DANGER: The Coming *2-Fold* Housing Collapse.

this report indicates what part of the

real estate housing market could get hit

the worst in 2023. we're going to talk

about this now I want to give you my

bias check up front I have launched a

real estate startup it's called

househack you can learn about it by

going to househack.com we want to buy

the dip heavily in this real estate dip

which we expect will heavily happen in

2023 2024 between the next two years

basically and when you hear me mention

locations in this in these sorts of

reports know that I'm documenting this

because there are going to be places I'm

going to avoid and they're going to be

places they look for and I encourage you

to subscribe and watch the journey

because we are going to deploy tens of

millions of dollars investing in real

estate dip opportunities in my opinion

it's going to be a really cool journey

to watch in fact you could even tag

along and watch me explore real estate

by either subscribing to the channel and

watching the Vlogs or by clicking the

link down below and shadowing me for a

day in person you meet me in California

we'll hop on a private jet we will fly

to check out real estate and then we'll

fly back we can grab a drink on the way

or some dinner and I'd love to have you

as part of the shadowing experience so

what's the news well

we'll go to this in just a moment let's

start with a couple charts

first

multi-family housing starts take a look

at this this is a chart from Morgan

Stanley right here and it shows us that

housing starts from multi-family which

implies the pipeline of what kind of

properties we expect to come to the

market are actually substantially

positive over here these are all at the

bottom you can see these are the last

six months here of 2022 and we see a

about 10 to 20 percent boost in housing

starts from multi-families

now housing starts are a little

different from permits permits are when

Builders go buy some land and they apply

for new building permits or maybe those

permits get issued housing starts are

when developers actually break ground on

new construction and what you're

noticing here is a large uptick in the

amount of ground that's being broken on

multi-family construction so I need to

think about that for a moment more

construction and multi-family is going

to mean over the next two years more

supply of multi-family buildings right

and these numbers can be volatile but

the trend in the last about six months

has been up for multi-family Starts Now

how does that compare to single-family

residences look at that massive

difference in Trend single family

consistently over the last eight months

below zero and trending down to about

negative seven to negative nine percent

in other words a lot less new

construction coming to single family

relative to the opposite happening in

multi-family now it's possible that

Builders are looking at rents with a

hindsight bias that is they look back

and go oh rents are so high let's build

some more apartments and milk High rents

problem is rents are projected to start

plummeting in fact here is Bank of

America's rent growth projection and

what you could see is this blue line

showing that inflation-based rents are

rising that's because they look at

stupid data like owner's equivalent rent

that lags about six months but that yes

while actual rents have skyrocketed

they're already plummeting according to

not only Zillow properties rented

apartment lists uh website data uh

rentals and yardies total rent equations

showing that rents are substantially

trending down so even though Builders

want to take advantage of these higher

rents they might not be able to if we

see a substantial amount of Supply

coming to multi-family which could hurt

multi-family more than it actually hurts

the single family market now that's

actually really interesting because take

a look at this this is is the property

report in the Wall Street Journal yes I

still get the paper in addition to the

electronic forms of research that I do

but I found this very interesting

apartment vacancies are piling up

the biggest wave of new rental buildings

in nearly four decades is expected to

cut rent growth across the country in

other words we're already seeing a

substantial flood of new supply of

apartment buildings plus what you just

saw on the housing starts Morgan Stanley

report right here you're building way

more multi-family than You're Building

single family so what you want to be

thinking to yourself is if you're

thinking about getting into the real

estate market you might want to have a

bias towards single family instead of

multi-family going forward especially

when you consider household formation

okay household formation is a little bit

complicated to think about but

population hasn't actually changed that

much so it's not like you have some

crazy substantially higher demand for

housing than you did before the pandemic

but you did so what changed household

formation changed household formation is

when you have young people for example

move out of their parents homes and go

get their own pad they get their own

apartment or their own house or whatever

or maybe they move from an expensive

area where they have roommates to buying

their own house in Texas or Vegas

because it's cheaper and they can have

their own place right that's household

formation it's when you see maybe three

individuals sharing a place each go into

their own individual apartment now you

have three households when previously

you only had one that's household

formation and during the pandemic it

exploded in fact listen to this early

lockdowns created pent-up demand for

housing that exploded in the months

after the introduction of covid-19

vaccines in late 2020. many young people

went out to rent their first home and a

sudden increase in people searching for

