Will The 2022 Housing Crash Be Worse Than 2008?

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Many economists are talking about a potential 2022 housing crash, but very few are comparing this housing market to the 2008 crisis. In the video we will look leading indicators, debt levels, and monetary policy from both periods to determine the most probable path forward for the 2022 housing market.
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Опубликовано:

16 сен 2024

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Комментарии : 516

@msallomi3417 Год назад

2008 had garbage loans adjustable rate, where the borrower was actually able to "state" their income. This means if you tried to get an auto loan, you would get declined, but if you apply for a home loan refinance you could literally lie about your income. This coupled adjustable loans. In 2021, 95% of mortgages taken were fixed and income was vetted. In addition government loans like FHA are now assumable. This means if you have a 2.5% rate, and are forced to sell, a potential buyer can qualify for your current rate. So Foreclosures will not be anywhere near 2008. Common sense facts over trends and graphs people

@stupidd6513 Год назад

I was at WF in 2008, trying to help underwater homeowners with HARP. What a nightmare.

@realestatemindset 2 года назад

What an absolutely intriguing and clean breakdown of the comparisons. Well done sir, I applaud you 👏👏

@EPBResearch 2 года назад

Thanks for watching!

@AnonYmous-vm5ls 2 года назад

this video was bonkers!!!

@realestatemindset 2 года назад

@@AnonYmous-vm5ls 😂 love you dude

@AnonYmous-vm5ls 2 года назад

@@realestatemindset Hey brother give me a shout out next video. Juan from Miami. Me and my fiance watch your videos everyday. Take care bro

@cjstock5978 2 года назад

Travis from RE Mindset sent me here. Love the video, new subscriber now!

@bobsacamano7653 2 года назад

The big mistake that was made was keeping interest rates at or near zero for so long

@bradwhitt6768 2 года назад

yes and fed MBS buying. They essentially bought all the subprime that would have been in derivatives of the last housing market crash. This crash will be worse.

@cjstock5978 2 года назад

Totally agree Bob, I remember thinking in 2021, what is the fed doing, and I am very far from a financial guru. The pros should have seen this coming and changed course a year before they did.

@jamesnguyen7069 2 года назад

"big mistake" yay it was literally planned dude...

@mikefleek9259 2 года назад

And many "amateur investors" speculated in real estate . Glad to see prices normalizing, I need a retirement home.

@buddie623 2 года назад

Not sure it was by accident. The county tax collector are raking in billions. This is criminal. Japan kept rates near zero. The CPI is fake. Rates should never be below CPI. There hasn't been incentives to save money for decades. This was man made deliberately.

@raybarrettiii 2 года назад

Uhhh yeah, that's not only good economic analysis, but your presentation skills and video transition skills are perfect. You don't see this very often at all.

@hsingholee1058 Год назад

The biggest difference between 2008 and today is that mortgage rate was the leading factor in 2008, whereas job-loss or mass layoff will be the single most important factor to determine we will have another correction.

@truthaboveall7988 Год назад

No the loss of $ in the coffers after spending 8T to lose wars in Middle East the GFC & covid grift /we r going to c an economic paradigm shift which we were meant to have post GFC but Obama joined the republicans & so we ended up w Wall St in power just as the GOP loves it /trump gutting Dodd frank helped wall st buy homes & that cost is the highest print on CPI which the fed is battling w old data so they will break it all as usual since Great Depression

@jcpt928 Год назад

This. There is very little correlation, if any, between what happened in 2008, and what MIGHT happen soon.

@jonunderwood2476 2 года назад

Great explanation, but you buried the lead. The simple biggest factor in downward pressure is a reduction in buyer purchasing power due to the Fed raising rates so fast, and the rest of it just makes that worse. Increased interest rates have already reduced buyer purchasing power by 40%+. 1) Take any loan calculator you prefer, calculate the monthly payment on a $1m mortgage with rates in March 2022. 2) Then, raise the interest rate to todays/next hike rates instead, but keep the same monthly payment you had before. This will force you to lower the house price down from $1m to below $600k….because that same buyer who could afford a $1m house in March can only afford a $585k%+\- today. Simple math. This is the same house, with the same down payment, same credit, same monthly payment, but the buyer pays more in interest and less in purchase price. People are often approved for around 40% of their income, and they tend to buy as much house as they can. The Fed has gutted buyer purchasing power, prices are forced to follow, but cash buyers are still buying with 10% price reduction. It will be 40% price reduction by next year from the steps the Fed has ALREADY taken, regardless of everything else in the video. QT is awful for the FIRE sector + bad for crypto because the Fed is draining liquidity, not enough money to support these asset prices. The top is in for Real Estate, and the Fed is going to resist lowering interest rates below 2% ever again, so it’s not coming back. There won’t be the foreclosures we saw last time because no NINA loans, but prices are crashing in slow motion….sell it all, and sell it now

@jamesnguyen7069 2 года назад

a war will kill the market

@jonunderwood2476 2 года назад

Housing prices are dictated by purchasing power, how much house you can buy fir the payment you can afford. I don’t see a war on the horizon for the US that will fundamentally affect that, but an increase in interest rates by the Fed affects it same day.

