Home prices Are Declining in 75% of Major Cities
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- Опубліковано 1 жов 2024
- www.epbresearc...
The US housing market is in the middle of its 6th major downturn since the late 1960s.
Home prices are declining in 75% of major cities, with many areas posting declines for six or seven consecutive months.
In this article, we’ll look at the distribution of home price declines and show where home prices have fallen the most and where home prices have held up the best.
We’ll also compare the depth and duration of this home price downturn to declines of the past to see how it stacks up.
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DISCLAIMER: This video does not provide investment or economic advice and is not professional advice (legal, accounting, tax). The owner of this content is not an investment advisor. Any securities, trading, or market discussion is incidental and solely for entertainment. Nothing herein shall constitute a recommendation, investment advice, or an opinion on suitability. The information in this video is provided as of its initial release date. The owner of this video expressly disclaims all representations or warranties of accuracy. The owner of this video claims all intellectual property rights, including copyrights, of and related to this video.
I’m in Ohio and the housing market here over the last 7-8 years is unlike anything I’ve ever seen. Homes that were bought for $130K in 2015 are now being sold for $590k. I’m talking about tiny, disgusting, poorly built 950 square foot shit boxes in quite mediocre neighborhoods. Then you’ve got Better, average sized homes in nicer neighborhoods that were $300K+ 10 years ago selling for $750k+ now. Wild times.
A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
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@@maryHenokNft Do you mind sharing info on the adviser who assisted you?
Definitely! All of this happened in less than a year after *Gertrude Margaret Quinto* told me what to do. I started with less than $100,000, and now I'm about 17,000 short of having a quarter million dollars.
It is really incredible!!!! because I'm just shocked that someone mentioned and recommended Camille Alicia Garcia. I thought people didn't know her... She's really great!
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
Tthe US stock market had been on its longest bull rally ever makes the widespread worry and enthusiasm understandable given that we are not used to such unstable markets. As you pointed out, it wasn't tough for me to earn over $780k in the last 10 months, so there are chances if you know where to go. I hired a portfolio advisor since I was aware that I needed a solid and trusted plan to survive these trying times.
I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
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She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2024. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?
Investing in real estate and stocks might be a wise choice, particularly if you have a sound trading plan that can get you through profitable days.
@@SandraDave.investing…..is not trading
The biggest mistake ive ever made was not buying a home in 2008 when i was 8 years old. And as a real estate agent now i can confirm its bad 💀
Gotta pull yourself up by your light up shoes bro. Being 8 ain't no excuse to avoid the hustle
23 year old real estate agent in 2023, 3 years after the pandemic?
God bless your soul brotha
@@anthonyc2072 i know i know 😅😅😅 thanks though. Wish me luck!
Ikr
If I twerk can I get a house for free
It’s a bummer that I need a housing crash to happen in order to afford a home 😅
The problem is, you won't have the income to even buy a house during a recession with a lack of jobs and extremely lagged wage increases that don't even keep up with inflation. That and high rent makes it harder to save. So when you're ready to buy a house (or a state/federal program that makes it easier) is really the best time to buy a house.
In 2009 my 5-year ARM loan expired. Trying to refin but the mortgage dept of all banks were gone.
Worst case scenario is that things stay so high.
That's how it works but it will take longer than you think. People won't take their losses, because people are dumb and don't take responsibility for being wrong.
It's even more of a bummer that rich people that can afford to buy a house choose to wait Until they crash the economy
I feel like buying, that means we've hit the crest. I call it the Dylan-index. The more likely I wish to purchase something without knowing much about it, the more likely it is a bad deal
Seems sound
Spitting hot 🔥 you are
Truly is the Dylan-index because I feel the same lol
So do the opposite of what you do
We need updates sir
I feel like we've been hearing this for a year and interest rates keep rising and Im still watching homes being sold.
Yup a crash needs a catalyst and there isn’t one on the horizon. There’s only positive pressures on homes right now, such as the surge of the top 40%’s income, the work from home trend, and the new trend of vacation rental home investment.
The downturn is literally because of tech companies tightening their belt. The correlation between percentage of tech workers in a city and where that city placed on the graph of home price decline is impossible to ignore. Tech workers are scared for their jobs and are therefore deciding to hold off buying homes, causing prices to drop. There isn't a general recession on the horizon, there is an ongoing tech one
Don't just sit idly and wait for the crash. They're hard to find, but look for good deals while waiting.
More like multiple years
It's nit going to happen bro. They may go down but never back up. The WEF want to remove all property ownership.
This crash isn't like previous crashes because it's not being caused by individual homebuyers getting predatory loans, it's being caused by the rental speculation market and corporations buying houses to turn them into AirBnBs and rental properties for vastly inflated prices.
Progress Residential needs to be razed to the ground.
That’s a small part, primarily rising interest rates off the back of a decade of easy money though. All has to do with central banking.
I do think Covid changed people’s priorities when determining where to live. Coupled with Millennials fully entering the homeowner market has increased demand. Cities and suburbs surrounding popular cities have had a significant increase in demand as Americans are deciding where to settle either as they start families or enter retirement. This shift has altered demand across the country much more than anyone previously anticipated.
There isn't going to be a housing crash. There's literally NOTHING that will reduce prices. Inventory is incredibly low. You'd have to obliterate buyers which is extremely unlikely. We still sold houses when we had 14% rates.
@@jamescarter8311 “Inventory” both in what’s available on the market to buy or reduced construction of new homes?
As you are mentioning, a crash happens when speculation increases prices and eventually the market corrects itself, revealing that prices are wildly above actual value and prices tumble to significantly lower.
Remember FOMO works both ways… don’t be waiting in fear with thoughts of missing out on a crash.
Yes! My thoughts exactly! I got caught in that fear and now that rates have blown up I'm glad I didn't listen!
Bingo!! Fear mongering helps no one.
