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Red October: The Impending Real Estate Crisis Explained

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  • Опубліковано 27 лип 2023
  • Ken dives into the consequences of the Federal Reserve's 11th rate hike, which has led to the highest interest rates in two decades. Ken analyzes the critical differences between the residential and commercial real estate markets, unveiling the looming crisis brought on by rising rates and mounting loan defaults.
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    #kenmcelroy #FederalReserve #RateHike #InterestRates #CreditCrunch #LoanDefaults #RealEstateCrisis #Inflation #HousingMarket #DebtMaturities #CashReserves #Refinancing #EconomicCrisis #FinancialMarkets #BankingSystem #MultifamilyProperties #RealEstateIndustry #realestate #realestateinvesting

КОМЕНТАРІ • 143

  • @KenMcElroy
    @KenMcElroy  Рік тому +14

    Hey guys! Appreciate the feedback on the video.
    In the video, I tried to highlight the impact of the Fed's rapid rise in interest rates. Question for you: How has the increase in interest rate impacted your business and you personally?
    Comment below. Let me know what you have done to minimize the impact of the higher rates.

    • @christopherjamesrussell
      @christopherjamesrussell Рік тому

      In South Florida we haven’t seen much of an impact. Although we did see a massive increase in short term vacation rental operators. I’ve been in the business for 15 years, the competition quadrupled. I’m hoping higher rates and maxed out values change that and most people get back to annual rentals. Other than that, rent is still in extremely high demand, but sales have slows down significantly with people using mortgages. I have seen a bunch of 1031 exchange cash offers still coming through on my personal assets. The unicorns 🦄 that have been depreciating assets over and over still need places to park their cash to avoid recapture. But there’s only so many of those scenarios.

    • @coctostan1860
      @coctostan1860 Рік тому

      Ken, you only highlighted CMBS multi family loans coming due, correct? Thus, that chart would not include bank loans, Fannie Mae, etc? thanks, great work

    • @katelee5781
      @katelee5781 Рік тому

      @kenmcelroy I'm seeing cap rates rising bec/ of new, higher cost of borrowing. I'm on the industrial investing side and sellers are lowering their prices (higher cap) to recalibrate to new Fed-induced environment. Most investors aren't willing to take on negative leverage or have slim profit margin due to rising rates, so they are demanding more favorable prices from sellers. It's also about opportunity costs for investors; if you can get 3 month treasury bills (risk free) for 5.43% then why invest in commercial when the profit margin is negative or thinner?

    • @coctostan1860
      @coctostan1860 Рік тому

      @@katelee5781 nobody is which is why the sales volume is off massively and will be for a while...

    • @GotGracexxxxx
      @GotGracexxxxx Рік тому

      This is not based on predictive models. All the DSCR numbers are hard and fast, calculated in the company financials and reported in the annual taxes. I’m an attorney in RE and business law, and actually did a DSCR by hand this week. The increased cost of a higher interest rate blows up the denominator of the calculation, making the NOI in the numerator look puny and shrinking the overall ratio. It’s just math.

  • @sando425
    @sando425 Рік тому +43

    If none of this happens in October, will you make a video explaining how your predictions were wrong or will you just push the timeline to 2024?

    • @nomorewar4189
      @nomorewar4189 Рік тому +8

      It’s coming don’t kid yourself

    • @sdhillon901
      @sdhillon901 Рік тому +5

      @@nomorewar4189most likely in 2024 I would say but yes it’s coming

    • @josephedlin2172
      @josephedlin2172 Рік тому +6

      This is coming. Look at the yield curve. People need to understand that a “soft landing” means higher rates for longer and that’s worse than a recession.
      Soft landing means inflation rebounds as energy prices discount recession and job market stays strong aka wages climb higher… you think landlords won’t then pass cost to renters in a resilient economy to balance their debt costs? All that plays out and people will be begging for a recession then.