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ?

@MarketFund2k 2 года назад

You're on to something here, but let's put it in reverse shall we? The homebuyer now can afford the $600k house, but what about all of the people who already bought the $1M house in the last couple years and elected for the variable interest rate loan? Now they're in a $1M house when they could only really afford 60% of that house = they really can't afford the house they're in. So, you can see how the defaults are looming and will start rolling in. Thankfully there's fewer variable interest rate loans out there now as compared to GFC and no more teaser rates on subprime adjustables (that I've heard of) but what's the difference if the teaser rate expires and your interest % jumps to double the rate or the FED does it for you? It may not be of equal magnitude to previous, but the mechanism is starting to resemble the issues of yesteryear. As far as CDOs and CDS, do you think these instruments went away? The big banks aren't required to disclose their inner workings. You better believe they've been cooking up new schemes in the past 14 years. How do I know? Do you remember in 2020 and 2021 when the investment banks were reporting record profits off their trading desks? How do you think they made those profits? The most lucrative parts of the market are the esoteric fixed income markets that nobody understands besides maybe the lawyers who write the agreements. Is this true? I don't know, I can't check, but this is what happened last time and I don't see any change in incentives for these degenerate gambler types that grace the halls of Wall Street. Why do I think this? How many people have you heard say that it's different this time, it's not at all like the last housing crash? Credit scores are better this time. There's no way anything could go wrong. You have to offer $50 grand above asking for the house to buy it sight unseen and skip any inspection whatsoever. People will be writing books about this crash in future decades and wonder how we missed the signs that were so obvious, but we are too busy looking backwards, patting ourselves on the back because we're so much smarter now, and ignoring the reality of the situation that's right in front of our face. This crash will be spectacular. Will it be as bad as last time? Honestly, what's the utility in guessing at something unknowable. This time the FED can't bail everybody out again. If it unleashes a tsunami of liquidity in sufficient size to backstop every bad asset, inflation will flare up again worse this time. The FED CANNOT DO THIS and they're finally starting to realize it.

@markrealestateagent 2 года назад

@@MarketFund2k you are current

@chriholt 2 года назад

Thank you for this! At 67, I'm looking to finally buy my first home - had to move out of California to Minnesota first. This kind of info is super helpful!

@RogueTravel 2 года назад

I’d wait a little bit if you can

@markrealestateagent 2 года назад

Do you want to buy a home. ?

@pings007 2 года назад

Can you wait another 3 months?

@markrealestateagent 2 года назад

@@pings007 hey

@HA-nx5qn 2 года назад

Why waste your time here? If I were your age I 💯 would bounce to the Philippines or another south East Asian country and buy there cheaper and MUCH better quality construction that the crappy materials used in 99% of American homes. Marry some 19 year old Asian beauty and enjoy my golden years😄

@zhuochen 2 года назад

One of the things to remember is that CA has a cap on property tax growth. Property tax can by law only go up by 2% per year if you don’t sell the property. I talked to a lot of investors who bought 5 years ago and they are paying 20% less property tax than their neighbors. By selling, you lose that property tax discount. As long as the cash flow is good, a lot of people still want to hold on to their investment properties

@johnsmith-dh9mu 2 года назад

Conjecture

@networth00 2 года назад

Did you know you can carry that low property tax rate with you for the next house you buy, if they're over 55yo? Talk about stoopid california laws. Prop 19.

@curtissharris8914 2 года назад

@@networth00 why so I intend to use it this year, will save me about 500 a month.

@DigitalYojimbo 2 года назад

when fed rate goes to 4% people are going to be dumping their 2nd and 3rd properties. alot of people with variable rates or rate renewals coming up will be having a fire sale.

@chrispaul1117 2 года назад

@@NikolaiRay renters will double and triple up. Learn from the illegals. Carlton Sheets forgot to add that in.

@chrispaul1117 2 года назад

@@NikolaiRay why is rent growth going up when house values drop and supply comes on line ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-IZ65sM01K6U.html

@hospitaladministrator3359 2 года назад

@@NikolaiRay income would need to keep up with that

@zenfuri89 2 года назад

@@NikolaiRay people will be upside down on their loans. Nobody is going to pay the super sky high rent while they hold a depreciating asset makes Zero Sense.

@JC-cf4rs 2 года назад

@@NikolaiRay rents will be dropping soon, sorry but that thesis won’t hold water

@jmoneymillionaire6705 2 года назад

Such a great video. Well done! Totally puts to rest the main-stream narrative that we have a housing shortage when the months supply of homes is skyrocketing

@spatialinterpretations449 2 года назад

It is more to do with affordability. Homeless is up up up up.....

@herlanrulz 2 года назад

oh don't get it twisted, there are supply issues. It's caused almost exclusively because of all the corporate equity parked in single family homes + all the wanna be real estate moguls buying up house after house and then renting them out to pay for their mortgages. The ones in my rural area have 30-80 single family homes each. Buying up entire areas, then renting to families or putting them on 1 week at a time rental websites to pay for themselves. It's a dogfight to try and get a house before one of them snatch em up with their inside connections.

