Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
@Brilliantrans she actually appears to be well-read and educated. I just did a Google search for her name and found her webpage, I appreciate you sharing
I live in New York & I lived in my home for 27 years. I get badgered daily by real estate agents & investors calling, sending letters and texting me saying they will pay me cash for my home. I refuse to sell my house, where am I going to live in New York paying $1,200 for a 3 bedroom house?!! People are paying $1,500 and up for a studio apartment. 🙄🤷🏾♀️
yeah, those badgering you are trying to make money off of your property. I bought a 382k home in 2010. zillow says it is worth 1 million today. get constant mail from flippers who want to buy my home for cash. I guess people are dumb and don't know what their house is worth sell it to them
GUYS, it is NOT only rates. There has been too much appreciation. Yes, rates are not historically high, but when you have a run-up in cost that has doubled or more over the past decade, then to apply a 6.5 or 7% rate to that cost....well..it is too expensive. Prices are going to have to come down. Prices are the main problem, not necessarily the interest rate. I'm 60, and I've been doing this for some time now.
Kelman has always tried to change the narrative to the housing market. He know this. He knows rates are not the singular factor. But he come out and say that housing is detached from reality. It's not in his intrest in saying that.
Thank you for saying it, I don’t know why people are trying to compare 7% in 2000 with 7 % in 2023. They completely forget the 25% price increase from 2020 to late 2021.
@@MrRehash198d Spot on, and in some cases a 100% ROI. I just sold some holdings in the Nashville area that I purchased in 2016 and sold 7 months ago and doubled my money completely across the board. 100% over 6 yrs. It has been extremely lucrative.
Q. What motivates a homeowner with a sweet 2.5% mortgage to sell? A. Capital losses. Or put another way, the house across the street just went up for sale at half the price you paid.
@@chrisginoc Agreed, it's not 2008....it's worse. I look to the last inflation induced recession for guidance. The 1980's era housing correction(s) took almost 12 years to work through system. So that fits nicely with your 5-7 years to overcome the Lock In Effect (LIE). That's a great acronym!
I locked in a 2.7% rate on my 3000sqft house. Payment is only $1400 a month. Meanwhile, you can’t even rent a 1 bedroom apartment in the area for $1400. We’re looking to move soon, but no way in hell are we selling this house. It’s going to be a rental
so if existing homeowners can't afford their own homes at these rates how do you expect potential buyers to afford homes with these mortgage rates? This works both ways - sellers don't want to sell, buyers can't afford to buy = stalled out market, but there will always be some desperate sales that will bring down the comps for everyone
@@joesmith3590 You’re both right. Joe should be wrong, but there’s still a mentality out there that buying a home is still a good investment no matter what the cost, so there are plenty of fools to buy the small number of houses on the market at inflated prices. It will break eventually
@@joesmith3590 1930s, Canada and America. You could buy a whole factory for $10 but nobody had $10 and nobody could afford electricity or property taxes. Deflation. 1990, Canada and America, no population collapse, but housing imploded. Some people bought at the peak and lost about 65% on their homes in a year or two, being suddenly underwater for many years or being forced to sell. Real estate agents, property investors, wiped out, bankrupt. All their rental properties that had been making money suddenly, underwater. This is what's coming. Deflation. People will live with relatives or in tiny apartments, even in tents, whatever, but housing can implode and it has before, in this country and abroad. This time, I expect housing to lose 95% of its value. According to the excellent book The Millionaire Next Door, if you make say, $60k/yr as a single person, you shouldn't be buying a house for more than double your income (about $120k), even at 5,000 year low interest rates as we had by summer 2021. Everybody's used to a mega bubble, buying homes for ten times?+ their incomes. Insane, perfect setup for an implosion. Canada, Sweden and Australia will be hit the hardest by the housing collapse.
Only people selling right now are people forced to by job relocation. Everyone else knows they can't replace what they have, because prices will only go up more.
The basic explanation is that if a seller puts his home up for sale, he has to find a home somewhere else. Unless he is moving to a cheaper area, it doesn't make sense for him to sell the one he has. If he buys a house near where he lives now, it will be more expensive, because the interest rate on the new loan will be higher than the loan on his existing home. For the home prices to go down significantly, one or more things need to happen. 1.) increase in new constructions 2) economic downturn that leads to increase in foreclosures, such as massive layoffs 3.) increase in interest rate 4.) the bursting of the housing market bubble due to overpricing.
How if everyone that owns either have owned a long time or have really low interest rate for 30 years reducing the inventory. Everyone else that doesn’t own is screwed if interest doesn’t come down.
Sequential timing is the key: 1) widespread recession call 2) forced selling 3) foreclosures mean revert 4) prices tank 5) Fed will hold longer than expected but eventually pivot 6) lowering interest rates will raise inventory 7) then market will bottom
@@redpill-finance I'm not so sure it will. Stagflation perhaps. When you factor in the consumer ccd debt and other consumer debt, extremely abnormal appreciation rates across most sectors already, the toxicity of CRM as to both price and practical demand, oil futures, etc etc. There isn't any appreciation room for many assets. Nominal wages have been far, far outstripped by inflation and appreciation run-up. Bottom line, there simply isn't any more room for asset appreciation. I think we are headed for a major, major crash of asset value. The Feds have really screwed up this time. They should have been tapping the brakes yrs ago.
@@redpill-finance Not doing anything about the southern border will raise inflation. When companies can just resource out to someone with a work authorization, make half what you make, send half home, thrive off that half. We could have all come to a consensus to shut down that southern border a long time ago.
@@The_Internet_Is_Overrated yes that is a huge question mark. It could be another “covid” type event and it could be nothing. But I’m seeing “headline recession” by end of year, which will start the dominoes. If you’re looking to buy, what do you have to lose to wait? We’ve seen a significant correction in many markets, and now the summer inventory seasonal kick should begin. Why rush into the largest decision in your lifetime?
