Housing Market in EMERGENCY MODE AS SALES PLUMMET..

we've all been waiting for the inflection point where the housing market starts to change and turn around well I believe that inflection point is now as we're starting to see many of the key data points that looked like they were never going to turn around actually start to turn around in terms of inventory in terms of days on market in terms of how many price Cuts we're seeing lots of different stuff so of course I'm going to give keep you guys updated on all this also give you some reasons of why I think this stuff is happening so here's deal mortgage rates have been coming down but the buyers haven't been jumping back in okay and redin even recently made a report on this about how you know they're seeing an uptick in foot traffic and stuff like that but they're not seeing an uptick in contracts getting signed in fact we're seeing the amount of cancellations of contracts go way up right now so right now as of the latest July figures the seasonally annually adjusted uh home sales is sitting at 3.95 million okay okay this is horrible guys we have not seen numbers anywhere near this bad since at least the last housing crash okay it's very very bad when you take a look at this chart here all the way to the right is where the home sales are at right now and you can see how much they peaked up during the pandemic but prior to that you can see it was pretty stable it was pretty normal to have anywhere between five and 52 million home sales happening per year now we are under four that's how unaffordable real estate has become and how few buyers are jumping into the market right now in fact when we just look at the July numbers alone we can actually see some very startling data you know the home sales in July 2024 are 2 and 1/2% lower than they were in 2023 but they're 19.1% lower than they were in 2022 they're 34 1.2% lower than they were in 2021 they're 26.7% lower than in 2019 and 2018 because remember July should basically be the last Peak month of the housing market you know usually March April May June July those are the big months for sales in real estate because it's the spring and summer housing market now kids are going back to school in August things start to taper down from here and here's the thing 2023 was already the worst year on record when it comes to home sales in July home sales in 2024 were half% lower than that so it looks like 2024 is set to be the next worst year ever this is all happening while inventory continues to climb on the US housing market according to the National Association of Realtors we have 1.33 million homes on the market which is the highest amount since October of 2020 and if you take a look at this chart guys you can see just how much supply of homes has gone up in 2024 you know we had some run up in 2023 but 2024 makes 2023 look like nothing in fact we are basically at prepandemic levels of existing Home Supply on the market it's almost there you know the Blue Line kind of marks the historical average we recently just ticked up above that now of course you can see pre pandemic as the market es and flows during the height of the spring and summer Market it does go higher than that up to about 4 and 1/2 sometimes even close to 5 month supply of homes but we're already at four and I think you're going to see this number continue to climb especially into 2025 because you have all this unsold inventory people that tried to sell houses this year couldn't get the price they wanted like H we'll wait till next year it'll be better by then they're going to have lower interest rates everyone's going to come back and I think everyone who's thinking that is going to be disappointed and they're not going to be getting that higher number that they were hoping for next year because you and everyone else will be trying to do the same thing simultaneously and we're going to see far more Supply than we're even seeing right now which will definitely put the pressure on prices to come down even further already this year we're seeing a 36.5% increase in inventory year-over-year according to realtor.com and you can expect that number to grow in 2025 and a lot of people say well this isn't happening my area doesn't apply to me well it's happening to a lot of areas guys you know realtor.com they track the 50 largest metros I'm not going to put them all up here on the screen but you can see you know in descending order here for like the first 20 or so of them how much active listings are up year-over-year Tampa Takes the Cake at 95% year-over-year we also have Orlando right underneath it San Diego Denver Seattle Jacksonville Miami Phoenix you got San Jose Charlotte Atlanta Dallas Raleigh Memphis Sacramento and the list goes on from there and all of these places on the first half of this list have year-over-year inventory spikes higher than the national average of 36.2% the lowest one on this list is 45% you're starting to see happen exactly what I said was going to happen in that the active inventory Supply continues to grow as the sales numbers continue to decline and this is all happening while the interest rates are dropping guys so how far are these interest rates really going to have to come down in order to get people excited about buying again especially at these prices I don't think they can lower them enough to get people excited you know maybe if it were to go back to where it was at the Mania of the market if we were in the low threes that would definitely get people excited about buying again even at today's prices but it wouldn't take long for us to be back to square one where prices get driven up so high again where you know even at 3% homes are unaffordable just like we talked about in the 40-year mortgage video start giving everybody a 40-year mortgage how long before or no one can afford that price reductions right now you have 37.6% of listings as of July have a price reduction which is the second highest on record only behind July of 2022 which makes sense because in July of 2022 you had people just asking absurd numbers because the inventory levels were so low people were kind of testing the market