2021 REAL ESTATE MARKET FORECAST - Kevin Ward

what is going to happen in the real estate market in 2021 hi there my name is kevin ward and in this video i am going to give you my 2021 real estate market prediction and yes that's going to come at the end but before we get to that actual prediction i'm going to talk about what are the factors that are that are in play today what are the factors that have been in play in 2020 through the pandemic through the apollo all the politics and everything is what are in play now what is in play and what is coming that is going to determine what happens with the real estate market in 2021 and beyond and then at the end i am going to give you my personal prediction of what i believe is going to happen and why i believe is going to happen and i'm going to tell you how it affects you what matt what really matters at the end of this video i'm going to tell you what really matters if you want to be successful as a real estate agent regardless of what happens in the real estate market so let's talk about 2021 real estate market prediction what's happening right now what are the factors that will determine whether the real estate market is going to continue to go up or if it is time for the bubble to burst and everything to come tumbling down so here are the direct factors that are going to be at play in 2021 when it comes to the real estate market obviously number one these are i'm gonna talk about direct factors and then i'm gonna talk about the indirect factor so the first factor obviously are actual housing prices that's the first thing what is the housing prices doing are they going to go up are they going to go down now here is what we know for sure home prices have in most of the country in most of the united states and beyond they have continued to go up now there are some factors we're going to get into of why that is happening but i want you to i want you to notice something and that is that the case-shiller index which really indexes home prices over long periods of time adjusted for inflation how and where are home prices today and here is the thing that when you look at home prices adjusted for inflation since 1900 in 120 years there have really only been two housing bubbles in the last 120 years the first housing bubble was from 2000 to 2006. that was the very first one if you go all the way back to 1900 based on inflation based on the actual value of the dollar and the prices based on inflation there has really been a pretty flat line for over a hundred years of just prices were pretty much the same with it with the exception of the great depression when home prices dropped for a period of time but that they came back and they pretty much maintained for literally a century and then something happened around this turn of the tournament of the millennium where the feds got involved government started doing all kinds of weird stuff and all of a sudden you started seeing the financial markets started doing some weird stuff with mortgages and so forth and all of a sudden you started seeing a housing bubble from 2000 to 2006 and then it burst the second time in the last 120 years where there has been a housing bubble according to the case-shiller index is from 2012 to 2021 where we are today now i want you just to notice that from 2000 to 2006 we had a bubble that popped in 2006 2007 and it was six years before that before we bought them home prices bottomed out in 2012 and then it went right back into a new bubble so that's important in other words whenever the bubble pops it does not pop for six months it is a long-term adjustment that is coming so one home prices right now are high and historically they are in a an extreme bubble right now by the way nar just announced that in 2020 there were more homes sold in the united states than there have been sold in a year in 14 years now what was 14 years ago ah it was 2006. the last time we were at the very top of a bubble so just looking at history these are things to take into effect of where are housing prices today based on history housing prices today are extremely high what does that mean for the future it means we're in a bubble okay and bubbles at some point burst the question is when so what are the factors that are going to determine in 2021 are prices going to continue to go up are they going to level out or are they going to go down so here are the other three direct factors one is your interest rates interest rates are a big deal when it comes to buying houses right because the lower interest rates are the more uh buying power your dollar has and a lot of the price increases over the last several years have not been so much because the economy has gotten better or because wages or income has gone up it's because the buying power has increased because the interest rates have gone down all right so that's the third direct second direct factor the third direct factor is actual income how much money are people making if you're making less money you can't buy as much if you're making more money you can buy more okay so what is happening to the income well we have been in a economic downturn since coronavirus hit where wages have suffered now there's some people making more money and there are some people making less money that's going to come into the indirect factors that affect the housing market but one is how much money are people making okay number four and the fourth thing then is actually the inventory and that comes into the amount of inventory then is the main driver of the concept of supply and demand when you have a low