    • @enthused7591
      @enthused7591 Рік тому +7

      You must be new to economics. Are you one of those people who's completely financially overleveraged, meaning you owe more in debt than your entire income and net worth combined? The yield curve inversion is worse than the 1928 inversion before the great depression and it generally takes 14-18 months to get the rise in unemployment and recession following. We're on month 13. Even worse, the ratio between median home price sold and median US income is 20 PERCENT worse than the peak of the 2007 bubble. We're in the single largest asset bubble in US history and high interest credit card debt is rising the fastest in history because 30% of the US can't even afford to pay for food and basic shelter due to the 45% increase in costs from just 2020-2022, while their income is up only 8% on average.

    • @GotGracexxxxx
      @GotGracexxxxx Рік тому +4

      This is not based on predictive models. All the DSCR numbers are hard and fast, calculated in the company financials and reported in the annual taxes. I’m an attorney in RE and business law, and actually did a DSCR by hand this week. The increased cost of a higher interest rate blows up the denominator of the calculation, making the NOI in the numerator look puny and shrinking the overall ratio. It’s just math.

  • @JC-sw7dv
    @JC-sw7dv Рік тому +18

    US bank just laid off 200 loan officers and loan officer assistants… Wells Fargo already laid off most of their loan officers…
    Truist is no longer offering commercial loans on real estate…
    What Ken says is true.

    • @JC-sw7dv
      @JC-sw7dv Рік тому

      @mikelaurey7577 not on rental real estate. If you need the rent to qualify, it’s not an option.

  • @fractalart8352
    @fractalart8352 Рік тому +21

    I like how Ken put on glasses for when he came out with near genius level analysis.

  • @GillerHeston
    @GillerHeston Рік тому +39

    In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.

    • @GenghisKhan311
      @GenghisKhan311 Рік тому

      People have been proven to be morons.
      Who gives a real estate company a commission to inflate what they are buying.. insanity

  • @RRags
    @RRags Рік тому +15

    Thank you for being straight forward, honest, and educating us with real information and how DSC works! Nice job. By the way. I am a commercial lender.

  • @ToblerX
    @ToblerX Рік тому +9

    I've been getting multiple emails from Syndicators who's deals I passed on over the last few years because the fundamentals didnt make sense with rates rising. Now those same deals are in distress and they are offering incentives for investors to inject capital to rescue these bad deals. Its coming.

  • @tylerv4879
    @tylerv4879 Рік тому +5

    Great video Ken. You truly explain it so even the folks that are not seasoned pros can still understand and I think that’s important. I use your information to help educate all of my LPs. Keep up the impactful content!

  • @GotGracexxxxx
    @GotGracexxxxx Рік тому +1

    This is not based on predictive models. All the DSCR numbers are hard and fast, calculated in the company financials and reported in the annual taxes. I’m an attorney in RE and business law, and actually did a DSCR by hand this week. The increased cost of a higher interest rate blows up the denominator of the calculation, making the NOI in the numerator look puny and shrinking the overall ratio. It’s just math.

  • @varunemungal5213
    @varunemungal5213 10 місяців тому +1

    Excellent Analysis!!

  • @siddharthnaik6621
    @siddharthnaik6621 Рік тому +2

    love your insights Ken . I think ur spot on and we have not seen the bottom even in single family as ur rightly alluding to . this video is one of the best analysis i have seen this year

  • @chetoshiro7928
    @chetoshiro7928 Рік тому +2

    Great update Ken! The audio is so much better too 🎉

  • @bsfugitt1
    @bsfugitt1 Рік тому +7

    Ken, I don’t understand the “ripple” to the single family market. Can you explain that concept in greater detail? You and your buddy Jason Hartman seem to have different opinions on this. I’d love to hear you and Jason discuss the future of the SFR market.
    I started listening to you 3 years ago. Now, I have 15 SFR rentals with 30 year fixed debt (low rate) on them all- your videos helped me get here. Thanks so much for sharing your knowledge.

    • @randaloopy
      @randaloopy Рік тому

      Wow nice work. 15 in 3 yrs w/10 yr debt. Future is bright.