apartments helped rents climb over 25

percent in two years now however that

same thing is happening in Reverse it

has gotten very expensive to live alone

thanks to the crazy inflation that we've

seen and wages actually growing at a

negative Pace relative to inflation that

means even though it feels like we're

getting paid more our money is going

less far and we're actually making less

money now than we were in 2019 on

average of course now that is leading to

concerns that we're actually going to

see more multi-family building at the

same time as we see less household

formation that means you're probably

going to see no guarantees but probably

going to see more pain multi-family real

estate than you will in single-family

real estate or potentially you see a

delayed bottom right so what that could

mean is single family real estate might

bottom it at the end of 2023 for example

multi-family might not bottom until 2025

when all that new construction floods

onto the market so that's a really

interesting disparity usually we think

of real estate as aligned but no you

just have to look at the construction

charts and you see a difference then you

consider household formation and ask

yourself this if people are going to

move in together and be roommates

because maybe recessionary times or

inflation or whatever are they more

likely to be roommates in a single

family or in apartments in other words

previously we went from a house with

three people to three Apartments what if

now we go from three Apartments to one

single family that again gives you a

little bit of boost to single family and

more pain to multi-family now

I I want to be clear I don't really

think I have a bias between either

single family or multi-family I just

want to buy the best deals I'm just

trying to transparently share that I

believe my vision for house hack based

on the data that I'm seeing uh not just

on this piece of paper but elsewhere is

it looks like single family is going to

be the better strategy first and then as

single family rebounds later it might

make sense to get into multi-family now

keep in mind we are looking for

accredited investors for house hack and

now this video can't be a solicitation

where you can go to househack.com to

sign up if you're an accredited investor

and we're releasing the non-accredited

round probably in March so if you're not

an accredited investor and you want to

be a part of what we're building with

househack at a one-to-one valuation

which is crazy for startups to do a

one-to-one valuation really really good

uh take a look at the details obviously

on housesite.com you can learn all the

perspectives and the fine print that PPM

right private placement remember

everything read that be educated right

um go to housesite.com learn more if you

have questions email us at IR

househack.com but let's continue with

this right here listen to this

now many of the same prices places that

shot up in price are seeing slides in

demand and rents are going down between

April and October 2022 rents fell three

percent in Vegas two percent in Phoenix

one percent in Tampa Florida according

to apartment list all three of those

cities saw rents rise more than 30

percent in the preceding two years

on top of that affordability is now

becoming challenged of the 44 million

households that rent in America more

than 19 million almost 50 percent of

rental households spend more than 30

percent of their income on rent and the

more that level goes up the less people

are motivated to create their own

households instead they want to share

places with other people right easier to

do that in a house than an apartment

obviously

then uh you have here if migration and

household formation continue to slow

analysts said some markets could see a

full 12 months of negative rent growth

starting sometime this year 2023.

it also goes on to say here that

according to an individual actually the

VP of data of the data division AT yardi

Systems sites Miami Austin and Raleigh

North Carolina as places with an

especially large amount of new supply of

multi-family homes expected to open this

year

and in 20 oh this is also interesting

now this actually changes the mindset

for investors as well I saw this a lot

with the uh REITs like Invitation Homes

and American homes for rent I saw a lot

of this people would basically buy a

single family home and rent it out and

they do like no work to it listen to

this in 2021 and into early 2022 you

could raise rents significantly without

doing a lot of work to the property

itself

we don't see that happening going

forward according to a group of landlord

investors blah blah blah whatever

what this

telling us these facts so far are

telling us that single family has

advantages in that less new

single-family construction less

household formation for apartments

potentially more consolidation into

single families and a requirement that

people if they want actually to maximize

rents that people actually focus on

renovating properties which is actually

really interesting because that's also

exactly what our plans are with

househack to buy homes fix them up to a

high quality standard and then rent them

out to median to slightly above median

tenants who are highly qualified to

minimize our risk of eviction knock on

wood I've never had an eviction in my

career so very very excited about the

future but I want to pay attention to

these changes and Trends because as the

stock market works the real estate

market fluctuates as well and we want to

pay attention to those changes so we can

make the most educated decisions

consider subscribing and following me

for more if you want to Shadow me make

sure you you check the link out down

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we could chat about real estate thanks

so much for watching and we'll see you

soon thanks bye