I agree, back in early 2020, the market was way over priced, not buying then waiting for a crash didn't work out for a lot of us, but most people are priced out now, or would have to buy something that needs a ton of work, and everything is still a rip off, your whole life savings plus you will be in debt at a high interest rate for 30 years plus, very sketchy position for most people to put themselves in, even if they are capable. Now is not a good time for most people in most situations, only if it makes sense should someone buy, and there are a lot less of those deals these days.
“Don’t buy a house” been hearing that for 5 years now… -.-
Got mine @ December 2021 👍
I earn $130K and have $200K in cash and $170K in a retirement account and can't afford a house in the suburbs here around NY despite loads of people who have much lower level jobs/lower incomes being in pretty nice homes (if they bought pre 2020). Obviously something needs to break or no house will ever get sold again except mansions to CEOs
working doesn't work. All anglo countries are rentier hellpits run by and for the banks.
Hey now... those CEOs need those mansions!
Are you trying to buy in cash or with 20% ? If you're a first time buyer, you can put even less down.
You could get one in PA for $250-$300K if you’re willing to drive 90 minutes/80 miles, but inventory is low
What type of house in the suburbs? For 150k 15% down gets you a $1M home. When rates come down you'll be able to afford it.
Price/Income is probably a more valuable measure than adjusting for general inflation.
On that measure, the average new home reached almost 10x average disposable income compared to a 50 year average of 8.0x.
Currently about 9.5x.
You'll own nothing. And you'll be happy.
@@Lazlo. have you tried grinding harder
@@EPBResearch Interesting. It seems that houses are so much more expensive, but from 8.0x to 10x of average disposable income, it means that houses at worst time are "only" 20% more expensive than average.
@@_Konrad_ except with inflation where it is currently, general every day expenses like food etc. are eating up a greater proportion of income than typical times.
All houses here in Phoenix are bought by rental companies within a couple hours of being posted. It’s insane
@@Placebo201 BOT COMMENTER HERE! this does indeed happen
Arizona appears to be held hostage by an extreme amount of corruption
Same here in Tucson. Prices are still rising and the affordability index is dropping like a stone.
I feel you I’m 29 and a native Arizonan can’t get a damn house to save my life they just want us to rent, humans are greedy scumbags it’s sad.
Well, if you're an investor looking for rentals, you're looking to pay BELOW market value. So, I highly doubt what you're saying is true. At the national level, landlords are dumping their properties. The market is much better for flippers. Imagine having to overpay for an investment property and then having a tenant you essentially cannot evict when they stop paying you.
My county assessor just sent me and everyone on my street a notice that my property value went up 15%. Two years ago it went up and now I am paying almost 50% more in property taxes than what I was paying just 3 years ago. I’m all for paying taxes for taking care of the schools and roads, but this rate of increase is unsustainable and disgusting.
I don't understand how some people in my area are still paying taxes on prices from 20 years ago while I just bought a house having to pay taxes on today's prices.
And this is the issue with states that use a % off of home value.
Some states the levy rate moves inversely of the values. Do taxes still go up? Sure. But it’s MUCH more stable.
My monthly property tax is now more than my mortgage.
Yep that’s what Covid did artificially inflated things that are not supposed to partly greedy investors and banks
If you got something from your assessor you can fight it to avoid paying the higher tax. Worth a shot anyways
The only way for these prices to be reasonable if everybody made double but I don't see that happening any time soon.
Wage inflation could happen.
@JWonz great possibility but it'll still take A while for the labor wages to adjust but it'll just trickle higher inflation anyways but the fed knows this that's why they are doing qt.
"A telltale sign of a bubble is an increase in the amount of mortgage fraud." - Michael Burry. Did you know mortgage fraud is at an all time high? 😏
Not yet but if Biden gets his way and 630 credit scores get mortgages
How do you measure and track mortgage fraud?
Is it?
Home prices have almost doubled in Miami since 2019 and a majority of that growth came from the COVID boom. In order to call this a “crash” I would have to see home prices drop below precovid levels. For reference, I bought my house for 369k in early 2019 and now it’s worth almost 700k.
Congrats!
That wouldn't be a crash for YOU, but it's still a crash for the person that purchased in 2022 for $650k right??? I think you'll actually see more pain in the commercial market.
@@NotTrav you are 100% correct about commercial, but 60% of markets have recouped losses and all markets are expecting to regain losses by mid year due to shortage of inventory caused by historically low interest rates.
@@gustavoramos2441 there's an awful lot of work in progress in the commercial space. If prices dip and interest rates rise there will be some tough decisions to finish the project or cut losses.
which they never will. 10%-20% at most
Buy a house when you're in a position to afford one in whatever the current market is. Don't buy a house you can't afford. Don't _ever_ "wait on the market"
THIS!^^^^ I hate when people do this for the stock market too! "I'm going to time it out! Not this year!"🤣
Yes, exactly
Can't argue with that, just look at all of the supporting evidence you presented to back this up
@@sauercrowder I have a senior real estate banker in my family. He recently talked about people who are waiting to buy. Don't wait. Let's say you didn't buy a year or two ago because you were waiting on prices to fall. Let's say you bought this year and saved 5% on your purchase price, but now you're paying higher interest, and how much money did you lose in the last two years if you had bought two years ago? The point is, you're going nowhere if you don't buy because you're waiting on a "maybe prices will drop". Eventually, in the long term, real estate always goes up. Even if you bought the house and the value decreased afterwards, eventually it's going to increase and surpass your purchase price. And, all that while you are paying down a loan. Not paying rent to someone else who's using it to pay down their loan.
@@sauercrowder good on you for implying you use UA-cam comments to inform big decisions lmao. Do your own research and make your own choices bud
🎯 Key Takeaways for quick navigation:
00:00 🏠 US housing market in 6th major downturn since the late 1960s; 75% of major cities have declining home prices.
01:23 ⏳ Duration and depth of current downturn: 10-11 months, 3% decline; Past downturns ranged from 2% over 37 months to 30% over 116 months.
