Holy $h*t - The Housing Market Crash is Happening

hey everyone me kevin here boy oh boy

one of the biggest things i always talk

about when it comes to real estate is

that you can see changes literally

happening before your eyes and

especially if you are a local expert

because you're constantly investing in

or looking at your local real estate you

can really see the changes happen

quickly but the beautiful thing about

real estate is you can combine changes

happening in your local market with

what's happening in the national market

or in other areas to see if your

feelings and suspicions are similar so

for example earlier this year in january

i said i'm highly concerned that the

real estate market is going to slow down

as real estate interest rates rise

substantially and then we create the

fear that oh no real estate prices are

starting to go down and then guess what

more people start dumping properties on

the market that's how it starts you

start seeing interest rates go up more

properties stagnate price drops increase

then all of a sudden we see prices start

declining closing prices decline two to

three to four months later then you

potentially get a wave of fear of more

people selling these are usually your

investors or people who can go to

renting or downsizing or they move into

an rv and they get rid of their homes

they don't necessarily need a

replacement home right there are plenty

of those people and you don't need that

much of a delta to really affect the

real estate market that is you don't

need that many more homes for sale or

home city on the market to really affect

the market and so

i've been noticing these trends and

we're going to look at some crazy charts

here and numbers in just a moment

because we've got a big update here but

i've been noticing these trends since

january at least in my local market i

decided to sell almost all of my rental

properties in fact i'm honored to say

that as of today we have absolutely

zero tenants that means we went from

over 20

million dollars in real estate to still

having some real estate left but no

tenants we're still in escrow and some

properties and we've still got some

properties under construction but no

tenants kind of feels weird to say but

we don't worry we'll be getting back to

tenants very soon because that's how we

made our first millions and highly

encourage you getting into real estate

as well because you can do the same

thing but i want you to see some of

these charts so let's pull up these

charts here this first we're going to

look at austin texas now you might be

saying to yourself why are we looking at

austin texas well austin texas is where

i'm first noticing an inflection point

they're the first ones to really have

started

showcasing an increase in inventory when

i started noticing them right here and

inventory starting to increase i'm like

oh austin which is by many accounts

considered one of the best places to

live at least that's what magazines say

and a lot of people are moving to austin

people like oh austin's not going to

slow down it's boom town well i'm

starting to notice an inflection point

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see this inflection point here that we

saw in austin right okay so active

listings with price drops in austin

texas okay cool kevin but what happens

after you get active listings with price

drops in austin texas well you get the

following pending sales in austin texas

oh look at that our first stage two

decline first

you see active price drops skyrocket

inventory stagnate and at the same time

you actually see pending sales go down

and then when these sales actually start

closing you tend to see sales prices go

down you're not seeing that yet in the

united states you're already seeing that

in canada which happens to be where i'm

sitting right now but as of last week we

did not have this chart yet look at this

one percent of active listings with

price drops in the entire united states

skyrocketing uh oh

this just updated on the redfin data

center since it's a rolling four week

period and we just got an update on it

and boom do we have a national

inflection point but folks it's not just

here take a look at this percent of

active listings oops that's the same

screenshot here yo look at this we got

seattle folks boom explosion in seattle

in active listings with price drops now

you're seeing it in los angeles when i

first looked at this data we were not

yet seeing an increase in price drops in

los angeles now you are miami florida

also getting hit you've got boise idaho

also now getting hit you've got new york

getting hit you've got san diego getting

hit folks

you have atlanta georgia getting hit and

you've got tampa florida getting hit

people are like epic heaven oh real

estate is local yeah well when the

entire nation moves together you tend to

see no matter whether or not you got

these little like wiggles between

different markets it all kind of moves

together like the hand versus the

fingers the fingers being your

individual markets the hand being the

national overall market right so this is

a problem so we're seeing the same

trends that we saw in all of these other

areas that is the same trend that we saw

start in austin

followed by a decline in pending sales

the same trends are happening in all of

these other areas

folks you can go to the redfin data

center and see this yourself but you

might be wondering why is this happening

kevin come on folks look at this

this is your 30-year mortgage right now

it is sitting at 5.97

which means most people are probably

getting qualified for 6.25 to 4 sorry

6.5

which it represents a 40

decrease in purchasing power but what's

really bad about this line is the

inflection point that we got over here

at this uh green arrow so see this green

arrow

first follow the screen arrow down over

here this has been the rate of uh of

interest rates going up over the last uh

you know well this goes back to january

right so year-to-date increase in

interest rates back here is where i

warned you that there were going to be

problems coming to real estate and i'm

already finding it harder to sell real

estate today than here that should be

obvious especially as you're seeing

those price drops increase like crazy uh

so this was this was so obvious to see

and and that's why i've been taking

advantage of it and i dumped my real

estate over in this region here and i

got a couple escrow still closing here

but that's just the way it works

sometimes things take a little bit

longer but hey honestly for dumping over

20 properties in the span of six months

not bad

people like oh real estate liquid uh

yeah it can be but anyway so uh take a

look at this this was the rate of

interest rates going up over the last

six months then we got some really bad

inflationary numbers last week and look

at the rate at which now mortgage rates

are going up see this red line

represents a substantial increase in in

the rate at which rates are going up

right the acceleration is now stronger

it's kind of like you've got your foot

on the gas at you know 40 miles an hour

right here and then all of a sudden

you're like uh wait we need to pass

somebody going from 40 to 60 right and

that's now the speed that we're driving

at it's a problem folks it's a big

problem it's going to create some

massive opportunities in real estate you

better be ready but i wanted to give you

this update because folks this is

not not looking like a good trajectory

so far and if austin will pay attention

to my opinion to austin first because i

think austin is the canary in the coal

mine and everybody else is following and

so far everything we've been talking

about has been coming true in real

estate let's see how it ends up going so

far we still have depressed inventory

and i understand that all the real

estate agents on tech talk are like the

inventory is still low just wait it'll

change