New Home Market Collapse: Worse Than 2008?
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- Опубліковано 15 жов 2024
- All across UA-cam you'll find dozens of videos claiming that a housing crash is already here. Yes, you heard that correctly, these are channels that are not predicting a housing crash but rather claim that it's already underway, and the evidence they are using can be seen as reliable form certain angles.
The main argument from many experts is that new homes are experiencing a mini recession, at least in terms of pricing. According to federal data, new home prices reached their peak in October 2022 at $497,000. Over the past 19 months, prices have steadily decreased to $431,000, marking a 13% drop. While a 13% decline might not seem severe, the rate of decline is actually sharper than what occurred in 2008.
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Houses could drip 25% from peak. Still won't feel cheap!
It was over x100 times less expensive in 1980
@@mysticyamcha3697not if you use real prices. Aka adjusting for both inflation and average wages
As long as modest homes, in that hell-hole Phoenix, are selling for anything other than $180,000, we're still in a massively over inflated market.
Phoenix is the most overrated in the nation.
Why bother when there is Las Vegas?
Housing here in Colorado needs to drop 50% from current level to match what they should be and were in 2019
Yeah. Problem is lots of people with big $$$ still want to live in Colorado and are willing to pay up. Great year round weather and natural beauty makes Colo a very desirable place to live.
@@setfreemissgeographical barriers
Not buying until prices drop by 50%
Stock price is no indication of anything when the entire market is in the biggest bubble of all time. You have trillion dollar market cap stocks moving 15% in 1 day.
PE Ratios are now infinite 😂
So you’ve been hoarding your videos for a month…
Right no one is really is saying that. It was a huge inflation spike with a settling market
MHFIN, I think that the prices adjusting downward has only just begun. As the Recession fully materializes and it is then acknowledged by the Federal authorities, you will see price fall further!
Crash happens when the bubble adjusts. So yes, this is the beginning. Builders adjust quickly, they will have to keep adjusting and the resale market will follow.
A 21% drop in price is not a “normalization” it’s a crash, especially when inventory is spiking to 2008 levels in some places. Also saying if a crash was here/coming, the home builder stocks would show it, just remember a lot of bank stocks didn’t crash until the last minute in the GFC, meanwhile Freddie/Fannie was insolvent, countrywide was going belly up, and all the other signs were present. This is a housing crash, plain a simple.
Most rich people stay rich by spending like the poor and investing without stopping then most poor people stay poor by spending like the rich yet not investing like the rich but impressing them
People prefer to spend money on liabilities, Rather than investing in assets and be very profitable
You are so correct! Save, invest and spend for necessities and a few small luxuries relatives to one's total assets ratio.
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The prices of homes were incredibly over valued from inflation, and guess what overall orices are still going up in all the major markets
You are missing out on two points:
Increased technology that will cut costs (3-D printing) and inventory is shooting in a few areas
It's just homebuilders "adjusting" prices and looking for a "normalization of prices" so they can "move inventory and maximize profits"? That's what happens in a crash. You're describing supply and demand, and all we've been told for years is that demand is too high and inventory is too low to bring prices down. Here you are with an example of just that happening. I don't care what you call it, I'd love to see a 20% "normalization" in existing homes too.
Never buy an American wood framed shack. Those shacks are substandard and barely worth $60,000. They're so substandard that they're illegal to build in Europe.
Tell me about it
Builder stocks are not showing a warning because they are offering teaser rates that expire after two years. How long do you think they cant keep duping people into that nonsense?
How are your showing a 13% decline and the short clip is showing 19%?! What am I missing?!
Why are all of the comments here grammatically awkward? Bots? Non native English speakers? Literally the first 8 comments are difficult to understand the first time you read them.
Cellphones.
Interesting I need to pay more attention to potential propaganda!
Hear no evil, see no evil , speak no evil. It’s hard for me to believe builders and investors would give us an honest outlook when they’re using incentives to further deceive us.
Stocks are fine because the cost of materials is also returning to reality, so the companies are still making good money on building houses. Lumber price, for example, peaked around $1600/1k board-feet and is around $500 today
"Dead Cat" bounce is another way of describing your data points.
I don't think new home builders are going to be the determining factor for pricing this time around, but rather people who are denied HELOC/HEL's after they lose they jobs/laid off. If they have "200k" in equity but can't borrow against it to live, did it ever really exist?
Yes it exists on paper.
@@chinaboss6683 I understand that but, what I'm saying is everyone that is losing their jobs will try to use that paper equity, get denied because the banks are insolvent and credit is super tight and they have no income, and realize that paper equity never really materialized into anything substantial in the real world.
@@chinaboss6683 On paper, yes. When people lose their jobs and want to draw against that paper equity is when the dominoes start to fall.
