They are NOT up (y-o-y) in many zoom towns: Nevada, AZ, CA. Phoenix is DOWN y-o-y. Beside that....if housing goes up 15, 20, 20% for 3 years....OF COURSE it will take a while to show a decline y-o-y. Month-over-month is a no-brainer (the slide is OBVIOUS to everyone) ....but even y-o-y will become obvious. It takes a while to slide down from the big climb.
Nothing pulling houses prices down? What about a doubling of rates? The fastest in history to my knowledge. A 7% interest rate severely limits buyers ability to afford higher prices.
Which means that buyers can't afford the existing prices, but sellers have to be willing to come down in price before the market can actually shift and many sellers are holding out because they can.
First half of 2022 was 100% Jerome Powells fault. Instead of raising rates in December when “transitory” was out of the window he announced a 3 mo warning of rate hikes. Which then caused FOMO to lock in low rates which carried through to June as people with locked in rates purchased anything available before their lock expired
Employee: “I can’t afford rent/housing - pay me more, employer!” Employer: “I can’t afford to pay you more between the inflation of cost of business and your coworkers asking for raises.” Home owner/landlord/property company: “where’s all the buyers?? We set the rent at the market rate.”
It must be very painful for you to say the home prices can go down. iBuyers going bust, new construction inventory and price cuts, investors and flippers leaving the market, JPMorgan with $1 billion on the sidelines to purchase SFH's (doubt their waiting for interest rate affordability to improve), etc.
i mean if you are in phoenix like me from the peak of 22 we are down double digits already....once may shows up the yoy will look gnarly. Inventory is still a massive issue but demand has been crushed and the general market sentiment has shifted. I may be biased because my market was heavily affected by covid and those may pull back harder during the correction
San Diego SFR market is down to 770k median from 870k in the Summer of 2022. That's a huge drop regardless. Southern Florida, West Palm for example, is down from 410k to 380k, for comparison. Cali is getting crushed, lol
@MY TIN FOIL HAT we will definitely see declines but the FEDs money printing really ruined the economy. We will see price declines back to 2019 levels but adjusted for inflation IMO.
So what you think might happen Sir? Thanks for the facts on how things work but based in your gut feeling and your experience....what do you truly believe is highly probable?
He only mentioned two factors hear median prices and sales and interest rates. He didn't factor in unemployment, new builds, the fact that 25 percent of our single family housing market is owned by people who do not live there a second home or investors like them. If we hit as little as 5percent unemployment which is what the fed is aiming for then there will be more foreclosures, deflationary pressures Will bring housing and rent prices down which will force the investors to sell creating and influx of houses. Let alone the back log of new houses built. Which if you look at 2021 was the highest builder permits in decades. 2021 meaning those houses hit the market end of 2022 and are just sitting there with no demand. All these things are huge factors and he painted a picture 🖼️ with basically two colors. I think he needs to bring a more broad analysis to give us a better picture because this one is blurry and inadequate
14:30 This is where I agree with you, despite being a bear on house prices, a recession does not equal more price correction historically. In fact in our specific scenario 2023, it probably increases the prices of houses due to lower rates (and that foreclosure stuff only happens 2 years later if after a steep and prolonged recession)
Great data and analysis. I might have missed it so you could have mentioned. High rates will hurt supply since more people will stay put. Demand goes does but also supply. People that would normally sell a home to upgrade or downgrade are the largest pool of buyers. Unless we see a major economic downturn I don’t think we will see a glut of inventory unless it’s an area with a massive amount of new construction which is only small parts of the country. Typical RUclipsrs cherry pick certain data like heavy new homes areas with sharper declines and call for a major crash.
Good job, Dave. I'd love to get some insights into top economists who also share in this outlook. You've mentioned them in other videos, can you share your recommendations?
6:38 lol your inside Dave started laughing out loud when you said the most important way to look at it is YoY, so you said YoY is important ..... as of now. But I am guessing come April 2023 you will say YoY is a HORRIBLE way to look at things!
This is Dave -- I think I'll stay consistent with that. You need to remove seasonality from housing market data to get an accurate understanding of market dynamics. YoY accomplishes that!
I think 2023-2025 market will stabilize and range but overall be uptrend still. Will bounce like/\/\/\/ form clear support and resistance zones then once interest rates go to around 5% and stabilize maybe 2024/2025-2030 2nd phase of bull market happens and the current range bound /\/\/\/ breaks out to upside of another bull flag. If Cali prices respect current support of around 2019 price by 2030 median will be 1.2-1.4 M
Let’s keep it simple, real estate grew way much that is enough for another 5yrs atleast. It’s overrated now. Dead cat bounces from 2024 q2-q4 and goes down completely after elections until 2026.