02:34 📊 Case Shiller data: 75% of cities showed declining home price growth over 6 months; the 2008 recession hit all cities and lasted 116 months.
03:42 🏙️ Regional variations: Cleveland, Chicago, and Atlanta were less affected; San Francisco and Seattle hit hardest with ~15% declines; Others, like Dallas, and Denver, had 6-10% declines.
05:05 📈 Real home prices decline around recessions; Peaked in 2022 nationally; 6 major downturns since the 1960s, except 2001 and COVID, average 12% decline over 37 months.
07:11 📉 Current downturn: 6% decline over 6 months, economic downturn ahead; Historical downturns averaged 12% decline over 37 months.
08:20 💡 US housing market: 75% cities with declining prices; Varied impact across cities; Market peaked in 2022, continued downward momentum.
Another key takeaway that wasn't discussed in the video is that the 2008 crash was attributed to banks and loan structure. This downturn, based on what cities are effected and which aren't, is clearly because of social issues.
So if you're trying to use this information to wait and buy a property, don't get too excited, unless you want to go grab a home out in Portland in 2 years when the house prices are 30% less. But I don't recommend it.
A slight decline from the most ridiculously high home prices ever is hardly a meltdown. I've lived in the SF Bay Area my whole life and home prices have risen exponentially, well beyond the rate of inflation, with single family home prices at a median of about 1.5 million in my area.
This video didn't age well. I get why people thought this was going to happen. However, I saw yesterday that the average home price in the US was up 1.9% from the same time last year. People really underestimated how low the availability of home would go when interest rates went up. You pretty much have to buy new right now.
We live in the Bay area too in a small condo despite earning well into the 6 figures. There's no way we could afford a home without being stupid. I think a lot of people are way in over their heads and will be suffering for years to come.
Inflation is relative. The government can claim that inflation is 4% when your housing market is inflating at 15%. Owning a home in this Bay area is a game of hot potato. Do you really want to be holding the potato when the music ends?
Round here on the east cost, housing prices have gotten ludicrously high as well. There is not a lot on the market, and what is on the market is going for 3 times what they went for less than 5 years ago.
Yeah this views like a snakeoil salesman given the events of the past 6 months.
Just goes to show that anyone can say anything on the internet
I don't think we're gonna see something like 2008 again. It was a different time. Everyone was buying what they could not afford for unreasonable rates. I suspect if anything does happen it'll be the auto industry that crashes first and then the housing market.
Literally called the bottom of the 2022 decline.
Market is up now 😂
In my area since 2019 an now houses went from 230k to 380-420k for the same houses essentially putting me completely out of the housing market making only 80k a year (crazy to say only 80k) 80k used to be great😢
bro I finally got a decent job above 50k a year and then this inflation and housing market shit happens and I feel like I'm minimum wage again.
@@UncJ84 that's essentially what that is which is sad
I know right lol. Sucks
It won’t crash as hard because in many areas, there’s just a lack of inventory
This is true
There’s quite a bit of shadow inventory, not even including vacant units that aren’t getting Airbnb’d, even though demand collapsed. Inventory will come in droves
a lack of inventory right now... this will be like 5 years of downturn which will bottom in the end of a recession or after it. (we are just in the beginning of a recession)
Exactly also people are actually forgetting that we’ve had an insane amount of monetary inflation…just because your jobs didn’t up your pay doesn’t mean that inflation doesn’t exist. In almost all markets home prices have nearly doubled due to inflationary/supply based effects and it’s not going to disappear anytime soon.
No, there's plenty of "warehoused" units that are completely underutilized, but they're held as loan collateral, and by artificially "reducing supply" they can make it worth more and get bigger loans. The real estate business is a scam enabled by capitalism.
Bought my first home in 2011. Refinanced in 2021 to a ten year note @2.8% Best decision I ever made.
Haha that’s amazing. Hope I can make some similar great decisions like that in the future. Time will tell!
Bro timed it perfectly lol
Lol mortgages here in my country went under 1% interest. With 30 years long that interest. AND you can take that mortgage with you to another house.
Low inventory is keeping prices from falling faster
Yeah I think that is the key people are ignoring a bit
Doesn't help that the airbnb market and people who buy homes to rent them out or sit on as an investment keep that inventory low. Lots homes not being used for their intended purpose, living/raising a family in.
@@amw21 Good point
@@amw21 depends on the region, not that much of an issue here. building new is just to damn expensive and you can't get qualified workers.
The wonderful part of being in a younger generation. If you can't afford a house now, just save up and wait for the economy to crash again. It's like a rhythm game or something, just stretched out over years. You would think that the 2008 crash would have shown people that growth at that rate would be unsustainable, but everyone wants to believe that the bad luck won't happen to them
People forget. I don’t. I’m waiting for the real crash. Unemployment is still low but everyone is leveraged to the gills. I think 2024 is going to be a bloodbath if consumer spending finally goes down and unemployment goes up. Guess we’ll see. I’ll be in the market for a house in the next year or two so fingers crossed
The problem is interest rates were insanely low so most people aren’t going to sell their houses. I have a 2.55% interest rate fixed for 30 years, I’ll never sell it, I’ll rent it if I ever move. If home prices drop a little, investors will buy them up and rent them.
The other problem is if people decide to sell to take advantage of inflated prices they have to buy something else that’s overpriced or pay rent that’s wayyy more than their current mortgage. 2008 was different, people short sold and had foreclosures left and right, due to high interest rates and bad mortgages, so you could buy a house that was foreclosed very cheap and people sold their houses at a lose to save their ass. That’s not happening this time, anyone who bought in past few years isn’t getting rid of their low cost mortgage to move into a rental that costs more.
Good grief. You know so little
@@trust1952 same. 2.25% fixed. The only thing I’ll consider is possibly buying a second house if values drop that much. I’m not holding my breath on that.