to see what they could get away with and realize they couldn't get away with a lot of these prices they were asking and if you guys want to know just how little home prices have actually gone up in the past couple of years you need to look at where the market peaked back in June of 2022 okay as of today where we sit right now home prices are only 1.8% higher than they were in June of 2022 guys so little over 2 years of so-called appreciation and we're at 1.8% so it's basically nothing and when you factor in how much people have seen an increase in their property taxes and insurance and all of that any little bit of appreciation you might have seen has gotten completely wiped out by those increased expenses to own your home another thing to realize is that prior to this whole run up in the housing market prior to the pandemic it was a normal year for Real Estate to appreciate anywhere between 3 and 5% sometimes a little less than that in you know markets where prices stay very low but to have it only be 1.8% in the span of 2 years is abysmal and this also confirms the other thing I've been saying which is that I think the the runup in the housing market is over guys you are going to see a few uh submarkets out there like in the midwest where homes are still very affordable and prices are still going to go up higher than that of course but overall you know this runup in the market is done so this is no reason for most people to have fomo anymore especially when you're starting to see the inventory pile up like it is the level of price reductions being closest to the highest on record that should give buyers confidence moving forward that there are going to be far more and better deals to come in the future if you just wait you know even according to red fin they're talking about how people are out looking at houses right I kind of mentioned this earlier but I'll give you the details and you know they say red Fin's home buyer demand index has risen 4% over the last week to the highest level in 2 months they try to make it sound like you know big shocker that there's a bunch of people out there looking but you know it's 4% rise in 2 weeks guys it's not a whole lot and it makes sense with all the new inventory coming out in the market I'm even going to open houses here every weekend you know they do a lot of open houses in this area I'm staying in and I go to things just to see it just out of curiosity I look at things that maybe I would be interested in buying in the future and just because people go in to see a property doesn't mean they're going to pull the trigger on one and the data reflects that because they say that the uptick in home tours hasn't yet translated to more sales pending home sales are actually down 5.3% year-over-year the biggest decline in 9 months and mortgage applications are down 8% year-over-year but they say well don't worry about it because pending home sales are a lagging indicator and they may improve as home tours pick up I think people are just getting more Curious like me you know they're going out there and looking at seeing you know how desperate are sell asking some questions you know getting a feel for neighborhoods and stuff of places they might want to buy in the future rather than being serious about pulling the trigger I mean I could be wrong that's my feeling about what's going on though but I don't really see anything happening right now that can get PE most people excited about buying at this moment guys like yeah the is the Fed set to cut interest rates pretty soon in September yeah is that going to make homes a lot more affordable no it will lower mortgage rates a little bit but you understand that the mortgage rates we're seeing today are already reflecting the future rate Cuts so you're not going to see mortgage rates drop a whole lot between now and the end of the year unless the FED starts emergency cutting you know next year could potentially be a good year to buy if we see enough inventory come online and rates go low enough you know for people that have been patient and been waiting have your down payment save have good credit and are able to get good financing when the opportunity arises you might come across some good opportunities in fact you're already seeing it happen right now you know a lot of sellers are getting very desperate one of my viewers Chris sent me this listing out of Myrtle Beach South Carolina take a look at this right now they're currently asking 265,000 right but they listed it for sale back in the January of this year for 319,000 cut the price barely a month later after it was listed down to 315 did another price cut in May down to 305 and now they're getting serious in August after they basically wasted the whole entire home selling season with no deal and now they dro the price an additional down to 265,000 and this is somebody who paid $298,000 for this property in June of 2023 guys so everybody who thought they were going to make a fast bucking real estate it ain't working in fact I saw a comment in my video about the 40-year mortgages saying oh one thing Michael's forgetting is that people don't stay in their homes very long so you know you should save the money and get the 40-year mortgage your payment will be lower and then turn around and sell it for a profit a couple years later yeah just like this guy you should do exactly that that worked out so well for him right I mean buying for 298 and trying to sell for 265 if you're lucky doesn't sound like turning a profit to me and you see that's the problem right that's the mentality people have like oh let me just get the cheapest financing option I can possibly get so I can turn around and sell it for a profit later like those days appear to be over for now at least for the foreseeable future and keep in mind guys just back in 2016 this property was only worth about 125,000 you know that's what it sold for in 2015 and now someone's trying to get basically double that and they can't get it but they paid more than double that so they are literally the sucker holding the bag in this case and I don't feel any remorse for people like that in fact I'm happy