The Next HOUSING CRASH: A STORM IS BREWING 🌪️ | Be Prepared for What's Coming
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- Опубликовано: 25 мар 2024
- The next housing crash will be something like we have never seen before. It isn't going to be caused by bad loans, a bad economy, or inflation. The single greatest threat to the real estate industry is natural disasters. Insurance companies are already pulling out of high risk areas left and right. Don't be caught off-guard. Prepare NOW.
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Do you live in a high-risk area? Have you considered natural disaster risk when deciding where you live?
Watch next: Florida Prices are RIDICULOUS 😳 | We Had to GET OUT!
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We were house hunting for 10 long years 😳 I’ve seen for my own eyes that the prices only go up. People say they’re going to go down every single year and every single year the prices go up. Lol
That is how it is almost everywhere
All markets are local. San Francisco down 50%, Austin down 30%, Boise down 30%, my area in Washington DC is slowly changing no overbids, lower homes still sell quickly, mid price slow with some price drops, higher price very slow.
@@kenyonbissett3512 Down from when? Buying a house is a long term commitment especially for the roof over your head. Investing is optional but we all need a roof over our heads. We buy for the long term. We are aware there will be ups and downs as the market is cyclical. In the longer term, like 20 years ,prices are always higher.
We bought our first home in 1995 and in 3 years it doubled in price from 80k to 160k. This was in Singapore where land is scarce and prices usually uptrend but can be volatile too in crisis though it bounces back. We sold and upgraded to a 400k house then, paid down half. There was a crash the following year and prices came down as low as 300K. Took 7 years to go back to over 400k. But today it is worth over a 1.2 million.Meanwhile we got our money back with rental income. We upgraded in 2009 and rented this out for 2.3k, today the rental is 4K . We had paid it off completely by 2009. Could we have bought it for less ? Yes.But during the crash the first property we sold would also have crashed. Moreover by buying when we did we were able to pay it down earlier and collect rental income all these years. It was perhaps not the best timing in terms of the market. But it was good timing for our needs and in the long run it has been a good decision.
We lived in Florida for a total of 19 years. You could not pay me to return for financial, weather, and political reasons. Weather is going to affect all of us, to varying degrees, no matter where we live.
very poor air quality
Here in the mountains of Southwest Virginia, our biggest threat has been flash flooding in the last several years.
A shame because most of that is because stupid government officials refuse to put in or allow owners to put in catch ponds.
My area for the last 20 years did not have a price increase for insurance instead they were sneakier. They sent a letter mid term and gave notice that any name storm, rain or snow, would have a 15% deductible on top of your regular deductible of $100-$5,000. So your home is damaged in a name storm, you pay have your deductible and if repairs are $100,000 you only get $85,000 to cover damages. This could crush a lot of home owners. I live in the mid-Atlantic. I have been renting for the last 5yr so it could have changed.
One reason for the rate increases has nothing to do with homes and the risk of homes. Insurance companies lower their risks by buying investments. A big one is large office buildings, always stable in the past. Due to C-19, office buildings have lost 1/2 their value, a huge hit for insurance companies. To stay in business, they need us to make up the difference of the office building earnings and the decline in value in a higher interest rate economy.
The next housing crisis will impact RENTERS. Apartments buildings and most multi family properties are financed on a 5yr ARM, these properties do not qualify for a traditional 30 year mortgage. The one’s adjusting this year rates will DOUBLE. Owners will pass this onto their tenants. This could go on for 2-3 more years.
I moved in 2020 to a pretty low risk area but my concern is more about social instability than natural disasters (not downplaying those). Another big environmental concern for me involves increasing solar storms while our magnetic field weakens. There is a direct, well studied correlation between cosmic radiation and heart disease and also cognitive decline. Staying healthy while avoiding unstable people is extremely important too.
I agree with this 100%.
Every area has its ups and downs so it would be prudent to weight these and make decisions based on what matters most to us
Maybe in the US but not rest of the world. In Australia, Singapore etc prices just keep going out. Those who sell and wait for it to fall to buy back or wait end up being priced up. Even in the US , in longer term its always higher. Like anyone who bought 20 years ago would have seen a big increase. In Singapore even in 3 years , it goes up a lot. Any crash is always very shortlived and recovery comes quick.