@Asian0Riceballs 2 года назад

I’m I think that’s a misleading statement. Supply is going up because rapidly increasing interest rates are sending people to the sidelines in droves. It’s not like construction companies have ramped up building new homes across the USA.

@e.h.4933 Год назад

It's still a shortage in affordable housing. If people can't/won't enter the market, it doesn't matter how many new homes there are if the people who need a new home (or any home) can't afford it.

@ok373737 2 года назад

I like that you are not yelling "crash is coming" like the other RU-vidrs but rather present the data objectively.

@avenger1212 2 года назад

While I agree the housing market downturn will be unlikely to cause a banking crisis, as you pointed out we're dealing with financial issues beyond housing this time. A bubble in say consumer revolving credit, or auto debt, commercial debt and real estate, or any combination of, could exacerbate a housing downturn and risk another global meltdown. It is in a sense an everything bubble.

@mjsmjs7905 2 года назад

In New Hampshire prices are going through the roof, and not coming down anytime soon. Inventory not there.

@scottandrews947 2 года назад

@@mjsmjs7905 This is false. New Hampshire housing prices are already falling significantly. Median home sales prices are plummeting.

@rockfire1669 2 года назад

@JJ Macky you are right in it not being a complete fallout, however it will be more fallout than 2008

@mjsmjs7905 2 года назад

@@rockfire1669 na, 2008 was the perfect storm, and you saw it coming too, housing prices were doubling every year it wasn't sustainable, then wapp! Everything crashed at the same time stock market, housing market, job market. You lost your job and your 401k was evaporated, if things get that bad it'll be Armageddon.

@nole8923 2 года назад

Very good analysis but one thing you left out is that a major factor causing the inflation is supply chain issues. And increasing interest rates aren’t going to solve that. The liquidity needs to be invested in new factories, plant and equipment so we are no longer dependent on places like China. Therefore government policy needs to be focused on encouraging the liquidity to go towards rebuilding our manufacturing and supply chain and training people in the jobs that are required for that. And discouraging things like speculation in the housing market.

@ChrisandCaroline 2 года назад

But it’s not though, the major factor is the money printing and hand outs by the fed, the supply chain issues are a part but not the major part of why inflation is up.

@saadhussain6155 2 года назад

What about foreclosures? Where do they factor into this equation?

@1973superdad 2 года назад

they come after companies start laying people off, probably later this year or next year, then about a year after that foreclosures uptick, so guessing 2024-2026

@CaptainCaveman1170 2 года назад

Foreclosures AND strategic defaults. Everyone knows somebody who got two years of free rent last time by squatting. This generation won't hesitate to "flip the script" on the system if they feel they were tricked...and they were. What comes next would be soooo predictable if the Fed and the Government weren't the wildcards. I am sure they are going to allow millions to squat indefinitely (again) and the Fed will keep buying all the toxic waste securities ad infinitum.

@CsondesMateHUN 2 года назад

I really love your content, the best channel for knowledge about macroeconomics. Just a suggestion to consider, but personally I'd love to see clear cut videos with simple explanations about how macroeconomics generally work, how different parts come together, so a diligent person can make up his own mind about what is about to happen on the long term in the economy. Anyways, great content about recent developments as always.

@alp.9672 2 года назад

No, this video was great. There are plenty other channels if this was too difficult for you.

@doctorsofficecafe 2 года назад

Add George Gammon to your viewing list. He also has excellent whiteboard presentations explaining macro.

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ?

@yuni360 2 года назад

Just started subscribing the channel This channel is a pure gem I think

@pedrolimaneto5573 2 года назад

Great difference regarding mortgage approvals between 2006-08 and today's market. The banks are way more cautious approving loans to people, therefore, the majority of people who bought house(s) in the last 2 years, were well qualified. Consequently, way less foreclosures in the near future. Which was another contribution to the 2008 crisis.

@jshep23 2 года назад

Well, I subscribed. Best detailed explanation of all of this so far. Incredible quality. *Real Estate Mindset* sent me 👍

@raymondcapone2728 2 года назад

The only metric left out is the cost of the home at the time of mortgage inception. The median home value in 2006 was approximately $245,000 on the prevailing interest rate but today’s median home price is $405,000 and interest rates are still climbing (with no end in sight until 2024) at a historic speed. We are in big trouble!

@Darkdevil1584 2 года назад

not gonna lie i really dont understand what the game plan is, no company will be able to afford to pay enough money to keep up with all this nonsense people need to eat and live, not just work to pay rent, its unsustainable. In my mind prices must come down before everybody just suffers even more then now, in my life time my parents home went from 250k to 1.3m who the fuck they gonna sell it to? my generation has no money.

@sergequick5053 2 года назад

@@Darkdevil1584 opendoor or black rock will buy it in cash rent it out to as many people they see fit to make a profit

@justinhaase8825 2 года назад

I will agree that cost to acquire is a real thing for long term landlords. Then we have so much free money and inflation…but also a low in places to live…because homes or places to exist are now not just a thing but now a profit center from a second home or more owner. The thing is few real estate investors are looking towards replacing…but rather cost of buying and maintenance and taxes and still be worth being a “property manager”. Long term all property investors are property managers. So is their cash flow. They are the useful idiots.

