Your Home is NOT WORTH AS MUCH AS YOU THINK! 

Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.

The entire real estate market is over inflated in price period.

I remember in 2007 when I was working in real estate seeing people buy homes new from builders with the intention of selling before close of escrow to a new buyer for profit. The crash was so brutal and fast that I remember seeing a lot of these units foreclosed on with the builder plastic still on the carpet.

Low paying under 15 bucks an hour are 98 percent of the new jobs …. We just had a local factory announce they are closing at the end of the month taking the jobs to Mexico!! In a town of 1k. 350 jobs gone it will destroy the own .. the average pay was 20 bucks an hour .. there’s nothing in the area to replace it …. Small town Ohio…….

In 1982 I signed up for a 14% mortgage. It was on a $59,000 home. I was on a mission to kill that loan. It took me 3 1/2 years.

Flagg is full of Cali transplants who cashed out of CA and moved to AZ. Same with Prescott, AZ. All of AZ is overpriced, lots of Air BnB's in all of AZ markets.

Even with a 3% rate, why would you want to buy a house that is extremely overpriced.

Country Club's HOA is having issues. Something happened with a lake draining and residents of the HOA are now having to fork over a few grand each. Flagstaff itself is a town who's economy is mostly College and tourist. None of the college students can stay after graduation due lack of jobs and high rents. Its also a town where the rich Phoenix/Scottsdale folks have their summer getaways. (1h30m drive and you go from 120 degrees in phoenix to 70-80 in Flagstaff). The high cost of living paired with mostly service industry level jobs has given this town the nickname of "Poverty with a view". Don't get me wrong, I love this town. But its been a challenging town to build a career in and not have to worry about moving if there is a jobloss. I got lucky and waited for the crash in 2008. Bought in 2010 and refi'd in 2022. The bubble here in 2006 was insane, and I can't believe this one has surpassed it. It took until 2012 for this area to start recovering previously. I can't imagine what it will be this time around.

Tired of people treating home equity like it's money in the bank. (My homes worth $500,000 I owe $300,000 so I have $200,000)!what! Still need to deduct maybe 10% closing costs, find that buyer, hope you have no unexpected factors like repairs, market swing, neighbors identical house listed for less

If your neighbor overpays for the house, they will pay higher property tax on the overvalued price... this ruins it for us also, because the assessor's office will raise the appraisal on our house, based on the comp with the neighbor's house.... by default, we will pay a higher property tax also

485k in flagstaff is also bulljunk People in flagstaff can’t afford that - only NAU types and people from cities like Portland or California coastal cities

For Arizona it’s cause all the California realtors and contractors came over, bought all the houses, put cheap updates on the houses, asking that there are no inspections, and putting everything on the market for at least double the price. It’s not just Flagstaff, it’s the whole state.

Hello Michael :)- I enjoy watching all of you videos as they are very well put together! I am 50 years old, single, never married and I don't have any children. I have already surrendered to the reality that it is very unlikely that I will ever own a home!!!!! :)-

We call flagstaff living “poverty in the pines”. It really has turned into a liberal hellscape from its former glory. Thanks NAU

It's nice to see residential areas in different parts of the country.

Great video! Flagstaff averages 100 inches of snow every year! Last year 140+ inches!

Michael, I’m probably as old as (if not older) than your parents. I will tell you what you probably already know, but to share with others. In the end, there really is a ‘3rd hand’ that decides these things. I learned as a wee lad growing up in Bethesda, Maryland, just outside of D.C., I’m sure you know of it. Many houses were out right paid off, they were in the $30-$50k range. Many retirees, multi generation families, of all trades and incomes. Actually, almost like an old tale. Anyway, curiously and progressively faster, many of the content paid off retirees started moving out. That’s when I learned about the power of the government to literally push even full out owners out by turning up the taxes when they and their cronies have profitable plans. For the most part now, Bethesda is now multi million dollar ‘spec homes’ for doctors, lawyers and wealthy internationals. Along with their offices, financial institutions and government buildings. Bottomline, all the common man’s planning is sadly a distraction from the things they may really have no control over. It creates a lot of money for those who make a living ‘fostering’ those dreams.

