Why Home Prices Haven’t Crashed… Yet. Housing Market 2023

now you've heard all the real estate gurus the sky is falling the sky is falling look out it's crashing ah so I got a question for you where are all the foreclosures that they keep telling us about for the last three years really where all the 50 off deals where all the affordable houses what's going on look mortgage rates have gone up and now they're telling us they're going to go up even higher this runaway inflation is nuts it's crazy and it's still affecting us all every single day so why haven't home prices crashed yet you got to look at the broader economic Trends and the stuff that no one else is looking at to figure out what's really going on here and this is why I'm doing this video to educate the public but if this is your first time here welcome aboard this is the Real Estate Channel That's all about helping you to avoid those pitfalls that are costly so give me a thumbs up if you're good with that now for years you and I have been lied to and I'm not talking about Bigfoot mermaids or the Loch Ness Monster I want to give you the seven reasons why home prices have not crashed and here they are in descending order number seven Baby Boomers now what does that have to do with anything I'm going to tell you this is a massive retirement of the population that will all be over the age of 65 by the year 2030 and many of them worked saved and invested their entire life and many are flush with cash now and retiring all at the same time it's happening nothing's going to stop this it's not the economy it's their time so the question I have for you is what's on the cover of every retirement brochure it's the beach it's the ocean it's like they've been programmed and they've got to go now many are moving to warmer weather lower taxes and a better lifestyle this leads us to number six so why haven't home prices crashed yet well if you already have a low rate mortgage you've got a low incentive to sell you know during the pandemic and right after investors and homeowners they all started to buy up new homes and they also bought rental properties second homes vacation rentals and some just left their property empty now currently 62 percent of all mortgage holders in the nation are locked into historic incredibly low mortgage rates which has led up to a severe drop in the number of houses that are being put up for sale which leads to the problem of supply and demand so whenever there's a low Supply and a high demand prices go up but the number of houses coming up for sale continues to shrink because many will not be giving up that cheap mortgage that they're locked into for 30 years and then trade it in for a seven percent mortgage that just doesn't make sense right so they're not putting that house up for sale and this is not a normal real estate market which creates a major pipeline clock now even with the talk of recession and housing prices many areas of the country are not dropping Like a Rock because buyers have so few options that are coming to Market for example I'm willing to bet for the most part if you were looking for a cheap home or an affordable home in your area where you live it would still be super hard to find that property this continuous ridiculous inflation is still way out of control no matter what they tell you it's happening number five home prices have skyrocketed yet some people are being completely priced out of the market and many thought they were being smart and they'd stay out of the market and rent for a while which kind of makes sense but they were waiting for it to crash before buying and many of you have written me and told me that you're horrified to find out that it's not just prices but it's the interest rates along with affordability that's keeping you out now you must keep a few things in mind if you're looking to buy a house into the future over the next few years you must have a long-term plan and I'm going to go into that in a minute but even if you win the lottery that doesn't mean that you can buy your dream home but at the very same time number four we're in uncharted waters right now with the supply and demand issues and things are just not right now you look at the number of new homes that were built during the last 10 years it slowed dramatically compared to the number of new affordable homes that are needed but the number between 2012 and 2022 is 15.6 million households were formed but during that same period 11.9 million housing units were completed you see a problem here we're short big time now pull out your shiny crystal ball in 95 degree weather and you'll see it's not a good sign for future buyers because a lot of people who are looking to buy we don't see any inventory in their price range and this creates a major pipeline clog and this is not going to change anytime soon now it's the game of musical chairs where everybody's smiling and laughing until the Music Stops and then everybody needs to take a seat and then someone's sitting comfortably While others are left standing the problem the housing market in the United States is short 6.5 million homes now let's look at another number considering only single-family homes the current rate of housing starts that are happening right now would need to Triple the number of new homes that are being built for the next five years every single year just to keep up with the population demand triple the current construction rates guys now tell me do you have new construction going on where you are comment below let me know what those new home price points are we are in uncharted waters with high prices High interest rates everybody needs a place to call home but the demand and the need it's still happening there's an imbalance between the number of houses for sale and the number of people who are actually want to buy one now that demand it's not going to change until we have a surplus of that Supply it's not going to change it's going to take 10 years of building before we even catch up to have enough houses built to reach the amount of demand that we're talking about number three it's the month's supply of inventory now this is the number of months that it would take for all of the current inventory to sell so in other words let's say if there's 100 homes for sale on the market and 20 