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ?

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ? Our home price are negotiable worth $100,000

@Eyes0penNoFear 2 года назад

That was a ton of data packed into this video, well done and earned my sub! On a very minor side note: locals pronounce the a in Nevada like the a in apple, not like the aw in saw.

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ? Our home price are negotiable worth $100,000

@joe7665 2 года назад

We didn’t have high inflation in 2008. Food is over 20%, cars, property taxes up, utilities and a looming layoff crisis…🤔 Not much wiggle room if u had a tight budget to begin with

@wakethebarbarian4577 2 года назад

Best video on housing and economics I've seen in awhile. Keep up the good work!

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ? Our home price are negotiable worth $100,000

@bills.1390 2 года назад

Very informative, and you are correct about large companies like American Homes for Rent are the unknown component this go round. These companies bought thousands of homes for cash, so interest rates are of no consequence to them. Also, we should include the large influx of foreign buyers, particularly Chinese and Indian that are also cash buyers. The question is, will these groups gobble up homes at the greatly reduced prices that eventually will come or will they be satisfied with their current holdings ? Many builders have ceased building as many buyers have backed out of contracts to buy, so the chance of a major "glut" seems less than in 2005-2007. And lastly, all real estate is local, so none of this applies to some areas, at worst, they stay flat for awhile.

@mjsmjs7905 2 года назад

Hate to be the bearer of bad news people. Home prices are going up and they're going to keep going up. The only thing that's going to bring them down is the economy completely falling apart, and right now we have a labor shortage so not happening anytime soon.

@ToblerX 2 года назад

Dude these videos are fantastic. Pure data, none of the finance youtuber bullshit. Got my sub!

@jarenb2331 2 года назад

You should do a video on global debt, as there is a good chance of a sovereign debt crisis emerging in a few countries.

@jwndr 2 года назад

This is exactly what I was suggesting. US debt is one data point, but if we look at what is happening in China (given they aren't transparent about their data), UK, and Germany, we see a pattern globally of the impact of QE through the 2010s. One way this could play out is that the US is relatively okay compared to the coming energy crisis about to befall the EU and the US Dollar or gold will become in high demand as inflation runs rampant in other countries. This isn't supported by any data, but one scenario that seems possible.

@RP-le1fp 2 года назад

Got to wonder why anyone would lose their home and their 2% fixed rate home loan when all they have to do is rent a bedroom or two.

@coffeecoffeecoffee7651 2 года назад

Crystal clear and extremely informative video as always. Thank you!

@johnshaff 2 года назад

Good video. An important point is that change Real M2 Growth rate, is not the same as change in Real M2. This is not a minor point as the Fed obfuscated their path on balance sheet reduction, delaying settlement (by choice not mandatory process), while constantly sending governors out to talk about reduction while doing almost none

@powercharles1008 2 года назад

Could you do a video on what sectors will thrive coming out of this recession and/or add context of what is the ideal reaction to these negative market trends? Excellent videos by the way. Just interested in options to address these trends.

@ryanwalthuis1928 2 года назад

No one will buy new homes because one, first time home buyers will not pay those high prices and two, those who own homes have low interest rates so it does not make sense to buy new homes. This will lead to layoffs in the housing sector and recession.

@federaider3847 Год назад

I think this needs to be compared to ownership/eent rate for people. Alot more people were focused on ownership during 2008 crash, much less so today. At the same time people are renting their homes over selling them

@onafunjourney 2 года назад

No, because there is no ‘22 housing crash. 4 months left in the year and we are what maybe -5% from the peak and still positive YTD. Maybe a ‘23 crash will come but doubtful unless you call -15% a crash crash cuz that’s very likely. But it wouldn’t even bring us back to 2020 prices. What would that take maybe -33%? If it does come I welcome it. How are young people ever supposed to afford houses at this rate? I’m sure people make a lot of drama out of -33% move but after +44% climb the last couple years calling it “CRASH!” seems like hyperbolic nonsense to me. Are we going into recession? Yes. It will be the the 48th in our nation’s history (U.S.) It will not be as severe as the Great Recession as a lot of excesses and bankruptcies were cleared through the system. Americans have record home equity and record low unemployment. Sell things if you must to keep in line with risk tolerance. I am about 60% out of the market now and would love to buy a nice condo in one of a couple sweet locations I’ve been eyeballing for years. Forget the drama, make decisions from the mental level not emotion invoked fear of missing out or fear of riding down.

@alexanderyozzo 2 года назад

I like the other side, good perspective. But it’s hard to not jump on the bandwagon. Patience

@WildcardWondersTV 2 года назад

My friend, you just earned a new subscriber. Amazing video of breaking it down. Cheers!

@hamiltonblake1129 2 года назад

So glad I found this channel, he’s like the student that teaches better than the teacher does

@future62 2 года назад

Thanks for your brilliant content as always. I wish your subscription service had a lower tier though.

