Is the Housing Boom Really OVER?

are you a potential home buyer or seller wondering what's happening in the housing market how will the housing market play out over the next couple of months even into 2022. according to many youtubers out there we're on the brink of a housing crash a foreclosure wave we're in this massive housing bubble but as many of you know i believe that to be complete nonsense with that being said there has definitely been a cooling in the housing market since the highs back in the spring but in no way does that mean that the housing market has changed entirely and that's what we're going to discuss in today's video we're going to take a look at some data from zillow in a report by tlr analytics and you know we're going to discuss it we're going to look at it in more detail and show you exactly what's happening across the united states now as i say that one thing i really want you to understand and that's that real estate is local right so what's happening in my market might not be happening in your market and what's happening in your market might not be happening in my market i hear a lot of people out there at the moment talking about increased inventory huge price drops across the board just because that's happening in one market doesn't necessarily mean that's going to be the same you know across the united states take for example boise idaho the hottest market over the last year probably the last 18 months with regards to appreciation with regards to growth and in that market inventory is still a huge problem not seeing a lot of price reductions not seeing a lot of inventory come on the market and when something does come on the market it moves very very quickly so if you're in boise you know you're going to expect much the same versus being in a smaller you know market across the united states where maybe you didn't see the same appreciation the same growth yeah maybe you're seeing a slowdown so that's one thing i want you to keep in mind if you're out there looking to buy a house or even sell a house is that your housing market might be a little bit different than than you know what a youtuber is discussing uh in a video so just keep that in mind when you're going through the process and looking to buy a house that all real estate is local but in today's video we're going to look at this data show you exactly what's happening across the u.s so you can get a better idea of what the future holds in addition to the data i'm going to discuss what i'm seeing in my local housing market at the moment working with buyers talking about a couple of different listings that i have at the moment i'm going to show you exactly what's going on with those so that you can get a better idea of what's happening in my market as well before we dive into the data though i want to ask a favor if you find any value in this content at all just one small thing do me a favor hit the like button it helps the youtube algorithm push the video out so more people can see it which ultimately helps me accomplish my goal of helping more home buyers and home sellers and guiding them through the real estate process and i appreciate the support as you know zillow produces a large amount of housing data based on its database of over 110 million condos and single family homes it believes its pricing indexes are better and more accurate than corelogic's case-shiller index because it updates more often and more quickly compared to the case-shiller with that said let's take a look at the zillow data done by tlr analytics dive into the details and help you make some sense of it as i mentioned earlier this report is from tlr analytics it's looking at the most recent zillow data from august now as you're going to see in this data there's definitely some changing happening in the housing market with regards to inventory with regards to prices compared to where they were n05 and o6 a lot of people want to keep referencing that time because there was a housing bubble and now that we've reached those prices again a lot of people believe that we need a pullback but as you're going to see from the data here it's not happening in all of those markets right we're going to take a look at what actually is happening now with regards to the real price index that zillow uses versus you know where prices were back then and you know and show you that it's it's you know all real estate is local right not all markets are participating but let's take a look at it help you understand it and give you some insight as to what it means as we move forward so as you can see here it does say that the super heating is very visible as as of the end of august both the yearly rate of change and the real price level have surpassed the 2005 and 6 peaks august yearly gain of 18 percent is well above august 2005's 12 and the real price level is 3.6 above where we were back back in october of 2006. so the real price index is is up and the yearly rate of change is up when you compare it to 2006 so yeah it looks like a bubble in pricing but let's look at all of the metros that they use to to get this data and see what's actually happening so curiously though august 2021's real price exceeds the 2005 and 2006 peak in only five of the top 15 metro areas and the yearly price gain exceeds the previous bubble max in just eight so not all markets are participating right 10 of the top 15 metros we're not seeing you know the the real price index exceed where it was in 2006 and at the same time the