supply and high demand there's more demand than there is supply it's a seller's market when there is more more supply than there is demand it is a buyer's market and we are still and have been in a market where there is less supply there is less inventory than there is demand and therefore prices have continued to go up but these are the factors these are the direct factors that are going to determine what is going to happen in 2021 to housing prices as we go forward now let's talk about some indirect factors the associated factors that will also play come into play here so one is employment okay jobs okay because jobs not only how many people have jobs and how many people don't have jobs but also how well are the jobs paying so wages also is a part of that okay again it goes back to this idea of income but the real economy the real economy is based on how much money people are actually making our wages going up or our wages going down and how many people are actually employed how many people are not employed again it is a dire it is not directly that determining the housing market but is an indirect factor in it the second thing are emotions how do people feel about the housing market how do buyers feel how do sellers feel what is their are they are they confident or are they cautious do they believe things are going to continue to go great it's a great time to buy it's a great time to sell what are buyers and sellers feeling where are their emotions now right now buyers are like okay interest rates are low there's no houses man we gotta buy we gotta buy sellers are like we're not selling right now for whatever reason but the emotion is not like oh my gosh we gotta sell so you don't see people rushing to the market to sell their home what you see is people fighting to get a home so there is a sense of emotion this feeling that i have to buy a house today now that's for people that are actually in the market there just happens to be more of those than there are in most markets of people selling okay number three the third indirect driver is going to be inflation inflation deflation stagnation our price is going to go up is the value of the dollar going to get go down is it going to stay the same as they're going to go up as the as the fed continues to pre to print more money push more money into the economy into the financial sector into the markets the dollar over time has to become worth less because there are more of them without anything else backing it up okay so at some point you have to deal with the reality of inflation and one of the things that's happened over the last year is when you look at just the prices of commodities the prices of commodities everything from corn to soybeans to to oil to copper to precious metals prices have gone up the buying power of the dollar has gone down but is that going to continue and with the economy still the real economy still in turmoil which is a another big part of this is let me go back to employment is the continued number of people filing for unemployment has it spiked when coronavirus first hit last year and then and the the economy got shut down and all that and then it came back down but it's leveled out by the way it has leveled out for now months and months and months at record territory in other words pre-pandemic there was never a month never a week where we had as many people filing for unemployment as we have had now every single week week in and week out now for over uh coming up on a year actually it's really when this all started happening was in april of 2020. so the you know the fact that there is a lot of unemployment is still a big part of this now this is the fourth indirect factor and i'm going to call this intervention intervention into the whole game of the economy and the housing market and what am i talking about i'm talking about um we'll just call them the big boys i'm talking about the powers that be the government and the federal reserve i'm talking about this the stimulus that is coming from the government from the federal reserve that is being pumped the things that are being pumped into the economy to keep it moving to keep it going to keep things rocking to keep that housing market strong keep the stock market going to keep people having having money and all that kind of stuff what how is the government and the feds so we'll just call them the powers that be how are they going to intervene so there's ways that they intervene they're in in positive ways to boost and there's other ways they've intervened that stop things for example the lockdowns so log downs what do they do they stagger the economy now whether whether you believe that they help stop the spread of covet or not does not matter what matters is we know for a fact that lockdowns cost people jobs they cost businesses they make business businesses close and they make some business go out of business and other businesses just to get make less money all right bottom line is that drives the economy the real economy down okay when you drive the real economy down income at some point is going to be affected by all of that okay but what else is the big boys the intervention done well one is keeping interest interest rates low artificially keeping interest rates low has a major impact on what happens with mortgage rates um when they keep pumping money into the markets and the economy what is going to happen now in 2021 are the feds how's the government going to respond are we going to have continued lockdowns or lockdown's going to be ease what's going to happen with the vaccine that again is