Who’s Right About the Housing Market Crash? (Dave Ramsey vs. Graham Stephan)
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- เผยแพร่เมื่อ 25 ส.ค. 2022
- Who’s Right About the Housing Market Crash? (Dave Ramsey vs. Graham Stephan)
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Don’t be afraid to disagree with Dave. This is YOUR show. He already has his. 👍🏼
And as usual, Dave ramsey is almost always a too simplistic moron anyway
Even though a lot of this doesn’t directly apply to myself (I am not in the US) the Money Guy has become my favorite show on TH-cam. Thanks a lot, from Japan!
Your English is excellent
Yeah me too, i am also a fan of their show even tho im not an American
I feel like Dory when trying to buy a house right now: "Just keep saving, just keep saving, just keep saving..."
Literally all I can do. Been turned down for financing by everyone lately because I took a higher paying job this year. I thought it would help me but turns out nobody will touch me now. Saving over $7000 a month right now...
Chuck all that cash in market accounts and at least let it grow until you’re close to needing it.
@@rnt45t1 I’m confused. Is it because you don’t have 2 years of income from this higher paying job? I haven’t heard of lenders not approving off of higher income.
@@robertfisher85 Yes, everyone wants at least a year. I didn't know that was a thing. I have been working in my field since 2011.
@@rnt45t1 plan
New drinking game: take a shot if Bo is excited about the show.
Woah I’m drunk
I tried this and I died 👻
“We eat our own cooking around here.”
Love it 😂
The biggest mindset mistake people have is that housing prices going up is a good thing. Obviously not for first time homebuyers, but for existing homeowners as well. More taxes, more insurance, etc.
The only people that benefit from housing increasing are investors.
This👆 Carrying costs are always ignored in the homeownership discussion.
I always forget that property tax will go up to if housing keeps going up. And insurance too!
City governments benefit from higher prices=higher taxes in their coffers.
truth, and if it only tracks with inflation, those carrying costs will eat away at affordability.
15:53 Unless you're taking a massive salary... No one has 20% down, can afford a 15 year mortgage at just 25% of their take-home pay for their first home in most markets 🙄
Haha yeah I did the math when Dave brought that up to someone the other day on the Dave Ramsey website. Even with $240K/year I would have to come up with $60k for a down payment and could only afford a $300k house which I don’t think there are any around here.
Agreed. It's not realistic at all.
@@omnimoeish yeah, not everyone has parents with connections to local bank to get home loans like Dave did...oh, that's right, we are supposed to believe he lived on the other side of the street.
27 y.o. I make $200k, wife makes $50k. Both self employed so lots of deductions, take home $175-190k. $300k down on first home, $800k home, PITI is $3,500 +\-. 23% of take home pay in South Bay Area California on a 30. We plan to pay off $200k in the next couple years and refi into a 15 year fixed. If we saved up a couple years we could do the same thing without touching the 30 yr. But the wife wants a home and frankly, with our income it’s hard to justify holding out. It’s possible. Work harder and don’t feel defeated before you begin…
I did it and several people I know did it
Haven’t seen a video in about 4 months and Bo is still super excited. Doesn’t get better than this.
Thanks! OMG… this relieves stress off my shoulders from all the different expert opinions in buying houses on TH-cam.
im so happy i found u guys, u guys have seriously changed my life. awesome video!! gives me hope for the future
I feel so bad for first time home buyers. By your numbers or Ramsey's numbers, a first time home buyer can only buy a home in the scariest parts of town where it certainly wouldn't be safe to raise kids here where I live. I don't even think there are any homes in the $175,000 - $200,000 range at all here, and I live where they used to say it was really affordable. Not anymore.
In Montana where I'm stationed there are homes like that, but they are in the WORST neighborhood, are 100+ years old, and absolute gut jobs. Literally like crack houses with tons of problems. Not issues. Legit problems like foundation, insulation, heat, electrical, plumbing. I've stopped listening to Dave on real estate and investing because he is just so tone deaf, and super arrogant about his stances.
