they were staying at home. It's a nightmare, there's even fewer spots than there were before, even as the economy has kind of normalized. In terms of health care costs, again, we've just been through a pandemic that has killed hundreds of thousands of Americans and gotten others sick. And we haven't seen any sort of underlying reform of out of pocket cost or anything like that. We're still waiting on Congress to tackle the cost of prescription medication, which they've said that they're going to do, and then they haven't. And then housing. There's this moment during the pandemic where rents really came down and a lot of people left the really high-cost cities and a lot of workers started working at home, but the problem has actually in a lot of ways only gotten worse. We've just spread it around a little bit and we still have these really profound housing shortages that make it impossible to solve any of the other problems. They make gentrification worse, if that's something that you care about. They make it such that in many cases a lot of our cities, they seem more and more sort of like resort areas where only the very wealthy and only folks who were lucky enough to inherit from their parents or only people who are making six or seven figure incomes and can afford. And we've seen, as the millennials have tried to, especially older millennials have tried to buy homes, they've just gotten bid up and bid out and it's been a really hard process and prices are so high that it's not clear how much appreciation they're going to get on the other side, so maybe it's not even a good investment. So in so many ways the situation remains really bleak.

Nora Ali: Yeah. And the pandemic only exacerbated this supply-demand mismatch in housing where even before the pandemic there was this housing shortage that has been an issue. In what way was the housing shortage years in the making? How did we even get to this point, even pre-pandemic?

Annie Lowrey: Decades in the making. So here I think that the story is a little bit more regional. And so some places, like California has a somewhat slightly different problem than some other places, but California is obviously our biggest state and a lot of people live here. The story had been kind of that building restrictions started throttling off the supply of housing in desirable neighborhoods, mostly urban neighborhoods a really long time ago. And so people would sort of say, "Hey, I don't want to live next to that bus stop. I don't want to live next to that apartment building." And so more and more neighborhoods and cities became kind of transformed and preserved in amber and the supply never caught up to demand. And you can see that very clearly in terms of prices. And so this caused the gentrification of a lot of neighborhoods. A lot of middle-income families got squeezed out. A lot of younger workers are caught kind of living with their parents or living with lots of roommates for longer than they would like to. And what you're seeing now, I think is that people are leaving some of these really high-cost areas like a San Jose or a Boston they're going elsewhere. And now they're driving housing costs up for everybody who's there. And again, I think you're totally right to identify a lack of supply as the beating heart of this problem. And the estimates are that the United States is short something like 5 million housing units, which there's only a hundred million households. It's a lot. It's a ton. And it's going to be really hard to build our way out of this.

Nora Ali: Why is that though? Is it a labor shortage? Materials are costly? How do we even get to that point where there is such a supply shortage?

Annie Lowrey: A big part of the problem is that if you're a homeowner, say you bought an apartment in Brooklyn Heights a really long time ago, you have an unusual ability to throttle building in your neighborhood. You can show up at the local planning commission meeting and say, "Hey, I don't want to live next to public housing. I don't want to live next to a big building, that's not in the neighborhood character. That's going to affect the price of my home." And so I think that's one thing that we've seen is that, it's pretty rare, if you are a podcaster or a journalist, you can't prevent other people from producing the supply of those products. Really hard if you are a sandwich shop to prevent other sandwich shops from coming to your town. But if you're a homeowner, you have a lot of sway over what gets built in your neighborhood. So this is a really complicated, difficult problem. I think that basically one of the things that happened was we had this enormous housing crisis where there was some overbuilding in some areas and people just expected prices to go up and up. And there was a lot of speculative building in places that people didn't want to live. And I think that we're still dealing with that after effect as well. Because again, it's not just about... there's people that are always like, "Oh, well, why don't we just build new cities in the middle of nowhere?" And it's like, "Well, nobody wants to live there." You have to build where people want to be or otherwise you haven't solved the problem.

Scott Rogowsky: There's also a demographic related element to the surge in demand for homes, right? Because you have people like us. I mean, I think all three of us here are in the same age range here, the elder millennials, and studies have shown even that millennials have delayed the adulting process, but have now after all these decades, we're now at the age where we're realizing maybe we should be buying a home now. So, the largest generation ever is all surging to go buy homes at the same time. That's also driving up the prices and making things scarce, huh?