What about inventory? Still seeing crazy closing prices and fierce competition here in Seattle due to low inventory
What say you about low inventory keeping prices up? Seeing this in LA
You are going to be watching these videos for the next 5 years while you sit on the sidelines and watch prices continue to raise, especially when interest rates start to come back down
This issue could have been avoided if houses for investment were limited to ARMs and primary residences on fixed rates.
ah, i remember when i used to believe that regulators were there to help regular people.
the good ole days
What do YOU think would happen to YOUR rent if interest rates rise ?... Increase in interest rate on investment property = rise in rents.
You think individual investors with 3-5 home should be limited to ARMS? That is a very good way to make sure only corporations buy investment proerties kicking out individual landlords.
What about in a falling rate environment?
@@ST-fk3jz Purchase prices will rise...USA is quickly ( Under Biden) becoming like Europe--middle class & workers will be lifelong renters.
The fact they say we're just lazy workers and thats why we are struggling into our 40's is absolutely ridiculous. Sure there are lazy or very troubled people out there but many of us are simply working our a$$es off trying to make ends meet. The fact that not too long ago you could work at a tire shop and buy a home, car and support a family of five says enough does it not!!!?? I've been working since I'm 14 and never been in debt or had kids and still live paycheck to paycheck renting because of the time I was born and graduated into a world where even quite a bit above minimal pay doesn't keep up with inflation. I now make close to 6 figures and still can't buy a home in my northwest town unless it's an old 900sf, unsafe neighborhood total dump!!!
Sounds like where you live sucks, maybe try a relocation? Smaller cities are much cheaper especially in the outer towns
@@chad4858There is definitely something to be said about the upper 5-fig tax bracket strangling the middle class.
@@chad4858yeah you don’t live in an expensive area. 90k-95k is not that much money.
Student loans repayments is my concern. It has been 3 years and it’s going to shock a lot of people when their nut goes up in October.
Will be hard, but trying to pay off highest interest first by October.
I mean, if you just hand-wave away the lack of inventory… without housing supply, there will be no crash and a slight correction down at most.
I’d argue the exact opposite - buy a house!! It’s a scarce, hard asset. We’re in a decade of inflation (with deflationary periods) and hard assets will do extremely well. 2023 is nothing like 2008. The debt problem is at the sovereign level, which means they’ll continue to print and debase the dollar
And if so, inflation adjusted housing will go negative
A 3% correction off the highs is embarrassing when you have fed interest rates go from 0% to 7% so quickly. That can easily double the cost of a 30 yr mortgage.
Watching this video, I have realized that the driving force behind the house market crisis are people like you who consider houses as an investment and not as a place to live. Thanks to you many young people have problems getting houses
It’s so disgusting that people view houses as an investment instead of a basic human right as it should be. I wish the government would do something about it but that’ll never happen in this ass backward country
The government has to steal everything it has. Stealing is not the answer. In fact, most of the governments at various levels in the United States make it illegal or unprofitable to build more homes, because of zoning laws (not in my neighborhood!), rent ceilings (so there's no money to be made in building new homes), onerous safety regulations (you must use the 1000% best materials even if they are overkill), and other issues.
If we would just "let the builders cook" we would have too many homes instead of not enough, because they would keep building until materials were too expensive to keep going.
@@danbowser3071Should the government give you food and money too?
@@johnnythompson-nz4ws I know you’re probably too brain broken by American Individualism, but yes if someone is struggling the government should help them. Even if you wanna view this from the most capitalistic perspective, ensuring people have food and shelter (aka basic human rights) it would allow more people to be contributing members to society and the workforce but you’re so against any kind of governmental help that you would rather people starve and die on the streets because you don’t wanna pay slightly more taxes.
@@danbowser3071 Perfect leftist math. More taxes for corps=lower profits=less money for new hires. Also not American, but it is the best country in the world.
I wonder how this data can be overlayed or incorporated with supply of homes. It's hard to see a scenario where home prices in certain cities will continue to fall drastically (I'm in Seattle) when supply is so low, unless we hit a major financial crisis, especially when a high number of mortgages are sitting below 4% fixed rates. New home builders are positioned to do well but that alone can't get us the supply of homes we need to see extreme drops in home prices.
Love your videos!!!! Good work!
Am in the Seattle area as well and am looking to buy on the east side. The low inventory is frustrating. My agent is trying to convince me that the only way to get a house is to get into a bidding war with lots of money(100k+) in escrow and waive all financial / buyer contingencies. Thought we put those crazy 2022 days behind us.
@@RaoVenu You need a new realtor
There are 12 million vacant homes owned by investors or utilized as 2nd or 3rd homes. A portion of those homes will likely be put on the market during a recession. Some Airbnb investors are taking a hit. Some of those are coming into the market. The government has been using drastic tactics to helping struggling homeowners stay in their homes. That can’t go on forever. Foreclosure are increasing. New build inventory is being delivered to the market. I believe 175,000 homes this month. Let’s see what the market looks like this time next year.
@@RaoVenu same here! It’s tough in Seattle. All cash offers, no inspection, or $50k over asking price for a small home that needs a lot of work (in some cases). It’s difficult even with a high income for the area.
@@RaoVenu Your Realtor is an idiot , find another one.
All we are experiencing and witnessing are symptoms of a crack up boom:
A crack-up boom is the crash of the credit and monetary system due to continual credit expansion and price increases that cannot be sustained long-term.
In the face of excessive credit expansion, consumers' inflation expectations accelerate to the point that money becomes worthless and the economic system crashes.
The term was coined by Ludwig von Mises, a noted member of the Austrian School of Economics and personal witness to the damages of hyperinflation.
A lot of people say they won’t sell. Then life happens.
