Updates to the real estate market 2022

This is a correction and uh that we were in a bubble as a result of cheap money which is in the form of interest rates so do you feel like if they keep raising the interest rates like uh you’re predicting that they will that it’s going to lead to a crash or do.

You think it’s still a correction i’m right now saying it’s a correction and it is a correction so the question is is will it go above 20 percent if that’s your number i don’t know and i think each market’s gonna be a little bit different could boise uh technically crash i could could boise um you know have a over 20 percent correction and when moody’s the same at 72 sure it could but you know but then you got to look at other markets that are under supplied.

You know there’s a lot of markets in florida that are doing very well in north carolina and atlanta and and of course southern california and there’s there are markets that are doing very well right we’re not even seeing decline correct right so so you can’t just blanket the the country with with a number you know i think that’s the most important thing you have to look at this on a sub-market.

By some market basis well i think when people see some of these headlines that you know boise is going to drop 72 percent or austin’s gonna drop 61 percent it makes them not want to buy if they find something that cash flows and i think that’s a huge detriment to them.

Updates to the real estate market 2022

It’s hard to find something that cash flows right now and i don’t think trying to time the market is the way to do it but this goes back to the very basic principle that we that we talk a lot about with on this channel and that is cash flow versus capital gain so you know so if you if you bought something in boise and it didn’t cash flow and it doesn’t um you don’t have a way for it to cash you you simply are buying it like a stock and you hope that it goes up.

This is your day of reckoning right you know that’s what this is that this happens every cycle is you know people think next year is going to be higher than last year and that is you know unfortunately that’s that’s what’s about ready to happen i was you know the people who are you know.

I don’t want to use the word paycheck to paycheck but the people that are high income earners as a result of commissions you know for let’s say real estate or mortgages or uh you know in this industry and don’t have any real um cash flow passive income they’re gonna be hurt right yeah and turnbuckle said the fed needs to rip off the band-aid and be more aggressive with its rate hikes and they i think they are going to be between now and the end of the year.

I really truly believe that we’re going to see a fairly significant increase in the federal funds rate over the next three meetings and i think by the end of the year you know we could be looking at pretty high i think at one time what did i say jerry did i say eight percent mortgage yeah yes i did that was a couple months ago wasn’t it yeah i said.

We’re gonna see over eight percent interest rates by the end of the year all right so all you trolls come on wow come at me right now so i’m telling you guys because what are we at now we’re almost at six right well i think it’s even yeah when i started talking about it we were at four.

Demand Side Correction

So i only got two more points to go the problem is you’re not going to expose yourself and take it on the chin if i’m right but yeah attack me if i am wrong but the point is i do believe that we’re going to start to see these these um price reductions there’s going to be more listings this is a demand side correction ever you know there’s going to be people out there that said we’re still under supplied we’re still under supplied we’re still under supply and that may be true but right now we have a demand issue.

There’s two sides to equilibrium well and what i had seen is that most of the deep discounts are coming from new home builders and flippers because they’re in a position they have to or they need to get rid of it it’s not and this is something that’s important right so for the crash in 08 people had two three homes and they were all trying to basically be flippers like they were trying to buy and sell higher.

We don’t have that same same thing happening right now it’s very similar but it’s not as bad well what do you what do you mean well that’s if uh a rehabber if you buy a home rehab it and put it back on the

market and use it hard money it’s oh yeah yeah it’s very but i’m saying with your average joe person is not doing that like in 08 a lot of people were most people so now you have an average joe and they want to sell their home but now the prices are going down well that doesn’t and they’re at a 2.8 interest rate.

They’re the chances of them just saying you know what let’s just keep it or uses it a rental or whatever they’re not in a rush there’s no reason they have to sell unless you know they want to which is different than 08 as of right now if you were calculating your net worth based on your home’s equity those days are you know you’re going to be upset in the next uh six months to one year uh there’s no question you your home equity is going to start to go down.

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