Annie Lowrey: Absolutely. The issue is, you always hear about people who are like, "Oh yeah, my parents bought a house in the Boston suburbs for $45,000." Prices are really high now. And so that means that millennials are going to be spending more on housing. It means that they might not see the upside that somebody who bought 30 years ago bought. In fact socially, we would want that to be true. We don't want housing costs to keep up going. We want to fix the supply problem. And it means that you have less money to spend on other stuff, right? Because you have to pay that mortgage payment or that rent payment. And we are seeing millennials move into the market, but they're moving in older and later and they're paying a lot more. And now we have interest rates going up, which is a whole other complicated issue, but we might be paying more in interest costs also going forward. So I think there is a feeling that... I remember George W. Bush sort of saying that home ownership is the pathway to the middle class. It's really important that people have houses, savings, and an investment vehicle. And there's been this social expectation that the price of your house just goes up and up and up and up and up, in the way that you would want a stock market to over time, even with all of the up and down that the stock market does. But that's problematic, right? Because that is sort of saying that you are decreasing the supply of housing relative to demand for housing in perpetuity in the future. And if you think about 50 years from now, we would expect there to be millions and millions more Americans, and we would want them to live where they want to live. And so right now we're pushing them out to these kind of outlying suburbs and they're commuting really long distances and it's terrible for the environment and it would be better if they could live in places like San Francisco. But that might mean that an apartment in San Francisco is not the world's greatest investment. And maybe you could have put that money elsewhere into starting a business or invest in some other way. And so I think that it's a matter of social expectation also. And people buy homes expecting them to appreciate. But I do think that we want to back away from home ownership as being the end all be all and sort of say let's just get rents and mortgage costs down everywhere for everybody, such that you wouldn't be spending so much on your mortgage, but also you wouldn't be expecting appreciation of this asset in the way that you might have, because now the boomers, they're all like, "I bought this house for 10 bucks and now it's worth $5 million and I'm never going to let anybody else build here." Right. And that's a real problem.

Nora Ali: Let's take a quick break, more with Annie Lowrey when we come back. Annie, you have written about a broken Congress and many reasons why we haven't arrived at any solutions around the housing crisis, but what comes to mind when you think about policy changes that could start to address these issues, whether it's state funded affordable housing construction, or other options, what do you think might work?

Annie Lowrey: So there's different options for each of these different problems. It's probably worth noting that Joe Biden has enormous unilateral authority to get rid of student loan debt. He can't touch the private debt that students take on, but the federal debt, it's a pretty good legal case that he could magic wand that right out of existence and just take it away for people or some large number of them. And that's not something that he's been willing to do for a complicated set of reasons. Something like child care, we've seen some states really zoom ahead in terms of in cities... zoom ahead in terms of providing publicly financed 3-K and pre-K slots or doing more to kind of intervene in the market and make sure that there are enough spots in high quality child cares for infants and toddlers, but it's a place where the federal government could really... we've seen a lot of other national-level governments in other countries spend way, way, way more on that zero-to-five childcare bracket. And they sort of fix the market because child care has this sort of awful dynamic in which the people who provide child care are often making the minimum wage or a little bit more. So these are miserably hard jobs that are really under-compensated, but it's also very expensive for people... the flip side of that is it's also expensive for the parents. So the government can fix that mismatch, right, by spending more, socially spending more. And that's something that the Biden administration tried to do with the social policy parts of Build Back Better, and that just hasn't gone anywhere, which is frustrating. Housing, it's tough because it's like a town by town, block by block, state by state fight. There's not a lot of federal housing policy. Sure, there are ways that Congress can rearrange the carrots and sticks. They could certainly do more financing through HUD, but this is really an issue where you need a lot more building to get permitted at the local level. And so states like California have done a tremendous amount to try to start to encourage that. So allowing sort of [unintelligible] and fourplexes, letting people build on their own property, but it's hard. We don't have a government that has a kind of national level, "Okay, we're just going to build 5 million houses in the places that people most want to live." There's no way to do that here. Maybe that's true for some of our peer countries in the OECD.

