The Housing Market CRASH will *End* HERE.

two quick notes I'm gonna be in the air

flying today so you can follow me on

Instagram to see what I'm up to I'll be

at a special place and you're gonna see

a lot of cool stuff so follow me on

Instagram and we did extend the flash

sale to the end of the week for those of

you who emailed us and for anyone else

69 off largest percentage basis sale for

the programs I'm building link down

below now we've got to talk about the

housing market and the latest drama

that's going on in the housing market

first we already know that we've got a

lot of anecdotal evidence especially

from what we covered just the other day

of new construction home builders

alleging that home builders are

potentially rigging their current

contracts to make it seem like they

still have good contract flow to

manipulate appraisals to make sure their

existing deals that are already in

escrow actually close this is scary but

one of the big things that makes me want

to really pay attention to what's going

on in housing always starts with

mortgage rates mortgage rates and

housing are very correlated this should

be obvious but a lot of people don't

realize the connection for every one

percent that mortgage rates go up

buy your purchasing power Falls by 10

that's because your payment for your

Piti principal interest taxes and

insurance plus potentially HOA dues if

you have those actually end up going up

by roughly that amount now that's

because property taxes are usually based

on what you're paying for the property

right and uh then of course mortgage

rates are based on uh what's happening

in the 10-year treasury market and what

is the risk-free rate of return and so

that pushes up or down mortgage rates

and so mortgage rates have obviously

moved up from somewhere around 2.75

percent for a 30-year fixed rate

mortgage all the way now for somebody

with a 740 credit score let's take a

look at the latest data latest data

shows us survey says

6.442 now that has moved up recently as

the 10-year treasury yield has moved up

and this is a lot of reduced buyer

purchasing power now one of the things

that the real estate market really is

going for it is that there's very very

little inventory available in markets

right now for example example if I look

at the market in my neck of the woods

which is we'll look at the city of

Ventura for example what I like to do is

I like to regularly see okay how many

houses and how many condos are for sale

and I remember when I got in the

industry at the bottom of the last

housing market actually the market still

had a little bit to go down it still had

another year of pain when I got in so I

was still on sort of that downslope when

I got started in 2010 uh in 2011. what

you found was a lot of Agents were

panicking because there weren't enough

homes to sell and there were about 80

homes on the market at any given time

that was really deemed lack of supply

and what I found throughout my career

was that anytime that number ran up to

somewhere around 400 homes uh which let

me let me clarify that when we were at

80 homes I was actually already that was

closer to the bottom Market 80 homes on

the market was 2012. when I got into the

market there were about 400 homes on the

market so let me make that very clear

bad Market 400 homes on the market good

Market low Supply easy to sell

properties right prices going up 80

homes on the market that was like the

end of 2012 and that's when we really

started seeing a pop-up and so what I

like to do and you could do this very

simply in your neck of the woods is just

simply go to our like Redfin for example

type in your city and look at how many

homes are for sale in your area right

now we've got 98 homes for sale that's

pretty low that's pretty dang low so

inventory is still low this is something

that really has uh the real estate

market propped up now what's remarkable

about that is we are seeing months

Supply increase because fewer people are

buying because that buyer purchasing

power is going down and the big fear

moment that we've been talking about we

can get the latest update here from the

Redfin data center which just updated I

think actually this morning the latest

update from the Redfin data center is

that nationally median home prices are

stable at about 347 right now in the

last week of January going into the

first week of Feb worry a stable 347

hopefully moves up for people who own

homes but if it stays stable is very

soon going to start showing

year-over-year declines in fact in about

two weeks we might see this blue 2023

line cross over the black line and then

anytime that blue line is under the

black you're going to have negative

year-over-year numbers and I think in a

few months time that's really going to

start a media circus around oh my gosh

home prices are officially negative year

over year and that's going to make

people pretty nervous now if you own a

month's supply of homes over here

if you are a bull on the housing market

you want months Supply to come down if

you're a bear on housing and you want to

see housing prices come down you want

months Supply to stay elevated we ended

last year at about 12.9 weeks of supply

for the nation the year before that we

ended 2021 with about seven weeks of

Supply so already housing supplies

skyrocketed but right now weeks of

supply for homes is sitting at

16.4 more than double the level of

housing Supply based on how many people

are actually buying than we had

previously so even though there are very

few homes on the market

roughly you could factor in if housing

Supply stays stable you could roughly

say half as many people are actually

buying right now then would ordinarily

Buy in sort of an average market and so

that creates some red flags for the

housing market and potentially create

some opportunities to buy homes soon now

there are some markets uh that's because

we would think that maybe once we hit

sort of peak fear while mortgage rates

are still high there'll be some really

good opportunities to buy real estate so

for example if you look at Boise you

could see okay we have home prices let's

go back to home prices over here it's

just the Redfin data center you could do

this as well you go to home prices over

here go to median sales price and we can

see look at Boise dropping off a cliff

the more this blue line gets bad and

it's already under last year's line

we're already down 11 but imagine it

stabilizes at 434 and then you compare

up to this peak over here

434 divided by what is this number over

here 547

547 shows you declines of over 20

percent that's scary now if that

continues to go down that could be even

larger so where are areas that are

potentially leveling out well let's look

at Tampa Florida for example look at

this Tampa Florida actually is starting

to see home prices take up a little bit

which is great because if this blue line

could Trend above this black line you

might not ever have a negative month

over month read for homes in areas like

