Prepare for Massive Housing Market Catalyst | Huge Price Cuts Coming.

after your last listing link was

basically fraudulent deception I don't

know if he's just trying to pump the

stock or what hi Kevin can you elaborate

on your housing crash stance distressed

debt is less than one percent and most

loans are sub 4 rates appreciate all you

do this is correct so a lot of folks are

calling for a real estate crash that

could be worse than what we've seen and

the depths of the Great Recession that's

bullcrap this crash I in no way none of

the Research indicates to being anywhere

near as bad as what we have seen in the

Great Recession now let's be real there

is going to be a lot of fear that comes

to the real estate market in the next

six months now I want you to know this

we are uh when it comes to getting data

we are two months lagged thanks to the

the way the case Shiller index works for

Real Estate I could tell you today data

data for January already I could look at

all the numbers the sales data for today

in January and what does the case

Shiller do they spent time looking at

November so this leads a lot of people

to believe that real estate prices are

actually still increasing because they

hear the case Shiller index and they

hear that oh real estate prices November

year over year actually up maybe four or

five percent

but what's actually happened is that

real estate prices have started to come

down and the question now is how much

further will they come down do we expect

a foreclosure crisis like we had in 2008

absolutely not and it's true it's not

only because interest rates are

substantially lower or had been

substantially lower to where a lot of

individuals who actually hold uh real

estate are are not at debt distress in

fact they're much better off just

renting out their properties than than

selling them there's no necessary

there's nothing necessitating them

dumping their real estate because unlike

in the 2008 financial crisis we don't

have people who signed up for a negative

interest rate to be able to qualify for

the loan and then we're told that don't

worry when your rate readjusts to a

seven percent interest rate you could

just refinance it oh but wait prices

were falling so you can't refinance

anymore but you can't make a seven

percent payment because you were never

qualified to pay that and what happens

you get foreclosed on we now have

ability to be repay rules where the

entire

set of payments that you make you have

to qualify for no matter if you started

with a lower interest rate or you end up

with a higher interest rate so for

example if you have an adjustable rate

mortgage you have to show that you can

actually qualify when and if that rate

adjusts up to qualify for all of it

that's really important that alone is a

huge difference you also don't have

Ninja loans which were no income no job

no asset loans where basically dead

people were able to get loans you have a

pretty stringent lending environment

where the average credit score of a home

buyer before this started a recent

takedown although it's probably still

about this range the average credit

score of a buyer over the last 10 years

has been in the range of 740 to 780

average credit score of a home buyer

back in the financial crisis was closer

to 650 substantially weaker

now if we look at the fear that's coming

though and this is the big fear that

folks are going to capitalize on

substantially over the next few months

it has to do with median sales prices

change it take a look at this

what you want to do here is you want to

look at the Blue Line and I want you to

pretend that this blue line stays stable

that is home prices don't actually fall

anymore now let's just say home prices

stay stable at a national median sales

price of 350 000 well if you draw this

line stable going over to the right what

happens right now well it actually shows

that it's still above the red line so it

shows that home prices are still up year

over year right but what happens when

that blue line is right here under the

big black line and all of a sudden in

February we see that home prices were

353

000 last year and today they're 350 000.