Scott Rogowsky: Sounds like there could be another reason why UBI is necessary here. And, Annie, you've written a book called Give People Money, which looked at the idea of a universal basic income, a stipend to every citizen. How do you think that might play into housing cost? Are those payment stipends going to housing? Is that going to help alleviate the market? What's your argument for UBI vis-a-vis housing.

Annie Lowrey: So I think there's a much stronger argument for UBI when you're comparing it to something like food stamps or other kind of transfer payments that are sort of cash-like. This is one of these places where UBI could be kind of difficult in this situation because you just give people the money and then it goes straight to the pockets of landlords. That's not a happy equilibrium for anybody unless you're a landlord, right? And so UBI, I always say, it's not a silver bullet. There's a lot of problems that it can solve. Child poverty is my favorite, we can just get kids out of poverty by giving them cash. We know we can do that, there's really strong evidence for that. There's no individual we can't get out of poverty with cash transfers in this country. And that's a really great way to spend money, but if you're not working on that supply side, do I think UBI fixes the childcare crisis? I don't. Is UBI going to somehow fix the student loan problems? No. You have supply-side problems, too. And UBI is that purely demand-side solution. Where I think that UBI would be really, really good is in terms of tackling issues of poverty. Maybe that can be kind of helpful in some cases for when we're doing things like heating assistance, these kind of super targeted policies where it'd be better to give them cash. We have these programs that are, you can get broadband with this voucher and you have to go through a whole process and it's like, "No, no, no, just give people cash." But I think it's actually a really important thing to bring up to say, yeah if you put a UBI out here in San Francisco, you might just make housing costs worse or that might be one of the things that you do.

Nora Ali: Well, the stimulus checks during the pandemic was maybe some version, loose version of the UBI-

Annie Lowrey: Absolutely.

Nora Ali: ... where a certain amount of money per household, depending on your income, any learnings from the pandemic because you are so interested and well researched on UBI, any learnings that we can apply from the pandemic to how that system might work in the future?

Annie Lowrey: Absolutely. So this is so wildly different than what we did back in the Great Recession, where first of all, we undershot on stimulus. Whereas we got much closer to doing an appropriate amount of stimulus to the size of the fiscal gap in this one, which is not to say that it was perfect at all. And then second of all it was really effective. So even though we saw millions of business closures, even though we saw the unemployment rate spike up really, really high, really, really fast, household consumption remained level. People didn't have to cut back because they got the expanded unemployment insurance payments and those stimulus checks. And they worked really, really well to prevent poverty. And that's great. That showed that we could do it. We could do it even faster and easier next time, if we sort of set up systems with the Fed and Treasury to get money out to people. So you could just transfer it, you get a Venmo from Uncle Sam, there's all sorts of great thoughts about how to do that. And the other policy that worked really well and we're still waiting for the results to come in on was the expansion of the Child Tax Credit. So the Biden administration for six months sent almost every parent in America, a check to pay for their kids' food, diapers, whatever, you could use the money on whatever you wanted. And we have lots of research that suggests that, that's a really great way to ameliorate the effects of childhood poverty with potentially really long lasting effects that it was only six months and the program is gone. And then there was one other lump sum payment. We know that, that reduced the child poverty rate. And since it went away, 4 million additional children have fallen back into poverty. And I think in time, we'll see what the effect of that was. And I really do hope that Congress considers taking another look at that policy, because it is quote-unquote expensive in the sense that it's a big-ticket item, but the social benefits are so great to making sure that kids are living in stable homes, have good nutrition, have the lights on, gas in the car, all that kind of thing for their parents. The cost of housing is kind of like the cost of gas in that it makes the cost of everything else more expensive, right? So if you have housing under supply you probably also have a lack of spaces for things like hospitals. You increase the cost of child care because those child care workers probably need to live close by. So you need to raise their wages to bring them in. So it's really... it acts as a tax that kind of drags up the price of tons and tons and tons of other things. And so if you could fix the housing cost problem, you could fix all of these other downstream problems. The cost of commuting and transportation would come down. The cost of child care would come down, cost of groceries would come down. All of these other prices for consumer goods and services would start to decline, if you could get housing costs under control.