This is what I literally experienced in America while everyone kept telling us to wait bc the prices will go down and the market will crash lol 🤦♀️ It never did for 10 years!
@@summerjoy247 spot on. It is too risky to sell and wait. Rentals keep going up too. Some end up homeless because they can no longer afford to rent. I for one would not want to risk having to live in my car.
Thanks for sharing! You prove that all markets are local.
@@kenyonbissett3512all markets are local. But some principles hold true most of the time such as long term appreciation. Most of us buy a home to live in for the long term and it isnt practical to sell and move everytime the market looks like its " going to crash" in a certain area. We choose where we live for various reasons including jobs and family. It is better to focus on getting ourselves to a position financially where we dont need to worry about not being able to afford higher insurance or living costs . If we do move for those reasons we need to consider whether the new area has the same income earning potential and suits our needs in other ways.
Yeah…people should be leaving Florida in droves.
You would think all these natural disasters would open some eyes
It's the individual's risk tolerance combined with finances. Our home is in Florida, it's paid for so only insurance and property taxes. Cars are paid for and no other bills other than health insurance and utilities. This is our retirement home and don't considered it to be a "bank" so the resale value of it doesn't matter. Our adult kids live in another state and aren't expecting an inheritance (we didn't get one) so whatever they can sell it for after we're gone is gravy. We've been down here for 20 years, built new and have made sure our home is reinforced to the latest hurricane standards. We've been through multiple hurricanes so we know the drill (generator, water, etc). If we still lived in Indiana we'd been dealing with tornados and the horrible cold so we'll take our chances and stay here in Florida. The kids enjoy their free vacation every year to escape the cold. 🤣
If all Florida residents could have your situation there would be no problem 😊
Not to worry. If you’re in Florida and your children live out of state the fees are so high to settle the estate there won’t be much money left.
I left CA almost 5 years ago. While there were many reasons I chose to leave one of them was the wildfires that had occurred within a 200-300 mile radius of where I was. One of those was the fire in Paradise, CA.
We just left El Dorado County this past January. The Mosquito Fire got stopped by the dozer line 2 miles north of us and 1 mile east of us. We got so lucky. As I am sure you know, a large fire can travel a mile or two very quickly when there is nothing but dry forest. The Fork Fire was also uncomfortably close, as was the King Fire. It absolutely is a question of when, not if. Like you, there were other reasons too. But avoiding fire is a fairly good reason to leave a place!
I’m licensed in two states. There is not a going to be an housing crash unless all the institutional investors sell most of their properties.
Boy, I couldn’t disagree with you more.
I left a comment about the increasing home and car insurance costs in Dallas, but it disappeared. Katie, if you or the subs are interested in the info, let me know.
We live in Salt Lake City Utah, I worry about drought and fires. Insightful video as always.
How many countries have lived in or even visited? I have lived in 4 UK, Australia and Singapore and now Hong Kong.I have to say your theory doesnt hold up. Generally in a 5 to 10 year period it goes up barring global.financial crisis. In such crisis like subprime and even Covid, they bounced back fast . Also this theory abt low risk and high risk areas is too simplistic as Insurance is just one minor factor that applies to.those who.are retired or dont have a job like you. Everyone else is concerned about job prospects and amenities. Areas in the US and globally with higher paying jobs will have more demand
Real estate follows cycles in America, as do bonds and stocks. Within each area there are cycles. An example would be office bldg cycle, apartment bldg cycle, retail bldg cycle, residential housing cycles. Within the real estate cycle we are also affected by business cycles and changes. Texas went thru a terrible real estate cycle in the 90s with the collapse of the oil market. Silicon Valley went craz with the technology boom. All markets run in cycles in America. Other countries may be different and to be honest this video is about the Continuous American States, not Singapore or UK or Australia. You will have to make decisions about homes or investments on different criteria. I can address some of the quirks in foreign countries but nothing like a native of those countries may be able to.