There are big drops happening, but it's highly location specific. Primarily areas that were most overheated during the pandemic. A lot of areas around Austin, Dallas, Phoenix, etc.. We won't see a full scale crash until unemployment goes up and people are forced out of their low interest loans.
Yup
The rent is too damn high!
That is why I don't pay
Builder stock is up because we printed 40% of our money in. The last few years…… so everything is up it’s macro economic not stock specific
Or GameStop effect. Look at P/E ratio
Horton over leveraged? Look for short? Rate increase….
People are overcomplicating things while looking at stock prices and data. You can throw numbers at a wall all you want but prices are simply out of range for most people and a correction will have to occur eventually.
Housing crash? Yet, lower rent is no where in site, how you come up with?
IDK. In New England, inventory is rising rapidly. (I haven't seen inventory this high in 10 years)
Prices are all over the map.
Homes that are under 250k and livable are selling.
Not much else.
Simple observation very local.
That is the price which people can afford anything more is too much for most people
there should be a law to legally require seller to disclose the effective price for each closing. any tricks to suppress free market demand supply balance should be banned.
I got lucky selling my home this last month, there is a large inventory hitting the market right now and they are priced super competitive for my used. I still sold it over 40 percent it's original value from a few yrs ago.
What did you say in that video about click bait titles? I like how you're looking at data, but how long can you predict a crash that doesn't happen?
truth is most people can't afford a home with these prices.
WHO really knows the future? but...I sure love the clear Charts on this Channel. The overhead shots of cookie-cutter McMansions and beachfront...not so much. Eyecandy isn't the point here, right?
Not until the Fed 'pulls the market'
By far the biggest clickbait channel on the web... hes been calling for housing or market crash for 4 years now each video with new nonsense reasoning
“Bizarre events of 2020” more like the “man-made disaster of 2020” with the human made virus and human enforced lockdowns 😅
conspiracy theorist
@@bobsacamano7653 tbh the conspiracy now is that Covid was naturally existing and that the lockdowns were necessary. Pretty wild how the evidence has flipped so much
Still bizarre.
5:38 this is the wrong question.
selling houses for cheaper is not dynamically opposed to higher stocks. If profits are steadily rising or plateaued, especially during a correction like this, than that would be a very bullish sign. It would be strange to imagine investors long term minded enough to adhere to this, but it's possible they saw the absurd profits during the plague, and see how things are currently despite huge cuts, and are satisfied with the growth trajectory so they buy the stock. I dont actually watch these companies or their economics, but to say "house prices down, why stock no down" is a simplistic and wrong way to look at this situation.
Lumber prices are still ridiculously high and likely gonna get worse. It's almost like this was all planned. 😂
Much less than it’s peak
Prices will never drop in my opinion. I think they'll stagnate, which has started to some extent.
But prices can't come down because we have too much currency in the system. The government and Fed will continue to print and devalue the currency. So everything appears to go up in value when the dollar is just losing value.
This means prices will trend up or remain stagnant due to unaffordability.
They will come down when people lose their jobs, then it still takes a year or more.
@@bobsacamano7653 not if the corporations and banks are bailed out or bailed in or the currency hyperinflates. Costs will not stop rising due to money supply saturation. The only way the prices will drop is due to national debt default via government officials (nearly impossible), which restricts the ability to print money or if the Fed radically raises rates which would cause a second great depression. Which is also unlikely to impossible.
Only 13 of the top 100 markets in the entire country are increasing in value, all others are either flat or declining year over year.
Prices are going down.
Affordability for the average America will occur when prices drop at least 50 %. We will wait for this to happen and it will happen over the next 2 to 4 years.
Institutional buyers/builders have been keeping the market inflated.
Is it really true that new house prices drive down resale? New homes are not built where people want to live in most cases. Is there more data to account for this situation? Thanks.
Yea just look at new home median prices vs existing home median prices. FED St Louis. No denying it.
@@MHFIN Thanks. Is there sufficient connection to suggest causation?
Living in America has become a nightmare. Look at the housing industry. Look at the careers that are available and competing with people from China and India. Look at the state of dating and marriage. Look at the state of our politics and election integrity. Look at the cost of everything.
Every aspect of life is under assault. We are being squeezed worse than ever.
This is an embarrassing appeal to authority. "Market analysts can't be wrong... right?"
Breaking news April 30th 2024: "US home prices jump by most in nearly two years in February, FHFA says"
The housing market: new home builders new builds is like money printing . It’s debt to build (cheap debt) to sell an asset (pricey debt) to then finance (offset builder debt if builder financed) it. Debt us money.