@EPBResearch 2 года назад

On the way! Check back in the next month or so

@jonobester5817 2 года назад

You can thank Alan Greespan

@future62 2 года назад

@@EPBResearch keep us posted!

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ? Our home price are negotiable worth $100,000

@ThorSparks 2 года назад

Amazing visuals. Not sure about your closing statement regarding private vs. public debt though. It's possible I misunderstood the statement. Many people have purchased homes while their value was inflated and most of that was by going into debt, the investment firms did the same and are expecting to receive rent. But many are being laid off and not able to afford daily needs due to inflation. The historical solution is to move back in with family. (AKA reduced need for high priced homes. This will greatly affect both private & public investors.) Note the larger chance for moving in with family due to how the pandemic made people feel.

@yufu9875 2 года назад

such a great video, Love this series so much! I have turned on my loudest notifiction for you!

@vircervoteksisto5038 Год назад

As a homeowner I would be more than happy to see the value of my property decline because spiraling housing costs don't help anyone including property owners who have to pay more in the form of property tax and property insurance. Not to mention spiraling housing costs lock me into a property because if I sell it, I couldn't afford to buy another comparable property.

@robinbjoernplatte1822 2 года назад

Thank you! I am facinated by how well you set up those videos!

@mikebrown6250 2 года назад

Mortgage rates that were adjustable and made ballon payments with zero verification of credit or down payments caused the bubble. The loan companies just gave away home loans to unqualified buyers and made loads of money. Greed. Greed caused last housing crisis. We are nowhere near the same type of bubble.

@hermanrogers1325 2 года назад

I don’t think it will be as bad as 08

@AttemptedValue 2 года назад

Love the visuals, getting better with each video!

@maverickjones9418 2 года назад

Another tidbit here, a lot of people aren’t going to give up their low interest mortgages and rent control like in California have capped rising rent payments year by year. A lot of people are essentially stuck in their current living situation which kills demand.

@heyjonbray 2 года назад

I think it's the same situation, showing itself differently. The previous bubble was concentrated for a number of reasons: The states with large growth offered financial incentives for small businesses, tax breaks, and other incentives to get people to move from the low concentration states. Those that had the financial ability to move did so, even if it was just enough to do it and not be able to afford a new home. Government incentive prior to 2008 was focused on the institutional sector, which is why the bubble was concentrated there. However, now with quantitative easing and other Fed policies, the "remedy" is being directed at the populace. Those with the means to do so (the upper-middle class is mostly evenly distributed in the US) purchased homes even though the market wasn't favorable. This can, IMO, only lead to a liquidity crisis where cash outflow from citizens makes it's way into institutional debt and by the time this current bubble begins to collapse, it's going to be an instructional problem all over again. No matter how hard The Gov't tries, if they don't put people first, people will fail, and they'll be right back to cleaning up a state and federal level mess!

@drott150 2 года назад

_"Today, we have _*_financial innovation_*_ ..."_ Yes, we certainly do, don't we? 😂

@dylanwatts9344 2 года назад

I don't know about this... Big institutions buying up private housing is causing a massive rent spike (+50% over projected precovid). This on top of only larger houses being build (1900+ sqft), more expensive houses being built, it is driving consumers from the market. So with the lack of savings due to rampant rent increase, only more expensive houses being built, and demand increased due to corporate is a perfect storm to cause a massive economical crisis. As housing nose dives corporate will pull out, but due to lack of savings because of rent spikes no consumer will be able to buy. Personally, I'm theorizing a massive crash and any home owner will see the value of their home drop to half while rent sky rockets further as people try to get out of the market. This is a veritable Titanic sinking situation because not everyone is going to make it out without some level of damages, from minimal to extreme.

@CarC369 2 года назад

5:04 LOL I love how you have a pokemon card as financial assets

@jaf70829 2 года назад

It's not in the same situation as 2008, inflation rate is higher and employees rate is growing up then house value never never comes down.

@stevef7814 2 года назад

If stocks go, so goes housing. Stocks could go very low 2023

@ntrod84 2 года назад

Thanks for once again educating us and sharing your knowledge in such a concise and clear manner. Curious to know if the share of homes bought by institutional buyers and speculators is large enough to have a meaningful on existing supply should they decide to liquidate. I have seen some stats suggesting that their share is not large enough.

@Ltlbrthr12 2 года назад

I didn't hear you mention unemployment. In the late 2,000's the unemployment rate got up to 10% causing people to not be able to pay their mortgage which then became record foreclosures. If unemployment goes up as the Fed has indicated it will, then housing bubble 2.0

@grafik1979 2 года назад

This is great man. Heard you on the Hidden Forces podcast and have been reading all of your stuff since then.