Where are you located?
Great job guys! Keep up the good work and keep staying positive!
I used to like Dave Ramsey, but honestly, after his "special" townhall video covering the housing market, I realized he says what he says because he is heavily invested in real estate. He is not saying this stuff for our benefit, he is trying to mitigate risk to his assets.I stopped listening to Dave after that...
youre wrong. he buys when real estate is low. in fact he bought a ton back in 08-10 during the crash. based on this, he would want prices to drop, not go up 3-5%
The same is true of everyone talking about real estate though.
Spot on.
@@amireallythatgrumpy6508
Absolutely 💯
buying a house at this time is risky hight price hight interest and the entire stock market dropping over 20%. sounds over optimistic to think realstate is going to hold up
Great show guys! Love hearing your very open minded take on multiple sides.
We bought our second home in our 30s. Like the Brian said, the extra room allowed us more “options.” We didn’t have to upgrade during the pandemic because we had extra room. Things to think about when buy in your messy middle. Brian is right.
good insight pointing out the messy middle between awareness of your want/need and actually buying. do you think most people are just stuck in constant messy middle status?
I put 20% down on my first home (I was 23) ... but it was 2010 and my house was the same price as my car. It was a 2 bedroom home in an ok part of town that needed some TLC. I bought it because it was all I needed at the time. Best decision I've ever made. I worked on it for 7 years and it doubled in value. Used the appreciation as the down payment on building my forever home because at this point I now was married, with a 2 year old, working from home in a 2 bedroom. You'd think it would be a nightmare, but it was so much fun. You learn every piece of furniture needs to have 3 purposes and your child only having max 10 toys makes every toy special.
The forever home was a 3 bedroom we had built. It has only appreciated 52% in 5 years. So while it's still appreciating, it technically wouldn't be as good of an "investment" as my first home... but that isn't why I bought either home. I bought them both to live in and what I needed at the time... not what everyone else was doing.
I like your 'within my means' mondset
Consistently great content, enjoying every episode.
Thank you! Great show
Appreciate the well-balanced commentary. This was a timely upload for me.
The reason I avoid Ramsey like the plague began around the 31 minute mark. Sheer arrogance and contempt for the young generation. I know zero people who want any of the things he listed. Shame on young people for attempting to establish roots in safe neighborhoods with great schools, I guess. Thanks to the money guy team for being empathetic and positive! You guys are great!
I would love to see him follow his own plan for a year
Work a retail job (at least 60 hours a week)
Eat LITERALLY ONLY rice and beans
Sell his 10+ luxury cars and drive a ‘99 Toyota
Not spend a dime on anything that provides joy
The guy sounds like a pretty crappy human being with 0 empathy for people's struggles.
The cognitive dissonance of Ramsey always makes my skin crawl. Arrogant, holier-than-thou attitude. His co-host is always bootlicking and amplifying whatever Ramsey says without challenge. He's just gross.
@@blake469 yep… chooses to hide behind his “faith” and “the Bible” a lot which is disgusting
I listen to Ramsey everyday. But hard to agree with him regarding the way to purchase the home. If I had waited to save for that down payment to get me to be qualified for 15 yrs loan along with only 25% of my net income for monthly payment, I would never be able to buy a home. I wish he would be more in tune of younger generation.
Thank you for these great videos.
Fantastic conversations. Thank you.
Typical Dave being a tone deaf, self centered boomer... The problem isn't that people are trying to buy mansions, it's that the median income for people age 25-34 is $49k while the median house price is $430k. The numbers are just no longer feasible for most people.
Typically millenial/zoomer, playing the victim. Boo hoo 😭
Also in my neighborhood they don't build one story homes anymore. They only build 2k sq ft 2-story huge mcmansions because that's what the developers can make money on. Why would they build a smaller affordable house and sell it for less. So it's BS that people should "accept less" there just aren't that many smaller affordable homes on the market.
Thank you for this video!