    • @patmagic3301
      @patmagic3301 Рік тому +2

      I think he’s talking about new residential and lending. The resetting of commercial loans which are structured differently will cause that same lender (bank) to tighten their standards for new loans across the board including residential. “Maturing” meaning if you had an ARM about to adjust to prime from the initial teaser rate. I don’t think there’s to many residential arms out there now though.

    • @adampage8508
      @adampage8508 Рік тому

      Where did you buy your rentals? Did you use a turnkey?

    • @erickillian313
      @erickillian313 Рік тому

      Yes, could also like clarity on the residential ripple mentioned. If lending is tighter then harder for borrowers of single family to get approved is only thing I can think of.

  • @allsouls5997
    @allsouls5997 Рік тому +19

    “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” ,Thomas Jefferson

    • @GenghisKhan311
      @GenghisKhan311 Рік тому +1

      Its not just banks. Real estate companies should be illegal. People need to stop giving them commissions to infalte the market. Complete stupidity..imo

  • @RobotsCanDoAnything
    @RobotsCanDoAnything Рік тому +3

    Excellent commentary Ken, take cover and get ready to pick up cash flow deals😊

  • @MustyRusty5
    @MustyRusty5 Рік тому +5

    You know it's getting real when Ken has the glasses on

    • @Notme-tq4xs
      @Notme-tq4xs Рік тому +1

      He borrowed some 85yr grandma's glasses....

  • @jbp122
    @jbp122 Рік тому +3

    But when the market does not collapse in October will he make a video about that ?

  • @patmagic3301
    @patmagic3301 Рік тому +8

    I’m looking forward to more pickle ball courts being created out or abandoned malls and large commercial.

  • @jonathanhahka9939
    @jonathanhahka9939 Рік тому +4

    Your premise assumes CRE exists in a vacuum. The FED raised interest rates which will affect all of real estate. Additionally, we’re now in the real estate part of the cycle where seasonally home prices go down. Home prices will go down once inventory naturally increases. Thanks.

    • @jonathantaylor6926
      @jonathantaylor6926 Рік тому +1

      Yes and no. CRE is financed with short-term debt. Residential is financed with long term debt. This is why commercial is reacting to these higher rates much faster than residential.

  • @introtothenewworld
    @introtothenewworld Рік тому +1

    Thanks for the helpful info Ken, your knowledge and experience provides a lot of value!

  • @Kyle_Apgar
    @Kyle_Apgar Рік тому +2

    Thanks Dr. McElroy :D

  • @artsychik
    @artsychik Рік тому +2

    I'm so sick of hearing about the real estate crash over the last couple years! At least at this point I wish it'd actually happen already

    • @josephwong604
      @josephwong604 10 місяців тому

      This is commercial real estate causing bank failures. As far as commercial real estate, it's price already crashed, just no foreclosure yet.

  • @jarjop
    @jarjop Рік тому +1

    Ken. Always speaking the truth.

  • @davidrpriest
    @davidrpriest Рік тому +6

    Starting to see a lot foreclosure notices and very distressed deals in multifamily. Opportunities are here!!

    • @seadoo4life127
      @seadoo4life127 Рік тому +1

      Not really. These fools overpaid soooo…

  • @tyb3938
    @tyb3938 Рік тому +4

    If commercial real estate had 30 year fixed at 3% they would be holding strong as well. No one wants to sell single family so artificially holding up values. If unemployment goes up the house of cards will come tumbling down to earth

    • @bryantholt3433
      @bryantholt3433 Рік тому

      Agree. So called recent run-up in residential real estate prices is a head fake. Just look at what new home builders like Lennar are doing. They are buying down the interest rate. Many places around the country, Lennar is offering 4.5% mortgage rate when actual rate is close to 7%. What does such a significant buying down of interest rate mean? If you do the math, that translates into 12% to 15% backdoor price reduction. Add to that 3% to 5% discount they are offering on list price, you get 15% to 18% price reduction. This is not showing up in reported sale prices only due to financial gimmickry.