yearly price gain only exceeded it eight in the top 15. so there were seven markets where that yearly price gain did not exceed the 2005 and 2006 highs which shows you that it's not happening in all markets right all real estate is local as i mentioned earlier there are definitely some markets out there at the moment not participating and that's what i want to stress here as we go through this video and as you're watching videos online and trying to make decisions about the future of of you know you buying and selling is that your market might be a little bit different and that's what i want to point out with with looking at this this data so the gains are more narrowly distributed than you might guess so 23 of the top 50 metro areas have surpassed their 2005 and 2006 highs in real terms so there were 27 metros that did not and 46 of the top hundred so 54 did not in that case but only 25 of the bottom 50 and 40 of the bottom 100 have logged new highs so there's a lot of markets out there at the moment not participating in in new highs in those markets right you know southern california you're seeing those new highs in other areas of the country you might not be seeing those because you haven't had the same gains the same appreciation the same demand that we've seen here in say southern california for example the median value of august 2021's real price relative to the 2005 and 2006 high is negative two percent in every subgroup top and bottom 50 top and bottom 100 and top half and bottom half also shows a median below zero so again a lot of areas out there just aren't participating now this graph that we're going to look at here shows the yearly change in home prices and then the real change in home prices zillow's chart right you can see nearly 18 nominal you know gain year over year and then here the real price index of zillow just over 300 000. now unfortunately zillow only goes back to 2009. so we don't have data from the last housing crash or the last housing bubble with regards to zillow and those numbers um but we do have is is the most recent data coming out of the pandemic here and which shows a sharp rise in sales coming out of the onset of the coveted crisis they were up 79 from february 2020 to june of 2021 but sales have eased by 11 since and and the yearly change has broken below zero so now you've seen cells ease by 11 but remember where you're coming from right sales were up 79 percent so when easing by 11 is still up higher than they should be but it is trending in the right direction if you're a home buyer out there and you can see from this chart here now third inventory this is what everybody keeps talking about inventory is increasing everywhere right that's what everyone's saying inventory is picking up and that is what is eventually going to slow the housing market because it's supply and demand as you get more supply that's going to to to ease the pressures if you will is going to give buyers more options but it has to be increasing at a level that outweighs the demand for it to really slow at this point it's just giving buyers more options but as the graph below shows the number of houses for sale has been contracting since the third quarter of 2019. so as you guys have heard me say before the pandemic didn't create the inventory crisis we were already headed you know down with regards to inventory prior to the pandemic the pandemic just accelerated it because it gave people more options to to work remotely to work from home needing more space because of kids all of that stuff it just exceeded you know demand at that time along with low interest rates so that happened in the third quarter of 2019 we started seeing that shortage and combined with insatiable demand has driven prices sharply higher it maxed out at minus 33 in april of 2021 and has turned up but it's only up at minus 23 so it's still negative right you can see here on the chart that's the bottom there april 2021. now we've got inventory increasing but we're still at minus 23 we're so we're still well below where we need to be and this takes us back to to that 2019 number the third quarter of 2019 that we mentioned earlier so nationally inventories are up 16 since april and in 14 of the top 15 metros with miami not participating so 14 of the top 15 metros out there are seeing an increase in inventory but at the moment not enough to really curb the demand and lastly price cuts a lot of people want to talk about price cuts the graph below shows the share of listings showing price cuts fell from 18 in the fall of 2019 to 7 in april of 21 so you saw a big drop in price cuts from 18 before the pandemic to 7 in the middle of the pandemic and at the moment of the top 15 metros they have data back for 12 of them and they're all suggesting that you know that those markets are seeing a cut with regards to to prices right so all 12 metros that are reporting at the moment are seeing price cuts in those markets including miami in this case the other three they don't have back at the moment and they're not saying which markets those are so they're seeing slowing in sales rising inventory and more price concessions but what they're saying here is it's going to take some time for this whole thing to unwind right it's not going to happen overnight and they also go on to say that most of the mortgage borrowing is done by affluent households with high credit scores subprime barely registers on the radar at this time but returning to earth from the stratosphere is likely to be