At about the 13 min mark you give Dave R the floor and he says that 3-4-5% is the historic average. But no one is challenging Dave with the idea of when do we make up for the 40-ish% growth in the last two years? Meaning: You dont get to hike it 40% in 2 years, then add on 8 more for 2022 and then say... "now it is back to the average."
The "average" has been dramatically skewed and for anything to be "an average" we need to "deal with" the fat years.
Great episode. Thanks.
Great Show! good advice!
“We actually eat our own cooking” haha I love it. First home, I post down little to nothing 🤣🤣
Another great show. Loved this one.
Dave Ramsey was saying 6 to 8 weeks ago that now is the best time to buy real estate 🤣🤣 I couldn’t believe my ears it’s only going in one direction for 6 to 12 months DOWN BABY Down, be patient and just watch it unfold. Don’t worry you will not miss an overnight boom that sends prices soaring. Ain’t gonna happen, wait and observe.
Prices have already gone down accross the board in San Diego. Doesnt mean it will continue. But there was also little local justification for prices to jump 30%+ in a year. Jobs dont pay that much more.
If any of the big tech workers get summoned back to the mothership it will hurt the house prices in the nice areas where the cheapest place is $1.1 million bucks.
You need to measure "price drop" against what's on the market. If all the most expensive homes are taken off the market because smart investors are holding, then of course the average sale price will go down. It doesn't mean that there are great houses out there that you would be interested in buying. What you're going to find is a lot of fixer uppers and investor properties.
Great discussion 🤩
Glad you all curated the content and put this together! I don't want to give Dave Ramsey clicks.
I was going to buy a house in Central Indiana earlier this year until the price quadrupled almost overnight.
When Dave was a kid, thing's were different. Granite countertops were hardly in any house.
Microwaves are cheap these days. All houses these days have electric garage doors.
Towel warmers are cheap.
Dave use strawman arguments sometimes.
Dave is simply a liar and full of sh&(. The exact house he’s describing, 40 years older is still double what it was back when it was new. His example is a lie.
Yeah he's conflating the value of innovation over the decades with income/mortgage ratios.
Agree. 100%
Do you think you could do a video on homes for investing? Which houses sizes are the easiest to sell? Talk about types of homes: condos, town homes and single family? Cover HOA Fees? What is the best bang for buck improvement wise? All things that make a home less or more desirable for the next purchasers
I feel like it is best to wait a year and save and see what happens. Also the 1500-2000/month mortgage payment + utilities + home insurance + misc. should be considered when evaluating affordability. Also does the 3-5% down payment include closing costs. It’s more like if your going to put 5% down, you should probably have 7-10% in the bank. I have seen some have only the 5% or only a little more. Most of these discussions don’t cover these little details.
You say that every year then you die old and poor without a home
@@jtowensbyiii6018 nope, I have a house so I don’t. I suspect you mean people generally just keep putting it off. If you do say this every year then you haven’t evaluated your situation and ability to afford in the current market or assessed the market direction. If your ability to afford is the question, then take this time to invest in yourself. Right now there is multiple factors contributing to a unstable market. In 6-12mo hopefully it will be clearer but you are right, in that, this situation will probably still take 3-5 years to recover. Right now, no one has a clear picture because everything is still hanging on by a thin thread. We are seeing some housing markets drop but we don’t know how significant it will be. I am no expert, but I suspect 5-10% market correction depending on location, spanning the next 3-5yr. If your planning to remain in the house for 10yr, it will likely work itself out, if
I agree with the stat (38:40) that long commutes steal your life and health. Both my wife and I had 60+ minute commutes before C-19. We both started working from home and thankfully we can still do so. But since the spring of 2020 my diet and exercise has been much healthier, lost 40-50 lbs, have more time to do what I want vs have to do, stopped drinking (drank to deal with stress), and we get more rest. We did that commute for 12 years. We started by saying 2 years that’s it. That turned in 5 more years, that’s it turned into well in 10 years we’ll stop the commute. Which turned into, oh no there’s a recession coming we need our stable jobs we’ll commute until the recession is over… always a reason not to change those habits and be comfortable. Never released how it effects your health and well-being. We’re in our mid-40s now and are in better shape (physical and mental) than our 30-early 40’s.