I remember interest rates in the mid-70s were 17 to 18% but a $200,000 house would be like 30,000

Flagstaff AZ was an affordable mountain area in the $300k-$400k range for a decade. Not anymore

People who don't believe we are in for some very tough times are living in a dream world. Flagstaff reminds me of Northern Wisconsin or the UP of Michigan. Mike check out Sedona if you have a chance. A beautiful area of Az.

A home is worth what the highest bidder will pay for it. Simple as that.

Job numbers should be broken down into income, e.g., under $60K, over $60K. If so, you would see the $60K+ jobs plummeting.

Wife and I paid $155k for our 2400 sq ft back in 2003 . We bought new here in central Texas. Today the same house is trying to be sold for $600k. Makes no sense.

The value of something is what someone is willing to pay.

Northern Arizona is a nice climate, however way overvalued for what it is. The politics in Arizona are also turning Democratic, which is also hurting the state.

I’m in Tulsa, so almost on your way home. It always amazes me that a 1300 square foot home can be 150,000 where I am and 550,000 in other places Are bricks more expensive- NO Are shingles more expensive- NO Is a 2X4 more expensive-NO You should pay more for location, but your home should be insured for how much it would cost in materials to rebuild it.

Wow, over $700k in Flagstaff?! That's unbelievable. You must be in a high end neighborhood. We lived in Phoenix for 9 years and we miss those super low AZ property taxes! I hope you'll make a stop in stunning Sedona or Oak Creek Canyon on your way to Phoenix. Enjoy Northern AZ! Watch out for Bark scorpions & Tarantulas - I'm serious, Michael 🕷🦂

I’m just wondering Michael..How long will you be saying “When we get into a Recession “??? We are DEFINITELY IN ONE ALREADY. Thank you so much for sharing your travels with us and keeping us informed on so many different areas. Blessings, Carlos ✝️🙏❤️😊🇺🇸

My uncle lived in Phoenix and In April would to the AZ mountains above Flagstaff. It looked like Flagstaff. Nice weather in summer. He had a photo of him and his wife in the mountains in mid October they had snow up to their knees.

In 2000 I was 25 yrs old and purchased my first home. A brand new build home for $133k at 8.75% and I had the lowest rate compared to my neighbors. So it hasn’t been that super long since those high rates where here. It’s crazy how the market has changed. Thank you for all your valuable information 🙏🏼

I live on Vancouver Island in British Columbia, bought a home in 2003 for 232 thousand dollars, 2500 sq. feet, ocean view and only a year and a half old. It’s now assessed at 950 thousand. My property taxes are pretty low at 4000$ a year. I want to sell and move to Italy 😊

I just don't see what's the rush to buy a home/house, for some people. Because of the topsy turvy housing market, people should just wait and stash cash for a 20% or more down payment or buy with all cash. People with the FOMO mentality is just going to regret their rushed decision and be more stressed. Patience is a real thing nowadays. There will always be homes to be bought.

I passed through Flagstaff with its pine trees and mountains, it's definitely like Colorado. It's like Colorado in the mountains, not on the Front Range. Very pretty, but I could tell the winters are rough. I'm sure I could enjoy it there, but it's too expensive and - for me - a bit too isolated.

I'm hoping there will be a housing crisis so I can buy cheaply when I sell a few houses in 2024. As a backup plan, I've been thinking about purchasing stocks. What advice do you have for choosing the best buying time? On the one hand, I continue to read and see trading earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?

I agree with your economic views. We should have had a recession in 2020 but the pandemic prevented it with all the government intervention. It created an even bigger asset bubble and kicked the can down the road. The pain train is on the way.

My first condo - 1978 in San Diego. New construction $77,000. Rate was 11% fixed. I sold it a few years later and covered costs and didn't make much. That same condo, now old, is worth over $500,000. Crazy market - high interest rates and high prices.

None of these homes are what they’re worth. Your standard home is probably only worth 100k max. Values are inflated like crazy. Townhomes in the DC suburbs go for a million dollars. TOWNHOMES!