Scott Rogowsky: Let's take another quick break, but more with Annie Lowrey when we return. Annie, we've been talking about home ownership and buying houses, but let's discuss rent. According to recent reporting in The Guardian, rental prices across America have soared over the past year with some cities experiencing average price hikes of up to 40%. First of all, what happened to all the moratoriums and the rent forgiveness that was being discussed early in the pandemic when people were really devastated and losing their jobs by the millions? That all seems to have gone away. And now these landlords are reaping benefits with these rising rents. How did we shift so rapidly from that period, maybe what? A year and a half ago? To where we are today.

Annie Lowrey: Yeah, there's this extraordinary momentary period where rents declined really rapidly in these cities that have seen no relief in the rental market for four decades. So New York people were getting a thousand, $2,000 off in rent. And that big delta, that big jump that we saw is because this stuff is ending and there's so much demand for people to come back or these special deals that got cut. And we've seen the end of all of these protections for renters in a lot of places. In some places they didn't actually work that well, if you get illegally evicted from your apartment, you're still evicted, even if that shouldn't have happened. And we saw that happen over and over and over again in the pandemic, but it remains true that you just have outrageous disconnects between supply and demand. And so you have all of these problems in the market. You create this giant incentive for landlords to get existing tenants to leave, even when they're protected by the law, because then you can fix places up and turn them around and rent them for even more. And it's a crisis. And one thing that I think is interesting that I'm watching and I think we'll look at how this is shaping out over the next year or two, is that in a lot of places there isn't the same demand for downtown retail space. Offices are still closed. More companies have said, "Okay, we're not going to go back to having a big office. You can work from home." Seen that with Silicon Valley companies, some banks and finance companies. So will that shift over to being rentals, homes, instead of commercial spaces? I think that, that's one thing to watch that could start to bring a lot of big space back onto the market in places where it's really tough to build.

Nora Ali: That's a good point. And it does feel like though that it's going to get worse before it gets better. We know inflation is rising. The Fed has signaled that they're going to raise interest rates. How will all of this impact the housing and rental market overall given these movements in inflation and rates?

Annie Lowrey: So for a long time stuff sort of at large was pretty cheap in the economy. So any consumer good that was being imported was often getting better and cheaper. So electronics is a really obvious example that it used to be really expensive to buy a TV or a flat-screen TV and the prices actually come down. But now we're seeing the cost of consumer goods, especially gas and food really starting to spike, and this is for a number of complicated reasons. So Russia's invasion of Ukraine is affecting commodity markets because both of those countries, they're big agricultural exporters. Russia's a very big energy exporter. Then we have this shift from spending on services to goods that happened during the pandemic. So people stopped going out as much, but they bought more stuff for their houses and supply chains have really not adapted to that reality even two years later. So there's that. And then third, there's the effect of all of the stimulus that's still washing around in the economy. So the Trump and the Biden administrations spent something like $5 trillion in stimulus and people are still sitting on some of that money. They still have it in their bank accounts, even as these programs have passed. And so that's raising consumer prices really, really quickly. And companies are sort of saying, we keep on raising prices and people just keep on paying them. So what does the end of that look like? Interest rates are going up. People are starting to show that they can't take on higher costs. And so they'll stop buying as much stuff and that will reduce demand from the economy. And the hope is that we manage this through what's kind of termed the soft landing, which is that people sort of slowly pull back and interest rates come up slowly, such that prices can moderate and inflation can come down without tipping us into a recession. In the past, especially gas prices spiking at the same time that the Fed is hiking rates up can often end in recession because that's a really hard thing to massage. But it's tough, and a lot of this is geopolitical because nobody controls the coronavirus shutdowns that are affecting ports in Asia and making shipping things around the world hard. Obviously the Russia-Ukraine situation is a tremendous humanitarian crisis and who knows how long that's going to last. And it shows up in American consumer prices. The Biden administration has been very straightforward about, we're just going to have to pay more for gas while this is going on. And this is the way that we're supporting the people of Ukraine, is by implementing these sanctions. But it's just tough, it's very chaotic. And I wouldn't be surprised if the economy softens and hopefully it just doesn't. Hopefully we're not talking about big increases in unemployment, declines in consumer spending, increases in poverty, those kind of things that would be really bad to see.