I see both sides DR at least opens your eyes as to your expenses vs MG going off of gross doesn’t. 15vs30, I would do 30 but I invest vs spend the difference. Love your show!
I would really like you guys to look at and address the content from reventure consulting.
As long as our government allows these equity firms to buy up reasonably priced homes we will continue to get taken to the cleaners when buying a home.
That's a lie. Those investors own like about 1-2% of houses.
@@saulgoodman2018 depends on where you are. The town I live in you can look up property and search by owner. I've seen some of these companies that own 2 to 3 dozen homes each in my county with a population of just over 100,000 people.
Many of the homes are just sitting vacant for over 6 months. They are artificially keeping inventory low to drive up the prices. At one point 1 in every 4 or 5 houses sold were purchased by investment firms. Do some actual research before you speak.
@@domdrty The overall country, is less than 2%.
@@saulgoodman2018 investors bought 25% of the houses last year. People are competing with capital. That’s fact. You can’t dispute it.
@@saulgoodman2018 false, it's about 20% nationwide
Clear and detailed - outstanding job. Solid content.
Hey Money Guy team, will you add the source videos of Dave and Graham. Add it to a pinned comment or to the description. It would help to see both in context.
Thank you!
The houses that are selling now (in my area) are those that are priced to sell. I don't mean low I mean not crazy high. The houses I see sitting for 30-60 days before being pulled from the market are still priced like things are shooting up with a rocket and will do so forever. A lot of the "new construction" i see finished are priced this way, the company my wife and I were talking with about building stopped taking contracts from individuals for about 12 months and instead built the houses themselves so they could sell them themselves except now.. no one is buying them but they won't consider dropping the price.
I live in an area that is relatively cheap compared to the rest of the country and there is absolutely nothing under $200K. There must be a lot of methy looking trailer homes bring that supposed average to $175K.
We are already in one. July had the lowest home sales since 2008
Lot to digest. I've always leaned toward a longer commute to put my family in a better situation-schools, safety, etc. Brian-I love you Bro, but south Atlanta has not been a good place for a long time-crime rate, schools, etc. unless you went as far as Fayette County. New home buyers have and will continue to make mistakes because they want what their parents have already earned (and their wallets can't support). I have been house poor earlier in my life and it was NO FUN! You are providing sage advice for the people that are disciplined enough to hear and apply it.
I'll take a minute just to thank you guys. I saw both of these Ramsey and Stephan videos and thought to myself "I wouldn't trust either of these guys to be unbiased in their delivery". I've listened to you guys a few times to check myself and I appreciate how you guys try to give information for the avagerage person and still explain the things that might make you choose something different. Truly wishing you all the best.
Literally millions of people have been helped by Dave and you said “ I wouldn’t trust this guy”
@@christophershriver2289 Read my whole reply. I loved listening to Dave discussing human behavior with money and live much of my finances through that lens. But you're naive to think you should only listen to a realestate mogul tell you whether or not his customers should panic because prices will fall. I'm all for Dave. But I'll be getting get a second doctors opinion here, thanks.
@@themechanicaladvantage I would believe Dave before I listen two guys that just have a following on TH-cam
@@christophershriver2289 they are personal finance gurus. not as commercial as dave but very good at what they do
@@dandahl5964 I heard a lot of “it fells to me” and “why does whole areas cost a lot” life isn’t based off of wishes. It’s reality
Interest rate and down payment matters less then the deal itself.
Give me a high rate and low down payment with a great deal.
Having equity in a house the day I buy is the most important factor for me
To give this more grounding. In San Diego we live in an area where house prices in 2019 where between $750k and $900k at 3.5% interest. These homes were easily affordable on a household income pf $160k+. Maybe $200k to be comfortable.