I think a big part of property price jump is also linked to true inflation. Energy and food jumped 27% in the last 2 years, durable goods and consumer item also went up 16%. Property price match inflation plus one some percent per year. People might be poorer due to slower wage increase, but the thinning of money wouldnt wait for anybody

Fast food workers in California will start at 20 dollars an hour shortly. My brother's son thinks it's ridiculous and he works in that field at 15.40 an hour now. He's like I'm going to make close to 25% more to do the same work.

So you think you own your home, even if it's paid off, just miss paying your property taxes. We all rent...

Love your videos. Prices are high all over. Craziness. Just returned from a two week vacay in FL. So much traffic and so many people. Housing prices are just not realistic, almost laughable for someone from the Midwest. And yes, there are many lovely places, like Flagstaff and others, to live without paying the extremely obscene high amounts on the coasts. It comes down to priorities for many, is the weather worth being in debt the rest of your life and never actually owning your property? Maybe not. Being able to buy a house and eventually be out of debt motivates a lot of people. Prices are elevated everywhere but it's relative to location. Some locations although still high are far more affordable and you can buy a very nice quality home for a fraction. Yeah, you may have to stay inside during the winter in your 5000 sq foot house with two fireplaces. Boo Hoo.

100% overvalued in South Florida. Lots of buyer’s remorse coming.

Moved from AZ to FL and regret it! Still love FL but AZ is a better deal overall ...though it does seem to be way over priced now.

I lived in Flagstaff for 30 years. I owned a business and watched real estate skyrocket due to a number of factors including a dearth of easily buildable land, a desire by family fathers to become an Aspen Co., and the location where Phoenicians headed to get out of the heat. BTW Flagstaff is a wildfire zone( inside the largest ponderosa pine forest in the world), watch for insurance rates to shoot up.

Last time I posted a link, to back up my presumption of a ‘shadow inventory’ that will knock down prices by 2-3x,in a year or two,I won’t this time, my apologies. There is good evidence that if people can wait, political pressure and realtors won’t be able to hide the massive price cuts in real estate to come. Even now MANY properties are not being reported, propping up false ‘low inventory’ values. Plenty of new housing has been over built and must be occupied before it literally falls apart from lack of maintenance. I still maintain you do a great job. I do think a of people are bathing in false equity though.

1970 median price for a US house was $27K. 1985 median price for US house was $87K. Wages went a bit above 200% from 1970 to 1985. That's inflation kids. Get used to it.

Flagstaff would be my top pick of cities to live in in Az. I saw some of AZ in 2021 and Flagstaff reminded me most of my home state of RI

Your content and delivery are priceless. Thank you!!

Think also of 4th option: there will be no affordability change in next 20 years. Income will not raise and prices will not fall and interest rate will not go down. Try to draw scenario.

I love Arizona, but their market is so unpredictable, it is been all over the place for decades. ps, i went to visit Flagstaff during pandemic and that town and most of state really was super locked down.

Somehow 5/6 people believe its not the time to buy a house - yet buyers exist propping the market up... magically. Normally with a ratio like that, it should be a death-knell for any market.

Since you are so close--you owe it to yourself (and your wife) to check out Sedona! Magical place. And if you have the time, this funky town called Jerome where a lot of old Western movies were filmed. It's not far from where you are...

I like how your content is focused on reality and facts instead of having clear bias like some other channels.

I think most people know what's really going on

If you wanna sell, and you know for a fact there are buyers in your area looking for a place, sell it, put that proceed away in a 5+% savings account or CD and rent for awhile, then buy your next home when prices come back down to a more reasonable & affordable level. That's what I would do if I were in that scenario.

Such a great video! I knew you were in the high desert, in a nice area, then you said "Flagstaff." Love that town! Yes, the temperatures up in the high desert are much cooler than down in the valleys. Pretty neighborhood too! It would definitely get cold in the winter though! Sedona is right below Flagstaff. Did you get to venture down to that area. Now there would be some even more expensive real estate! Stay safe on your drive back home!