@@kenyonbissett3512 I have lived in the US as a student so I am well aware that even in the US real estate is cyclical. It is cyclical everywhere including the countries I mentioned. Trying to time the market perfectly isnt always possible but in the long term it usually works out. Ask anyone who bought their home 25 years ago whether they are in the red or black? Of course some locations have more potential than others. Even with stocks Warren Buffett has made his fortune by holding on to blue chips. Too many people lose out and miss the boat by waiting for the crash to happen or by selling too early and renting or moving to a camper while waiting to buy back. I am not talking about RW as she has bought land. Rather I am addressing your comment .
I live in Western N.Y. and we do have high taxes, but our home owners insurance is low. We pay around 850 for a little over half an acre and a 1550 square foot ranch. Other than snow storms which are not usually considered natural disasters, we do not get natural disasters. Good video as always Katie.
The same where we are in southern Ontario ( basically your Canadian neighbours). Weather wise we are fairly safe. Though.. our cost of living in general is quite high in our area.
In my area, mid-Atlantic, name storms both hurricane and snow, there is a 15% exclusion of coverage. It’s in the small, tiny print. I was insured by Nationwide.
The biggest reason for the insurance exodus was a loop hole in a law that enabled ppl to sue them very easily, Desantis changed the law last year but the insurers are not returning. My insurance did go from $1700 to $3400, thankfully not as bad as many, I'm Eastern Hillsborough county, about an hour from the beach. I've never even lost power or Internet in any of our hurricanes so I'm ok. I keep a close eye on the insurance situation... We should see more insurers coming back soon now that desantis closed that loop hole
We live in Nashville, and of course there are natural disasters here. We moved here for the great schools and I would not move due to natural disasters personally. But I’d love that you have, and I love hearing how you made the decisions I think your channels the best.
FL was my dream place (currently in PA). I’ve done extensive research and everything you said is true. Not just for home owners insurance, but car insurance as well.
On Reddit, some folks in Florida who have their homes paid off are going without home insurance and just saving the money to pay out of pocket in case of disaster. That’s a huge risk to me.
I decided to stay put for now.
We live in FL but we live 40 miles inland. We have been here 22 years. Have gone through many hurricanes. We lived in IN first 13 years on a fault and so bought earth quake insurance
You really are financially savvy! Good for you well done! Love watching your videos!
thanks for sharing
This is really interesting. I'm considering a land purchase in the future so this is definitely something to think about. Thanks Katie & Fam.
I consider flooding more than any other natural disaster when buying. In NZ there are massive and devastating floods every couple of years and they do seem to be more frequent... Living in NZ we have a fault line running right through both islands so earthquakes are inevitable and I don't worry much about those. Our elderly neighbours don't worry about house insurance because land value is so high- their actual dwelling is worth $200K but the land is $800k so they are happy to fund repairs or just move on if needs be.
Well you need to look into the right to garden act. Only two states in the country got on board with making that act happened in their states. Is illinois and florida. So in the future they can stop you from gardening in virginia. You better somehow make that property a farm and list it agricultural.
For the small gardener there are many alternatives to follow. One integrate vegetables and fruits with house flower gardens. Plant fruit and nut trees now. The are green houses, vertical garden/trellis that can look like just greenery, aquaponics, indoor gardening. If we become a police state there would be problems but I doubt it will come to that for home owners. The coming years will be interesting. I think the country of Belgium is making a huge mistake with their war on farmers.
Your title isn’t accurate though I am not saying you meant it as click bait. What you are describing isn’t a Crash but rather a shift in Demand and Supply as people move from high risk to Low risk areas. There is a fundamental flaw in this theory of leading to pockets of crashes. That won’t happen because the same nos.of people will be occupying houses. Whichever area is favoured will see price increases in tandem with its increase in demand and likewise the areas no longer favoured will see falls in prices as demand falls. So if Florida becomes unpopular, prices will fall . Over time it may fall enough to compensate for the increases in insurance and other costs. Moreover people don’t just move because of high insurance or living costs. Most consider other factors like employment, family, climate and amenities.