  • @christopherjamesrussell
    @christopherjamesrussell Рік тому +6

    Couple of questions:
    1) Why wouldn’t BlackRock or others scoop up any assets that are being taken by the banks? Rents are at an all time high, there’s no inventory in desirable areas etc. Just seems that this would hurt the small time landlords, but the institutional buyers sitting back waiting will just scoop them up.
    2) If the reason we may face an issue is because of a controlled demolition with the FED raising rates this many times this quickly, wouldn’t they be able to lower the rates if calamity appears? Especially because the debt burden in this country is exponentially higher with higher rates, seems like cannibalism. As deflation starts, I can’t imagine how interest rates are kept artificially high. Before anyone brings up rates from the 70’s, consider asset prices prior to making that tired argument. There’s no possible way the government debt could handle extremely high rates like the 70’s, and asset prices were no where near this high, it’s impossible to go anywhere near those levels.
    3) Will the presidential race of 24’ create pressure to lower rates? Seems like that would be a timeframe that the current administration would not want major calamity happening, causing them to unleash whatever it takes to stabilize. Before anyone says the FED is independent, please consider that theory as being WRONG. If the administration has influence over all other 3 letter agencies, why would we think they don’t have influence on the FED, especially when rates are tied to debt burden/fiscal budgeting.
    Thoughts?

    • @coctostan1860
      @coctostan1860 Рік тому +3

      1. Most of these are single assets and it's too small for a blackrock. 2. They might come down but they want a normalized Fed Rate and wouldn' want to cause all this pain to go right back to it. They'll likely never go back to zero in the forseeable future. 3. Maybe but they already said they might hike in September and then they would go flat so even if they do get pressure it won't be until end of 1st qtr next year and that's too late to effect the elections. Plus, the dems do not plan on any sort of fair elections, ever again.

    • @christopherjamesrussell
      @christopherjamesrussell Рік тому

      @@coctostan1860 1) Blackrock bought entire neighborhoods of single family homes. Last I checked they owned 80k homes.
      Democrats never expecting fair elections is golden and very accurate.

    • @gwills9337
      @gwills9337 Рік тому +1

      Welll considered questions

    • @jonathantaylor6926
      @jonathantaylor6926 Рік тому +2

      Investors now have alternatives. These massive firms were buying real estate when the 10 year UST was paying 0.5%. The 10 year is now paying 4.1%. These gigantic firms that own 20,000 single family homes actually operate on a thin margin. It's a very expensive business to operate. Think about it.. would you rather deal with 20,000 tenets, late fees, evictions, repairs, property taxes, vacancies, squatters and the payroll for your employees to manage all of that.. or would you rather just buy bonds, collect your guaranteed risk feel yield and do nothing? The extremely low bond yields of 2020/21came with consequences- one of which was directing tens of billions of dollars into real estate that would have ordinarily been invested in the bond markets instead.

    • @richpickard1680
      @richpickard1680 Рік тому

      It's just an economy cycle. Government prints money to allow inflation to go up. And then they allow for a correction for people on fixed incomes To affordr things to come back down. Used to happen every 7 to 2 ten years but this one's gone on quite long

  • @GrayCapital
    @GrayCapital Рік тому +1

    Ken - Thank you for featuring Gray Capital's research on upcoming loan maturitites! Let us know if you want to do a deep dive.

  • @TophoriMusic
    @TophoriMusic Рік тому

    So blessed to have this for free

  • @davids11131113
    @davids11131113 Рік тому +1

    I’ve seen a lot of single family homes in my area in Colorado selling below asking.

  • @user-ob4em4ge6c
    @user-ob4em4ge6c Рік тому +1

    This is good news for future generations. The more interest rates go up comma the more home values will DECLINE. God bless, America.

  • @arboradvising6291
    @arboradvising6291 Рік тому

    Great job Ken and team! Thank you.

  • @ericacek
    @ericacek Рік тому +2

    Nice glasses Ken, digging it

  • @mullerk2
    @mullerk2 Рік тому

    Excellent Content

  • @legacyopp9318
    @legacyopp9318 Рік тому +2

    Thanks ken

  • @willbuchholtz4531
    @willbuchholtz4531 Рік тому

    Ken is the best in the game

  • @KidCity1985
    @KidCity1985 Рік тому +2

    In Seattle Amazon is forcing their remote employees back into office. It would need to be a very large sum for it to be good for Amazon. I wonder who is paying it?