My 2.75% mortgage rate makes me feel like King Charles III on his Coronation 🤴
Trapped. U get one life only... Loser
It's really easy to feel comfortable with my mortgage at the same rate because I'm going to be living in my community for at least ten more years
It’s only good if the price wasn’t 50% higher than you should have paid…
@@danieldeweerd6752 no u won't. U r trapped... Price will decline. N won't come back to 2022 level. U may have your low payment but equity will evaporate... The vlogger is wrong... Zirp is gone... See Japan. Home prices still 30% below bubble 1990s. A ton of boomers will pass over the next two decades
@@catliath5384 trapped... Look at their faces 5 yrs later...when equity evaporated...and it doesn't matter if they bought bef COVID-19... Declining equity is declining equity...they r scared to sell Bec they think they have gold... 10-20 yrs will pass n they stuck in the same city... U get one life only
ill buy at 10% rate when the prices drop...these things take a min to play out
Agree. 4.6 years on average for the correction. So we’ll see the bottom in 2026.
I think we will find ourselves in a situation of increasing inflation and increasing unemployment later this year. It will not be pretty for those thinking the current valuations of all assets are sustainable
@@The_Real_Grand_Nagus just refi when the rates eventually drop... because they will have to.
Have to consider mortgages rates and the FED actions as well. Cost of borrowing has shot up in combination with the near all-time peak cost of the home, clearly driving away borrowers and shifting the supply/demand model for homes.
100% - this is very very different than say the last crash - trying to run projections where fraud and a pandemic are considered otherwise equal markets seems a little silly.
There are 4 million legal and illegal immigrants a year coming into the US, between students and H1B and refugees. And nowhere near the supply.
Add inflation into the mix.... these prices aren't crashing. Buy a home. Do your life. This guy is yammering into the void
The advice I was given when considering buying a house was 'if you can afford it, if you find something you like, and you plan to stay for long while - do it' we totally bought the dang house!! Everyone told us we were insane for buying at 5% interest. Now rates are 8% . If we would have waited, we would be stuck. Waiting until you can afford is good advice, but counting on a crash to 'get something even better' - not great advice imo !! Especially if you really need the move like we did. Good luck everyone, it's wild out there 🙃
Same, we found something real good at 6% and well it is what it is. We're happy
@Hardlo that's awesome! Same, we're happy with what we have. 5 years ago the same price would have been a nicer/ bigger house, but it's shelter for our family in a great area so we're happy.
Best comment 😊
Ha! We were told we were nuts when we bought pre COVID. 4.7% and we paid exactly what the assessment determined it to be worth.
Then COVID hit, we refinanced to be below 3% while the value of the home over doubled. I tell people that I couldn't afford the house I'm living in if I were to try and buy it in today's market.
to your first requirement: how do know if you can afford it?
A realtor who was a friend of my brothers tried to talk me into buying a house in 2011 or 2012. I wish I had listened to him.
I was kind of forced to buy a home because my rent was becoming too much to bear with. I hope this won’t utterly screw me over in the near future
Sane. Rent will keep going up long term though. Whereas your new mortgage is stable at least, and u can refi a better rate even down the road. Hopefully.
There’s no such thing as being forced to buy a house and in a realtor. If you can afford the house great but there’s risk to buying cheaper homes at the top of what you can afford.
@@Danumals Yeah, but would suck to have to be paying a 500K mortgage off for the next 30 years for a house that is suddenly only worth 250K, even if you refinance. for example.
Same here. But honestly if your mortgage is comparable or less than your rent than it’s a win. As long as you can afford it.
@@rogue8853 *realtor holds gun to their head “sign it”
In Iowa didn't correct at all. My house went up 33% and corrected only 2%
It takes time. This is just the beginning.
@@networth00 have you been waiting since 2010? Lol keep waiting and renting lol
@@joncruz92 I own 6 homes now, i sold 3 small apartment buildings and about 8 homes from 2013-2019, sold 5 in 2020, bought one in 2021, now wanting to buy more... but waiting. These interest rates are no fun. I got one in 2021 with a 30 year fixed 2.5%. I'm a real estate investor with lots of experience. What's your buying/selling experience?
@@networth00 before I tell you my experience I would like to ask you what evidence do you have that “this is just the beginning”. Is there gonna be less demand? Is there an abundance of inventory? Do you expect rates to go much higher? Or do you think the average borrower won’t be willing to concede to high mortgage payments? What evidence do you have?
@@joncruz92 A recession is coming, but we nobody knows how bad it will be. Nobody has evidence, it's just people's opinions. My guess is that layoffs will get worse, but "they" claim unemployment is at record low. Yes, there will be less demand due to layoffs and interest rates. I believe that will cause more inventory. Nobody has real evidence. What evidence do you have of where you think we're headed? If I knew the future I wouldn't have sold all those houses and apartments I did a few years ago. I have 7 figures right now in cold hard cash sitting on the sidelines and don't forget I own 6 homes... so I should be fine either way. I retired at 43yo so I don't take lots of risks because I want to stay retired. I'm worth over $10 million and doing fine, my kids +1 live with me now.... but I would like to keep buying and selling when the market stabilizes.
well this video didn't hold up well
An interesting thing to note is the rate of decline being the steepest and fastest out of the last 8 recessions, at the current pace we'll be at the same inflation adjusted prices of the bottom of the last crash in 4-6 years. Of course it will also depend on government interventions and if they further distort the market like they're already doing with the recent foreclosure protection programs.
Exactly. Very well put. The naysayers are all those who FOMOd in and are now realizing they will be underwater soon. If they arent already.
@@Pelican5077 you gloom and doomers are pathetic lol
@@Pelican5077 I would say a very small % of buyers are underwater - mostly those who bought the top on the west coast. Everyone else is likely coasting with 6 figures in equity and 3% rates.
@@onlyfoolriding8223 That’s fine. Likely not the case, but I can’t prove it. But take Austin as one example. One year ago about 1600 listings. Today, 6500 listings. Avg sale price down 15% and dropping fast. Maybe a goodly % of those 6500 listings have some equity today. But they won’t have any by the time they sell. If they can sell. And if they can’t a far greater % than you can even imagine will walk away, once they realize it will be years and years before they get back to even in nominal terms. In real terms it’ll take a decade. It’s never different. It never has been different for 220 years.
