May 29, 2022 · 32m · allin
#AIS: Divvy Homes CEO Adena Hefets breaks down the state of the US housing market
Adena Hefets · 22m spoken Chamath Palihapitiya · 2m spoken Jason Calacanis · 1m spoken David Sacks · 5s spoken David Friedberg · 3s spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
At the All-In Summit, Divvy Homes CEO Adena Hefets analyzes wealth inequality and housing affordability in the US, presenting Divvy's rent-to-own model and discussing macroeconomic real estate dynamics with the podcast hosts.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 15.6% of the talking time here. How this is scored →
The hosts as informed peer 2.5 Guest teaching 4.8 Guest disagreement 1.5 The hosts pushing back 1.8
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 28:13 Rejecting host premise on investor reliance
Adena forcefully dismisses Chamath's suggestion about leaning on late-stage investors, stating that investors do not build the company and founders cannot expect Hail Marys.
Hardest push from the hosts ▶ 24:35 Pressing for collapse probabilityJason interrupts Adena's point about slowing growth rate to demand a direct answer regarding the specific chances of a full housing market collapse.
Biggest teaching moment ▶ 25:05 Explaining three-year real estate bottom lagAdena educates the panel with historical GFC timelines, pointing out that housing price bottoms lagged the stock market bottom by three years due to extreme real estate illiquidity.
The host holds their own ▶ 20:26 Exposing government mortgage limit engineeringChamath demonstrates strong macro domain knowledge regarding Fannie Mae conforming loan expansions and challenges how financial engineering leads consumers over their skis.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| All-In Podcast Title Sequence | 0 | 0 | 0 | 0 | Introductory presentation block where Adena Hefets shares a personal family story explaining her motivation behind housing access. No host interaction occurs. | |
| Wealth Inequality and Asset Appreciation Dynamics | 0 | 4 | 0 | 0 | Adena presents census and NYT data on wealth distribution, asset appreciation, and homeowner net worth advantages. This is a uninterrupted monologue without host participation. | |
| Housing Market Barriers and Macro Trends | 0 | 5 | 0 | 0 | Adena breaks down post-2008 housing construction deficits, down payment inflation, and mortgage rate affordability formulas. Hosts do not intervene. | |
| The Divvy Model and Operational Performance | 0 | 3 | 0 | 0 | Adena outlines Divvy's business model, customer demographics, unit economics, and capital deployment metrics before opening to Q&A. The hosts listen passively. | |
| Panel Discussion: Current Housing Market vs. 2008 Crisis | 5 | 6 | 3 | 3 | Chamath prompts Adena with Blackstone's affordability commentary and California density regulations. Adena reframes the conversation around housing market lead times and illiquidity compared to public equities. | |
| Panel Discussion: Fannie Mae Policies and Credit Risk | 6 | 7 | 2 | 4 | Chamath presses on Fannie Mae loan limit changes and financial engineering risks. Adena leverages insights from Fannie Mae's former COO to explain bank overlays and government conservatorship risk aversion. | |
| Panel Discussion: Real Estate Illiquidity and Crash Probabilities | 4 | 7 | 3 | 4 | Jason Calacanis pushes for a clear assessment of housing crash probability compared to other asset classes. Adena educates the panel on historical 2008 crash data showing housing bottoms lag stock market bottoms by three years. | |
| Panel Discussion: Managing Startup Scale and Capital Discipline | 5 | 6 | 4 | 3 | Chamath inquires about startup burn, valuation, and relying on late-stage VCs during downturns. Adena bluntly rejects the premise of VC reliance, emphasizing that founders must achieve cash flow independence on their own. |
Statements from this episode (19)
Hefets: Top 50% of US households own 99% of total wealth
“99% of wealth, ah, is owned by the top 50%, and the bottom 50% only own one percent of wealth here in the United States.”
Hefets: Bottom 50% of US families own zero percent of directly held stocks
“The bottom 50% Of families and household own one percent of overall equities in the market, and when you look at directly held stocks, so stocks in the stock market, they own zero percent, right?”
Hefets: US homeowners have 75 times the average net worth of renters
“Homeowners, on average, have 75 times The net worth of a renter.”
Hefets: 3% mortgage rates are likely the lowest for a long time
“That is probably the lowest they're gonna be in a really, really long time.”
Hefets: The minimum all-in cost for a US home builder is $200,000
“The cheapest that a home builder can build a home is roughly 200,000 dollars.”
Hefets: A $10,000 home price hike disqualifies one million families from buying
“A 10,000 dollar increase in home prices means one million fewer families can own a home.”
Hefets: 80% of Divvy Homes transactions are female-led
“50% of our customers are people of color, and 80% of our transactions are female-led.”
Hefets: 51% of Divvy renters buy back their home after three years
“51% of Divi's customers who have come to the end of their three-year lease have been able to buy back their home.”
Hefets: Divvy Homes will deploy over $1 billion in capital in 2022
“This year alone will deploy over a billion dollars of capital.”
Hefets: Divvy Homes expects an all-in profit margin around 25%
“Where we're almost probably going to be at about 25% all-in profit margin.”
Hefets: US home price growth will slow in 12 to 18 months
“At some point there's gonna be enough inventory coming online, that there's going to be enough supply, and a decrease enough in demand that it will impact home prices. Now, I don't know that that's gonna be in the next six months. I actually think it's gonna b…”
Hefets: Most US homebuilders missed Q1 construction targets by almost 60%
“I think that most builders missed their Q1 numbers of how many houses they were actually going to build by almost 60% which was mostly supply chain.”
Hefets: Fannie Mae takes less mortgage risk than it should in 2022 market
“Because they've been under conservatorship. So most of Fannie Mae's operations have been very dictated by the government. They're not actually taking probably the level of risk that they should in this current market.”
Hefets: US banks underwrite mortgages more conservatively than Fannie Mae requires
“When the global financial crisis happened, there were such, ah, very high fees and penalties that went for banks that didn't have really strict overlays that actually had a ton of defaults. And so now banks are super nervous To lend to people, and actually tak…”
Hefets: Housing bottomed three years after stock market in GFC
“Bottom of the stock market for the global financial crisis? 3:09 oh nine. Bottom of housing prices? June of 2012. Three years later.”
Hefets: Housing is last asset class to compress due to illiquidity
“Because the housing market moves so slowly compared to the equities market. And so, it is not surprising that housing is going to be the last thing that's going to actually start to compress in terms of value.”
Hefets: Divvy Homes raised a $200M preempted round from Tiger
“I'd say, so we raised a two hundred million dollar round from Tiger. It was preempted back about six months ago or maybe even nine months ago at this point.”
Hefets: Divvy Homes generates hundreds of millions in revenue, burns under $5M/month
“But now, now you have to just, now I'd say, look, Divi, we make, I don't know, we haven't probably put out there, but hundreds of millions of dollars in revenue. I burn less than I don't know, five to ten million a month, so less than five million a month. We …”
Hefets: Founders should never rely on investors to build their company
“First of all, I don't think you rely on investors ever. No, I don't mean that offensively. I think that some investors are great, but no one's building this company with you. I am building this company. With my employees, but ain't nobody else there with me.”