  • @josephwong604
    @josephwong604 11 місяців тому

    What is preventing them from doing pretend and extend? They changed the accounting rules, basically allowed the insolvent banks to issue bonds. Can someone shed some light into it?

  • @caustinolino3687
    @caustinolino3687 Рік тому

    9:06 How does it make sense that the lender would force the commercial operator to write a check to keep the building? The bank won't be able to make it cashflow any better. They would have to hire a property manager would would lose even more money. So what is the point?They've got a massively impaired asset on their books they have to write down?
    Seems like banks have every incentive to not enforce convenants and not take back buildings. I don't know how, probably with government help, theyll work out some arrangement where it all just keeps going.

  • @ericmcabee5823
    @ericmcabee5823 Рік тому

    Good report, thank you!

  • @budbud13411
    @budbud13411 Рік тому

    Makes sense! And I’m completely clueless when it comes to the housing market. Great explanation!

  • @danielcasey7385
    @danielcasey7385 11 місяців тому

    Hi Ken,
    Do most commercial loans, aside from the ones you mentioned in this video have adjustable rates that reset every couple years or so?

  • @byronrios4005
    @byronrios4005 Рік тому +3

    Wrong the entire housing will go down by 50 to 70 percent period…….

  • @SurplusFundsRiches
    @SurplusFundsRiches Рік тому

    I thoughts rents were also going up. If so, is the dscr still below 1 because the rent increases haven't kept time with rate increases?

  • @stunt101
    @stunt101 Рік тому

    Love this format of presentation

  • @rccpromotions
    @rccpromotions Рік тому +2

    Man, I really like the deep dive, but there are 4 reasons. I think this won't be as big of a deal as you think. I wish there was some way to cordially present the other side of the argument to see if I'm ignorant.

  • @111sunder
    @111sunder Рік тому

    Ken, excellent video.

  • @katelee5781
    @katelee5781 Рік тому

    @KenMcElroy thank you! Very information and easy to understand. Thank you for explaining the logic Ken. Q: with cost of borrowing higher, doesn't that mean cap rates have also risen so when underwriters reassess the value of the property for the new loan, the value of the property is worth much less, and thus the amount of the loan will be less as well? (another reason in addition to DCR for why the loan will be much less.)

  • @ramenslayer6016
    @ramenslayer6016 Рік тому

    My wife and I are looking to buy a place in Los Angeles, California and we are deciding on whether or not we should wait or go in now and refinance later. If we wait for rates to go down it will attract more buyers into the market. Its difficult to predict how the market will act but I'm wondering if anyone has any valuable advice. We found a place we really like and can afford long term.

  • @josephwong604
    @josephwong604 11 місяців тому

    The borrowers have more power now, because the least thing the lender would like to hear is their walking away from their properties. They will try to create terms that gives a little bit of hope to the borrowers to be able to hang in there. Still it maybe hard for them to do it, since the spread to the Fed offer rate vs these garbage loans must be high enough for investors to be willing to buy them.

  • @CT-ig2oz
    @CT-ig2oz Рік тому +1

    Thanks 😊

  • @SerendipityLuo
    @SerendipityLuo Рік тому

    This is a good explanation of balance sheet recession from the perspective of business practitioners.

  • @jessedau
    @jessedau Рік тому

    What ever happened with Wells Fargo getting out of the residential mortgage sector?

  • @henrytong8707
    @henrytong8707 Рік тому

    The mortgage rate can go up to 10% and housing still will not crash. People are just not selling homes where they have a 1.99% 15 year loan.

  • @AB-wg7qe
    @AB-wg7qe Рік тому +1

    Bring it on player.

  • @Horace1993
    @Horace1993 Рік тому

    Wont banks continue to make concessions amd adjustments for a while?

  • @crazytydoo
    @crazytydoo Рік тому

    as a high income millennial with no debt, I've given up on buying, prices are absurd even when making solid 6 figures. will rent a small place indefinitely to maintain agility.