The price range for those same homes just years later is $1.1 million to $1.5 million. At 5% interest. Sure I have $350k in equity now. But it doesnt at all cover the cost increase. Mortgages for these with 20-30% down are over $6k a month. Which means you really need at least $275k a year stable income to start to afford them.
The number of households that can afford these homes was probably cut in half from the top 5% of households to the top 3% or 2%.
Currently the top 5% of households in San Diego make about $240k which is around where we are at. And I wouldnt attempt to afford a $6k a month housing cost without another $60k income...
Keep in mind this is a suburb, not an affluent coastal community or city center area. If we see a pullback in transplants with huge amounts of equity housing appriciation at this level just doesnt make sense with current income levels. Pay for workers at the top end simply wont jump that much.
Short of us gaining much more FANNG level tech work. Which do have average oncomes between $250k and $500k. But the tech sector is retracting for avg talent. And top talent already had access to those incomes.
That clip from Dave about how young people today are expecting so much more than the 1000sq ft "standard" of the 60s is so laughable because anyone with even the slightest knowledge about housing "trends" among millennial and older gen Z would know there's a huge trend/movement called "Van Life," i.e. LIVING IN A VAN in order to save money or out of necessity because rent is unaffordable. Dave's generation used to joke about having to "live in a van down by the river," while that's the reality for a lot of young people nowadays, some of whom even have decent jobs. This is just a natural progression from the "tiny home" movement that reached its peak in the early 2010s. The younger generation has shown that they are incredibly willing- perhaps even moreso than past generations, to live in extremely tiny living quarters in order to have independence or a hope of owning one day.
That is not a big trend, that’s like a very very tiny number of people doing that and getting modest attention for it. Not nearly enough to represent any real market behavior.
there was a tiny house and van life trend a few years ago, but do you know what happened? Yeah, those millennials and gen z didn't find them so quaint after all. it was the same kind of thing where everyone was saying oh millennials aren't moving out to the burbs because they want to live in the city. Well, you know what happened? Yeah, those millennials discovered what their parents and their parents found out before them: schools suck in the city, it's crowded, and you want more space for the buck.
You highly over estimate the "trends"
@@adamseidel9780 I definitely exaggerated by calling the trend "huge"- obviously most young people are not living in their cars. But the popularity of the movement (like it or not, it's gotten national attention, and is most pronounced in HCOL areas like the Bay area) shows that there are plenty of young people not looking for heated floors and dog washers like Dave seemed to accuse of ALL young people wanting a home. Living in a van or a tiny home (much smaller than the 1000 square feet standard he references) is a pretty extreme sacrifice in material comfort. It's funny, Dave's laundry list of amenities perfectly describes the ugly McMansions of *his* generation that the younger generations find tacky and undesireable in addition to being unaffordable to most. Bo was right when he said that most young people just want to get into a house. Dave blaming these issues on young people just refusing to settle for less than a 5 car garage is erroneous and not based in any evidence of market trends either.
@@arthoeinc.3469 numbers indicate there are maybe 10,000 tiny houses in use in the entire country right now.
Get off Twitter.
Decreasing value isn’t that important if your living in your house for ten years. Also rentals are so high it’s cheaper to own than rent. We’ve been in a false economy for 10 years. If you’re single and rent find 1-3 friends that rent and buy a house together and write a contract to sell after 5 years if profitable. Or one of you can buy ther other two out.
Also you forget that people buying a house in the 60’s or 70’s these homes were maybe built in the 50’s or 60’s now if we buy a home built in the 50s and 60s today that’s a house that’s 60 or 70 years old plus. These “normal homes” need all new plumbing electrical, roofs, sub floor is rotten and needs to be replaced. I see buyers buying million dollar homes and can’t move in because it needs to much work first. Even these flips with new kitchens and bathrooms still have this old plumbing and electrical.
Of course you Bo are excited about this show .