Your comment makes no sense I’m a developer new construction money costs me my initial 20-30% downpayment for the overall project i.e land cost architect/engineering fees site development costs escrow fund construction costs then it’s 1% over prime which is 8 1/4% so that’s 5 1/4 fed rate + 3% to get to prime +1% over so that =9 1/4% cost of money to me so with a very questionable housing market I’m currently sitting it out on new construction and doing entry level rehabs of s/f and 2-4 units rentals that I can cash flow if they don’t sell.
@@patrickobrien2357 I get it. The public company builders are who I’m referring to. They’re funded by the BANKSTERS on wall street to keep the banking fiat system going right now. Many other markets are being gamed the same way. “gaming the system” at scale is not for Main Street folks.
D.R. Horton is down on the year and over 10% this month.
It was overvalued, upon analysis it seems to still be.
Down 3% Year To Date, but up 30%+ in the last year. I'd say it's doing pretty well
@@1969bones69 You sound bitter.
Their stock will fall along with the prices. People can't afford homes at these prices.
Houses are a train wreck tho right? Could that not be contributing to their trouble offloading stock from the builders?
They want to increase demand without decreasing existing mortgage defaults.
Yup
So your counter argument is the stock price? Lol..😂
The stock market is artificially holding up markets because a economic reset will hurt them more than lying about it.
13% drop in prices but new homes are 20% smaller 😂😂😂🤡🤡🤡
ALL CRIMINALS
Can you add ppsq into ur next video. They could be building smaller homes
You need to do a video, that many will call crazy-town, which you can point to in the future (if needed). The pandemic cooled the economy and there are two camps to what comes next 1) as you explain in this video, after some product adjustments and financial incentives, home prices will find a new normal. 2) Climate change (increase house maintenance costs) and energy price increases (from reduced supply) will make make large homes only affordable to the ultra-wealthy (as it was in my youth). When insurers stop covering homes what they're saying is "we don't believe this home will last 30 years reducing someone interest/ability to pay off the mortgage". I'm not going to get into a long-winded thing about climate change (aka, destruction of housing, roads, food, etc). If you study it you know.
I just bought a 3 bed 2.5 bath 2888 squarefoot house for 330k. I hope it doesnt crash lmao
Waiting for the hedge funds to start bailing.
You make 1 extremely wrong assumption. The assumption that investors are super intelligent is observably incorrect.
2008, wework, Uber, Bernie Maddof, etc(I could go on and on) all are recent examples of investors who kept throwing money into companies that did not make a profit.
You are basing your thesis off the intelligence of others….? I enjoy the camber of your voice when narrating your videos but now realize that your analysis is flawed.
I’ll still listen because of the Addie mentioned voice but now use this channel for a metric of what not to do as I invest further.
You have become a bellwether for the wrong choices. Good day sir
You nailed it.
1.) Most professional Wall Street investors were not working in the investment community when the recession of 2008 hit.
2.) Most main street investors, normal people, basically are speculators. They toss a dart at the dart board and wherever the dart lands, they invest. It's the same reason as #1. There has not been a "real" recession since 2008. The 2020 downturn was a government manufactured event not a real recession.
What do you guys recommend instead?
@@steamer2k319
I recommend the content creator have his own point of view. Not other people’s point of view that he/she prefers up as content.
Get out in front of the changing marketplace with a thesis(right or wrong) and have data to support that thesis. Also show the data that contradicts the thesis and explain why the thesis still holds true
@@Triangletox
Thanks for the reply. I'm not the content creator in this case, though. I'm just a guy looking for recommendations of other channels/voices that sometimes have helpful insights.
@@steamer2k319
Are you looking to lay out the plan I put in place for this upcoming recession and housing correction?
Or why I am so sure of the housing correction that is upcoming?
New home prices are falling on purpose.
Like no one is saying any of this click bait crap. Theres a difference between sensationalism on TV to get ppl to watch and actuality of people truly saying the whole market is fk'd. No one is saying that at all. No one who matters. Stop selling stupid fear.
Or you know. You could refute the data in the video with your own data. Instead of just being lazy and calling it clickbait like a bot.
This is not fear some people want this.
We are close to a depression. It won't be just a fall in prices. What happened in Japan and China will come to the US soon. Population is getting old and the collapse is near.
Here’s hoping the crash will be EPIC
When rates eventually go higher because of uncontrollable inflation and then they will have no other choice but to do so.
You’re are right about 2007 it took a year before it was even really noticed. Then all hell broke loose in 2008. Fuel became too expensive and that’s happening again with this administration’s of green policies.
We will just have to wait and see.
Seems like all prospective buyers have got their daily dose of dopamine. 😂 .It’s just seasonality.
With 8 percent rates with Biden finally all the crash videos came true
Jerome Powell is the fed not federal government but a separate entity.
🥱