well what are you going to see oh my

gosh real estate prices are down one

percent year over year you're not going

to hear the case Shiller index tell you

that home prices are down one percent

year over year until April

what's going to happen then when you go

to April of 2023 when you're in April

and you get that first negative one

percent what are actually home prices

down you're over here well if they're

still at 350 and the median home price

then was 374. well then you're going to

look and you're going to see that home

prices are actually down about six and a

half percent

year over year in April but the case

Shiller won't tell you that until June

and so now people are going to think oh

my gosh the housing Market's getting

worse and worse and worse panic panic

panic that's when the real pain comes in

my opinion unless interest rates fall

dramatically the 10-year treasury goes

down to say 3.4 uh 2.5 to 2.75 you're

not going to see a floor put under the

real estate market instead you'll get a

lot more fear because now you actually

have year-over-year price declines and

when you get to the worst part is when

you actually see home prices year over

year at the end of May go to a high of

389 000 and if they're just stable at

350 assuming no further declines if they

decline more it'll be worse

but assuming no further declines you're

looking at about an 11 decline in prices

year over year that'll get reported not

in June or May when it actually came out

but probably in July or August so you've

got another eight months of bad news

actually baked in to the mainstream

media narrative for Real Estate coming

ahead of you not behind you so the bad

news technically is still coming now of

course people like me are going to

continue to report what's actually

happening with that 350 number today

we could do this by looking at MLS data

to get exactly what our most recent data

is uh given that the Redfin data centers

Center is about one week delayed but we

could also go into individual uh regions

either through the multiple listing

service uh with Realtors or you could

play around on the Redfin Data Center

and you could actually see that in the

case of Austin you had another decline

last week in median home prices you're

down to 450 in median home prices that

compares to a peak of 572. 450 divided

by 572 that is a

21.5 drop is what you're going to get

reported eventually it has already

occurred from Peak to now but the lag of

that release is going to be quite

interesting

now you do have people like the CEO of

Redfin trying to mislead you into saying

that oh well the housing market is

getting better the first violation of uh

the CEO of Redfin in my opinion is

totally forgetting what happened in

January of last year let me make that

clear here he tweets and says in the

second week of November the number of

people going on a home for a tour with

Redfin agents was down 33 year over year

but by the third week of January that

number was only 19 down 19 which is

still bad but it's better and they did

the same analysis for people making

offers

I reply tweeted to this and I said dude

January of 2022 everybody stayed inside

because they were afraid of Omicron I

know that sounds wild but in the last

three weeks of January

you had very few people going out to

restaurants movie theaters real estate

people didn't want to get on me or they

were sick at home with army

so I think that's a bad comparison and

you shouldn't make that kind of

comparison and again I am not a real

estate like Mega bear who's saying we're

gonna have a worse than 2008 crisis

but things are probably going to get

worse before they get better unless that

10-year treasury yield plummets fast

this is what you want to pay attention

to the 10-year treasure yield yes it's

come down off of the four and a quarter

percent where it was in September and

October yes it is lower great but if it

shelves over here at three and a half

percent it is still remarkably higher

than the 1.5 percent we had when

interest rates were like two and a half

percent for real estate and mortgages

mortgage rates are still sitting at six

to six and a half percent your buyer

purchasing power is still down forty

percent and when you factor in the fear

that's coming you're probably going to

have more pain than not but that doesn't

mean 2008 level pain it just still means

more pain also consider this

institutional redemptions for real

estate investment trusts are still in

backlog that means companies like KKR or

BlackRock are still having to

potentially liquidate real estate

to give their investors the money they

say they will give them

this same thing is happening in

Australia right now dexas announced the

sale of six properties for 483 million

Australian dollars in December

signaling the willingness to dump assets

just to provide the redemptions they

promise to their clients to their

customers in America we have KKR

Blackstone and Starwood all of them are

potentially facing liquidations due to

withdrawal requests so think about what

you do have as a setup for 2023 you have

year-over-year fud

in terms of price decline news that

comes out you have institutional

liquidations not necessarily individual

homeowners dumping who've locked in

30-year fixed rate loans but

institutions who have to dump when they

get Redemption requests they don't have

the luxury of saying but but but guys we

locked in two and a half percent people

like give me my damn money

right that's the way institutional

Investments work so you probably have

more institutional liquidation along

with a massive backlog of new

construction the highest backlog of new

construction that we've seen since 2006.