There are so many factors in why buying a home now sucks. Not only is what you can afford being squeezed by high prices, rates and inventory, but the quality and condition of these homes are also crap because sellers don't feel the need to fix anything, or investors cut corners everywhere. You have to pay higher rates, higher prices, and invest more initially to bring the house up to snuff. Not to mention whatever issues you discovered after waving your inspection, or buying as-is. If you're buying now, be careful and do extra due diligence or be patient.
I missed the live stream of this.
One thing that is not mentioned is the competitive bidding and first time home buyers like me going up against investors willing to pay cash.
The federal reserve said they will ramp up tightening in Sept 2022. I think we will start seeing more supply of homes dramatically increase in dec-Jan 2023 due to layoffs, increased energy prices and the fed reducing their balance sheet. Give it 2-3 years maybe more and it will be bottom. The fed has never been in this situation. Watch the gas prices. That will be your major indicator if they rise then expect people to lose their jobs and lose all their money. About 80% of our services and products come from petroleum/oil. When you cut supply BOOM it increases prices for practically everything?
Hahaha, don't fight the Fed. I believed the Fed will keep raising rate until a large correct happens.
Dave’s comparison to the 90s and you can just refinance is ridiculous. Hindsight is 2020, rates since 1982 have steadily decreased. Fixed mortgage rates hit a bottom in 2021. How crazy would it be if rates now go in opposite direction for the next 40 years and reach near 20%. The scape goat of refinancing wouldn’t be an option.
In California they were the first to have huge commutes to get affordable housing and now people are leaving in droves. These are hard times. It is going to be interesting though to see the fall out.
I bought a townhouse from 1963 that matched the specifications of Ramsey for a 1962 house almost exactly. I bought it before the market exploded, but still, if I followed Ramsey’s rules, I could only afford it if I made over $95,000.
This show really highlights how expensive housing is in my area of Canada. I think I make a relatively good income for a 25 year old (~55k plus a good pension), but 25% of my gross income isn't even enough to afford to rent a basement apartment. That's not to mention that tax rates are higher here.
For what my opinion is worth:
As a general overview (not market specific), I think the housing market (overall) will only crash is no one can buy the homes (affordable or not).
- In market specific areas are similar - if more people are trying to move out than in, that creates downward pressure on prices.
The fed rate coming back down (assuming) in the next year or two should free up inventory and keep prices on level (lower interest rate = higher home price [typically]).
- Higher supply vs similar demand (people looking to upgrade their home, will free up smaller, more affordable homes). Which typically creates downward pricing pressure.
- Lower interest rates allows more home prices affordable, upward pressure on pricing.
- So, I would expect modest price appreciation of homes in the short term and probably not a crash.
Great show guys
I'm curious as to why two things weren't discussed;
1) How a mortgage turns real estate into a leveraged asset.
2) How inflation reduces the real cost of a mortgage payment through time.
I think you should of taken a look at Patrick Bet-David’s Valuetainment video on the future of real estate. He gives probably the best argument that a crash is coming and directly calls our Dave’s points with his own charts and stats
Bet-David is financial toxic waste. He is an MLM scammer who is willing to say anything and screw over anyone.
Dave said prices will keep going to for the next 5 years. He's technically right because it takes about 5 years before the full effect of crash is felt. Then it will drop like a stone
You were not hard enough on Dave. He said in June.... buy now! In most major, western metros (and Florida) prices have done nothing but drop and drop (price cut!)!
Anyone who followed his advice in June, in stead of waiting 2-3-4 months (how hard is that?) may be in trouble. In Phoenix, we have seen inventory climb and prices drop dramatically. Isnt that a better climate for a first time buyer? Of course it is, and I hope Dave will admit it in a couple months from now when/if they are even cheaper.
Remember what he said last year about student loans?
Why do you lie?
The cost of servicing a 30-year fixed mortgage at 5.375% is still way below the true rate of inflation. By the end of the term of a 30-year fixed people forget they are paying the same nominal monthly payment which is worth drastically less in real terms compared to when they initiated the loan. So the 30-year fixed mortgage PAYS the borrower over time (asset), whereas the property itself is actually the “liability.”