Scott Rogowsky: Last May Derek Thompson, who's been a guest on the show and is your colleague at The Atlantic, advised readers to wait out the wild housing market. It's only gotten wilder since then. And I don't know, you're talking about perhaps interest rates going up is going to bring prices down, but is there a sense from you that prices will stabilize or come down at some point? Is there any value to waiting it out? I mean another realtor friend of mine said, "If you wait, you're just going to keep losing ground because the prices don't seem to be going down anytime soon."

Annie Lowrey: So one thing that I do think is happening is that people kind of waited through the pandemic and they're now getting situated and so things are normalizing. So some of these price spikes are just pent up demand coming back into the market, and so you can wait that out. But as you're pointing out, if you just are going to be competing with 10 people who look exactly like you and maybe even make a little bit more money than you for every one apartment that comes out on the market, that underlying structural issue, we haven't been able to affect it and change it. And so I think that people are getting kind of creative. I think the ability to work from home or work remotely is going to change this dynamic for a lot of folks who might say, "Hey, I'm not even going to bother trying to get an apartment in DC or in Seattle or in Chicago anymore. I'm going to move someplace else." But it's hard to see how absent a lot of building the underlying dynamic changes. And it's hard to see a ton of building coming online in a lot of these communities fast enough. So I think it's just a tough dynamic. And I think as you point out, you could wait and none of this could get better for 10 years or 20 years. And so how long are you going to wait and how much time are you going to be spending money on rent and sitting on your nest egg, if you have one, right. Trying to save up for a down payment, it's really hard. And I have no advice for people because I really don't know what it'll look like. And I sincerely hope it looks better.

Scott Rogowsky: Well, maybe we should all move to Ohio. Maybe that's the answer because JobsOhio sponsors our quiz and it's time now for Quizness Casual, the Business Casual quiz. This is going to be fun because you get to play with Nora. Nora's going to be your co-contestant here. And we're quizzing all about where people live. So let's get to it with qumeronumero uno: What is the fastest-growing city based on percentage increase in population from 2010 to 2020? Is it Bend, Oregon; Frisco, Texas; Nashville, Tennessee; or Atlanta, Georgia?

Annie Lowrey: Ooh. I'm going to go with Atlanta. But I am not confident in that at all.

Nora Ali: Uh.

Scott Rogowsky: Largest percentage increase in population.

Nora Ali: Largest percentage increase?

Scott Rogowsky: Right. So Atlanta is already a pretty big city.

Nora Ali: Yeah. I feel like it would be somewhere like Bend. Bend, Oregon. Why do I feel like I've heard about Bend, Oregon in the news?

Scott Rogowsky: It's a cool town.

Nora Ali: Is it? You've been to Bend, Oregon?

Scott Rogowsky: I've been there. Yeah. Yeah.

Nora Ali: Wow. Wow. Well, Scott, you know I have to default with the guest's guess. So we're going to go with Annie's guess of Atlanta.

Annie Lowrey: I honestly I'm... I do not know on this one.

Scott Rogowsky: You don't have to Nora, but in this case it wouldn't make a difference because you're both wrong with Atlanta and Bend. It's Frisco baby. The current population of Frisco, Texas: 209,980. That's nearly 80% more than 10 years ago.

Nora Ali: Dang. Wow.

Annie Lowrey: Okay.

Scott Rogowsky: A little suburb of Dallas, home to the Dallas Museum of Art, Dallas World Aquarium. Okay, numero twomero, a Los Angeles mega-mansion known as "The One" was the biggest US home to ever go for auction and recently sold for $141 million, including commissions. Who bought The One? Is it Eric Yuan, CEO and founder of Zoom; Richard Branson, Virgin billionaire; Richard Saghian, CEO of the fast fashion business, Fashion Nova; or oil heiress, Ivy Getty?

Nora Ali: I have no idea.