@@Pelican5077 Yeah it's been tough, I nearly FOMO'ed even when I knew better, luckily I waited, but I'll likely buy before it hits the bottom all the way because in my market of Tulsa we are only overvalued roughly 25%, so it won't make a massive difference, I'm just waiting for an inventory spike so sellers will accept lower offers.
It's also possible that inflation is entrenched and we've reached a new plateau. Post WW2, the US Nominal House Price Index did a stepwise function of a 5-fold increase in less than 10 years and never came back down.
demographics make this very unlikely, the worst the inflation the more the boomers need to sell
People's income went up along with the rising nominal house prices. Not anymore .
That's only true if people start making more money in order to pay for the increase in housing prices. Affordability is the thing to pay attention to, not inflation. Since post-WW2 was an unprecedented boom in economic activity, and today we're already entering a recession, I don't see home prices being sustained at today's prices. Affordability is at historical lows, and everyone is feeling that pain. In a recession, inflation will only make homes more expensive ad wages fall, which will lead to a bigger bust, not sustained prices and a new peak.
It's true that inflation is likely here to stay, but inflation only drives up asset prices when people are making more money, not when prices are going up and wages are stagnating. Hyper inflation causes the relative value of assets crash, because people want food, not luxury investments. If inflation stays but wages don't improve, that's going to hurt housing even worse, because there will be less money to spend on housing, and the boomers will pull more money from their retirement accounts, which will cause the asset market to go down even more. Unless businesses suddenly start paying people more leading into a recession, the only way to restore affordability is to see a massive decline in housing prices.
@@alexlowe2054 or we've already gone through the recession and once the FED begins cutting rates again elevated asset prices remain.
Aaaaand prices are back up. This video didn’t age well. lol
"This chart shows the depth and duration of the home price downturn in the 20 major cities across the country" *proceeds to show a chart that includes 16 cities smaller than Houston, yet excludes Houston. The 4th largest city in the country.*
It can be difficult to determine the true inflation rate in the economy. The methods used to calculate inflation have undergone multiple changes over the years, and there is a potential conflict of interest as the government measures the Consumer Price Index (CPI). For example, the CPI has previously reported rental inflation rates that differ significantly from those calculated by Redfin. If you are working with inaccurate data, it becomes challenging to trust the final results.
This is just one aspect of the equation: home price.
- Interest rates have a strong inverse correlation with prices.
- unlike 2008, most people have 30 year fixed loans
- underwriting guidelines for Fannie Mae and Freddie Mac are much stricter than they were back then. No more NINJA loans.
- if rates continue to rise then home prices will stagnate and continue to decline
- if rates drop back down, expect the home prices to drive right back up to new highs
Rates will stay high until the job is done.
@@s3ts yeah but stocks will bottom (or already did?) much sooner. So being in stocks is the best play now. Prolonget high rates will still hurt the housing sector.
@@FeroxX_Gosu everything usually crashes soon after feds transition from quantitative tightening into quantitative easing. We are in a dead cat bounce bull market thats fueled by unfounded greedy bias.
@@s3ts I don't think we'll see 3% again for the rest of our lives. Today's rates (7%) are the low rates. I can't imagine them ever going back below 5% again.
@@DaddySizeIt This depends on how bad the economy gets. We have already used quantitative easing instruments to bail out regional banks, we might even enter that era already where the damage done is already too big to handle and we just don't know it yet.
Seattle prices may (or may not) have dropped, but the prices in the surrounding cities definitely have NOT moved an inch. Living in King County (Seattle area) is still ridiculously expensive.
Seattle is a dumpster fire.
A housing crash would be good for everyone but gen x and older
if ya want a particular house, you should probably get it before the more ambitious buyers come roosting; which will likely happen before the market bottoms
I can imagine all those youtubers without content if there is no crash or no bubble
If a crash happens they would be without content, right? Is better for them if it does happen or does not happen…
They will keep beating the crash drum like they have for two solid years, even a broken clock is right twice a day.
Regardless of the way the market is, people still need to live in houses. Renting just puts the power in the hands of the few and the rental companies.
I think very expensive homes may drop in price, but the 300k houses simply won't since rent increased so much everywhere.
I dont care about speculating over projected future prices. I just want a house damnit.
Crash not gonna happen. Don’t hold your breath.
I live in the St. Louis metro and we haven’t seen prices hardly budge here. I’m getting married in July and there are hardly any homes on the market. What a time to be alive!
Keep saving and be patient my brother
So basically, home prices are declining most in places that people are moving away from (Seattle, SF), but staying roughly constant in places people want to live (ATL & Charlotte).
I don't know if people "want" to live in Atlanta. Very unsafe and keep voting in dems.
@@networth00lol becausw it's full of blacks
more about markets that are driven by tech salaries vs other industries
@@yesimemoin0935 we have a bingo. Expensive places that rely on an economy that can work from anywhere are losing value. Full stop.
Best thing I can recommend is for everyone to not buy homes and live with your parents. Force the prices to collapse.
been living with my parents my entire life. im a few years to 30. about to go rent to be closer to work lol
Yees. Let corporateheads buy everything until we have no CHOICE but to rent lmao. We're screwed
Why are we looking at real prices/indexes (inflation adjusted) in most of the charts here? You can't make a statement "don't buy a house" from those. It only makes sense to make this statement, if you don't have any savings and buying a house fully funded by a bank loan. If a real price is decreasing, it doesn't mean that you are better off buying a house after they have decreased, as it could be that prices actually remained the same and your savings are now worth less.