Interest rates in 1990 in the UK went to 15%. I had a house in the country and an apartment in London. I sold the appt in London at that time a I couldn’t afford both. I still had a bidding war on the appt. It was surreal. One guy in the living room and another in the kitchen bidding up at £500.00 a go. Sold within a couple weeks. I was lucky. Within a couple months prices dropped by about 20%.

I'd like you to do an episode on Denver where I live. I was born and raised in Colorado, and it is absolutely insanity.

Most of the homes are not worth the asking price. My stepsisters house is overpriced for a glorified shack.

Looks so nice with the electrical cables underground, makes such a huge difference. Wonder why there isn't more of it in areas of bad weather, high winds, etc.

Is it possible that an incalculable number of homeowners are hanging for dear life, by their finger nails with a 2.8% mortgage and/or eating out of food pantries, etc., etc...? Because that's the feeling I'm gettin' here.

A house on my street just sold, waiting for the closing to see how much it sold for. It was listed for $699,000 and zillow values it for $750,000. It sold in about 2 weeks, I have a feeling the price was bid up to at least $750,000. Especially since ppl who want to move here move here for the school system in NJ. The houses going for over a million stay on the market longer, they use the same school system.

I opted out to just be overseas, also looking to purchase abroad (less taxes, better infrastructure, less violence). We've let corporations takeover everything, and buy politicians. The result is we've become unhealthy (physically, mentally, financially, socially).

It cost bare minimum $200k to build a normal house.

In Flagstaff the snow usually melts on the cement the same day.

Higher prices in Flagstaff are due to mountain views and proximity to the ski slopes. Also, not all homes in Flagstaff have access to municipal utilities.

The housing market in many areas in the US are out of control! One big Monopoly Game in real estate is going to end very bad!!

Absolutely correct.. when the correction happens it will hurt alot of people.. you will own nothing and be happy remember that.......

Michael is100% spot on. It`s a waiting game on when the recession will hit. I am putting off major purchases and investing in my no risk saving account. Living in WLV, California home prices are still going up placing my area outside the Bell Curve.

This is a very helpful link. Using Zillow's simple chart of a home price, over time, I've been doing a visual in my head to try and determine the trajectory of the long-term home values and the price spikes since COVID hit. Although I already had good general idea of what prices should be in my area, this mathematically generated PAU chart is great to see. One thing I would add is that the expected value could easily drop down to the negative side, in the coming months and years, due to the fact that mortgage interest rates were so low for so long. It's just mind-boggling to me that people are paying mortgages that are over $3,000/month, not including other housing expenses! And that's for a median priced home. Most homes for sale near me are over $650k, now, so payments are now closer to $4000k, just to get into a "decent" home. There must be a phenomenal amount of extra cash floating out there in the U.S., and if that's so, interest rates are still too low. Michael, I trust you went through Sedona, and hope you made a video there. It's so beautiful there, it's almost surreal.

Just sold my house in illinois for an insane 64 percent gain than i purchased it for in early 2020 ! Moved in my rent house and banked it .

1991 fixed rate was 8.65% FHA on a 30 year mortgage.

Check out any New England state. NE is beautiful , however much of the market is filled with older homes that need work for the average person. They so extremely overvalued! We lived in the beautiful Lakes Region of N H but couldn’t possibly return as seniors. Wealthy second home buyers have destroyed the middle class affordability . So sad

I live in Spokane, WA, and houses near me way overpriced. They are definitely not for single family anymore. I believe they need to drop 50 to 60% for people to have a continuous quality life they were used to in my city (that's including my own house)

Thank you for bringing us Flagstaff, AZ.

The higher the interest rate, the higher houses have appreciated. That's what data has said. Take 1970-1990 MSPUS. Houses went up over 5x. One would call those years decently high interest rates. The short term thinking is correct. High rates eliminate buyers and would drive prices down temporarily. But long term it forces incomes up and you get $3 up in the house price for every added dollar of wage.

Love Flagstaff, glad you made it there! There's a really good and very popular burger place downtown, can't recall the name, check it out!

You stated 'unless you bought a home in the 80's you haven't seen 8% rates'. This is not true 8% rates were prevalent for a 30 yr fixed for most of the year 2000.