Exactly. You always hear that when rates go down prices go up and vice versa. Right now there is no "versa". Rates are way up and prices are too. Prices need to come down.
@@EricK-vw5wh why would prices need to come down? It is supply vs demand. If you have a house with 2.6% rate, no pressure of selling it immidiately, why would you sell it cheap. There is too much demand. 2023 is the year with most people that are turning 33. We have huge pool of buyers waiting for rates to go down.
Housing is impacting other businesses in this country. People don’t have any money to spend on other expenses. Unless the housing situation improves many businesses and mom and pop stores are getting out of business.
Correct. Most people are going to get smoked. They will be underwater, vacant and bankrupt before they know what hit them. You can't have a whole middle class of people buying homes for say, ten times their annual income at 5,000 year low interest rates and not expect a mega depression to happen. Deflation is coming.
7% rates are horrific when considering the average price of a home is $500,000. When rates where 18% home a were $50,000. I’d rather have 18% on $50,000 than 7% of $500,000
Yeah, seems like a genuinely nice guy. Imagine wall street and corp executives running their companies with that level of authenticity and compassion + a similar demeanor from our politicians......phew! What a world that would look like.
You would be crazy to buy a house now while they are over priced. You will deeply regret it. House prices will come down and you will NOT be able to sell your house to cover the mortgage and you will be stuck with a high mortgage rate.
If you are able to pay in cash or mostly cash and plan to stay in the house for 7+ years, then buying now is reasonable. Just understand that you won't see any price growth in your home for potentially 10 to 15 years. This is all basic macroeconomics.
@@bobbym491 WRONG! Housing prices are unrealistically elevated and will fall. If you buy a house with cash, you could lose thousands of dollars of your cash when you try to sell later. There is no guarantee when the housing prices fall they will recover any time soon. For example, in North Carolina, housing prices went up by an average of $200,000 in 6 months. That will not hold and prices will fall. Especially with the high interest rates. You buy with cash at these elevated prices, expect to lose money.
@truthhurts5111 I 100% agree with you, but what I meant to say is that if you plan to buy your forever home and you have the CASH (with little to NO mortgage) then that is reasonable if you are cash heavy. This market may experience a slow bleed in prices over the course of years or just crash hard after a massive recession/high unemployment... we just don't know, but I agree it's absolutely the worst time to buy now, especially taking on a big mortgage.
@@bobbym491 no way even buying on cash ur money tgat u paid as mark up u loose Bcz market will crash regardless Do not buy house at all simple wait atleast 9 months
@Megan Mc oh so in usa everyone got reach and they now can afford houses Ok please go to bank and county court just within 50miles I m sure u will hv 3 or 2 county go and check foreclosed houses My friend invested 10million in Sharon MA just after covid Houses he got I. 550k to 650k are showing 900k to 1m on zillow and websites after assessment it is still showing 550k 650 k and same what he bought Plus in 25 months he got only 4 customer and he has 11 houses same with friend in Texas In Chicago west suburbs even in Fort collins Colorado Mc Stan You are a paid realtor troll HHaha In usa 80% population still live hand to mouth life and u r telling me all can afford houses and population gone up Crime has increased 45times what it was in 2018 in 2022 Hahaha very good joke 🇺🇸 pplgot rich
Bottom line is if you got a mortgage rate 3% or lower no matter if you want to move or not why would you get a new mortgage of 6% or more doesn’t make since. You can’t tell people who are use to low rates hey historically rates are not that bad don’t care about that lol
People locked in at 3% won't sell until they have to. And that will only come when we have a recession and a rise in unemployment. There will be many people losing jobs who are forced into relocating. That will likely kick off a herd mentality on trying to sell and lock in gains, especially amongst investors (not primary residences).
@@user-ow1bn6qv8qInvestors care about rents not values. I don't care if my house is worth a 2 dollar bill. Keep my 2k in rent coming in that's what matters.
Their is almost no way rates are going down for now at least not until their is a steep rise in unemployment & a steep decline in inflation. And given where the job market is at, this is going to take a while.
Myth. Yeah a 30 year low fixed rate is great but is that the reason for low inventory? Sounds good. But there's a problem with that logic. First the trend of Americans staying put longer started several years before low rates. Second this exact same low inventory issue is happening in many countries all of which don't have 30 year fixed rate mortgages available. They're all on variable type mortgages. Canada for example has what they call a "fixed rate mortgage" which is fixed for 5 years and then you have refi, payoff, whatever. What they call "long term fixed" is 10 years. So why is Canada also having the same low inventory. And Australia, Europe? Americans live in a bubble of fantasy.
It is the reason for the low inventory now. In most countries you have people renewing the loan constantly due to the term only being 5 years max. In the USA with 30 year loans this doesn’t happened. If you had a 2% loan and now you have a 8% loan thier is a chance you can no longer afford it so it has more homes on the market. So I’m reality in the usa loan rates have a fairly minimal effect compared to other countries. Yes less people can buy but less people will sell. No one is forced to sell in USA unless they have a life change.
This is surprisingly not true and especially not in our current situation. Also, America is building a record shattering amount of multi family units+the influx of investors for rental properties over the past 3 years. Renting will definitely go down even without a recession and it already has in many markets. Even affordable and hot markets.
House prices are overinflated if you look at the historical growth year over year. A house that should reasonably sell for $350 is now asking $550 or higher. What I have noticed is homes are being "sold" and then a month later they are back on the market. What that tells me is they are not appraising out for what the asking price is. When people do their homework they will look at the appraised value the assessor has assigned and then adjust accordingly and NOT overpay. It's not the interest rate that needs to come down is the actual house prices. Boomers who hold many of the homes that are not appearing on the market right now know this and will wait because they know that's the smart money thing to do. History has taught them this.