  • @paulpena9548
    @paulpena9548 Рік тому +1

    You look like "Brains" from the Thunderbirds with those glasses.

    • @nyquil762
      @nyquil762 Рік тому +1

      Awesome reference💯

  • @tobindrake2767
    @tobindrake2767 Рік тому +2

    I'd like to point out just one thing. Property owners of these multi-family units and apartment buildings did a massive amount of refinancing last year as they saw rates going up. While it may seem like there is a large amount of loans coming into maturity towards the end of the year, it really isn't that much compared to the size of the market. What we are looking at is less sophisticated borrowers that weren't paying attention to what was going on and allowed themselves to get into this position. These owners have no-one really to blame but themselves.

  • @nicolathonathan770
    @nicolathonathan770 11 місяців тому

    No default if employment rate stay strong.

  • @MgtowRubicon
    @MgtowRubicon Рік тому +1

    The too low Debt Coverage Ratio (DCR), also called Debt Service Coverage Ratio (DSCR), is causing (again) huge problems in commercial real estate.
    The conventional "wisdom" of DCR 1.25 is nonsense, regardless of the "quality" of the asset; the minimum reasonable DCR is 1.50 to tolerate recessionary pressure on income and expense.
    Low DCR is the same reason for the 2008 crash, because businesses were over-leveraging with DCR as much as 30-to-1; they had 30 dollars income to service 29 dollars debt.
    CAP rate compression schemes always fail when the music stops.

  • @michaeloconnor6683
    @michaeloconnor6683 Рік тому +1

    I am not sure about your assessment that NOIs are in good shape. In the town I live in, the 22 year average of multifamily units (new built) coming on the market is 1030/year. In 2021 there were 3847 and in 2022 there were 4955 units developed. Halfway thru this year there are 1786 units of permits pulled so far in 2023. I've been in the business now almost 35 years (commercial construction) and for the life of me I can't figure out were all these people are coming from to fill up these new apartments that have been built here in town in the last 5 years or so. The number of units under construction right now in this town is just mind blowing -- the vacancy rate as well as concessions are going to skyrocket at some point and here is no way most of these deals now being built are going to pencil out on gross revenue. So not only is the debt burned going to go up, the NOIs are going to go down -- absolutely crushing your ratio you are talking about.

    • @zaneenaz4962
      @zaneenaz4962 Рік тому

      The subsidies to these ventures need to be examined. Section 8 vouchers will probably fill many of these units.
      Find the increased vacancy signs in sacramento quite interesting .....people leaving the center.

  • @kjinnah104
    @kjinnah104 Рік тому +1

    Ken is the best!

  • @mrlarry999
    @mrlarry999 Рік тому +1

    I’m in San Francisco. Wells Fargo has been handed the keys on several large commercial properties (office buildings and hotels). In SF, most multi-family properties are financed with non-recourse, interest only loans. I think most of these loans need to be refinanced every 5 years. We’ve already seen SF’s largest landlord default on a $450 Million Dollar loan. Not sure what’s happening with that. But I see a lot of apartment buildings for sale.

    • @jonathantaylor6926
      @jonathantaylor6926 Рік тому

      First Republic did the same ting in the Hamptons.. 1% interest only loans for multi-million dollar mansions... these loans allowed doctors and lawyers in NYC making 500K a year to buy extremely expensive mansions in the Hamptons that would ordinarily only sell to people making 7 figures, not 6.

    • @lkd06
      @lkd06 Рік тому +1

      There was the one under construction in Hayes Valley that got torched...we might see more of that happen, too. Insurance fraud

    • @mrlarry999
      @mrlarry999 Рік тому +1

      @@lkd06 An interesting side note is that some local people who were interviewed said that construction on that building had been progressing quickly, but that all construction activity had stopped a week or two before the building went up in flames.