Home ownership rate is still very low and about 40% of homeowners own outright so out of 65.5% nearly 40% own outright . Also from q3 2020 is when the drop of home owners happened from around 68 to 65% a drop rate that did not Eben happen in 08 where that trajectory took about 4 years this time only 1 year crom 2020-2021.. meaning many people sold to investors and are sitting sideline still waiting for crash to happen which won't and end up using proceeds from the q3 2020 sale of property . The chart on fr3d speaks volumes
Great stuff, although if I may add. I believe it is mistaken when mentioning the factors leading to fluctuation in mortgage rates. There are several drivers that influence Mortgage Rates, but the main driver is the 10 Year treasury bond yields. Historically, rates (30 Year fixed specifically), is highly correlated with the 10 year yield. As Mortgage Loans are different than most other loans due to the fact the Mortgages are packed into Mortgage Backed Securities (Mortgage Bonds), and sold off in capital markets. Investors won't be willing to buy a Mortgage Bond if the Yield is below the safest investments in economy (US Treasury Bonds) Long story short. Fed is currently reducing it's balance sheet, and allowing bonds to mature/expire. Thus increasing Supply of Treasury Bonds in the market, which in turn Decreases pricing, but increasing Bond yeilds. Now the spread (difference) between Mortgage Rates and Treasury Yield can maybe shrink...but so long as Treasury Yields keep climbing, dont expect Mortgage Rates to go down much at all....
![FNAF vs TF2 - Episode 2 [SFM]](http://i.ytimg.com/vi/z5b3V2-VLb0/mqdefault.jpg)
They are NOT up (y-o-y) in many zoom towns: Nevada, AZ, CA. Phoenix is DOWN y-o-y.
Beside that....if housing goes up 15, 20, 20% for 3 years....OF COURSE it will take a while to show a decline y-o-y. Month-over-month is a no-brainer (the slide is OBVIOUS to everyone) ....but even y-o-y will become obvious. It takes a while to slide down from the big climb.
Nothing pulling houses prices down? What about a doubling of rates? The fastest in history to my knowledge.
A 7% interest rate severely limits buyers ability to afford higher prices.
Which means that buyers can't afford the existing prices, but sellers have to be willing to come down in price before the market can actually shift and many sellers are holding out because they can.
Thanks for the feedback. The video says that nothing was pulling prices down in the first have of 2022. The second half changed.
@@biggerpockets ah got it. Must have misheard you. I listen to a lot of these videos while commuting.
20k less doesn't help affordabilty at these rates at all. Your not factoring in inflation cost, the cost to also power and manage a home.
Powell needs to keep rates high at least for another 2 years
The Wharton school of business did a good segment with a real estate professor. Should definitely check it out
@@mr5timewcwchamp do you have the link?
when he says next year, he means 2023. Probably recorded this in December.
Thank you for that explanation 😊
That's correct, thanks!
Home prices should fall by 50%, for transactions to happen again
First half of 2022 was 100% Jerome Powells fault. Instead of raising rates in December when “transitory” was out of the window he announced a 3 mo warning of rate hikes. Which then caused FOMO to lock in low rates which carried through to June as people with locked in rates purchased anything available before their lock expired
Absolutely.
I like how you elaborate your predictions in your videos!
Employee: “I can’t afford rent/housing - pay me more, employer!”
Employer: “I can’t afford to pay you more between the inflation of cost of business and your coworkers asking for raises.”
Home owner/landlord/property company: “where’s all the buyers?? We set the rent at the market rate.”
It must be very painful for you to say the home prices can go down. iBuyers going bust, new construction inventory and price cuts, investors and flippers leaving the market, JPMorgan with $1 billion on the sidelines to purchase SFH's (doubt their waiting for interest rate affordability to improve), etc.
Love this!
i mean if you are in phoenix like me from the peak of 22 we are down double digits already....once may shows up the yoy will look gnarly. Inventory is still a massive issue but demand has been crushed and the general market sentiment has shifted. I may be biased because my market was heavily affected by covid and those may pull back harder during the correction
Thanks for your honest estimation of the market
San Diego SFR market is down to 770k median from 870k in the Summer of 2022. That's a huge drop regardless. Southern Florida, West Palm for example, is down from 410k to 380k, for comparison. Cali is getting crushed, lol
Finally - someone nails it!
It took time for the Titanic to sink and for a while, it didn’t seem like anything was wrong…
blah blah blah, start at 15:00
Is this chart based o n California housing market if not does it include California housing market
Will be tons of deals out there
Pre pandemic deals ?
@@mytinfoilhat9801 no way
@MY TIN FOIL HAT we will definitely see declines but the FEDs money printing really ruined the economy. We will see price declines back to 2019 levels but adjusted for inflation IMO.
So what you think might happen Sir? Thanks for the facts on how things work but based in your gut feeling and your experience....what do you truly believe is highly probable?
Great insight. Would you therefore recommend in buying inverse REIT ETF as we can assume house prices will fall for the first part of 2023
Not a stock picker but commercial real estate can behave differently than residential real estate.