so yeah there is bad news again I don't

think it's as bad as 2008 but it's

certainly not good and here's another

offense that really just pisses me off I

think the CEO of Redfin is just pissed

off that their stock is down Redfin

stock year today uh positive 41 sounds

really good right sounds great one year

down 76 percent

if you go even further and you go back

to the peak it's even scarier this thing

ran up to 96 bucks which means Peak to

trough this suckers down 93 percent

yikes

I actually bought Redfin at nine dollars

in the pandemic uh and I sold most of my

Redfin about 40 bucks because we saw

this real estate crash coming from a

mile away and there is no way

like 30 to 50 percent of agents are not

going to leave the industry that's bad

when volumes Trend transactions go down

you lose money at Redfin you lose money

at Zillow you lose money at expi so not

Investments I want to be exposed to

but this right here just really grinds

my gears the CEO of Redfin says bidding

wars are still the exception but not the

rule and says this is a property in

Sarasota Florida which just got 23

offers

and me having previously been an eBay

seller I know I can get a lot of offers

for things if I just listed up a book

and then the market sets the price right

and then I could tell everybody how I

got 100 offers on my property or my

product or whatever and it makes it seem

popular but I actually tweet replied the

CEO and I used Zillow to help me and I

wrote

detail helps

a 299 000 listing is what the CEO is

talking about here which was listed in a

neighborhood where other properties are

listed for 400 to 525 000 uh as list

prices

so in other words you under listed a

property potentially by over a hundred

thousand dollars

and it got 23 offers

a duh

you can have the market Fall another 20

and still be up money on that deal if

you get it for the right price so

another misleading thing so we got the

misleading information about Omicron we

have the misleading information about

the multiple offers property uh here

when we talk about Seattle

seeing potentially 12 offers on a 1.4

Million Dollar Listing with 155k over

asking for the home what do we have no

link to the listing so I can't even look

up and see what's going on over here let

me tell you about Seattle because I just

visited Seattle to look at the real

estate market you know what I learned

the agent's talking to me about how

they're not getting inbound referrals

anymore because people are leaving

Amazon vacating a 28 story office

building relocating 2 300 employees from

the office out of Seattle they're

pausing development of their campus in

Bellevue Washington why do I have this

sort of data it's because I'm running a

real estate startup we're starting a

real estate startup it's a startup after

all called House hack learn more about

househacko and househack.com we'll be

doing a reggae release uh probably in

about uh two months but anyway meta

subleasing two of its Seattle offices

because it's laid off so much staff they

can't pay the rent without subleasing

the empty space Microsoft is letting

three of its leases expire that's 1.7

million square feet of offices and new

offices that they were planning they

have canceled

the downtown Seattle office uh the

downtown Seattle Association that is uh

says that half of Seattle's core space

is Office Space

and new leases are down

33 percent compared to before the

pandemic

this makes sense because you've got

massive layoffs coming to areas like

this six percent layoff at Spotify

Tesla's laid off a ton of white collar

workers Google's laid off 12 000 workers

uh you've got Wayfair laying off 1750

workers Microsoft 10 000 workers meta 11

000 workers snap 20 gone 13 outlift gone

Twitter more than half gone Salesforce

10 gone coinbase 20 gone Redfin multiple

rounds of layoffs Open Door multiple

rounds of layoffs I think you've got two

like 20 layoffs at Open Door the amount

of layoffs that are happening in Tech

are insane so if you're going to be the

CEO of Redfin and you're going to tell

me that a listing in Seattle got 12

offers but you're not going to give me

the listing link after your last listing

link was basically fraudulent it's

fraudulent in my opinion to say that a

listing got 23 offers and not tell the

world that it was potentially under

listed by as much as 150 000 or as much

as 225 000 that's misleading I mean that

is just pure deception I don't know if

he's just trying to pump the stock or

what but I you know I I used to hold

Glenn kelman in esteem but this kind of

stuff pisses me off it makes me think

you don't know what you're doing you're

the CEO of Redfin you're not actually

providing context and instead what are

you doing

is you're providing quotes about how

Redfin agents are saying oh things seem

to be getting better we used to say take

your time but now we're not saying that

anymore now we're saying the bottom is

in let's go buy I have five people

looking to get pre-approved says one

lender well how do we know your lender

a isn't just a slow B and B oh my gosh

imagine that in January people want to

get pre-approved duh when do most buyers

buy most buyers Buy in March most

sellers sell in July of course more

people are going to get pre-approved

that's just the nature of of of what

happens in the cyclicality of Real

Estate

or let's get some more quotes instead of

facts on some listings I'm starting to

see offer deadlines again

it just bothers me that you have a CEO

that rather than providing data uh like

their own Redfin data center will