Annie Lowrey: I have no idea. I'm going to go with the first guy. No idea.

Nora Ali: I will go with the last person Ivy Getty, the oil heiress. I guess.

Scott Rogowsky: Ivy Getty? And how about this? Another situation when all of your guesses turned out to be incorrect because in it's C, Richard Saghian, CEO of Fashion Nova.

Nora Ali: We are failing.

Scott Rogowsky: You've seen Fashion Nova everywhere online. And I still don't know how they... I guess they all affiliate marketing, but he must be making a lot of money off that because he bought a 21-bedroom, 49-bath hilltop estate with five swimming pools, a 30-car garage, which had a list price for 295 million. So he got it for 141. He got a good deal on it.

Nora Ali: Ugh. All Right.

Scott Rogowsky: Half the asking price, jeepers creepers. All right, here we go. Final question. I think this one you should get, this is in your wheelhouse-

Nora Ali: Don't say that, because if we don't get it-

Annie Lowrey: [crosstalk] get it.

Scott Rogowsky: It's just, it's very near and dear. It's very near and dear to one of our guests. Which city in the US has the highest median rent for a two bedroom apartment: New York, Miami, Washington, DC, or San Francisco?

Annie Lowrey: I'm going with San Francisco. Although it could be, I feel it's got to be either New York or San Francisco.

Nora Ali: You're right. And I'm in New York here and SF. So let's go with SF. How do you feel? Do you feel confident Annie in SF?

Annie Lowrey: I feel like SF always comes in slightly under New York.

Nora Ali: Under? Should we split?

Annie Lowrey: But they're both just absolutely miserable. Yeah. I'll take San Francisco. You can take New York. Maybe one of us will be correct.

Nora Ali: We're taking our own locales.

Scott Rogowsky: Good tactic here. It is San Francisco.

Nora Ali: Yay.

Scott Rogowsky: The most expensive city in the country to rent a two-bed at 3,930 a month.

Annie Lowrey: Brutal.

Scott Rogowsky: New York is second you were right there, 3,930 to 3,400. Oh my goodness gracious. What are we going do.

Nora Ali: Anne, you got a point.

Scott Rogowsky: You got a point.

Nora Ali: A winning score.

Scott Rogowsky: That's a win, Annie.

Annie Lowrey: One point.

Scott Rogowsky: That is a win. These were toughies. These were toughies. Thank you for joining us and talking with us about this topic, Annie Lowrey.

Annie Lowrey: Thanks for having me.

Scott Rogowsky: We love hearing from our listeners here on Business Casual. So drop us a line, like this listener, Austin Roan, from Kent, Michigan, did. Austin wrote, "Here in Michigan to get a decent two-bedroom apartment that is in a somewhat safe area is roughly $1,700 a month to start and only goes up from there. Even a one-bedroom is $1,300. It is actually more affordable and better to buy a house on a 30-year mortgage right now. I'm contemplating moving down South simply for the fact that it's more affordable living wise." If you have a story like that, that's relevant to our episodes, we want to hear about it. Send us an email at or DM us on Twitter @bizcasualpod, that's B-I-Zcasualpod, with your thoughts.

Nora Ali: You can also leave us a voice memo on our website,, or give us a ring and leave us an old-fashion voicemail. Our number is (862) 295-1135. As Business Casual grows, we are excited to get to know our listeners, old and new. Drop us a line, and don't forget to leave your name and where you're calling or writing from, so we can hear from you in a future episode.

Scott Rogowsky: Business Casual is outbid by Katherine Milsop and Bella Hutchins. Additional production, sound design, and mixing by Daniel Markus. Alan Haburchak is the director of audio at Morning Brew. Sarah Singer is our VP of multimedia. Music in this episode from Daniel Markus and The Mysterious Breakmaster Cylinder. If you like what you heard, please follow Business Casual on Spotify, Apple Podcasts, or wherever you go for ear candy. And we'd love it if you give us a great rating and a review.

Nora Ali: Thanks for listening to Business Casual, I'm Nora Ali.

Scott Rogowsky: And I'm Scott Rogowsky.

Nora Ali: Keep it business.

Scott Rogowsky: And keep it casual.