We are looking to move up in house but are very weary of the market.
Dave said that over priced homes will go down but actual value of homes is not going to drop in one video.
Just started from the beginning. I want a "I am so excited" tShirt
NO, The phrase should be, "I am so excited about this"
No, it should be; “I’m super excited!”
In before the episode. My guess is that they're both wrong.
38:25 - correlation vs causation? Obesity, depression, stress, and long commutes are all associated with poverty. I do agree that life is better with a short(er) commute!
In Southern California good luck finding a one bedroom apartment for $1,600.
I feel like y’all gotta come back to visit Atlanta. Your thoughts on South Atlanta might not be applicable anymore. This is one of the hottest markets in the country with an influx of Hollywood money
house prices are going down in many west coast cities, not a prediction but already has happened
Predicting 3-4% increases in 2023 is the exact same thinking as the crashers. Crashes' only thinking is "what goes up must come down". They ignore current data. The only reason for thinking 3-4% appreciation next year is only based on after 2 years of 20-40% appreciation it has to return to normal...values can't keep going up 20% a year. It ignores data.
Low inventory. That's what caused the last 2 years appreciation. Inventory is up...but still low. Here in Phoenix we're 30% below normal. With so few buyers plus ibuyers, flippers and builders putting their properties on sale we should be above normal inventory...but we're not. Owners are sitting pretty. Fixed mortgages under 4%, many under 3%, lot's of equity, strong employment...no one is wanting to sell.
The past 2 years demand was never the main input...it was low inventory. Today owners are even more locked in place and not interested in selling. But we're still producing new buyers so potential buyers are piling up. Those buyers are having to rent and rents are still increasing.
It's just a matter of time before buyers pile back in. With this long term low inventory it's not going to take very many buyers to suck up what inventory there is and then what? We're right back to bidding wars. We could see 20% appreciation again in 2023. Demands on the economy....but the reality remains...we're making more buyers than houses. And building can't even get us out of this trend. Here in Phoenix new homes are built 1-2 hours outside of Phoenix. People want closer and you can't build more land.
I get it! I see both sides I know Dave takes it to extremes like towel warmers but he's spot on by saying young people now "expect" in "deserve" THAT house! Those are the ~80% of people living paycheck to paycheck. Myself and other mutants know how to find a middle ground. Have that you NEED; maybe a few wants but know when to sacrifice a little bit of today. For a bigger and better tomorrow!
Um... most people under 30 are living with their parents because they can't even afford rent on a 1 bedroom apartment lol. The issue isn't people expecting mansions, it's that wages haven't anywhere near kept up with inflation and housing prices.
@@elmateo77 most? I don’t know anyone living at home close to 30. They live with roommates if they can’t afford a one bedroom. 22-24? Sure but not close to 30 in my experience.
It is pretty obvious now who was right! Ramsey could NOT see the real picture and it wrong!
If we are in a recession and it prolongs then unemployment will go up. If you don't have a job you can't make the house payment.
Dave has said that it also depends on the location.
Every time you “go to the experts,” I get a Grant Cardone ad, LMBO!
Dave is an old man. He doesn’t get that the times have changed. Money guys are too nice to say that. But it’s true.
Great show. Y’all did a good job covering the breadth off the issue.
The more things change the more they stay the same.
You guys took Dave a bit out of context. He has said multiple times that some markets may decline. But that real estate as a whole will continue to rise.
Well they're both right. Housing is falling. But it's not going to crash.
They're correcting themselves back down to pre pandemic levels.
2008 was a liquidity crisis that triggered the global financial crisis. We were only slightly overbuilt then. That slight over building was easily absorbed in the first year of the recession. As you've pointed out we've since had 10 years of under building that we haven't made up for yet. On top of that, the population continues to grow. On top of that, the number of households is growing faster than the population. If you don't understand what that means look at it this way, Joe gets divorced, he moves out into his own apartment the ex-wife and kids stay in the house. Before there was one household now there are two. When I was in my twenties I always had roommates. These days anybody with a halfway decent job in their 20s wants their own apartment. It doesn't matter what kind of tenure you're talking about, we haven't been building enough housing for everyone who needs it for over a decade. That's why housing is expensive. That's not to say that there can't be a bubble, especially localized bubbles that can seem almost catastrophic. It just means that this is not 2008 all over again.