No state income taxes in FL. Well, at this point, it seems the least they can do. The property taxes in FL are about 3X mine, about ten miles out in the suburbs of Pitt, PA. And my taxes are considered high in Allegheny County and my school district. So much so, that large businesses started to congregate just outside the county almost 20 years ago, and until this day.

I bought during the 1980s bubble. Two years after I bought it, the house dropped 25%

We printed money. Inflation skyrocketed. Homes now cost more. That’s the story, no?

The rise in bond yields means that the fed has rates too low, so if they increase rates to where the bond market says they should be then yields will come down.

A couple of years ago I was watching CNBC doing a report about the price of homes in SF. They were showing a house for sale one story 2 bedrooms and asbestos tiles going for 1.1 million. Was it worth that price no?, but standing outside were about 50 Chinese people waiting to pay that price and more .. in cash.

The prices are insane. I have a good salary and after taxes and expenses couldn’t even afford the downpayment on any of these homes in Arizona. Who is affording to buy all these houses?!?

We have a rental property since 2011. Things are definitely changing in the rental market. 2 yrs ago, they were lining up there were about 3 competition, now 57. Dropping the price, which is still expensive for people. The housing market will follow.

My question though, how much to build a new house that is comparable on same size lot?

Michael, great video again. From reading Basic Economics by Thomas Sowell and reflecting on how it's unfolding in real-life, I'd venture the recession will be pushed just shortly to past the next election, so those creating policies now can point to those in charge in the future, if it's not them, and say it's their fault. If they are still the ones in charge, then they have nothing to lose, everything stays the same and they deal with the downturn. I wouldn't be surprised if this was the status quo until post 2024 election. Houses will be strategically trickled on the market to keep the prices high unless the market is flooded in the future and the economy will go until the next election. I am seeing houses instantly hit the market as 2-3 sell. Why aren't they on at the same time? Limit the supply, options, keep the prices high. That would make the most strategic sense.

The hardest working man on RU-vid!

Flagstaff is where all the college students are. There is no way it should be that much over there. There was always a lot of turnover there because of the college students renting. Why would you pay that much to live around that? It's the same reason military areas are cheaper - high turnover. AZ gets very cold at night. There's a lot of people that would be from out of state that ended up with frostbite after camping because they had no idea it would be so cold at night. If you hike in Sedona, stay away from secret canyon trail. Too many weird things have happened on that one. Devils bridge is really popular and was one of my favorites. It's not the property taxes in AZ that get you, it's the water bill. And the water there is brutal, so you will want a whole house water softener or plane on replacing your appliances often. Depending on the area, it will pit the porcelain in toilet bowls.

Prices aren’t coming down because people are still buying at current prices which keeps everything up. People have more money then you think.

Thank you, Michael - you should stop by Greenville, SC or Asheville, NC on the way back to FL (both mild winters, however pretty different housing prices and only about an hour apart).

The Fed should never, ever lower rates to the stupid low 3 and 4 % threshold . They should raise em until there is at least a 35% drop . Then reduce to current levels and hold . When the majority of people need a 55% raise to buy a home today something very wrong . Having said that people keep buying and paying silly prices . Sure hope it corrects soon so people will stop buying overvalued homes .

That log fence is beautiful!

The values Are coming, you just need to be patient.

when home prices drop 40%-50% not a lot of people going buy the house because they too scare.

We bought 3.21 and sold 3.22 at $371 sq ft in Flagstaff. Haven't seen anything close to that since. In fact some units are selling below $300 a sq ft now!

Flagstaff on the map! Next time in Arizona you should check out SEDONA, the real estate market there is pretty crazy, also awesome views and living. $1M properties with red rock views, air bnb has taken over up there and nice luxury resort stays

A few forced sellers with low prices will start a domino effect.

If we went with the 2 % inflation that the Federal reserve wants my, house would be worth $232,000 today but because of all the loose money and near zero interest my house is said to be worth $425,000 so my house has $200,000 worth of speculation value added to it IMO that it crazy

I've been saying 75% across the board or a crash. Home Prices have gone up One Thousand Eight Hundred Plus Percent Sinse 1970 Incomes over that same Period have only gone up Forty Five Percent That's a Problem.