this is happening to people because those people at least will hopefully learn their lesson maybe not humans as a whole don't seem to learn from history so I don't think this is going to make any difference doesn't mean we're not going to have a future housing crash again you know people are kind of dumb in this in this regard they don't learn from history you know we had a big housing crash just barely 15 years ago and now all the same mistakes of the past are being repeated on an even bigger and Dumber level in a lot of cases so good for you guys who are losing the money enjoy that now why do I think all this is happening why do I think we're seeing this sudden shift in the housing market I think it's a couple of things like number one you're starting to see the FED getting a lot closer to their first rate cut and people are anticipating that as well and thinking well maybe let me get ahead of the game and list my house for sale and maybe I can get out while the prices are still higher right that's one scenario but you also have people that need to get out you know a lot of people have been losing their jobs this year the layoffs have been pretty substantial we've seen unemployment rate go up to 4.3% this year whereas a year ago it was in the mid- threes he had a transportation firm recently Purdue Transportation they laid off about 30 of their drivers it's pretty much surprise you know clean out your truck and uh hand in your fuel card and your badges you're done just like that no warning one of the employees said that they were told the company was restructuring and doing away with its Midwest over the road Division and the company was going to use outside carriers instead we were told the remaining drivers were going to be moved to the company's short Hall division so this is in the midwest guys where prices are still booming right but you have people losing jobs and that's not really a good thing for the local economy there I showed you guys how beaten down things have gotten there since I used to live in the midwest it's not really getting better so you think you're going to see this continual rise in home prices there forever probably not here in the Bay Area they're getting hit hard with a bunch of different Tech layoffs there was another company this week that announced they're going to be laying off 7% of its Global Workforce 59 is the name of the company as of the end of last year they reported having about 2700 full-time employees so it'll affect about 190 people 200 people are going to be losing their jobs now from this but those people are going to to be taken care of cuz they plan on spending between 12 and 15 million on Severance plans and employee benefits related to those layoffs so at least a lot of these people that are getting laid off are getting a nice severance package that doesn't happen to everybody I'm sure these truck drivers at Purdue didn't get that and why are they doing this the same reason a lot of other companies are doing this guys the CEO said you know it's because of decreased revenue and renewed focus on improving profitability that's why they're letting everybody go people are just not making the money that they were before and when businesses aren't making the money they got to let people go and as you can see it becomes this spiral downwards for a while and that's where we're at right now we're kind of just at the beginning of this downward spiral and companies like this don't even make any money they even had a 133% year-over-year increase in Revenue okay they made $252 million and even though they made that much money they still lost 12.8 million you have Amazon CEO they just announced that you know looking ahead a couple of years he doesn't know exactly when but there's going to be a lot of job losses in the tax sector specifically when it comes to coding he said that AI software developers will most likely have to innovate and update their skill set since being a developer in 2025 may be different than what it was in 2020 in fact it is predicted that because of AI and the rapid improvements with it that it could replace up to 300 million full-time jobs in United States and Europe by 2030 guys well it's only 2024 now that's 5 and a half years to go and 300 million people could be out of work because of this now yeah sure some of them are going to improve their skill set and learn things they need to learn to keep their job but a lot of those jobs just won't be necessary anymore if AI keeps going in this direction right so you're already starting to see the listings tick up now when people are trying to get ahead of it and try and take advantage of prices of they are before they fall even further and then you have people that just need to sell people that are losing jobs like this that really have no other choice and if we can expect a lot more job losses in the future to the tune of 300 million then I think you know when you combine that with the demographic crisis in this country with so many baby boomers that are going to be passing away in the next 10 15 years as well I really do think we are going to see an avalanche of new inventory hit the market in housing over the next 10 to 15 years here guys and I realize people don't want to wait and you might not have to cuz it's already pretty much back to normal levels now next year it's almost guaranteed it's going to be at or above normal levels and that's going to bring some good opportunity for people who have been hanging on and waiting so if you ask me the housing market is finally starting to crack in a way that's favorable for buyers don't be afraid to send your offers guys and if you have a real estate agent that doesn't want to make your offers then find someone who will because people like that don't deserve your business and at a time when there could be some good opportunities on the table you need to make sure you're trying to grab them if that's what you're trying to do so if you enjoyed this video make sure you subscribe to the channel and if you don't want to wait for my next video to come out check out this one on the screen right over here and I'll see you in the next one