Here’s the problem with Team Crash. If we can use the 07-08 crisis as an example, you’ll sadly come to grips with finding out banks don’t lend and become extra conservative during market turbulence. Those with money win. So it’s true if you make 3x’s the mortgage payment and can come up with enough down, buy now! If interest rates go higher you’re good. If rates go down you refinance.
Venture capitalists/REITS are also contributing to the unavailability of homes to purchase. They are interested in investing in homes to rent.
Why are there so many comments in here saying demand will remain high? Interest rates are already killing home sale volume, obviously price follows very soon. Not to mention the recession that IS coming hasn’t even really gotten started yet. Add in investment firms buying real estate on cheap loans only to find out they’ve lost 20% on the year? They’ll be margin called, then fire sales, then rock bottom. If you think it won’t crash you’re not paying attention.
The "crash" will happen in rural, low income, and areas that experience mass layoffs. But Austin, Denver, LA, NYC, Seattle, or anywhere demand will remain high? Nope. The real issue is who will now qualify for a mortgage. In a crash lending will become tighter. So the youth that are hoping for a crash will be the same people who won't qualify for a mortgage.
If there's a crash, it will actually be the opposite because markets like the midwest for example never saw an extreme rise. Since May 2022, median home sale prices have dropped nearly 100k in LA. Still up YoY, but trending down at least temporarily. It all depends on months of supply and a couple other leading factors which vary by market. There won't be a nation-wide crash as it will heavily depend on individual markets.
in Hawaii the new home buyer has already been priced out over the past few months
@@harrisonpayne50 The extreme rise is due to demand vs supply. The demand is softer in the mid-west and the supply is greater, thus more prone to crashing. In LA homes in the high crime areas are still selling for over $1M to this day. Home in the more rural areas of SoCal are still around $800K. The price drop was just due to the extreme hike where these $800k homes were going for $1M. Supply will always be limited in high demand cities.
@@thebestthingthatneverhappe6729 Hawaii is an special case. Millionare retirees, international buyers, and billionaires with vacation homes flooded the islands. Hawaii also has the smallest supply of housing of all the states. It's basically the new Jamaca.
@@socalrefrigeration548 You're ignoring a lot of other data sets. California, for example, is massively owned by Chinese investors. If you weren't aware, China is going through a Lehman bros crisis.
I wish my taxes were that low aka a fellow Canadian with a net of about 65% (first career year!! So not even at peak average tax rate)!
I was builder in 2008 this is not then. No easy credit. No one to build homes. Builders are slowing as rates are up they have learned. Sorry but this a supple side issue. House aren’t going down. How to tell if when we have a bubble. Interest only loans and no down payment. I have been there 2022 is not 2008
Young buyers will have more choices in the coming years as those 65 or older exit the market for good. I believe from 21-64 we will see a population increase of buyers around 3-4%. Exiting boomers are in the 16-17% range.
Most people don't "exit" the market is the problem until they die
@@jtowensbyiii6018 or move to retirement homes
It will not going to come down the same as 2018, 2019 prices. Not after it went up 36% bet 2020-2022.
Prices might crash if the fed keeps raising interest rates. Of course young people still won't be able to afford to buy in, the actual cost will still be too high it'll just go to the banks in interest instead of to the seller. But it'll be great for cash buyers.
Is Bo never not excited about a show?? 😅
NO
The numbers always have to make sense for your financial situation. Do the Math
Clutch, always crunch the numbers; they have to make sense.
Dave seems a little out of touch with the average person who can’t just go out and buy right now.
Realize I’ll now never be able to buy a home I won’t completely resent or that won’t be much more of a liability than an asset. Suppose “van life” it is