It Started: The Housing Market Is Collapsing

The YouTube Creator Academy

THE 2022 HOUSING MARKET:

On the most basic level, we have the numbers that everyone is talking about: Mortgage demand fell to a 22 YEAR LOW as rates have almost doubled from a year ago, mortgage applications are 18% lower than the same week in 2021, and refinances saw an 83% drop year over year.

BUT - the one piece of data that matters the most, is that for the first time since prior to the pandemic, Median prices have started to DECLINE, MONTH OVER MONTH, with prices now $10,000 LOWER THAN THEY WERE, JUST A MONTH AGO.

As the National Association Of Realtor's explains, the ongoing sales decline reflects the impact of higher mortgage rates, which peaked at 6% in early June, before now declining back to 5%. This increase SEVERELY impacted the number of buyers in the market, with total housing inventory having increased 4.8% from the month prior - meaning, with fewer homes being sold, there’s more AVAILABLE for buyers to chose from.

HOWEVER, even though they ADMIT that “we're witnessing a housing recession in terms of declining home sales and home building”….nearly 40% of homes are still selling at full list price, and properties were staying on the market for a record low of just 14 days in July.

On top of that…82% of homes sold were on the market for LESS THAN A MONTH…suggesting that, even though prices ARE beginning to fall…they’re not declining as fast as most people would expect.

In terms of falling home prices, The largest drop, so far - was San Jose, which recently fell 4.5% MONTH OVER MONTH, along with Phoenix Arizona, San Fransisco, Austin Texas, Sacramento, and San Diego - while areas like Miami, Richmond, and Memphis, Tennessee actually saw a slightly INCREASE.

On top of that, Zillow REVISED their forecast to show home price growth at just 2.4% throughout the next 12 months - which, WHEN adjusted for inflation - is likely going to mean: REAL PRICES, OVERALL, WILL PROBABLY DECLINE.

Moody’s Analytics ALSO believes that a large portion of the market will see a decline throughout the next year, with the most “At-risk” housing markets being the ones that saw the MOST home appreciation over the last 2 years.

That’s why, the way I see it - unless you live in a highly speculative market - most likely, some softening is healthy, and it might be a good opportunity to negotiate a lower price on a property that’s otherwise perfect. Besides that, though, I wouldn’t worry about a catastrophic real estate collapse, BUT, personally - I would only buy a property that you intend to keep for at least 7-10 years.

My ENTIRE Camera and Recording Equipment:

[Riggsnic_co]

After I sold some property in 2020, I'm anticipating a housing crisis in order to buy inexpensively. As a backup plan, I've been thinking about purchasing stocks. What recommendations do you have for the best time to buy? On the one hand, I keep reading and seeing trader 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?

[kevkamo]

So basically, even though the housing market is collapsing I still won't be able to afford a home. Got it, thanks

[michaelandrew]

I love how everyone always says “but historically interest rates are very low” yea but look at the Ratio of income vs cost of ownership. A house cost 45000$ in 1980 and people still Made $25000 average. Now the average salary is 54000$ and the average cost of a home is 450000$. That’s an absurd separation. I’ll buy a house for twice my annual salary TODAY FOR 40% interest. interest is only as relevant as the time you intend on succumbing to that burden.

[donnyj]

What’s funny is if the house you’re looking at was 500k before the pandemic, raised to 675k during the pandemic, and drops to 600k in the next year, you’re still over paying.

[DJR]

If the housing market doesn't collapse and rents aren't cut in half from today's levels the US has maybe 5-7 years before we see the crash that we won't come back from. We can kick the can down the road all we want but eventually the road ends. Housing prices are ridiculous and rents are even worse accounting for in some cases 70 to 80% of one's income. It's the storm on the horizon that very few want to acknowledge

[ThiccEagle]

Also rising mortgage rates. If housing prices drop 20%, but the monthly payments are higher due to increase interest rates, then it isn't moving the needle on affordability

[EastTNflyer]

This “collapse” isn’t like 2008, which was from bad loans to people that couldn’t afford the homes they got approved for. How many “stated income” loans have you seen since 2008?.. Didn’t think so. This current “collapse” will be more of a reset in the market.

[mauibuilder]

Housing prices are all relative. With home prices tripling in the last few years, prices have a long way to fall especially with higher interest rates.

[KingKobra]

Whoever is reading this…Keep going, you’re doing fine! No matter how slow your progress, each new week is filled with tiny steps forward. Be proud of yourself. 💯

[swaninabox]

How's about you buy a house to live in and stop pricing people out of the market..

[guy_roh]

Can we just take a moment to appreciate Graham, putting his time and effort into researching this stuff so that we can get the best actual news on the economy in a simple and concise manner. Absolutely love it !

[Sellbow]

I feel like this decline is totally warranted, interest rates are rising and inflation is high. Houses don't have to always appreciate just like anything else that has a market.

[TRC]

Good. Now I can buy a house at a normal price without competing with 20 people and overpay by 100-200k

[sflxn]

Dude, the junk comments from scammers and spammers are out of control in your comment section.

[jimb]

The greed is ridiculous!! The
Market needs to crash so bad that it will take years to get to the prices they are now!

[kirilltancheff]

intro: "What's up Graham, it's guys here!" 😄
jokes aside, very informative as always! great video :)

[widowsson]

Gram, it's only supply and demand. Interest rates affect demand, the "economy" affects both.

[salouaiadaden]

The housing market is not collapsing!!! Home prices are going up crazy!!! I waited since 2021 to buy and I regret it, you have been saying that forever and now people can’t afford anymore.

[kbhwyqf]

The housing market won't crash unless is economy goes into a depression. Why?? Because there are too many people waiting for it with money saved up. If housing market even drops 20%, the demand will be most extreme. Everyone and their mother will want to buy a house. Therefore, house prices will continue being in a bubble until a total collapse.

[wedsonolivia]

As long as real estate is seen as an "investment" the housing situation will never be solved. It's another cog in the wheel of making money. The only hope you have is to save and wait for the bubble to burst again and then vote to have wherever you bought the house to be rezoned for multifamily, only then can we solve the housing problem