homes actually sell per month that would mean there's a five month supply so the absorption rate is a five-month supply to sales so just to put things in perspective when you have six months of inventory or more of the market this is considered to be a buyer's market and this is When Buyers have the advantage to purchase a home on the other hand in a seller's market it's where there's six months of inventory or less that's on the market but here's where it really gets interesting guys supply has actually been declining what yeah they keep telling us we're in a recession but the facts here's the numbers now last year we had a new home Inventory of 8.3 months of supply and now we currently have just 6.7 months more inventory is selling but the demand for a house is still there and much of that demand is happening in the southern part of the United States however there is a glitch in the matrix it's a big lie that they've been telling both you and I because here's the truth and here's the numbers as a nation not new builds but total housing inventory we have only 2.9 months of inventory in the United States and in some areas you still have a hard time to even find a good house because someone else Scoops it up Florida South Carolina Tennessee Texas all these Southern States currently have a super active real estate market and the problem is until inventory is replenished to keep up with that demand and until we can actually get a surplus of homes on the market you're probably going to be continued price increases now according to the National Association of Realtors there's some good news for buyers because national median existing home prices nationally fell 1.7 percent from a year ago but it still doesn't feel like a crash number two prices now here's some more numbers that are super interesting guys depending on where you live in the nation real estate is hyper local so where you live is going to determine the prices are either falling or they're actually increasing now on the west coast we're seeing some prices plunged by as much as 10 percent on the other hand here on the East Coast we've seen prices increase yep Buffalo New York 8.3 percent rise and in Myrtle Beach South Carolina prices were up 10.6 percent compared to last year Miami home prices were up 13.9 percent it's happening on the other hand in places like Florida crazy homeowners insurance crises it's happening with Sky High insurance going even higher all the storms the floods the insurance companies are actually pulling out of Florida and many are saying moving to Florida is no longer affordable so why aren't we seeing 50 off prices now that's because number one there is one tool that positions us to see patterns that we might not see otherwise that are invisible in the present you want to know what that tool is it's called history and there are two very important historical events that happen in real estate history a in 1979 inflation was absolutely out of control but even with a recession home prices actually shot up in the U.S during that recession now here are the numbers from 1970 to 1982 the median American home price appreciated by 159 with a crappy economy the second part of that is B okay so even though they tell us that it must be 2008 all over again sure we know better than that subprime mortgage meltdown was caused by a lot of shady learning practices and Banks can't do that today in 2007 Banks would give out mortgages to people who were at risk of not even being able to pay back that mortgage now back in 2007 the average credit score of a subprime borrower was 620 so lower credit scores are supposed to be likely indicator of a default of that loan right but lenders they were greedy they did it anyway but the days of no money down handing out mortgages with low credit or marginal income Banks got their hand slapped and all that stuff ended in 2008. however many of you have written me and you told me that you're currently renting and you're finding it hard because you're not qualifying for your first home and you feel like you're being priced out of the market and you could be right because this runaway inflation is making everything more expensive and buying a home is getting further Out Of Reach for some today there's stricter regulations on banks where banks are going to do a background check on all loan holders their finances their income their job stability and for the last 15 years credit score has to be higher in order to be even qualified for a loan for the last 15 years Banks were only lending to people who could meet those higher requirements so in that way it ensures that they can pay back that loan today 768 is the median credit score for those who are taking out a mortgage so most people who bought a house in the most recent years have been super qualified and low risk of default and they may even put a big chunk of money down so they have a nice piece of equity in their homes so why are we not seeing the housing market crash sure we are seeing some overpriced homes and they've taken price reductions and they should but nowhere in the market is there any buy one get one fifty percent off sale I haven't seen it have you tell me what's going on in your area I'm curious to see what you're seeing in your area and I can tell you one thing here we're still finding some hidden gems for our clients if you know where to look and what to look for what was any of this information helpful you know I'm making these videos for you so if you have questions we have answers my real estate team is here to help you avoid the pitfalls that are costly so pick up the phone give us a call at 843-839-9870 we'll talk soon and if you subscribed I'll see you in the next video take care guys

Channel: Jerry Pinkas

Views: 970,829

Keywords: housing market, housing market 2023, real estate, housing market crash, real estate crash, real estate investing, real estate bubble, home prices, mortgage interest rates, graham stephan, housing market update, housing market bubble, housing update, real estate update, home price, housing, interest rates, economy, economics, recession, recession 2023, inflation, inflation 2023, stagflation, stagflation 2023, homes, credit score, passive income, us housing market

Id: WLlzQiPl8CA

Length: 11min 28sec (688 seconds)

Published: Sun Jul 02 2023