Dont know why this interview still take place. It is common sense. If you own a home worth 350,000 would with 2% interest would you trade for a similar home for a 300,000 with 6-8%? of course not even if you got 50k off. You are still paying triple as in interest. Plus the price are not crashing because people who own homes dont want their home drop and who own homes dont sell it unless they have to.
My city has about 1/10th of its normal for-sale home inventory. This has been the case for 12-18 months. Most of the existing inventory is decades-old product. Redfin does a terrific job of reflecting “boots on the ground.”
Housing crisis . Ironic because wasnt it Redfin, Zillow, as well as Wallstreet equity firms and banks who bought up residential homes at top dollars for the last few years that drove prices up and helped caused this housing crisis ? He is more worried about rent prices it seems. Maybe because he bought up many homes to rent ? Its people who profit from selling homes who push the narrative that homeowners need to upgrade every few years. Why? Unless you outgrow your home, need to downsize or need to move, why do people need to upgrade homes? For Vanity ?
Not selling 😮 30 year below 3% On hold. 7% interest in 2010 maybe NOT! Prices sticky. Affordability a challenge. Colorado is very slow in sales. 3.5 to 4% is needed.
I’m gonna sell my house, but I don’t plan on buying another traditional home. I want to look at buying a very small one bedroom one bath house. Those don’t sell very well so I think I can get that for a good deal.
We will know we are out of this financial mess only when the housing market gets less "interesting". My MN legislature just poured a lot of money into assistance with housing for working class people. (I am living in a house we bought decades ago with similar assistance.) I hope that helps. I also donate to Habitat for Humanity; more housing stock helps us all.
People are locked into their homes at low interest rates. Either prices come down enough against existing mortgage rates to get people to sell or interest rates come down enough against prices to make people move. The first seems more likely at this point. If either one happens people who are using their home as a castle with their low interest rates will thaw out.
So many regular people and real estate people also meaning local agents purchased homes three years ago on the cheap and now are trying to get twice or more what they paid for them. It’s greed. Pure and simple. Of course if more modest homes were built then the supply crunch would dissipate as would the greed dreams and schemes.
The bigger problem is that there's 30 year loans on houses that don't last 20 years because they were built with wood chips and sawdust. What's the fastest way to compost a log?...cut it into little pieces. This in combination with the car market creating loans that far exceed the life of cars designed to only pass warranty (if that) will result in a catastrophic economic dumpster fire.
Rates need to go up, not down. Sorry, but he's wrong. Cost of capital is too cheap. Politicians looking to sell bonds, Corporations looking to sell bonds, rates need to up. Plus we can't fill jobs, the economy needs some unemployment to keep things in balance and avoid a price/wage spiral.
@@carlostapia1101 nevertheless, private builders have autonomy over their own financial abilities to construct new homes. Unless they are waiting on another government handout.
@@corey8924 speaker referred to secondary markets being hypersensitive to short term rate changes, nothing to do with new construction or govt handouts
@@carlostapia1101 quantitative easing is the cause of all the housing problems. They used that free money to take all the single family homes off the market.
The guy is in charge of a corporation that intentionally manipulated that housing market resulting in millions of people not being able to afford homes. There should be some consequences for the company and him personally
If you can't increase supply then decrease demand. That will drive the price down. One way to reduce demand is to increase the interest rate. Just double it to 14% and home prices will come down.
Demand won't be disappeared like next day. People needs a roof over their head that means their rent will be up again anyway so more people wants to buy homes. Oh wait lol lots of builders already stopping build more houses unless they are scheduled projects because they learned their lesson in 2008. Work smarter not harder for the maximum profit baby!! 👍
Ive been skeptical of these commentators who are saying that the residential real estate market was due to collapse or severely correct for the reasons this guy mentioned. If you have a 3% 30 year mortgage what would be your motivation to sell (assuming you didn't have to for a job transfer or something equivalent) You would lose probably the best mortgage rate of a lifetime for something around 7%. So, given that, it's no surprise there is no inventory. Buyers are having to buy up all the new construction because that is the only source of supply.
Thank you for the interview. I would like to hear an expert's thoughts on condominiums as short term rentals in sun belt areas like Phoenix. With higher interest rates and a slowing economy for customers, will investors sell them. Will there be a divergence in price trends for single family homes vs STRs?
1:25 The Fed doesn't care about home values. Home are considered "capital" not a consumable good. So home values are not a factor in CPI. Only rent is in CPI. Home values could go up 100% but rents go down and the Fed would be happy because inflation would be down. And it's common in much of the world for property values to be much higher relative to rents. Only in the US is it easy to buy a SFH to rent and have positive cash flow day 1. That could change.
I'm looking for a humble house, or condo in the suburbs of Philly. And I'm seeing a lot of houses come down 5, 10 even 15K. There's a part of me that hopes that the currency continues to inflate. If I buy now that would be beneficial. But I'd be upset if the assets crashed in the future. Timing this is not easy.
All CEOs are puffing machines. Their company could be literally going up in flames and they'd go on tv saying how great things are and predict fantastical future growth.
@@damham5689 I know also good CEOs who don't let their employees down. And who in the past were even too honest towards the shareholder's meeting or media.
They only way things will improve is if we have huge economic slow down that lasts longer then 2008. It can be hard to go through but so many advantages.
@@uo7482real inflation is not over, they just printed $1 Trillion dollars in the last 30 days from the debt ceiling. Check the debt clock it’s still going up. Good luck with that mentality.
@@mzliz1249 : Realtors are justifying the ridiculously high prices by blaming it on low inventory. No low inventory in Florida, so what's the real reason? Greed?
Blame Zillow they started over paying for homes causing a Domino effect on the real estate market then they bailed when they had a 2 Billion dollar lost.
The problem is all the funny money printed by thr government and people want to hold onto hard assets. More than stocks. My mom owns half my dad's house and now their house now after he died she doesn't want to sell even though prices are way up and she's a millionaire just from 1 1/2 modest homes. Now commercial real estate is an entirely different story...