Disclaimer: I live in Europe, so locally the charts are a bit different for me, but I found that it's actually a good time to buy real estate in Europe, especially if you have savings (cause other investment options are currently in decline as well and carry a risk). It's all about probabilities. I would say there's a very small chance of real estate prices dropping more than 30% in the next 1-2 years where I live. The chance of them staying the same, dropping less than 30% or actually increasing - that's as much as 90%, IMHO. So by not buying a house right now, I'd need to bet on the market dropping more than 30%, because with the current inflation and no signs of it going back to normal real quick, my savings will devalue more than 30% in the next 2 years. So I'm risking of not having a home for the sake of the small chance that the prices could drop more than 30%.
Is there a chance that prices will drop 10-30%? Yes, absolutely, and I think that will happen with a probability of at least 20%. It is much more likely to happen than prices dropping more than 30%, because a lot of a lot of homes here in smaller European countries aren't funded solely by banks. So the money printing effects haven't even began and people still have a lot of money to buy up the real estate as soon as prices dip and I think it's only a matter of market sentiments being negative and people waiting for prices to drop.
Real home price indexes here were actually flatlining here, even though inflation is as high as 20% in some countries. So at the very least, this is a perfect time to negotiate the price down and enjoy a bigger supply of homes to choose from.
Lastly, now consider the situation where you don't buy a home. A couple of years pass and what if real home prices drop, but nominal stay the same. And even worse - your income drops, your disposable income is even smaller due to inflation, etc. You'll have worse conditions to get a loan to fund whatever amount of the cost of the home you need to cover. Yes, paying back will be worse as well, but just don't get one where you can't afford to pay, if payments double in a few months. In this situation, where you don't buy a home now, but buy one in 2 years, WHILE HAVING A SIGNIFICANT AMOUNT OF SAVINGS, I would consider that you are in the worse outcome.
TL;DR If you have savings, this video doesn't necessarily apply to you, because you have to consider how you will at the very least minimize the inflation caused losses of your savings and also consider the probabilities of each individual scenario. E.g. prices dropping more than 30% could mean a whole collapse of the economy and you not even having a job to fund a bank loan, which can go badly either way - if you have a loan or just thinking of getting one.
Actually just bought a house, it was extremely difficult in my area, they're all being bid up and do not stay on the market for long.
There is a home shortage here in Washington and home prices are still climbing… but luckily I got a hood deal on my house in 2020 for 380k and that was top of our budget then same house now worth 600k… kinda wild and there is not one house you can even find for 380k now it’s only condos or apts
I wonder if the definition of recession will get changed again.
You can take that to the bank! Oh wait. . . .well maybe not SVB or FRB or Signature or Silvergate or Credit Suisse banks.
Totally nothing wrong with the economy /s ;)
I work on new houses to get them ready for sake. The average price of these new houses, nothing special about them mind you, they go for an average of...300k. Absolutally nothing about them is remotely close to that price.
2020: Don't buy a house!
2021: Don't buy a house!
2022: Don't buy a house!
2023: Don't buy a house!
2024: How's renting going for you?
There's a difference between fear-mongering and just looking at patterns
If you can wait, wait! I saw the same thing happen in 2006 and everyone thought they should buy a home before it went up. They did and lost money if they had to sell around 2012 . My aunt never got equity after buying in 2008 and selling in 2022.
Wait until when
@@jlee6087 if you aren’t in a hurry to move then why buy unless your rent is higher than the cost of a mortgage. If you are in a hurry then buy only if you can afford it. Prices are astronomical.
@@jlee6087 Exactly. I'm paying a shit ton in rent right now, and it doesn't matter when I leave this place, I'll have 0% equity when I'm done.
It’s wild. My wife and I are both engineers with no kids in a city of 100k people. We make just under $250k/year. And will not be able to comfortably afford a home unless we buy cash, due to the interest rates making payments cost above 20-25% of our monthly income.
The ironic thing is is that I locked in a decent rent 3 years ago, and now new tenants are paying almost double us. Around here, homes have continued to increase with inflation. With those prices increasing, so has property tax, which alone on a standard 3bed 2bath home in my area is half our rent.
25% of your income is a completely reasonable amount to spend on mortgage payments
@@fluffysheap I agree. It is above that amount.
Here in the UK, 25% to 40% on rent / mortgage is the new normal, it's incredibly difficult to save / invest for a better future. At least at the moment.
@ch-yq5yn $400k is at/above what we are wanting. We are in a mid sized city (100k people) in the midwest. A 3 bed 2 bath is about $350k in my area. If you make the same, you are spending more than 25% of your take home, or you allocate less than 15% to retirement (which is also recommended by financial planners).
What you’re not considering is the migration of people from big cities to smaller cities. Grand Rapids Michigan the market hasn’t gone down at all
A ton of the comments below are either ignoring or not aware that an increasingly significant portion of single family homes are being purchased by companies (both large, med, and small) to rent out. This reduces the amount of total homeowner and makes the market more susceptible to problems. If one LLC that owns 1,000 homes is forced to liquidate their inventory.... then that can drastically impact a local market and trigger a crash. The bubble this time is not irresponsible lenders convincing people to buy homes they can't afford, it is massive amounts of homes being owned by relatively few owners.
Property prices have been in a bubble for a long time due to banks lending far more than they should and having interest rates at the lowest levels in history and keeping them there for a very long time.
Like all bubbles, they eventually pop and the longer they last the bigger the crisis.
Where I live in the UK, the average house is around 14 times the average salary in the area, the level of overvaluation is extreme and first time buyers are having to take on huge amounts of debt and stop spending money in the real economy leading to long term stagnation and economic decline. What banks and governments around the world have done to enable such high levels of house price inflation will eventually come back to bite them. When you look at the debt levels now, it’s a scary and unsustainable situation thats primed to collapse.
Glad your content is starting to blow up. Well deserved.
Musta been all that c4.