intervention into the into what's into the current situation that has a lot of impact on lockdowns on the economy on jobs and all that kind of stuff so interest rates keeping interest rates low how much money is going to be pumped into the economy whether it comes as direct stimulus to to to citizens or it's being given into the into the markets or to state governments whatever it is the how much input are they are they going to have in pumping money into the economy and then the third the last thing about intervention is the forbearance and eviction moratoriums that we see uh happening that have been going on now for nearly a year and one people that are have mortgages not making payments can't afford the payments so they go into forbearance which means they don't have to make payments and then the eviction moratorium where says hey if tenants aren't paying rent you still can't evict them because we're in a time of major crisis all of that is intervention by the big boys in other words this is not free a free this is not being driven by the free market this is being driven by policy that is saying okay you can do this you can't do this you don't have to make a house payment and you can stay in your house all of that is in play right now what is going to happen in the future with all of that okay well with the lockdowns hopefully we're going to have fewer lockdowns in 2021 than we had in 2020 the economy is going to be able to open back up and hopefully that will help begin a you know helping in a natural a more a real organic recovery than simply by continued stimulus now all indications are that the the government is going to continue to just try to stimulate the economy and produce more stimulus checks that's everything that based on the new administration and congress and all of that that looks like that is going to happen so that's going to keep things moving okay assuming that happens that is going to keep money coming the stock market the feds have said no limits man infinite qe infinity we're just going to keep printing money we're going to keep pumping money in we're going to keep interest rates low artificially we're going to keep just doing everything we can to stimulate the economy and we're not worried about inflation all we're worried about is keeping the economy going and the market strong okay that's what's happening right now that being the case based on that then the housing market will continue the things that are driving it people will still have money you still have income and you have still have a lot of people making a lot of money and then you have you still have you know you have almost this idea of the the rich are getting richer and the poor are getting poor that's a problem it's a dichotomy it's way beyond the scope of where i'm going to be able to go in this particular video but interest rates stay low income people continue to have money okay certainly people are in the market to buy a house peop the inventory because this forbearance is continuing nobody that needs to sell has to sell in other words if they can't make house payments they don't have to sell they're not going to sell they're not going to put their house on the market with but the day comes the day comes when forbearance ends the question is when is that going to come so one year from when the pandemic really started we're talking about march and april of 2021 coming up this spring is if that first 12 months of forbearance if that starts ending for people whether it's not extended or whether people just look at it and go like man we've been out you know i've been making a house payment in months and i'm not going to be able to make it it's time to sell all of a sudden you have more inventory hitting the market or if forbearance gets extended for until this fall six more months whatever it is we don't know yet uh eviction moratoriums those are already been extended all of that means investors can't sell because how are you going to sell you got somebody occupying your rental property and they're not paying rent you can't get them out it makes it very difficult to sell so you have all of that creates this inventory that is not is not materializing even people that can't make their house payments need to sell they don't have to sell right now and why would they sell when they can live there for free okay it's just that's just it's just economics right it's just it's just money so all of these things are happening and in play and how do all those play out over the next 12 months and beyond all right so here we go here is my prediction for what is going to happen i'm going to give you my prediction both short term and long term and this is where it gets a little bit fuzzy but i'm going to then tell you okay what do you need to do to prepare for and what really matters in this whole thing okay so first let's talk about short term and let's talk about long term so short term here are the factors supply your inventory interest rates demand which is a factor of inventory and how many people want to buy it by a number of buyers in the market and then prices so in the short term with everything that's happening with the the intervention from federal government from the feds pumping money into the markets stock market stays up presumably and i think that's going to continue to happen that the stock market because they're still pumping air into it pumping air into it it's all artificial it's totally separate from the real economy where you still have you still have millions of people unemployed that should not that have normally not been unemployed