Wow I' m just shock someone mentioned expert Mrs Clarissa I thought I'm the only one trading with her She helped me recover what I lost trying to trade my self..
When you invest with genius like Mrs Clarissa you don't have any other choice then to keep winning she trading strategies are very productive and reliable. I made quite a huge profit today all thanks to Mrs Clarissa
It surprises me why everybody gets really worked up about inflation and inflation data. Inflation has always existed, and people have been using investments to beat the inflation. The stock market return, for example, always beats inflation. I heard of someone who invested $121k last October, and has grown the portfolio by more than $400k. I need recommendations that can give me similar return.
I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $21k passively by just investing through an advisor, and I don't have to do much work. Inflation or no inflation, my finances remain secure. So I really don't blame people who panic.
@@yolanderiche7476 True. I first came across investing in the market in 2019. Already stashed about $80k in savings then, and the free money from the Government was pouring in, increasing inflation rate. I just got an advisor and kept the money there, just because I didn't want to keep the value of the money depreciating in the bank. Tbh, it's the best investment decision I've made since then.
@@JeanpaulCeme Haha. I definitely share your sentiment about these firms. When I was starting out, I checked out a couple of freelance investors online, so you could do the same. I personally work with "Julia ann finnicum", and she's really good.
They ll never go down because banks.... this only if wages dont go up. if not, I believe governments will need to act. I actually belive houses are overvalued and that a massive correction in the real estate is coming, like stocks, assets cant go up forever. you might see people selling their house the moment the economy gets back on the run. As a single men late millenial, I cant afford a house in North France maybe later with a better paycheck.
WRONG, HOUSING PRICES NEED TO COME DOWN. Interest rates were still around 4-5 percent before they came down to 2%. Housing prices SHOT UP during the pandemic because of it, and now its the interest rates fault? Lol. Interest rates going up are bringing back price normalcy. Keep it going. The housing market just takes so long. People want answers NOW but the answer is a lower price LATER because of cause and effect. STOP SAYING THE SELLERS ARE IN THE CLEAR FOR HOLDING ON TO HIGH PRICES. 🤮 Its not our fault you overpaid.
It’s a good time for a true home buyer. Bad time for investors. See that’s why they are upset. They can’t buy up 25% of homes in an area to rent them for profit.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
@Brilliantrans I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
@Brilliantrans she actually appears to be well-read and educated. I just did a Google search for her name and found her webpage, I appreciate you sharing
I live in New York & I lived in my home for 27 years. I get badgered daily by real estate agents & investors calling, sending letters and texting me saying they will pay me cash for my home. I refuse to sell my house, where am I going to live in New York paying $1,200 for a 3 bedroom house?!! People are paying $1,500 and up for a studio apartment. 🙄🤷🏾♀️
yeah, those badgering you are trying to make money off of your property. I bought a 382k home in 2010. zillow says it is worth 1 million today. get constant mail from flippers who want to buy my home for cash. I guess people are dumb and don't know what their house is worth sell it to them
they are desperate for you to be dumb enough to sell now, before it just goes up more, and rents become even more unaffordable.
He needs to say: "We're the ones that have pushed this narrative and now we're all screwed".
GUYS, it is NOT only rates. There has been too much appreciation. Yes, rates are not historically high, but when you have a run-up in cost that has doubled or more over the past decade, then to apply a 6.5 or 7% rate to that cost....well..it is too expensive. Prices are going to have to come down. Prices are the main problem, not necessarily the interest rate. I'm 60, and I've been doing this for some time now.
It's GREED
Exactly, rates alone aren't the issue it's the irrational growth in home prices over a 2 year period.
Kelman has always tried to change the narrative to the housing market. He know this. He knows rates are not the singular factor. But he come out and say that housing is detached from reality. It's not in his intrest in saying that.
Thank you for saying it, I don’t know why people are trying to compare 7% in 2000 with 7 % in 2023. They completely forget the 25% price increase from 2020 to late 2021.
@@MrRehash198d Spot on, and in some cases a 100% ROI. I just sold some holdings in the Nashville area that I purchased in 2016 and sold 7 months ago and doubled my money completely across the board. 100% over 6 yrs. It has been extremely lucrative.
Q. What motivates a homeowner with a sweet 2.5% mortgage to sell? A. Capital losses. Or put another way, the house across the street just went up for sale at half the price you paid.
Half the price? This isn't 2008. This Lock In Effect will affect homebuyers and sellers for the next 5-7 years
Or double digits unemployment rate!
@@chrisginoc Agreed, it's not 2008....it's worse. I look to the last inflation induced recession for guidance. The 1980's era housing correction(s) took almost 12 years to work through system. So that fits nicely with your 5-7 years to overcome the Lock In Effect (LIE). That's a great acronym!
@@DesmondMiles333 that's why the house across the street is up for sale lol
@@Trudgery better grab it before institutions gobble them up.
I locked in a 2.7% rate on my 3000sqft house. Payment is only $1400 a month. Meanwhile, you can’t even rent a 1 bedroom apartment in the area for $1400. We’re looking to move soon, but no way in hell are we selling this house. It’s going to be a rental
so if existing homeowners can't afford their own homes at these rates how do you expect potential buyers to afford homes with these mortgage rates? This works both ways - sellers don't want to sell, buyers can't afford to buy = stalled out market, but there will always be some desperate sales that will bring down the comps for everyone
No thier will always be buyers because we don’t have enough homes. You can repeat incorrect info because you want cheaper homes or live in reality.
@@joesmith3590 You’re both right. Joe should be wrong, but there’s still a mentality out there that buying a home is still a good investment no matter what the cost, so there are plenty of fools to buy the small number of houses on the market at inflated prices. It will break eventually
@@lukethompson5558 show me where that happened in the past or even in other countries? Outside of population collapses No examples thanks.