provide rather than looking at that sort

of data we're using anecdotes to talk

about the real estate market it's just

ridiculous

so again do I expect the real estate

market to crash like 2008 no but you

look at the home builders and they're

struggling contracts a DR Horton down 38

percent

they uh they had contracts come in as

they just reported earnings at uh at

just 13 382 versus the 14 528 that were

expected

massive moderation in demand for housing

the same thing is happening at uh KB

Homes and a lot of the other builders KB

Homes down like 68 in contract signings

or sorry their cancellations are up to

68 which is way above the usual like 12

cancel rate you see on new construction

it's insane

so yes I do expect there's pain coming

to real estate uh again do I expect it

to be as bad as uh 2008 no but is there

pain coming oh yeah

oh yeah

now what I do think is interesting

though is you do have entertaining uh

commentary on Redfin from a lot of

Clueless people on real estate or Redfin

Reddit I mean uh and some of them were

actually entertaining to to look at and

oh wow one of them has been removed by

the moderators uh anyway there was a

this post about pretty sure wife hates

the house we just moved into and when I

was reading the post this person's

talking about how they bought a home on

septic and on a busy road and I'm like

first of all you're an idiot you should

have taken the zero to millionaire real

estate investing course which tells you

not to buy a yeah but a yeah but is a

property where like look I bought this

cool house yeah but it's on a busy

street yeah but it's abnormal in your

area to be on septic it's stupid you're

selling an abnormal product and even if

you want to go rent it out you're going

to have less desirable tenants who find

it okay to live on a busy road and and

more likely to move in GTFO if your wife

moved into a house and hates it what do

you think the wives of tenants are going

to think or the tenants themselves

whatever what do you think they're going

to think when they move in they're going

to hate it too

don't buy abnormal real estate don't be

a dummy a dummy in real estate is

somebody who buys a yeah but a yeah but

is any property that's next to an auto

repair shop a graveyard on a busy road

or Worse all three which I have seen

before next to a graveyard auto repair

shop and busy road that's stupid

properties under high tension power

lines not normal power lines that's

normal but high tension power lights

stupid you'll glow in the dark and die

there are some properties you just don't

buy

now I don't know what it is with with

Reddit removing a lot of uh the the the

posts that I'm trying to talk about here

but here's you actually still have the

post of the picture here this is a good

one they actually wrote a rare time in

which you wish you had an HOA this is

another thing that I actually teach in

the zero to millionaire real estate

investing course coupon code expires

January 30th

you want to buy properties in a

homeowners association to rent them out

most people most home buyers who come to

me are like why would I want to buy a

home in an HOA they're going to tell me

what to do

well then don't do stupid [ __ ] it's very

simple

an HOA is almost like a property manager

for the neighborhood it makes sure

people aren't dumb and leave rusty water

heaters on their lawn park on the grass

or put Billboards in their front yards

or do stupid stuff like this picture

here where you have a Joe Biden poster

saying he has dementia Jared Polis sucks

Joe Biden's an idiot Biden remorse Biden

wasn't elected he was D what is that

installed oh my God anyway so like these

are the stupid things that HOAs prevent

because these are the things that ruin

neighborhoods these are the things that

make a mess and you might agree with

those posters but you don't want that in

your neighborhood because it's going to

lower property values in the

neighborhood it's going to lower

desirability of people wanting to buy I

don't care if you're a democrat or a

republican but if I am a real estate

investor I want your money that's the

way it works I want you renting my

properties and I want you demanding to

rent in my neighborhood because it

increases rents it increases sales

prices I don't want dummies like this

jerk with all his signs ruining property

values in the neighborhood I don't want

that and so I actually prefer to invest

in neighborhoods that have small HOAs

again you got a rules body you've got a

way to actually Force compliance it's a

great thing you don't want people

leaving their Christmas decorations up

all years all year long because they're

too damn lazy to take it down

that's how you ruin neighborhoods I've

gone through

2003 built neighborhoods there's a 2003

built neighborhood in my city and then

there's a 2004 built neighborhood in my

city one of them has an HOA the other

one doesn't the one that doesn't have

the HOA has people growing squash in

their front yards RVs parked all over

the place and everyone painting their

home a stupid insane different color

from black to neon orange I kid you not

I will take you through that

neighborhood and show you it is stupid

you go through the HOA neighborhood that

has an 18 a month HOA no RVs no cars

parked on the grass consistent paying

schemes wow higher property values

imagine that imagine real estate

actually being better when you have some

homogeneity and Conformity and you don't

have stupid yeah butts

wow I don't know real estate's simple

but apparently a lot of people don't

think so