you've got businesses are closing businesses that are making less money than they are and by the way let me just say this one thing there are a number of business and this is you look at the stock market they talk about the s p 500 and it's just in record territory and all this well there are six six companies six companies out of the 500 that represent 40 of the cap of the capitalization value of all the s p 500 so you have six companies that are doing really really well and that's driving the market okay but what you gotta understand is that in america nearly half of all business and all jobs is small businesses they're not on the stock market they're the ones they're the restaurants they're the hardware stores they're the the little mom and pop operations many of whom are closed right now depending on where you are some of them are closed some are open at limited capacity and all of that is happening that is nearly 50 percent of of the jobs in america and it is nearly 50 of the gdp in america and there is a lot of pain out there okay but again government keeps pumping pumping pumping keeps interest rates low and and and people that that can't make house payments they don't need to move they don't have to move they don't have to sell so supply and this is at least for the foreseeable future now when i say this i'm looking at 2021 and just saying this is what is going to be happening for the foreseeable future in 2021. now at some point in 2021 this could all change but it'll change based on these factors okay one for right now the supply is going to continue to be low we are going to continue to have a low supply interest rates are also going to stay historically low the feds have already said we're going to keep interest rates low they ain't going anywhere so they're going to stay low for at least probably for at least all of 2021 and in the foreseeable future even beyond that okay because of that demand is probably for now going to stay high certainly higher than the supply and because you have low supply and high demand you obviously have upward pressure on prices so prices in most markets are going to continue to grow now here is one little one little uh footnote or factor uh one caveat and that is not every market in the united states is the same there's one more associated factor i really should add here and that is migration we'll just add this here migration and that is where are populations moving and so you have a lot of the major cities the people are leaving the major cities they're moving to suburbs they're moving to other states or wherever whatever but there's a lot of that movement so you talk you look at major cities like new york city san francisco chicago los angeles these are cities where there's a lot of people moving out and because of that there is massive vacancies in especially in in downtown areas in the city suburbs are not so much people are moving to the suburbs sometimes cases people are leaving the states and they're moving to different states they're moving to states like texas they're moving to states like colorado or utah where or nevada where are arizona where there is a lower cost of living lower relative real estate prices and so forth so you've got a lot of those things in play as well all right so based on all that my short term prediction for real estate 2021 is people are going to keep moving at a limited number they're still going to be very low supply people that don't have to sell aren't going to sell if you get a listing it's sold okay it's hard not to sell a listing in this market and i think that is going to continue because that prices are going to continue to go up for the foreseeable future in 2021 now it may end before 2021 all this may change long-term prediction here's what's going to happen at some point everything turns everything that's happened for the last year in the economy and for the last uh eight or nine years now in housing prices we are clearly in a bubble the stock market clearly in a bubble now again you go back to the factors that are driving this okay housing prices are staying up why because inventory is low income for people that can buy is still there and interest rates are still low now what's going to happen as we go forward here long term is when forbearance ends when you look at all these indirect factors when you look at the employment situation and it's it continues to get worse or it doesn't get better emotions if all of a sudden people get scared and this is what happened in 1929 when the great depression started was panic and they still can't put their finger on what exactly was it that caused everybody to freak out i don't know but they they freaked out so at some point emotions turned if consumer confidence goes ballistic and people start freaking out and they start panicking on wall street if wall street starts to tumble all bets are off okay if all of the guess who's buying all the mortgages nowadays mortgage-backed securities are being bought by the government by the feds they're buying them they're buying it all up buying it up what if those debts are going and solvable what if all that starts collapsing there's debt the collateralized debt obligation there is a bubble in place in the financial markets that is rivaling if not surpassing what happened during the global financial crisis 2008-2009 so all of that is in place inflation if inflation starts kicking up prices start going up now we still may see a period of deflation again so many factors that could happen um but again government policy there comes a point where stimulus quit