a shock in some type of way so the question is when is that return from the stratosphere actually going to happen i think it means if you're a buyer out there looking you have a better opportunity to get into a house now than you did six eight months ago when it was even more competitive people were you know going well well well above the asking price with multiple offers i think the market has calmed down a lot in a lot of markets out there but not all markets right remember as i mentioned earlier all real estate is local and so that's why i want to tell you what's actually happening in my market what i'm seeing with boots on the grounds out there helping buyers and helping sellers with real estate so buyers still very very competitive out there you know i have a handful of buyers right now sending me property in fact had some clients actually two sets of clients see some property over the weekend that they had interest in making an offer on and they called me to get more information on it one had 14 offers the other one had nine offers so 14 offers and nine offers on two different properties the the agent told me that the the offers were well above the asking price one was listed at 725 and the price had gotten above 800 000 and the other one was priced at 779 and the price had gotten up above 817 so you got two different things going on with buyers there right so it hasn't slowed down enough at least in that price point to stop the multiple offers now in some price points maybe you're seeing that um and but you know just keep in mind when you're out there looking that it might still be competitive so make sure you're working with a professional make sure you understand you know how the market works so that you're not completely caught off guard if you're out there going to to make offers on property this still isn't the time to be offering well below the asking price unless something is way overpriced right i actually have two listings at the moment that have been sitting on the market a little bit longer than normal couple weeks here now these are both unique properties in the sense that one is is a very small studio not a lot of buyers looking at it and it started out with two offers on it right to begin with very first weekend two offers we countered both of them one got cold feet and the other one didn't want to negotiate so those deals fell apart but you know it's it's a it's a property that that's priced pretty competitively based on you know the market but it's unique in the sense that it's very very small it's a studio not right for that many people so it's likely going to sit a little bit longer but this isn't the kind of property where you can offer substantially less it's actually priced pretty accurate based on the comparables it's just not a property that a lot of people desire because of the size and the other one i have is a you know is a very much a condo kind of like apartment living if you will somebody above you below you on each sides of you and you know in this market just not ideal for every situation doesn't have an elevator and a lot of people that have been looking at it want that elevator so it's unique in that sense and we've had offers on it uh that have been decent offers but just not what my seller's looking for so it's not like it's not getting activity it's just not getting the activity that my seller wanted to see and therefore still sitting on the market so you know just because something is sitting on the market doesn't mean that no one's interested in it or no one's making offers just means that the seller hasn't been willing to accept something at this point so you know when you're making offers out there make sure you understand that information and you have somebody on your side that can help you understand that information so that if you are looking to make an offer you you understand how to approach that in this environment because i don't think you're going to see much change as a home buyer over the next couple of months i think you might see inventory even dry up a little bit as we move closer to the holidays towards the end of the year because that's typically what happens and demand's not really going to go anywhere because interest rates are going to stay low so you're still going to have a lot of buyers out there just looking for the right property and chances are going to be less inventory in a lot of these markets you know which means it's going to be competitive on the homes that do come to the market that you know appeal to more buyers so just keep that in mind when you're out there looking that all real estate is local and and if you're hearing that there's price reductions or huge price drops in some markets that doesn't necessarily mean it's happening across the board but if you're wondering what's actually happening with regards to the changes in the housing market check out this video here where i talk about it in more detail and how to approach it but for now i appreciate you taking the time to watch i appreciate the support have a great day bye-bye

Channel: Jeb Smith

Views: 4,454

Rating: 4.7525773 out of 5

Keywords: housing market, housing market crash, housing bubble, foreclosures, foreclosure wave coming, jeb smith, huntington beach, buy now or wait house, buy now or wait, housing, california, foreclosure, forbearance update, first time home buyer, buying a house, buying a house in 2021, Zillow

Id: vAuW-_S7te4

Length: 15min 43sec (943 seconds)

Published: Tue Sep 21 2021