Tampa Florida Tampa Florida Miami are

getting insane amounts of inflows and

you might actually not have a housing

correction in Florida whereas in an area

like Boise you're absolutely likely to

have one and prices are still falling go

to for example Austin Texas opposite of

Florida what do you have in Austin Texas

negative prices year over year already

and so I think this becomes very

important for if you're looking to buy

real estate is you want to know in what

mark markets are you going are you

already negative or are you likely to be

negative soon San Diego seems to be

starting to try to form some form of

recovery here though even just looking

at at the end of November and December

over here the numbers are are not great

right we're still at Lowe's and so we'll

see if that can actually recover if you

go to let's say Salt Lake City let's

take a look at Salt Lake okay that's

interesting uh how about Utah okay fine

then we won't look at Utah for the

Redfin data there's got to be Utah in

here what if I just do SLC no Salt Lake

no okay fine then how about we go to

Phoenix

so if we jump on over to Phoenix

negative year over year right you're

already negative five percent year over

year and that gets worse when you're

over here so you've got a lot of markets

that have really corrected but then

there are markets that are still booming

and Florida seems to be one of those

markets that's still booming quite

substantially Seattle you have this

major massive hump over here it'll be

quite fascinating to see if this hump uh

ends up uh ends up negative if you get

any kind of stability over here so we'll

see personally I think a lot of it is

going to be driven by those mortgage

rates and again one of the things that

could be manipulating some of the data

that we're looking at right now is we

did have a lull in mortgage rates right

look at this lull in mortgage rates we

had a low in mortgage rates right around

February 1st maybe around yeah but

probably I mean here the way we could

probably look at this a little bit more

clearly just go to CNBC look at bonds

look at the 10-year and what do you do

when you look at the 10-year just go

back say about three months

and look at this yeah you had a lull in

mortgage rates around February 1st which

that aligns with what we're seeing here

now mortgage rates today are higher than

where they have been almost all of

January and the beginning of February so

it's possible you could actually see

sort of a micro double dip dare I say

those words uh if you go to the Redfin

data center over here

what do you have you could potentially

see going to median sales prices

you could potentially see a little bit

of a flattening and Recovery thanks to

mortgage rates being stable but

potential and even in Florida where

you're seeing that increase and then

potentially a double dip again should

mortgage rates stay stable High

so the longer those 10-year treasury

yields stay high the more pain you would

expect for real estate and if you

combine High 10-year treasure yields

with those year-over-year comps probably

going to have a little bit of a rough

spring

but if we can get through spring and we

start seeing real housing disinflation

in owner's equivalent rents and we start

seeing inflation decline dramatically I

wouldn't be surprised and this is sort

of my forecast of of what I see for the

housing market the following happens

so I think you potentially go through

this you have this down sort of

Correction of 2022 where home prices are

falling and they're falling as mortgage

rates are going up then you have

mortgage rates temporarily fall which

leads to a slight bump in home prices

because mortgage or real estate is very

sensitive to rates right this is

potentially your Jan Feb bump but if

rates stay high for longer like they are

now you're probably likely to see this

sort of continuation where we go back to

at least the lows of where we were here

potentially even a little lower as what

happens is you start lapping that year

over year fear right this is where you

get that march to May year over year

fear but come June July maybe even

sooner come June or July you're probably

going to see a substantial set of

housing disinflation drag CPI down when

CPI inflation starts plummeting I would

expect the 10-year treasury is going to

plummet very quickly so I would expect

over here the 10-year will probably

break three percent so that break on the

10 years is likely to happen that's my

opinion right so I think the 10-year

breaks three percent and that actually

leads to a support being placed under

the housing market and you actually see

your your slow and sustained rebound

back to home prices doing sort of their

usual three four percent perhaps I think

a lot of that is going to be dependent

on mortgage rates actually coming down

again by breaking three percent on the

tenure I think you're likely to see that

so the summer and spring might be

difficult because you've got to get

through fear and higher yields which

we're about to hit fear and you're in

higher yields uh in terms of the market

now and they seem to be pretty sticky

around this level they might be pretty

sticky at this level until the next fed

meeting which would be about March 22nd

uh but who knows they could also be

sticky through about May until we really

get that summer disinflation from from

lapping some of the owner's equivalent

rents so that's my thesis in timing if I

had to choose when to buy personally I'd

probably want to be looking at uh July

through December as my buy time I think

July might be when you have a lot of

most of the fear in markets but December

is just generally usually a good time to

buy because the people who are selling

usually have to sell right so that

really puts you somewhere between Q3 and

Q4 you know is it possible that that's

you know that Florida is already beyond

that bottom that maybe Florida bottoms

right here which ends up being something

like a December and it recovers from

there absolutely

personally Florida is probably uh not in

in my radar for buying anyway so uh that

that you know could work out for your

personal situation right you might be

more motivated now in Florida and later

if you're more West Coast you might be

more motivated in the second half of the

year there's just some Theses about

where the housing market would go and I

really encourage everybody to get

started in uh real estate I think the

easiest way to become a millionaire it's

the reason I called my course secret to

millionaire a real estate investor is I

actually think everybody can do it uh

people hear that and they're like you're

crazy man not everybody can be a

millionaire I'm like uh wrong like we

can because bread will cost fifty

dollars a loaf I'm just kidding as if

everything just inflates that much uh

but anyway no I'm very very optimistic

of that anybody who wants to become

successful in real estate can do it so

uh that's my take on some of the latest

regarding the housing marker