@jeffreylevin9728 2 года назад

Your statistics are missing a lot of content. In 2005 though 2007 new home home sales represented approx 15% of all home sales. In 2022 its about 10%. So that graph that shows spiking new home inventory - 10 months. That is apprximately 400,000 new homes across the entire US. Its not that huge. Also - the new homes are predominantly in markets that are ssing significant influx of outmigration from high tax states - surprised? Also - you are glossing over the debt issue. By the end of 2008, 5% of all mortgages were in default and another 4% were approaching 90 days past due. That means that by the end of 2008 almost 2.5% of the entire housing stock was in default with another 1.5% approaching and therefore would be coming to market within 90-180 days. Total less than 1% of mortgages are approaching default and significantly less than 1% are in default. Therefore at present there is no incoming wave of defaults that will be hitting auction markets in the US. Remember, 4% of the total housing stock in 2008 represented an entire year of sales (130 mm units in 2008 with a 4% default to market rate). This is what crashed home prices. Do i expect a number of markets to see downturns over the next 24 months. Sure do. Do i expect anything near 2009-2010 24 month period, no. Remember housing is a real asset. If you want combat inflation, own real assets. There is a natural underside to the price action given the current market fundamentals.

@gregoire4496 2 года назад

Really instructive video! Would it be possible to do a similar analysis of the UK housing market. Looks to me after brief research that the demand of homes is still above the supply so I guess it's an indicator that prices can only increase? What are your thoughts?

@mrjeffreylai 2 года назад

Economists are mostly agree that 2008 housing bubble was caused by Subprime mortgage and MDS. And recent housing bubble is caused by trillions of dollars dropping from US government to people & inventory shortage caused by 2008 crash. It is likely we will have a housing price “correction” rather than a crash.

@Ralphhy 2 года назад

Fantastic video!!! Touch a few point we discussed on your twitter! Keep up the fantastic work man!

@nathanlindley Год назад

Bro, these videos are the smartest thing I've ever seen on RU-vid

@SquirrelsLoveAcorns 2 года назад

Also combine increased mortgage rates with the current rate of inflation and mortgage payments become even less affordable.

@Halofanization 2 года назад

Great concise video as always. Keep up the production quality!

@ahmedroman8237 2 года назад

Here is a stupid question. If banking system is using housing as a financial asset and most debt is auto debt/student loan for people and government debt, then why would the housing market crash? Who is going to be forced to sell homes. It seems that banks are on solid ground, so they have no reason to sell assets that bring rent. The only thing I see is that unemployment becomes higher because the mounting corporate debt (tens trillions of dollars per year) is due to be refinanced. But who is crazy enough to refinance at this point with such high rates. So companies either default on their debt (go out of business => employment goes up) , pay up (which means less money => lay offs to lower costs), or refinance (more obligations and so more lay off to satisfy obligations). So people who are laid off are likely to default on their loans. How large will that number be? Will be large enough to cause a similar crash to that of 2008? Could banks be forced to sell of houses that they own because of QT? If so could you explain why that is?

@hermanrogers1325 2 года назад

Now here in 2022 a lot of people who bought single family houses they payed well over the value of the property and they are stuck and if the value drop they will be stuck paying for a over inflated price for a property that’s not worth the value and a whole lot less than what they payed for it and they will never see any equity until 20 or 25 years

@RichFlemingRealtor 2 года назад

A couple of things ... the 2008 crash was essentially do to overexpansion of VERY poor credit quality mortgage products that required little to no downpayment. The 2022 slowdown is purely interest rate driven. the market had an incredible run-up due to unheard of low interst rates. The reduction of rates, due to covid, increased people's buying power by 25% to 30%. Credit quality has been has remained pretty high, though. Next, you over-emphasize the importance of new home construction. While it is important to the overall economy, in many established metro areas, existing homes sales make up the majority of the market. If I recall correctly, existing homes sales are typically 8 to 10 times more in units than new home sales. Finally, I don't think you emphasized the current housing shortage in many markets which will act to prevent prices from crashing. There was somewhat of an oversupply in 2008, then little new construction for 5 to 7 years. Now the nations is short of housing of all types.

@tommyhunter1817 Год назад

This is a different time. The 2008 crash built up a HUGE demand for homes. It’s the rubber and effect. Once people get used to higher, more normal, interest rates, home sales will respond. Nothing is static.

@TheEpicChikidii 2 года назад

I love to hear an analysis of the Canadian housing market too, it is rarely talked about but totally out of control!!! We have had 40% price increases or more in housing prices during the pandemic and I think your analysis of it would be very interesting

@colsonskur6714 2 года назад

What would be the best way to take advantage of the housing bubble burst? How do you properly short housing?

@dflo.fitness8882 2 года назад

Look up drv stock

@doublehd159 2 года назад

Love the clear & concise info and sweet graphics. Great work!

@edubmf 2 года назад

Said it before but it bears repeating: you have to do Canada, it's insane up here.

@johnbrooklyn285 2 года назад

Really great info keep up the good work

@T.RiceBuilds 2 года назад

Amazing video. Well worth subscribing to. Thank you for such a great video. 👍

@TheHomesTeam 2 года назад

Excellent video! Great content, great presentation, and your narration is on point.