Though she doesn’t mention it, there are many other financial and even cultural storms brewing that will affect every American. I won’t list them as most people are aware, but it won’t be pretty.
This 2024 hurricane season is supposed to be insane in Florida!! Crazy!!
I LONG AGO SAW WHAT YOUR SAYING. CA HOMES GOING TO DROP MY AREA OK BUT. NEAR WOODS NO WAY
Scary times.
Don’t be afraid. Even during a pandemic, house prices still went up. The stock market still went up. I would base it on that historical proof, not speculations 🤷♀️
Acknowledging possibilities and preparing for them in a logical common sense way is wise and smart. For years, I kept a pantry for 1 yr and at times only 3mos. Why? During the period for a 1yr of pantry of supplies we were on a tight budget and I could borrow from my personal food bank and only buy from myself. Even as the budget loosened, then the industry my husband worked started deregulation and it was upheaval and uncertainty. Then my husband developed a chronic illness. Then there have been 4 recessions and 1 mini depression (2008-2011). I believe that in a persons lifetime there will be ups and downs and to plan for them.
Some people like to live by the seat of their pants or on the edge. I could do that until I had children, then it was not okay with us. Everyone is different. You must follow what is comfortable for you. For me the way I shop, my costs are very low while still enjoying a nice quality of life. I still believe in the 3 month pantry to buy food and other products at their lowest prices. I can feed a family of 4 a variety of meals for the cost of $2.50-$3 for all or $3/4 people is $0.75 each person. So about $50-$60 a week. Others spend $100-$300.
Keeping a generous savings and emergency fund is important. Flowing the news keeps you informed about upcoming changes. Just face those changes in a logical, common sense manner and make decisions that are best for you in your situation.
I agree that we need to be aware of the cost of climate change for those of us living in high risk areas. The area I live in is impacted by the high fire risk area surrounding us. I feel my property is relatively safe but, insurance companies are compensating for their losses and passing it on across the board,as well as canceling some. Another impact for my area is salt water intrusion, so water prices are high, along with the high price of power due to law suits against the power companies. Additionally environmental regulations are making property improvements ridiculous. $90,000 for a new septic system. Yep, ninety thousand.
Am not sure what you are advocating. What solution are you suggesting? That people in high risk areas like FL sell and move to " low risk" areas?
People choose to live in an area often because it is where their job is situated . What is the point of moving to a cheaper area where you cant find good paying jobs?
Lifestyle is a factor too. Many of us would prefer to just earn more so we can have a good quality of life. If locals leave and prices fall, foreign investors will swoop in to pick up cheap real estate in Florida and California for instance. To some foreigners buying with cash even to the tune of millions isnt a problem as our home prices are much higher back home .
Obviously I can’t answer for RW. I think she is saying beware and plan in a common sense, logical manner that applies for you. Look forward to ever increasing insurance costs and possibly having your home in a flood area as maps change with climate change. Just watch the ice caps to know there will be continued rise in ocean levels which will change shore lines. As the ocean salinity changes many changes in weather will happen over time.
So to your questions, it depends on where you are and what type of real estate you own. It depends on your income, family situation and expectations. Condos are extremely precarious at this point with the changes in laws and requirements. Single family homes may or may not be at risk, only you know. It might mean just selling to get a different home in Florida or just raising the amount you set aside for expenses. You have to make your informed decisions about your home and life. RW enjoyed 3 yrs in Florida. Based on their lifestyle they are making changes to suit them.
My nieces MIL has a Florida condo in Palm Beach and a very nice apartment in a major east coast city. Though irritating, none of this matters to her as she has a very high income. She will make no changes, just pay any extra money.
@@kenyonbissett3512 older folks who are well off are less concerned about the financial value of their homes, they don't want to move. It is too disruptive to adapt.
But I would like to hear RW's answer to my question.
@@Sunshine-zi4nq you are definitely right, seniors tend to stay where they are planted. It will be interesting to hear her response.
Everyone's home insurance went up 20-30% last year because of inflation. The costs of building materials, fuel and construction labor have skyrocketed and the insurance companies are passing that on to everyone. Natural disasters are already part of underwriting. Risk is a fact of life. We are all just one earthquake, one fire, one storm away from this no matter where you live.
