Housing price crash and correction with values of 70%

You’ve been saying forever that the boise Coeur d’alene area was like your number one that you thought was going to have a big correction and moody’s is agreeing with you but you don’t think it’s going to have a 72 percent correction of course not so guys like you have to look at the whole picture you you know and first of all doesn’t necessarily mean moody’s is even right but it is backed by math right their math okay so and they are making some assumptions as are many others i think it’s just important that you know as you’re as you try to unpack this that you realize that you’re going to want to take your information.

From people that aren’t trying to sell you something that’s the most important thing so you know so so so uh and then of course read a little bit deeper because i do believe that um the people that are lazy are gonna read that and freak out um but the the reality is is we are going through a correction we are definitely seeing price reductions you can go on zillow today and see price reductions you and i have been watching this for uh for a while now so and it’s kind of fun to see a seller price reduction

Seller price reduction it’s it’s pretty transparent so but not all markets have price reductions so you know there are still you have to take a look at the whole picture so you have to take a look at is a market under supplied.

Housing price crash and correction with values of 70%

In the beginning in other words does it need more housing number one and you can’t just blanket the whole country and say the whole country needs more housing because that’s not true does that area have population growth and job growth and where are the migration patterns headed so are people moving out are they moving in all of those matter.

So all of that makes up the strength of a housing market so you know phoenix arizona cleveland ohio and miami florida are very different markets so you just have to take a look at these with a grain of salt but dig a little bit deeper and it’s not that hard to dig a little deeper if you really start.

I mean for preparation of this today you and i had fun over the weekend just you know googling some different things and all kinds of stuff came up yeah and a lot of people you know it’s a very confusing time in the market um but if you really look at what moody’s is saying and i think it’s what a lot of us think is that moody’s is predicting a 10 to 20 correction not in every market which is kind of a general statement depending on how bad the recession is so if we don’t have much of a recession they’re predicting five to ten if we do they’re predicting 15 to 20.

But that’s still a very big correction

I think that’s what people don’t understand there’s only ever been two double-digit corrections and that was the great depression and the great recession so you know those are big corrections but they’re nowhere near 70 percent well i’ll let the cat out of the bag here

i’m doing two videos on this one this friday and then one the friday after um and i made some predictions in there but there’s a difference between a correction and a crash so now by definition that i found anything over 20 is considered a crash anything under 20 is considered a correction now.

You might have your own definition and you might find another one but that’s the one i found so regardless the last crash we had was that you know 2010 2009 that you know that time frame they went home prices went down 27 i also think it’s important to note that single family residential

when it’s when when it’s going up it helps rentals so high price of housing and high cost of mortgage due to high interest rates push people into rentals so this this is creating better affordability for people that need to buy homes and want to buy homes.

I really believe people should and i’m in the rental business so you’re saying the price is dropping i’m saying that prices are dropping it’s already showing not in every market and the problem is is that people are going to defend their own little sub-market based on their limited information the bigger issue i think is we’ve had four interest rate federal funds increases four since march of 2022 and the

inflation rate is the exact same number as it was in march that’s important so there’s three more this year there’s one in september one in november and one in December.

when the federal reserve is meeting again i believe that we’re going to see more increases between now and the end of the year as the federal reserve tries to tie back to that two percent it’s all over the internet jerome powell has made it clear that two percent is his target and so there’s a big gap there so we’ve already seen a 22-year low we’ve already seen 23 percent difference in mortgage applications we’ve already seen an 83 reduction from a year ago in refinances and that’s has he moved the needle on inflation just wait well and will said you know right now is the highest 30-year mortgage since 0-8 yes right it’s it’s basically doubled from a year ago.

So i you know guys like i looked the the average mortgage payment has gone up 700 a month that’s a lot so that’s a significant issue for a lot of people that what that’s doing is it’s a couple things it’s it’s it’s keeping people in rental housing which is not healthy for rental housing it’s creating affordability issues for people that should be buying home and and progressing and progressing right so it’s not good

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