@unabonger777 2 года назад

I understand the Fed has been buying 40 billion or more in mortgage backed securities , MONTHLY, since late 2019, instead of those MBS being sold into the market via Fannie Mae back in 2008. Is it true that the fed will be ending that program now? What effect will this have on mortgage rates and availability and what will be the end result? Could this initiate a much more rapid decline?

@myfree090 2 года назад

@2:15 90% of that 11 month house supply is basically concrete slabs and not complete houses. these builders can leave it like that with little loss for quite a while too.

@papigus5027 2 года назад

Excellent content!

@GuansCorner 2 года назад

last time nobody knew the toxicity of the financial engineering. could there be something else lurking like that this time? did the financial debt move somewhere else? corporate debt is also thru the roof. on the contrary, i guess it is possible that all the excess liquidity replaced debt growth these past 5-8 years

@jd2569 2 года назад

Very well done video. Great voice too! 😊 Thanks for the information

@johnhouston8445 2 года назад

quality content with great info I haven’t heard anywhere else! You da best!!

@Vid_Master 2 года назад

No I highly doubt we will see a housing market crash. In order for the housing market to crash, there has to be massive lending issues and not enough people to buy the homes. Due to covid, there arent enough houses being built, we are in a housing shortage.

@banished341 2 года назад

Considering the insane inflation in rent, households are stuck between a rock and a hard place of unaffordable housing. We just bought a house despite the slowdown because we live in a HCOL area and our landlord wanted to raise our rent by over 40%, so even if our home's value will decline slightly, our break-even point between our closing+moving costs and "wasted monthly payments" (rent/interest) is just 1.5 years. I get that our home's value might decline temporarily, but at least we'll have "reasonable" stable monthly housing costs through our fixed-rate mortgage. This country is rapidly going to shit.

@bigmike9433 2 года назад

I have a friend who bought in 2006. He paid around 200k per house and put down 10 percent on each house. I have rentals also. In 2009 he let them go back to the mortgage company. He told me he had lost 100k on each house. I told him I would not have let them go back to the mortgage as they were all rented. Today those same house are worth close to 500k each. Mine are now paid for. No one knows the top or the bottom. You could be better off than you think. At the very least you have pride of ownership. Congratulations.

@unabonger777 2 года назад

they are attempting to raise the rents high enough to cover their notes on houses they paid way too much for. it won't be enough. welcome to the club.

@jwfriar 2 года назад

You forgot the biggest part of all of this - a massive under supply of housing when you have millennials coming of age to buy and there are no houses to buy. The “months of inventory” metric you site is extremely skewed by a short term slowing of housing sales, but the actual houses available is much lower than that metric suggests. Supply and demand is still massively skewed. You also didn’t really touch on the fact that there was an oversupply of housing in 2008 or that their houses were underwater when today they are not. Most have plenty of equity to survive and storm and won’t face foreclosure as they did in 2008. Overall, I think you missed several key pieces and overweighted toward a scare when there isn’t one

@g2121g21 2 года назад

Yes, but most Mileanians do not have the income to buy a house, some live with their parents, others prefer to rent rather than buy because they have the resources to buy a house 🤷‍♂️

@jwfriar 2 года назад

@Strategic Housing Analyst there are absolutely not 25 million empty or defaulted houses. Whoever told you that is lying

@jwfriar 2 года назад

@Strategic Housing Analyst 164k homes in default in the US this year. You are only off 152X…..HAHAHAHHAHHAHAH

@jwfriar 2 года назад

@Strategic Housing Analyst haha…ok dude

@jwfriar 2 года назад

@Strategic Housing Analystok Mr 25M empty houses guy

@nicktay66 2 года назад

I’m already seeing prices drop in my area (St.Louis, MO) I’m very excited to get a nice house under 170k next year. I’m already seeing them in the 160-190k range

@p51mustang24 2 года назад

Hey, this was a pretty clean analysis! Glad you mentioned private vs public debt bubble. The key difference this time will be that after the initial crash, we will probably have another bout of excess liquidity and inflation. Because of the PUBLIC DEBT. At the end of a long term credit cycle, bad debt moves up to the public level. After that, the only release valve left is the value of the currency …inflation. Deflationary bear market vs inflationary bear market.

@ericfregoso2266 2 года назад

Can you elaborate?

@trappart9209 9 месяцев назад

@@ericfregoso2266yes would be great to hear

@trappart9209 9 месяцев назад

Could you please elaborate on deflationary and inflationary bear markets as well

@butt. 2 года назад

One thing to also note, the high spike or MTG rates might deter future buyers. Today, ARM loans make up 10 percent of the market share of mortgage debt compared to 30 percent in 2008. Not to mention ARM loans post-08 guarantee a fixed rate for the first 7-10 years vs pre-08 where they had a shorter time period. I think this will reduce the possibility of a banking crisis as the issue with paying off loans won't be a problem for current home owners. It's interesting to see the delay in the prices falling, existing home won't move because of great fixed rates (or even ARM purchased within the last 7-10 years). Simply a lack of demand for new homes whether because of withdrawn liquidity or high spike in mortgage rates, i think sets up a recipe for housing correction but not sure about a major 'crash'.