@@joesmith3590 1930s, Canada and America. You could buy a whole factory for $10 but nobody had $10 and nobody could afford electricity or property taxes. Deflation. 1990, Canada and America, no population collapse, but housing imploded. Some people bought at the peak and lost about 65% on their homes in a year or two, being suddenly underwater for many years or being forced to sell. Real estate agents, property investors, wiped out, bankrupt. All their rental properties that had been making money suddenly, underwater. This is what's coming. Deflation. People will live with relatives or in tiny apartments, even in tents, whatever, but housing can implode and it has before, in this country and abroad. This time, I expect housing to lose 95% of its value. According to the excellent book The Millionaire Next Door, if you make say, $60k/yr as a single person, you shouldn't be buying a house for more than double your income (about $120k), even at 5,000 year low interest rates as we had by summer 2021. Everybody's used to a mega bubble, buying homes for ten times?+ their incomes. Insane, perfect setup for an implosion. Canada, Sweden and Australia will be hit the hardest by the housing collapse.
@@markhirstwood4190 lol. Ok man a Great Depression. I hate how dumb people think they can explain now.
Only people selling right now are people forced to by job relocation. Everyone else knows they can't replace what they have, because prices will only go up more.
The basic explanation is that if a seller puts his home up for sale, he has to find a home somewhere else. Unless he is moving to a cheaper area, it doesn't make sense for him to sell the one he has. If he buys a house near where he lives now, it will be more expensive, because the interest rate on the new loan will be higher than the loan on his existing home.
For the home prices to go down significantly, one or more things need to happen. 1.) increase in new constructions 2) economic downturn that leads to increase in foreclosures, such as massive layoffs 3.) increase in interest rate 4.) the bursting of the housing market bubble due to overpricing.
Rates won’t come down unless we have some major economic fallout, which would include prices crashing. So prices will fall before rates do
How if everyone that owns either have owned a long time or have really low interest rate for 30 years reducing the inventory.
Everyone else that doesn’t own is screwed if interest doesn’t come down.
I'm keeping my low property tax properties forever, if i sell and buy again i have to pay property taxes that are too high...
Sequential timing is the key: 1) widespread recession call 2) forced selling 3) foreclosures mean revert 4) prices tank 5) Fed will hold longer than expected but eventually pivot 6) lowering interest rates will raise inventory 7) then market will bottom
Lowering rates will ignite another massive wave of inflation
@@redpill-finance not when we are in a massive deflationary event
@@redpill-finance I'm not so sure it will. Stagflation perhaps. When you factor in the consumer ccd debt and other consumer debt, extremely abnormal appreciation rates across most sectors already, the toxicity of CRM as to both price and practical demand, oil futures, etc etc. There isn't any appreciation room for many assets. Nominal wages have been far, far outstripped by inflation and appreciation run-up. Bottom line, there simply isn't any more room for asset appreciation. I think we are headed for a major, major crash of asset value. The Feds have really screwed up this time. They should have been tapping the brakes yrs ago.
@@redpill-finance Not doing anything about the southern border will raise inflation.
When companies can just resource out to someone with a work authorization, make half what you make, send half home, thrive off that half.
We could have all come to a consensus to shut down that southern border a long time ago.
@@The_Internet_Is_Overrated yes that is a huge question mark. It could be another “covid” type event and it could be nothing. But I’m seeing “headline recession” by end of year, which will start the dominoes. If you’re looking to buy, what do you have to lose to wait? We’ve seen a significant correction in many markets, and now the summer inventory seasonal kick should begin. Why rush into the largest decision in your lifetime?
Its not about rates, its about prices... Therefore you don't have to rely on rates for a normal housing market.
Exactly. You always hear that when rates go down prices go up and vice versa. Right now there is no "versa". Rates are way up and prices are too. Prices need to come down.
@@EricK-vw5wh Thats becasue the fed should have drastically forced rates and it didnt
@@EricK-vw5wh It is also the quality. What you get for the cost is ridiculous. 350k for a fixer upper is insane.
@@EricK-vw5wh why would prices need to come down? It is supply vs demand. If you have a house with 2.6% rate, no pressure of selling it immidiately, why would you sell it cheap. There is too much demand. 2023 is the year with most people that are turning 33. We have huge pool of buyers waiting for rates to go down.
Housing is impacting other businesses in this country. People don’t have any money to spend on other expenses. Unless the housing situation improves many businesses and mom and pop stores are getting out of business.
Correct. Most people are going to get smoked. They will be underwater, vacant and bankrupt before they know what hit them. You can't have a whole middle class of people buying homes for say, ten times their annual income at 5,000 year low interest rates and not expect a mega depression to happen. Deflation is coming.
The US needs to change how we live in houses. This current system sucks
Federal reserve needs to stop artificially suppressing rates and sell mortgage backed securities
@@redpill-finance This! And stop allowing foreign investors to buy American homes.
This CEO always look so happy. God bless him and hope Redfin does well.
He lost billions to his investors.
@@user-fx5sw4jy7hYz9Hzi”lost”
@P what’s the basic story on the loss? He screwed up, wokeism, or?
Unless housing supply increases drastically the future looks bleak for home ownership
That's it in a nutshell.
7% rates are horrific when considering the average price of a home is $500,000. When rates where 18% home a were $50,000. I’d rather have 18% on $50,000 than 7% of $500,000
If I have to move and get a different house I am renting out my current house which was purchased in early 2020
Glenn very symphatetic, pleasant guy. Nice interview thanks!
Yeah, seems like a genuinely nice guy. Imagine wall street and corp executives running their companies with that level of authenticity and compassion + a similar demeanor from our politicians......phew! What a world that would look like.
@@simrans3675 Fully agree
I don't know who wants to buy it also... I don't want to think about a house for another 3 years.. I am goooooood...