  • @enthused7591
    @enthused7591 Рік тому

    Interestingly, according to FRED economic data, single family housing is down from a median home price sold in Q4 2022 of $479,000 down to $416,000 in July of 2023.
    Single family median home price sold in the US is down 13.1% in 9 months. That number is going to accelerate drastically as we see unemployment double throughout 2024. One thing to remember; In 2007 at the PEAK of the housing bubble, the median home price sold was only $257,000 and that bubble of sheer unaffordability relative to the $52,000 median US income caused a crash unlike anything the world had ever seen before. Today, that bubble of unaffordability is nearly TWENTY percent more unaffordable. ARMs and subprime loans in 2005-2007 fueled a BUBBLE, not a crash. The crash occurred AFTER the FOMO and bad loans led prices to be 25-30% more than the median buyer could afford in an environment where unemployment ticked up well above 4%. Unemployment went from 3.8% in 2007 to 10% in 2009. We'll see 8+% unemployment again from 2024-2026. Every single asset money can buy from cars, homes, stocks etc. will be 45-60% cheaper than it is right now as people struggle to afford just the very basics of living. 30% of the US is already in that scenario where these 40% increases in costs of groceries, utilities, insurance, transportation etc. are wiping the lower-middle class out and causing the fastest increase of high interest credit card debt in US history.

  • @josephwong604
    @josephwong604 10 місяців тому

    It is almost mid October, but so far no sign of anything will happen. Looking like they will do extend and pretend.

  • @aceofslayz
    @aceofslayz Рік тому

    Winter is no longer coming. Winter is here. And it's lookin spooky.

  • @veerenchithriki2803
    @veerenchithriki2803 Рік тому

    Spot on

  • @obxarms7685
    @obxarms7685 Рік тому +4

    Ken I love ya but you are wearing my Grandmother's favorite glam glasses.

  • @josephedlin2172
    @josephedlin2172 Рік тому

    This is coming. Look at the yield curve. People need to understand that a “soft landing” means higher rates for longer and that’s worse than a recession (for people).
    Soft landing means inflation rebounds as energy prices discount recession and job market stays strong aka wages climb higher… you think landlords won’t then pass cost to renters in a resilient economy to balance their debt costs? All that plays out and people will be begging for a recession then.

  • @KennethLeeAtLGA
    @KennethLeeAtLGA Рік тому +1

    October 1987

  • @derekdaniel5675
    @derekdaniel5675 Рік тому

    What's Manny Koshbin going to do!! 😂

  • @DivineMisterAdVentures
    @DivineMisterAdVentures Рік тому

    WTF OAI? Not OAI, NOI - Net Operating Income.

  • @samkapoor3441
    @samkapoor3441 Рік тому +1

    Your analysis of commercial real estate is fine but claiming no impact on residential real estate is being out of touch. When real estate gurus start talking 'this time is different', it is a sure sign of impending trouble. By every measure residential real estate is on the verge of a serious crisis. No amount of denial or creative explanation will change that.
    Honestly an expert that talks about only one set of problem and ignores other is not much of an expert.

    • @bryantholt3433
      @bryantholt3433 Рік тому +1

      During 2007-2008 crises, real estate professionals were in denial for a long time. California realtors association came up with forecast of double digit price increases every year for a foreseeable future in January of 2007. We know what happened next.
      I also remember head economist of National Association of Realtors claiming in early 2007 on CNBC interview that the worst is over and bottom has been put in. Again we know how perfect his timing was.
      Real estate experts are coming with creative explanations why this time around it is different. It ain’t so. Imbalance between prices and incomes always gets resolved . . . by drop in price to match incomes.

  • @peterbedford2610
    @peterbedford2610 Рік тому

    Residential real estate of SFR is not his thing.

  • @stevenporter9114
    @stevenporter9114 Рік тому

    No your not! You may see drops in some areas, but over all your not going to see the losses that you are dreaming of. The interest rates going up were not because of because of a banking issue, they were brought on because of a supply and demand issue. There are several reasons that the commercial real estate market isn't going to go down much. First, yes interest rates have gone up, but in the big picture of things they are still very low, second there are a lot of people that have been priced out of the market that would love prices to go down. I own a large portfolio of real estate and I can't wait for more to start hitting the market. Not to mention that we are coming up on another election year.