@jwfriar 2 года назад

Agree - his analysis doesn’t take into account the fact that people aren’t underwater and can survive this. They won’t be listing homes just of a short term downturn bc they have a great rate and tons of equity. 2008 was a house of cards that tumbled in on itself. Also, we still have historically undersupplied housing demand. There’s still a ton of money on the sideline waiting for some price softening, but they are ready to hop back in and buoy prices. Maybe $20k of student loan forgiveness will get them back in the market faster too.

@trappart9209 9 месяцев назад

Thanks for your opinions, it was interesting to have other perspectives

@sudo2998 2 года назад

Thanks brother. That perspective was very helpful.

@largol33t1 2 года назад

I don't really see a need for this video. It is quite obvious that this will not only be MASSIVE compared to 2008, but it will last a very VERY long time.

@kostasdounias6418 2 года назад

So i guess the discounts will start around February of 23

@jasongrig 2 года назад

Eric, I am disappointed to see M2 in your indicator-list. Who cares if the banks have bank-deposits or bonds on their balance sheet? M2 is not a measure of liquidity. Only the fiscal stimulus is. M2 is driven by QE which is just an asset swap. I think you should discard M2

@tyleradams7615 2 года назад

Eh I think it helps support some of his thesis. Markets in the end follow liquidity and if this were to become a major downturn in housing, his investor, big player stuff would come to light more than the households. Thus, tighter, and less M2 supply for a long time period most likely means pain in equity markets, here and abroad.

@galvygal4601 2 года назад

Really enjoy and appreciate your content and videos. Thank you!

@kapdolkim1914 2 года назад

Wow, finally someone who actually understands what is happening in the market. Yes, big finance is in single family housing. They borrow at 1/2% so even though they suck as landlords they make money. One point you missed is that big equity sucks as landlords. They are very inefficient in moving from buying to actually renting out a house. They tend to sit on a property for 6 to 9 months. There are a bunch of levels of lawyers, accountants, managers, etc. This inefficiency is keeping a lot of homes off the rental market. They sit empty for 6 to 9 months.

@AXV81 2 года назад

So Its good for mom and pop landlords we will have cheap houses to buy and put it in the markets for rent, not everybody can buy with this interest rates! There is a lot of houses under construction right know I care about cash flow, Not so much about appreciation. Big institutions want both. What do you think?

@khanfauji7 2 года назад

Great data and analysis. Heard some new ideas here that no one else is talking about.

@texasclawhammer6578 Год назад

With interest rates climbing, owners have no incentive to sell, that is not a recipe for a price crash. It’s a recipe for an entire generation to be priced out of home ownership.

@zacklemmon3201 2 года назад

Hi! 👋 My wife and I are saving up for our first duplex and should be able to buy mid next year. If the market has crashed by then, would you recommend that being a good time to buy?

@ELCybermatador 2 года назад

I’m holding cash now, I’ll be buying in the next 3-6 months. Probably a 8 plex

@YanRAWR 2 года назад

It took 2-3 years for prices to go to their lowest last time

@MarketFund2k 2 года назад

Please explain why you're looking at debt compared to GDP for a housing indicator. Mortgage borrowers don't care what the GDP is. They care about debt to income ratio, or more specifically monthly mortgage payment as a percentage of take home income. Mortgages have gotten much much larger and people are depending on the low interest rates to be able to afford these jumbo mortgages. Once their incomes reduce or disappear, the defaults will start rolling in. Then, even if the GDP is high, housing will contract.

@relaxbro5605 2 года назад

Love the way you explain it! Would you mind sharing what Software you use for creating these grafics?

@akmzahidulislam2764 2 года назад

Wonderful all-round analysis. Thanks a lot.

@langanct 2 года назад

how do these factors compare to risky lending of the early 2000s? back then folks were getting approved for risky adjustable rate mortgages that allowed them to buy a lot more house. But when rates jumped they all had to sell and thus supply took over demand in short period of time. with changes in lending practices that resulted, that would never happen today where most people would not be forced to sell due to the payment jumping up. your analysis misses this factor.

@SwaptakDas 2 года назад

These videos are so good. Please keep us updated on the housing market and this data.

@markrealestateagent 2 года назад

I am messaging you from a direct source we had like to connect with you else where. What is your email ? Our home price are negotiable worth $100,000

@xcore1901 2 года назад

thanks.. I really learn alot from your videos .. It is simple and more faster to understand than taking class ..

@martinolichwier1146 2 года назад

I went looking for homes in Naples Florida December of 2020. The Average prices that were being listed were around $350k....20 months later the prices for homes in Naples Florida are listed at $650k and UP!! That is almost 100% increase in SW Florida not the 20% you are stating?? Please comment.

@AlexPerez-rt5yg Год назад

How is Ian the hurricane affect now? The home I lost on betting multiple offers is washed away😱.

@djkhalid99 2 года назад

Every real estate market is different, some will take a punch harder than others. Price reduction on new constructions are tricky, too good to be true, yet buyers for that old trick. Resales won’t bring prices below current valuation as there is no need to urgently sell. Cali might be downturning, but not all of Cali..