You would be crazy to buy a house now while they are over priced. You will deeply regret it. House prices will come down and you will NOT be able to sell your house to cover the mortgage and you will be stuck with a high mortgage rate.
If you are able to pay in cash or mostly cash and plan to stay in the house for 7+ years, then buying now is reasonable. Just understand that you won't see any price growth in your home for potentially 10 to 15 years. This is all basic macroeconomics.
@@bobbym491 WRONG! Housing prices are unrealistically elevated and will fall. If you buy a house with cash, you could lose thousands of dollars of your cash when you try to sell later. There is no guarantee when the housing prices fall they will recover any time soon. For example, in North Carolina, housing prices went up by an average of $200,000 in 6 months. That will not hold and prices will fall. Especially with the high interest rates. You buy with cash at these elevated prices, expect to lose money.
@truthhurts5111 I 100% agree with you, but what I meant to say is that if you plan to buy your forever home and you have the CASH (with little to NO mortgage) then that is reasonable if you are cash heavy. This market may experience a slow bleed in prices over the course of years or just crash hard after a massive recession/high unemployment... we just don't know, but I agree it's absolutely the worst time to buy now, especially taking on a big mortgage.
@@bobbym491 no way even buying on cash ur money tgat u paid as mark up u loose
Bcz market will crash regardless
Do not buy house at all simple wait atleast 9 months
@Megan Mc oh so in usa everyone got reach and they now can afford houses
Ok please go to bank and county court just within 50miles I m sure u will hv 3 or 2 county go and check foreclosed houses
My friend invested 10million in Sharon MA just after covid
Houses he got I. 550k to 650k are showing 900k to 1m on zillow and websites after assessment it is still showing 550k 650 k and same what he bought
Plus in 25 months he got only 4 customer and he has 11 houses same with friend in Texas
In Chicago west suburbs even in Fort collins Colorado
Mc Stan You are a paid realtor troll
HHaha
In usa
80% population still live hand to mouth life and u r telling me all can afford houses and population gone up
Crime has increased 45times what it was in 2018 in 2022
Hahaha very good joke 🇺🇸 pplgot rich
Bottom line is if you got a mortgage rate 3% or lower no matter if you want to move or not why would you get a new mortgage of 6% or more doesn’t make since. You can’t tell people who are use to low rates hey historically rates are not that bad don’t care about that lol
People locked in at 3% won't sell until they have to. And that will only come when we have a recession and a rise in unemployment. There will be many people losing jobs who are forced into relocating. That will likely kick off a herd mentality on trying to sell and lock in gains, especially amongst investors (not primary residences).
@@user-ow1bn6qv8qInvestors care about rents not values. I don't care if my house is worth a 2 dollar bill. Keep my 2k in rent coming in that's what matters.
the new home inventory is much higher than you think, builders have not listed about 40% of their inventory. new homes are vastly overpriced.
Their is almost no way rates are going down for now at least not until their is a steep rise in unemployment & a steep decline in inflation. And given where the job market is at, this is going to take a while.
I have noticed in my area in FL, just within a couple months rent has started coming down
I have a 2.25% rate on 30 year loan and will never sell
Myth. Yeah a 30 year low fixed rate is great but is that the reason for low inventory? Sounds good. But there's a problem with that logic. First the trend of Americans staying put longer started several years before low rates. Second this exact same low inventory issue is happening in many countries all of which don't have 30 year fixed rate mortgages available. They're all on variable type mortgages. Canada for example has what they call a "fixed rate mortgage" which is fixed for 5 years and then you have refi, payoff, whatever. What they call "long term fixed" is 10 years. So why is Canada also having the same low inventory. And Australia, Europe?
Americans live in a bubble of fantasy.
It is the reason for the low inventory now. In most countries you have people renewing the loan constantly due to the term only being 5 years max. In the USA with 30 year loans this doesn’t happened. If you had a 2% loan and now you have a 8% loan thier is a chance you can no longer afford it so it has more homes on the market. So I’m reality in the usa loan rates have a fairly minimal effect compared to other countries. Yes less people can buy but less people will sell. No one is forced to sell in USA unless they have a life change.
Rents are not even coming down, they're going up here in Sacramento, if people can't buy because of 7% mortgage rates then they have to rent.
Low inventory means the rising rental rates. People are renting longer than ever. Landlords are benefiting the most.
This is surprisingly not true and especially not in our current situation. Also, America is building a record shattering amount of multi family units+the influx of investors for rental properties over the past 3 years. Renting will definitely go down even without a recession and it already has in many markets. Even affordable and hot markets.
I've never made more money than the last 3 years. All my rents have doubled. I love it
House prices are overinflated if you look at the historical growth year over year. A house that should reasonably sell for $350 is now asking $550 or higher. What I have noticed is homes are being "sold" and then a month later they are back on the market. What that tells me is they are not appraising out for what the asking price is. When people do their homework they will look at the appraised value the assessor has assigned and then adjust accordingly and NOT overpay. It's not the interest rate that needs to come down is the actual house prices. Boomers who hold many of the homes that are not appearing on the market right now know this and will wait because they know that's the smart money thing to do. History has taught them this.
Dont know why this interview still take place. It is common sense. If you own a home worth 350,000 would with 2% interest would you trade for a similar home for a 300,000 with 6-8%? of course not even if you got 50k off. You are still paying triple as in interest. Plus the price are not crashing because people who own homes dont want their home drop and who own homes dont sell it unless they have to.
Thank you!
My rent increased $300 per month in Orlando suburbs
You are lucky I'm a landlord in Orlando suburbs area and I just raised $500. I guess your landlord is quite generous
My city has about 1/10th of its normal for-sale home inventory. This has been the case for 12-18 months. Most of the existing inventory is decades-old product.
Redfin does a terrific job of reflecting “boots on the ground.”
$78k fixed up 1950s Bungalow in Florida at a 3.75% interest rate. I'm staying put.