20-30% of Floridas $6K premium is MUCH higher than 20-30% of the $1700 national average. It absolutely does matter where you live if you don’t want to risk your home becoming uninsurable. Insurance companies understand the risk and are jumping ship in high risk areas.
@@raisingwildflowers I'm sorry, I did not realize that home insurance was 6K a year in FL. I just meant that inflation is also a factor in insurance increases.
@@TPayne-fm8ienot true .
Mine didn’t...
Intel moved to our county due to the low risk however, although there is no seismic activity in our county we are on an iron plate. Even if there would be a quake along the Missouri River, Canadian Border or near the Carolinas we will still be affected. I still secure shelving and preps. Tornadoes, power outages and crappy people are the biggest concerns here in Ohio. In 2003, the NE power outage began in Ohio. The infrastructure is not enough to run Intel and they are already talking about rolling blackouts because of it. Not to mention Intel's need to pump millions of gallons of water per day and that they are tax deferred for 10 plus years.
The biggest issue with Intel is what will happen if Intel leaves and people base the lives around Intel staying for any time past their tax deferment. Too many cities, areas have been taken advantage of by corporations staying only as long as they get a free ride plus other benefits. Knowing this, I would plan my finances around the 10 year mark and be estactic if they stay longer. Many cities/areas end up in worse shape because people don’t plan for the exit and lose everything. At least before they were just making it.
I feel like your videos are contradictory. One says "Florida prices are ridiculous..." while this one talks about a crash. There won't be a crash unless banks stop lending. Some markets may correct while others will be fine or even increase in value. Real estate is hyper local. The fear mongering going on about a real estate crash is making it a great time to buy.
If a home becomes uninsurable, you will not be able to get a loan on it. That is why Citizens was created in FL - so banks would continue to loan on uninsurable homes. It’s a temporary bandaid. Home prices are ridiculously high temporarily, people will get loans on these overpriced homes, insurance rates rise, a storm rolls through tanking the housing market in that area … It is vital people are aware of what’s going to happen so they can prepare. Being prepared is the opposite of fear mongering.
Buy with cash maybe! FL is hurting & smart investors are not purchasing. It’s going to get worse. Glad I sold my investment properties in 2021. Prices are ridiculous even if I can afford it!
@@raisingwildflowerswhat is your meaning of " Being prepared"? Are you suggesting people sell and rent ? Or sell and move from high risk to low risk areas now?
@@Sunshine-zi4nqhow people prepare is up to them. One commenter in Florida said they had dropped insurance companies and are self insuring. They have upgraded their home to meet exceed all hurricane standards. They keep needed supplies (food, water, candles, etc)to be without electricity for a period of time. Everyone’s preparation are individual and different. She is just say be prepared.
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I live in Ohio… And apparently Ohio is going to be one of the safe places to be during climate change… So for the first time ever I think I’m lucky to live here😏
I'm in SW Ohio and have been thinking this same thing for a couple years now. We get the occasional high winds and a tornado path is not too far from me, but not much in the way of snow where I live for a few years. The older I get, the less I like the heat and humidity in summer, but it's sure not as bad as further south and west. My brother and his wife went to Texas and couldn't wait to get back here a couple months ago, lol.
@@cynthiamurphy3669 I Live in the snow belt and have noticed that snow is not as copious as it’s been in previous years… And I did read somewhere that the tornado alley is shifting and Ohio may end up in it I ..just don’t know how much of Ohio… But for now I feel like I can handle the 278 days of no sun that we get and have an $800 year insurance policy😆
Ya'll should probably do some research on the multi-state dangers that have resulted out of the East Palestine train derailment. The land and water has been contaminated State wide. I wouldn't move to Ohio if they paid me.
@@darrenoconnell9716 Truth is (as a bible believer) that things are going to get worse everywhere on the earth sooner or later. I put no faith whatsoever in humanity's ability to save anything, lol. Romans 3:4 KJV: ..."let God be true, but every man a liar."
@@Whatsnewpussycat3 Nothing would surprise me, that's for sure.