stimulating it just quits having the same impact and so right now they've had to keep increasing keep increasing where before if they put a 10 billion dollars it did something now they put a trillion in it doesn't seem to have the same impact so long term supply if once forbearance ends and all that all of a sudden people get scared then all of a sudden people start putting their house on the market supply goes up interest rates are probably going to stay the same for a long time okay they could start going up at some point in the next year but probably not okay demand if people start freaking out if employment keeps not working uh people aren't getting jobs and on all of that boom you could have a drop in demand this is when you get into a problem and all of a sudden when that happens long term prices are going to fall the biggest factor in all this is the fact that we are clearly and definitely in a housing market bubble a housing bubble and a stock market bubble and historically all bubbles pop now here's what i'm gonna tell you it doesn't matter all of this you're going like well you didn't really tell me when it's gonna i don't know when it's gonna happen no if if the if there was a person out there who actually knew when it was gonna happen i could prove it that it they would that would be the answer to end all questions right but it's not there but here's what i want you to understand it doesn't matter there is one key there is one key that matters whatever happens in the real estate market in 2021 and beyond and that key my friend here is the key right here that key is it's you i'm gonna tell you something in 2020 the average realtor in the united states who had been in the business less than two years made less than ten thousand dollars and according to nar there were more say home sales in 2020 than ever before since 2006 and yet the average new realtor was still making less than 10 thousand dollars what does that tell you it ain't the housing market my friend i had i had new agents in their rookie year making a hundred thousand two hundred thousand three hundred thousand dollars in their first year while the average was only making ten thousand less than ten thousand what does that tell you the key is not the market the key is what you do it's how you prepare it is your how prepared you are and how productive you are it is how equipped you are and how effective you are in the current market whatever it is whether the market is changing and where you're having to adapt or whether the market is just keep going on and you simply have to perform but here it is it the key is you and here's what happens and that is winners don't wait winners find a way to win and what i'm going to tell you is is that where if you're a real estate agent or you're thinking about getting into real estate or whatever it is is it a good time to get into real estate well it depends are you willing to do what it takes to win then absolutely is it a great time to be in real estate is a great time to get into real estate is real estate going to be good or is being a realtor going to be a good thing in 2021 2022 2023 if you're committed to doing whatever it takes to win when the reality is most agents won't in five years eighty percent of the real estate industry will be gone and that's just because that's the way it's always been that i've been in real estate for decades over two decades and here's what i know every five years there is an 80 turnover in the industry which tells you that 80 percent of realtors fail every five years every five years and it doesn't matter good market bad market 2008 7 2008 2009 over 400 000 realtors got out of the business that's what happened the last time there was a market downturn whenever it comes what are you going to do it's going to be up to you don't wait to see what's going to happen in the market you get prepared you get equipped you get trained so that whatever happens in the market you my friend can win that's where i come in yes masters real estate success training what we do is we help agents win regardless of the economy regardless of the housing market regardless of where they live regardless of how long they've been in real estate if you want to win i can help you with that now the next thing that i would invite you to do is join me at agent mastery live which is three days of full intense training on how to start a business how to build a business and how to win in this economy in 2021 and beyond just go to agentmasterylive.com and get your ticket today and i'll see you at agentmasterylive.com now i hope this has been helpful for you if it has make sure you give the video a thumbs up i want to hear your comments what are your thoughts what are your what what did i miss what would you add if you don't like the video give it a thumbs down but please leave me a comment and tell me why you give it a thumbs down subscribe to the channel if it's your first time here play to win and always expect yes [Music]

Channel: Kevin Ward - Real Estate Success Training

Views: 36,952

Keywords: Kevin Ward, yesmasters.com, real estate agent training, coaching, real estate scripts, prospecting, real estate mentor, real estate leads, lead generation, real estate presentations, objection handling, overcoming objections, how to get listings, youtube real estate, real estate marketing plan, real estate agent career, make money in real estate, 2021 Real Estate Forecast, 2021 Market Crash, 2021 Real Estate Updates, Housing Market Predictions 2021

Id: 7e93zGAcQno

Length: 27min 57sec (1677 seconds)

Published: Thu Feb 04 2021