Good info, appreciated this guy’s personality and valuable, concise analysis
No crash in site. Still to few sellers and too many buyers
Housing crisis . Ironic because wasnt it Redfin, Zillow, as well as Wallstreet equity firms and banks who bought up residential homes at top dollars for the last few years that drove prices up and helped caused this housing crisis ?
He is more worried about rent prices it seems. Maybe because he bought up many homes to rent ?
Its people who profit from selling homes who push the narrative that homeowners need to upgrade every few years. Why? Unless you outgrow your home, need to downsize or need to move, why do people need to upgrade homes? For Vanity ?
Not selling 😮 30 year below 3% On hold. 7% interest in 2010 maybe NOT! Prices sticky. Affordability a challenge. Colorado is very slow in sales. 3.5 to 4% is needed.
Home prices are obscenely high right now.
Nope they are still undervalued compared to Asia and Europe
I’m gonna sell my house, but I don’t plan on buying another traditional home. I want to look at buying a very small one bedroom one bath house. Those don’t sell very well so I think I can get that for a good deal.
With an open border, housing prices will increase dramatically
Hallelujah!! Rent will be skyrocketing also! What a great days to be a landlord
@@jameslocklear5298 Nope, rent controls are happening everywhere
I love watching Glen Kelman - he has a 90% lie rate - watch him just to know what is NOT true
We will know we are out of this financial mess only when the housing market gets less "interesting". My MN legislature just poured a lot of money into assistance with housing for working class people. (I am living in a house we bought decades ago with similar assistance.) I hope that helps. I also donate to Habitat for Humanity; more housing stock helps us all.
People are locked into their homes at low interest rates. Either prices come down enough against existing mortgage rates to get people to sell or interest rates come down enough against prices to make people move. The first seems more likely at this point. If either one happens people who are using their home as a castle with their low interest rates will thaw out.
What about the 1.5 million plus homes that are being built without buyers?
So many regular people and real estate people also meaning local agents purchased homes three years ago on the cheap and now are trying to get twice or more what they paid for them. It’s greed. Pure and simple. Of course if more modest homes were built then the supply crunch would dissipate as would the greed dreams and schemes.
So you wouldn't try to double your money? Are you a saint?
The bigger problem is that there's 30 year loans on houses that don't last 20 years because they were built with wood chips and sawdust. What's the fastest way to compost a log?...cut it into little pieces. This in combination with the car market creating loans that far exceed the life of cars designed to only pass warranty (if that) will result in a catastrophic economic dumpster fire.
Rates need to go up, not down. Sorry, but he's wrong. Cost of capital is too cheap. Politicians looking to sell bonds, Corporations looking to sell bonds, rates need to up. Plus we can't fill jobs, the economy needs some unemployment to keep things in balance and avoid a price/wage spiral.
If rates go down, even more business projects will be profitable, and even more jobs won't be fillled.
Forget about rates come down anytime soon. This is the new realm. New money.
Political gridlock doesn't have anything to do with rate hikes or private investors abilities to build new houses. What a strange guy.
A debt crisis makes markets nervous and puts pressure on rates
@@carlostapia1101 nevertheless, private builders have autonomy over their own financial abilities to construct new homes. Unless they are waiting on another government handout.
@@corey8924 speaker referred to secondary markets being hypersensitive to short term rate changes, nothing to do with new construction or govt handouts
@@carlostapia1101 quantitative easing is the cause of all the housing problems. They used that free money to take all the single family homes off the market.
@@carlostapia1101 the markets are the investors in these unscrupulous companies
Just keep smiling, just keep smiling, everything’s fine, just keep smiling
Since inflation will stick for a longer time than WallStreet insists, we'll need "forced sale" like unemployment.
So, it's not only interest rates. It's house prices.
rent prices in la are of the chart, they are going up not down
The guy is in charge of a corporation that intentionally manipulated that housing market resulting in millions of people not being able to afford homes. There should be some consequences for the company and him personally
If you can't increase supply then decrease demand. That will drive the price down. One way to reduce demand is to increase the interest rate. Just double it to 14% and home prices will come down.
Demand won't be disappeared like next day. People needs a roof over their head that means their rent will be up again anyway so more people wants to buy homes. Oh wait lol lots of builders already stopping build more houses unless they are scheduled projects because they learned their lesson in 2008. Work smarter not harder for the maximum profit baby!! 👍
Ive been skeptical of these commentators who are saying that the residential real estate market was due to collapse or severely correct for the reasons this guy mentioned. If you have a 3% 30 year mortgage what would be your motivation to sell (assuming you didn't have to for a job transfer or something equivalent) You would lose probably the best mortgage rate of a lifetime for something around 7%. So, given that, it's no surprise there is no inventory. Buyers are having to buy up all the new construction because that is the only source of supply.
Even in the case of a job transfer; just rent the place out.
Thank you for the interview.
I would like to hear an expert's thoughts on condominiums as short term rentals in sun belt areas like Phoenix.
With higher interest rates and a slowing economy for customers, will investors sell them.
Will there be a divergence in price trends for single family homes vs STRs?
No one is willing to purchase a home for Double or Triple the original price!
1:25 The Fed doesn't care about home values. Home are considered "capital" not a consumable good. So home values are not a factor in CPI. Only rent is in CPI. Home values could go up 100% but rents go down and the Fed would be happy because inflation would be down. And it's common in much of the world for property values to be much higher relative to rents. Only in the US is it easy to buy a SFH to rent and have positive cash flow day 1. That could change.
I'm looking for a humble house, or condo in the suburbs of Philly. And I'm seeing a lot of houses come down 5, 10 even 15K. There's a part of me that hopes that the currency continues to inflate. If I buy now that would be beneficial. But I'd be upset if the assets crashed in the future. Timing this is not easy.
Dont time it, just buy.