He only mentioned two factors hear median prices and sales and interest rates. He didn't factor in unemployment, new builds, the fact that 25 percent of our single family housing market is owned by people who do not live there a second home or investors like them. If we hit as little as 5percent unemployment which is what the fed is aiming for then there will be more foreclosures, deflationary pressures Will bring housing and rent prices down which will force the investors to sell creating and influx of houses. Let alone the back log of new houses built. Which if you look at 2021 was the highest builder permits in decades. 2021 meaning those houses hit the market end of 2022 and are just sitting there with no demand. All these things are huge factors and he painted a picture 🖼️ with basically two colors. I think he needs to bring a more broad analysis to give us a better picture because this one is blurry and inadequate
Well its next year and things are still kinda the same.
Always important to review previous data and trends, nice video!
14:30 This is where I agree with you, despite being a bear on house prices, a recession does not equal more price correction historically. In fact in our specific scenario 2023, it probably increases the prices of houses due to lower rates (and that foreclosure stuff only happens 2 years later if after a steep and prolonged recession)
In the last housing recession rates and prices fell together. It will be no different this time.
@@pjmccauley5324 any statement that says the two recessions are the same is in for a rude awakening.
Great data and analysis. I might have missed it so you could have mentioned. High rates will hurt supply since more people will stay put. Demand goes does but also supply. People that would normally sell a home to upgrade or downgrade are the largest pool of buyers. Unless we see a major economic downturn I don’t think we will see a glut of inventory unless it’s an area with a massive amount of new construction which is only small parts of the country.
Typical RUclipsrs cherry pick certain data like heavy new homes areas with sharper declines and call for a major crash.
interesting video same as my historical chart prediction on live section.
Wait until mid 2023 ..
Get in… buy the property at variable rate .. and refinance in 2024 or 2025 ..
✌️
David Meyer keeps killing it! Thanks for all the data leg-work put into these videos!
Those wage averages are terribly incorrect. Why didn't you just look it up?
They're from the federal reserve and bureau of labor statistics
Frenchy from The Boys?
Good job, Dave. I'd love to get some insights into top economists who also share in this outlook. You've mentioned them in other videos, can you share your recommendations?
Great question -- I read a lot of what Rick Sharga, Logan Motashami, and Taylor Marr write about the housing market.
Uneducated Economist is really good and easy to understand. He streams from his car.
Many thanks, am looking forward to checking them out. Cheers from another Denver investor!
*has a wonky crush on you* 😂😂😂 Always enjoy your insights. 🙂
When will inflation go down?
When Joeflation steps down
6:38 lol your inside Dave started laughing out loud when you said the most important way to look at it is YoY, so you said YoY is important ..... as of now. But I am guessing come April 2023 you will say YoY is a HORRIBLE way to look at things!
This is Dave -- I think I'll stay consistent with that. You need to remove seasonality from housing market data to get an accurate understanding of market dynamics. YoY accomplishes that!
I think 2023-2025 market will stabilize and range but overall be uptrend still. Will bounce like/\/\/\/ form clear support and resistance zones then once interest rates go to around 5% and stabilize maybe 2024/2025-2030 2nd phase of bull market happens and the current range bound /\/\/\/ breaks out to upside of another bull flag. If Cali prices respect current support of around 2019 price by 2030 median will be 1.2-1.4 M
Awesome analysis. I believe charts are the best way to make predictions and needles to say they're my favorite.
Let’s keep it simple, real estate grew way much that is enough for another 5yrs atleast. It’s overrated now.
Dead cat bounces from 2024 q2-q4 and goes down completely after elections until 2026.
dave, why is it nerdy and wonky?....im assuming whoever is watching this NEEDS to know what the fed does...no?
Dude your research is funny market is dropping hard .. not going up ..
Thanks for the feedback! What data or evidence do you see that suggests a crash?
Recession
Home ownership rate is still very low and about 40% of homeowners own outright so out of 65.5% nearly 40% own outright . Also from q3 2020 is when the drop of home owners happened from around 68 to 65% a drop rate that did not Eben happen in 08 where that trajectory took about 4 years this time only 1 year crom 2020-2021.. meaning many people sold to investors and are sitting sideline still waiting for crash to happen which won't and end up using proceeds from the q3 2020 sale of property . The chart on fr3d speaks volumes
Great stuff, although if I may add. I believe it is mistaken when mentioning the factors leading to fluctuation in mortgage rates.
There are several drivers that influence Mortgage Rates, but the main driver is the 10 Year treasury bond yields. Historically, rates (30 Year fixed specifically), is highly correlated with the 10 year yield. As Mortgage Loans are different than most other loans due to the fact the Mortgages are packed into Mortgage Backed Securities (Mortgage Bonds), and sold off in capital markets. Investors won't be willing to buy a Mortgage Bond if the Yield is below the safest investments in economy (US Treasury Bonds)
Long story short. Fed is currently reducing it's balance sheet, and allowing bonds to mature/expire. Thus increasing Supply of Treasury Bonds in the market, which in turn Decreases pricing, but increasing Bond yeilds. Now the spread (difference) between Mortgage Rates and Treasury Yield can maybe shrink...but so long as Treasury Yields keep climbing, dont expect Mortgage Rates to go down much at all....
🤑
Why are the SOB youtubers always have to put dramatic video title pictures its always them putting their hands on their head or face.
Bunch of weirdos
😂😂
It’s called clickbait my guy