Why The Real Estate Market Hasn't Crashed...Yet
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- Опубликовано: 2 июл 2024
- It’s been almost 4 years since the beginning of Covid when people really started throwing around the words real estate crash. But the crash still hasn’t happened. If you’re like me and most Americans, you’re wondering why it hasn’t happened and when on earth will it? In today’s video I’m going to show you the real reasons why the real estate market hasn’t crashed yet, and once you see why the collapse hasn’t happened, you’ll realize that we’re not done with the roller coaster yet. The things that are currently impacting the real estate market are going to be around for at least 5 more years, if not longer.
#housingmarket #ellenpitts #realestatecollapse
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My name is Ellen Pitts and I am a Raleigh NC Realtor, and founder of Harmony Realty powered by the Compass real estate platform. My team would love to help you with your move in the Raleigh area or we would be glad to refer you to one of our partner agents throughout North Carolina! Schedule your free home buying or selling consultation with me and my team here: ellen.pitts@compass.com
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Ellen Pitts
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Great information! You hit the nail on the head!
Glad you enjoyed it!
Arrghh, the story of my life. I'm a "mid-bulge" baby boomer, repeatedly hitting the high demand waves precipitated by my "generation"; I put that last in quotes because I maintain the definition of generation is too broad; social experiences are quite different for those in the front of new generation vs those in the middle and those at the tail end. I retired almost exactly one year ago and was looking to relocate with my wife to NC (!) but the market forces, driven by high demand (multi-determined) and low supply drove us further and further from our desired market. I've reached the point where I most likely will just make the best of where I am and forget relocation.
There are still some towns that are pretty affordable in North Carolina that are really nice places to live. You just need to get outside of the major metropolitan areas. I can understand the feeling of being overwhelmed with all the options though. Best of luck and if I can help in any way, let me know!
I think in the short run the market will be what you said as an “up and down” time. We are in a stagflation period in the economy. Some weeks it’s great and other weeks it’s bad. My big problem is that the FED has raised rates so fast in such a short period of time and it is said that they might raise it again a couple more. Our economy has been living on cheap money for over a decade and now it’s gonna get a lot more expensive to borrow. How long will the rates stay at 5 or 6 percent? I watch a lot of media and I do notice that a lot of analysis think that the crash is coming sooner rather than later. There were a lot making claims as early as last year when we got the two negative quarters, but I think peoples timing is off. It takes atleast 18 months to get the full view of where we are going. It’s been about 14 months since the first rate hike and they still aren’t done raising rates gets the banks very nervous. Remember, we just got done a period of a few months where a lot of regional banks got bailed out and now we are getting word that BOA is sitting on massive losses. Banks already are walking away from the mortgage business which was their bread and butter for a long time. As we know the economy is domestically and globally intertwined with other markets. There will be a black swan event where maybe the bonds that banks are holding are loosing value like SVB and the rest. Unrealized losses become realized losses and the trickle affect it has on the rest of the economy. I’ve studied when crashes occur. They usually occur during the fall. October/Novermberish. July as I’m writing this is too busy in economic activity for a crash but we will as you said, be in a stagnant time as the rest of the economy. Let’s talk about the longer prospects of the market. Now as you said before the boomers are the ones carrying this market. My big question is, what will the market be like when the boomers die off? Boomers were the largest generation in American history. American births have declined drastically over 50 years. It would be worse if it wasn’t for the inflow of immigrants and asylum seekers that sort of filled in the gaps. I don’t know what will happen but if immigration or investors don’t save the market then housing demand would decline drastically. Over a 2-3 decade period. But really that doesn’t concern me. What concerns me is that fact that as you said before investors bought up a lot of single family homes. Black rock has been getting zero percent loans directly from the Federal reserve. Maybe the market will or won’t crash, but I can’t tell you if black rock keeps buying up homes then Americans over a few generations will lose the opportunity to buy homes because they will get bidded out of the market by companies like black rock. Personally, I think a correction is coming. Our economy has echos of the 1970’s inflation stagflation period, but with alot more debt build up. We have really never been in THIS type of scenario before.
Yeah there really are so many variables here, it’s mind bending. I think the low rate of reproduction is definitely an issue but there are also other things on the other side of that like more people living alone than ever before which increases the demand for housing. The one thing that’s for sure….we’ve never been in this situation before. Thanks for the intelligent comment. I know this platform isn’t ideal for working through complex ideas but I appreciate you sharing.
Lol us GenX still running outside after dark. LoL.
Thanks Ellen. As a late boomer, now 64 I agree it is a big factor. We are may be some of the rare people who might not be moving. Boomers also have generational wealth and also money... So in our experience a remote job someone doing computer engineering work was lost as were about 7 other all remote jobs because it was based on supporting retail businesses that wanted to have an online niche. Also the company banked at one of the failed Silicone Valley banks and were not made whole yet. We also know that some major companies are laying off. Also, very estute on Millennials, some will just keep renting, but not all, and when you marry and have children then likely you want a home, and from what I hear a lot of the same space/private yard, and suburban type lives that they had growing up.
Thanks for watching!! Glad you enjoyed it!
Ellen, I enjoy watching this video. I have one question. Hope you can help. There is this argument: Although people's holding on to their houses due to the historical low rates on their mortgages reduce housing supply, housing demand will be reduced as well since people are not moving/relocate. Thus the net demand/supply effect is zero and this should not have an impact (either positive or negative) on home price. This argument seems to make some sense, but it's not what industry professionals are saying. A puzzle to me.
It’s true that the “move up” buyer group is choosing to stay put in many cases. But there are several other groups of buyers who are still very active, providing the demand on housing: 1) relocating buyers. That’s still 25% of the market right now. The reasons for relocation have shifted a bit but it’s definitely still happening. 2) first time buyers. These are actually still a pretty significant group…mostly millennials who delayed buying. People are adapting to the higher rates. Rate fluctuations have a bigger impact on people sitting out the market than consistently high rates. Once people believe this is what they are stuck with, if they need housing, they buy. And 3) retirees. Again they often relocate to better weather or better situations for retirement. It is a complicated market and there is a lot of psychology behind it.
Thanks for the reply and the comprehensive analysis of the supply and demand imbalance with the convincing prediction of the persistence of the trend. @@EllenPitts
The housing market will definitely not crash with all these youtubers predictions. I'd much rather see youtubers plugging house flipping, now that would be a real sign of trouble.
House flipping would be challenging in this market but you could do it by finding off market deals.