This CEO cracks me up
"crack up" means going mad? Why you dont like the interview??
That stock looks like a turd lol
All CEOs are puffing machines. Their company could be literally going up in flames and they'd go on tv saying how great things are and predict fantastical future growth.
@@damham5689 I know also good CEOs who don't let their employees down. And who in the past were even too honest towards the shareholder's meeting or media.
They only way things will improve is if we have huge economic slow down that lasts longer then 2008. It can be hard to go through but so many advantages.
for example? 1. WAR? 2.Meteoroid hits earth?
Housing shortage will only get worse if rates move to around 5%.
Taylor Rule says 10% needed to suppress inflation
@@redpill-finance inflation is over.
@@uo7482real inflation is not over, they just printed $1 Trillion dollars in the last 30 days from the debt ceiling. Check the debt clock it’s still going up. Good luck with that mentality.
Buy assets now to absorb inflation
Sorry to break if to you but stocks only go up. Wallstreet has decided there will be no more stock crashes.
Sister is a realtor,people are WILLING to sell houses.FIX YOUR HEADLINE.
No inventory problem in Florida. Check yourself. Thousands of houses for sale.
Yeah but, good luck getting affordable home insurance.
@@mzliz1249 : Realtors are justifying the ridiculously high prices by blaming it on low inventory. No low inventory in Florida, so what's the real reason? Greed?
don't sell your home! after dollar collapse it'll be worth triple!
I have a jumbo at 3.35 and am not going anywhere soon 😊
Who is moving to miami???? Most expensive city in flordia
Redfin is better than Zillow
Thanks you for helping us
Build more homes and get ride of that zoning regulations. Screw NIMBYs. Developers want to build more homes that people actually want to buy.
Blame Zillow they started over paying for homes causing a Domino effect on the real estate market then they bailed when they had a 2 Billion dollar lost.
The problem is all the funny money printed by thr government and people want to hold onto hard assets. More than stocks. My mom owns half my dad's house and now their house now after he died she doesn't want to sell even though prices are way up and she's a millionaire just from 1 1/2 modest homes. Now commercial real estate is an entirely different story...
Buy a house 20 years ago in California. Sell it for a huge profit. Go somewhere else cheaper & get more house for your money 👍
Here's why:
Me: that's a strange way of saying "greed"
Greed is good
How about corporate own homes?
I plan on downsizing. This isnt a good market to do it in.
if yield goes down prepare for the return of inflation.
I'm working on a 20yr old house gut job and all the water damage inside the walls is crazy. Houses are overpriced POS
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It surprises me why everybody gets really worked up about inflation and inflation data. Inflation has always existed, and people have been using investments to beat the inflation. The stock market return, for example, always beats inflation. I heard of someone who invested $121k last October, and has grown the portfolio by more than $400k. I need recommendations that can give me similar return.
I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $21k passively by just investing through an advisor, and I don't have to do much work. Inflation or no inflation, my finances remain secure. So I really don't blame people who panic.
@@yolanderiche7476 True. I first came across investing in the market in 2019. Already stashed about $80k in savings then, and the free money from the Government was pouring in, increasing inflation rate. I just got an advisor and kept the money there, just because I didn't want to keep the value of the money depreciating in the bank. Tbh, it's the best investment decision I've made since then.
@@JeanpaulCeme Haha. I definitely share your sentiment about these firms. When I was starting out, I checked out a couple of freelance investors online, so you could do the same. I personally work with "Julia ann finnicum", and she's really good.
@@edelineguillet2121 Thanks a lot. I'm definitely gonna check her out on google. Do yo have any idea if she manages family fund?
As layoffs rise that's when it will get interesting
layoffs would be good for our economy with full employment. Lots of unfilled jobs (except in a few areas).
10.6% unemployment rates sounds bullish to you. lol ( Btw any dumb idiot in finance can calc that unemploymen rate )
The federal government should raise the interest rate to 12%.
I live in Ga. a lot of inventory.
A young Mr Burns!!!!
Historically, there is no reason to believe rates are going back to 2.5-3. Prices need to adjust and will under the right conditions.
They ll never go down because banks.... this only if wages dont go up. if not, I believe governments will need to act. I actually belive houses are overvalued and that a massive correction in the real estate is coming, like stocks, assets cant go up forever. you might see people selling their house the moment the economy gets back on the run. As a single men late millenial, I cant afford a house in North France maybe later with a better paycheck.
Interest rates will never go back to 2.5%. Look at what it took to push interest that low meaning covid and lockdowns. No chance that happens again
Those 2-3% rates are looooong gone
Because your next home is going to be EVEN more expensive.
I see 3 vertical lines
WRONG,
HOUSING PRICES NEED TO COME DOWN. Interest rates were still around 4-5 percent before they came down to 2%. Housing prices SHOT UP during the pandemic because of it, and now its the interest rates fault? Lol. Interest rates going up are bringing back price normalcy. Keep it going. The housing market just takes so long. People want answers NOW but the answer is a lower price LATER because of cause and effect.
STOP SAYING THE SELLERS ARE IN THE CLEAR FOR HOLDING ON TO HIGH PRICES. 🤮 Its not our fault you overpaid.
Too much cash on the market is my opinion! House won’t come down unless these overseas buyer go away!
There are 20 new homes on my street in East Austin, come on by.
Why is it flat in Austin?
What a creepy-looking grin
It’s a good time for a true home buyer. Bad time for investors. See that’s why they are upset. They can’t buy up 25% of homes in an area to rent them for profit.
nobody can afford the rent. The rent prices are outrageous as well.
@@ST-rj8iu but the thing about rent is it doesn’t trap you into a mortgage for 15 to 20 years.
home prices are too high. Housing market need to crash asap.
Simple pay cash and don’t try and keep up with the Jones
Go to Detriot and buy those cheap homes and rebuilt the town :o)
no one wants to get in a loan at 6%-7% a year