Very dependent on where you live (as the video does indicate.) here in the Midwest there have been minimal price drops. The main issue is there is absolutely nothing in the market. Major cities have like 50 listings and they just sit for 100 days or more until they delist and then get relisted a few months later to try to cover the fact nobody bought it the first time.
yeah but where is the supply of homes coming from? during late 2000's more than 1 million houses were dumped into the market. On top of that, most people began to take fixed rate mortgage so their houses are not coming to the market. It is not the same condition as 15 years ago.
Facts: housing inflation can't outpace wage inflation, so anyone who is looking for their personal home to be an investment in the coming decades should think again, especially if they have a mortgage at 8% interest. In the long term, the housing market should be flat because the only way people can afford to qualify for a mortgage is to allow people to buy with a lower deposit and at a higher percentage of their income, but this has limits, so eventually homes would have to approved based on a group of buyers instead of individuals and couples, so whole families would qualify or groups of friends, and they would have to live more compact. The other possibility is homes get smaller and smaller, but in some markets, a NY apartment that is 100 square feet is already beyond what most can afford, so again, there are natural limits. But what about the rich? They have unlimited money to pay more and more, right? Buy who do they rent the property to in order to make any profit from such an investment?
Mortgage rates are an even bigger factor than house prices for me. I could afford a $300k loan at a 3% interest rate (that's about $150k to interest over 30yrs), but at 7% you're talking $420k over 30yrs. aka an extra $700 per payment. The extra ~10% buying price is negligible when you consider the long term cost of locking in a high mortgage rate. Unfortunately, to keep renting until things stabilize.
Hope u got 300k cash for a down payment lol cause aint no way u finding a house for $300 unless its out in butt fuck no where
@@SyntaxWyntax $400k houses with a ~100k down payment is my goal
Very clear and concise data. Love the graphs. What application do you use to present data?
would love to know as well
Could be worth showing average metro data rather than individual cities. In the case of SF, the city itself has gone down in value (and some exurbs), but many suburbs have plateaued after an initial small drop.
More urbanized cities in general didn’t fare well with the pandemic, but their suburbs are a different story.
Thank god for this 2% drop, home prices only went up 100% in the last 5 years so I should be able to afford a house any day now.
This video is misleading. Look at the graph at 6:20... The valleys are consistently at or around the level of the prior peaks. So, the 2023/2024 "crash" will presumably line up with the peak of 2007 (eyeball estimate of 225->195k or 14%ish). Let's just call if 20% down from 2022 highs. This would feel more like a correction than a crash. The terminology is not really important. Now, if interest rates fall and there is a rash of buying in a flat market, then there will be no significant correction, and guess what, yes, 2022 highs will be the next floor for the next "crash."
This is completely different than 2008. Dont get your hopes up if you're waiting for a crash
Thanks for elaborating. Very helpful
@@kcor4 to put it simply.... in 2008 we had poor loan underwriting standards, low or no down payment borrowers with ARM loans, securitized bundles of bad loans. Just a few items that contributed to the shit storm when those rates adjusted.
2023: much better regulation and underwriting standards. Majority of homeowners are locked into very favorable rates ranging from 2 to 4%. As a result, demand still exceeds supply keeping prices from crashing. It would take a massive catastrophic economic downturn to take down the housing market. And nothing currently indicates thats going to happen.
Yes, it's worse now. Homes didn't go up 40% in 2006-7 like they did this time.
@@networth00 no its not worse. Higher home prices does not mean a housing crash. Feel free to explain how my assessment is incorrect
@@apoc5000 Feel free to tell me that home prices haven't gone up 40% in a year or two.
We are the Japanese in 1980s
What happened? Overpriced housing?
I think the key difference is immigration. Japan has virtually no immigration, vs the US has a lot of immigration. If there is a collapse I don’t think it will be as bad as Japan though.
Prrrt 👎, demand is steady and supply is down, you doomsday preppers will be waiting for forever for that housing crash.
I just bought a house a month ago. I don't think there will be a 2008 crash, especially after going through what I did just to buy a non horrible house. The market is still insanely hot. People buying without inspections, and actual garbage being sold for 400k. People have been saving since before 2019 for homes, and they're tired of waiting. I personally know 3 different people who have bought homes within 2 months of me for this exact reason.
If it falls, it's going to be a slow and subtle decline. There just isn't anything to put your money into at this point, and with our money becoming worthless, people are pushing to put their money into housing. A house is at least an asset that gives you real value.
Supply and Demand wins everytime. Just bought a house at 29. Prices wont drop drastically.
Yea, my house in AZ has gone from 525k to 450k but in 2019 I bought it for 310k so 🤷♂️ Biden inflation in a nut shell, the market is just correcting itself
Home prices will follow japan post bubble. People argue differences but debt n growth or lack of growth is the same ...whatever the reason is
Good analysis. I would suggest exploring some index normalized by population growth to capture demographic pressures. Also for the indexed charts, show the year = 100. Thanks a lot, nice video.
Also, %charts reflect year on year change or change since the x axis start of the chart in real terms?
Other advanced economies house prices might be leading indicators of US home prices. Foreign investment in US real estate is not negligible … consider exploring that too.
Explore the average duration of a house in the market too
Great video, but would have really benefited from showing how much each market previously ran up. Both Detroit and Miami show little decline, but those took very different paths...
When the market does crash, it stays down for a long time. Don't even WORRY about "buying the dip". Do Not Buy and prices will stay down for 6 years.
Prices in Sarasota County, Florida are declining hard. There was a Taylor Morrison development that has homes starting in the $189,000 range. My neighbor is trying to sell their home, and they have lowered the price of their home multiple times, and not one offer to show for it. Absolutely no foot traffic.
Could it be the insurance issues plaguing Florida right now?
If you wanna buy a house, go ahead and do it. You can have it all. You really can.
Who the hell could in this market? I wouldn't expect it to decline much, not without major reform and controls on real estate which will never happen since landlords, especially corporate landlords, have an insane amount of say in policy. It's going to continue to be a problem until we turn away from a capitalist housing market.
Whats the alternative comrade?