  • @mattolivier1835
    @mattolivier1835 Рік тому

    Commercial real estate has NOTHING to do with residential! Wake up!

  • @user-no6ts9yx8u
    @user-no6ts9yx8u Рік тому

    thank you brother

  • @eddyloans
    @eddyloans Рік тому

    They're going to keep on going until the public hears or says the word "10%" then is going to start coming down. 10% is like saying Uncle when you're wrestling. And the coming down part will be around the next election for El Presidente 😂😮

  • @user-ob4em4ge6c
    @user-ob4em4ge6c Рік тому +1

    Home values will continue to fall well beyond a decade. Too many people locked in record low rates, for RECORD HIGH COSTS. Prices only need to decline about -10% for catastrophic results. Risky HELOCS, Airbnb busts, and decade long value declines, combined with commercial real estate in the red, across the board. Foreclosures are only now starting to uptick. Supply is increasing, NATIONALLY. This bottom won't show until the mid 2030's at the earliest. -40% when the dust settles. God bless, America.

    • @ryeann2567
      @ryeann2567 Рік тому +1

      Source: "Trust me, bro."

  • @javierquiroz9320
    @javierquiroz9320 Рік тому +1

    Mr don’t catch the falling knife all you’re guesses been wrong

  • @easyaudiorental4446
    @easyaudiorental4446 Рік тому

    So what is going to happen? Is Blackrock going to buy up all the Multi Family?

  • @mattolivier1835
    @mattolivier1835 Рік тому +1

    Well, I don't own any commercial real estate so big deal. Let it crash and burn! I love it! Boom bishes! Great times indeed!

  • @akinadownhillace
    @akinadownhillace Рік тому

    Glad I positioned myself in Texas for the fire sale that is coming.

  • @MikeyPaper
    @MikeyPaper 11 місяців тому

    FEARMONGERING FEARMONGERING FEARMONGERING!!!!

  • @shakazulu3594
    @shakazulu3594 Рік тому +1

    Massive disaster is on the way!! My karma spells on all those who stole homes after the 2008 housing crash are working!! Praise be!😄

  • @DivineMisterAdVentures
    @DivineMisterAdVentures Рік тому

    Squeezing the juice. No way can this last more than 18 months.

  • @seadoo4life127
    @seadoo4life127 Рік тому

    A big part of this is the simple fact that this administration was handing out billions like tic tacs.. Now it’s like… ohhhh wow that was stupid. Let’s dial it all back and make things even worse. Bravo.. Yet so many think everything is great right now. I want to send this video to all of the morons out there..

  • @wespotter6985
    @wespotter6985 Рік тому

    All I hear about is a soft landing please comment on your views

  • @Joshcodes808
    @Joshcodes808 Рік тому

    This guy completely fails to convincingly connect commercial to residential.

  • @seanmurphy5140
    @seanmurphy5140 Рік тому

    You have no clue what you are talking about. You have been going on about a crash for years. First unemployment goes up. Then a year later maybe people are in foreclosure. A crash is at least 12 months away.

  • @erhiyomaakpomughe9062
    @erhiyomaakpomughe9062 9 місяців тому

    No one cares

  • @rhb30001
    @rhb30001 Рік тому

    Always wrong 👎🏼

    • @patmagic3301
      @patmagic3301 Рік тому

      That’s it? No counter?

    • @ipappys
      @ipappys Рік тому

      Put us on some game sensei

  • @j.d.bradley7183
    @j.d.bradley7183 Рік тому

    Residential housing isn't in any sort of crisis as homeowners can't afford to finance another place. We're (and I'm one of them) at 2.5%. I'd be stupid to refinance. Ergo there is no housing crisis. Btw, I'm multi-family. I live in a 4plex and rent the other three out.

    • @bryantholt3433
      @bryantholt3433 Рік тому +1

      What about new buyers who are staring at 7% mortgage rate and prices beyond their reach (as a result of 40% to 50% run up in 2021 and 2022)?

  • @3xfelix
    @3xfelix Рік тому +2

    Huge housing crash coming...joyous times ahead