The ASSET BUBBLE IS POPPING | HOUSING IS NEXT

How will the asset bubble affect the housing market? Inflation is soaring while the fed is raising interest rates. This has caused the stock market to decline over 20% while bitcoin is down nearly 60% from the highs, is the housing market next? How does real estate differ from the stock market and crypto when it comes to recessions and sell-offs? In this video, we are going to discuss the asset bubble and how emotion and costs play differ from selling real estate.

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Jeb Smith (huntington beach Realtor/orange county real estate)
DRE 01407449
Coldwell Banker Realty

#housingmarket #housing #realestate

[AH_mich]

At this rate most people can never afford a house. I'm in Utah and wages haven't caught up or even come close.

[marksweeney]

Tuesday, August 07, 2012
All That Drama For 1%?
From the Sacramento Bee:
Since 1976, the Sacramento housing market has experienced three distinct booms and busts. Each was longer and more dramatic than the one preceding it, according to a Bee review of data from the Federal Housing Finance Agency.

In the first boom, from 1976 to 1981, inflation-adjusted Sacramento home prices shot up by 37 percent, more than twice the national average, before falling by 15 percent, about the same as the rest of the nation. In the boom that lasted from 1984 to 1990, home prices rose by 48 percent, after adjusting for inflation, while rising 12 percent nationwide. During the next seven years, Sacramento prices fell by 29 percent, compared to a 5 percent fall nationally.

The most recent boom ran from 1997 to 2006. It was the longest and the most extreme. Spurred by easy credit and subprime lending, Sacramento home prices soared 135 percent after being adjusted for inflation, compared to a 50 percent increase nationwide. So far during the bust, home prices here have fallen 53 percent. The average drop across the United States has been about 25 percent.
The net result of all the ups and downs: Sacramento home prices grew by just 33 percent during the past 35 years, after adjusting for inflation, for a relatively mundane growth rate of about 1 percent each year.

[EastCoastReefer]

The prices moving sideways for the next 5-10 years is wishful thinking during these times.

[xiaodidi]

Home Prices will settle at the level where it’s affordable to buy. The only reason houses are not selling now is because it’s unaffordable for the majority of the people looking to buy. Home prices will go down, we just don’t know how much of a correction.

[dubya]

Housing market lags. It’s going down ya’ll. Doesn’t have to crash but it will retrace.

[Dunn_mortgage_advisor]

Homes that were bought in late 2020 and early 2021 are now hitting the market in 2 of my main markets (AZ and TX). Opendoor, builders and mom & pop owners are cutting their prices. People are also going back 2 and 3 years looking at what houses have sold for. Finally, people have woke up and realized paying $600, 000 for a home that was bought for $300, 000 2 years ago makes $0 sense. We also have to factor in, many jobs are bringing people back to work. People are also selling now because their neighborhoods have shifted a seller told me "too many people moved into my neighborhood that wouldn't have been able to afford living here before these low rates and we don't like how its changed, we are MOVING up, " that same seller has dropped their price $100, 000 this is Aubrey, TX.

[ricdynasty]

Prices are going to normalize in a big way. Hope realtors and sellers like crow, because they’re about to eat a lot of it lol.

[alejandrogalvis]

"I believe home prices are somewhat inflated"...lol. Just like any other asset, prices are driven by fear and greed and fear is much more powerful than greed. Once sellers realize that they can't sell their homes for what they are asking, fear will start to build up, institutional investors will dump homes to an already weak sellers market, and individual sellers will be crushed. Yes, people need homes to live in but there are many reasons that can force you to sell your home: moving for a job, upsizing for a growing family, can't afford a mortgage, and so on... You are just like 95% of realtors: biased on a for ever growing real estate market and trying to sugarcoat the market cracks when they begin to appear.

[jondemartinis]

All asset classes? Really? You should look at the data again. Someone who constantly posts their " opinions " should know that in regard to real estate that all markets are completely from each other. Anyone who understands real estate should know that.

[jesuszavala]

What’s going to rule the market is the demand less people are qualifying for a home loan because of high interest rate and high price any of this two needs to be lower.

[jaybartgis]

Remember when Jeb and Josh claimed interest rates can't go past 5% and everyone laughed in the live stream when it did? Well of rates are in fact falling below 5% just as predicted

[patrickkesterson]

I have to call out his moronic take on Bitcoin. Yes, Bitcoin and blockchain is a new (not to mention poorly understood) technology that was created or "made up" as he says. Isn't that how all new technologies come into being? Seems like a pretty obtuse and uninformed perspective IMO.

[onr]

Nobody knows what housing market is going to next year or so. I remember people were talking about slowdown last year due to high prices, and crash talk. None of it happened. All we know is housing market is overvalued in many metrics, and anybody buying now should decrease their expectations. The returns from housing market next 10 years is very likely to be much less than previous 10-years and historic levels. How this is going to happen is uncertain. Can it go up 10% first and then drop ? yeah maybe if the interest rates go a lot lower in the short term, can it go sideways ? yeah, mild recession + 5% mortgage will do it. Can it go down %20 in the next 1-2 years? a black swan event or higher interest rates or a severe recession may do it. Nobody knows what's going to happen. Those who were calling for a crash were very wrong last year and missed %20 run in housing prices. It is almost impossible to time the market. If you would like to buy though, (i) have a longer time perspective (10-15 years), (ii) be ready to have drops in the prices along the way, (iii) lower your expectations on returns next 10-years (do not expect the returns of the previous 10-years).

[quantumzero]

Ohhh myyy goooodness.
I had to stop listening to this video because his voice was only coming from my left headphones.

[aaronthibodeaux]

The error in this thinking is that sellers will not budge in prices because their neighbor got X amount at the peak. We're already seeing 50-100k price cuts on houses here in Phoenix. Now these houese were listed at 80% over the original price, but because of that, the housing are just sitting and sitting. The Sellers that have to move won't have an choice but to lower prices. All of the FOMO free money buyers are gone. The interesting piece of this will be the new builds. Will they eventually drop. As of now they are only doing incentives, but I'm not sure how long that can last.

[nathansmith]

We are already in the big crash, Inflation is a
catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated.If you want to stay green, you have to rely on a lot of diversification. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.

[asolano]

When I refinanced, my monthly mortgage payment went down by about $500. I imagine the same happened to millions of others homewoner. That's a lot of extra money in the hands of consumers which is not going away no matter how much they raise rates. I'm never selling.

[straightdrive]

after analyzing all data and multiple scenarios I do agree with this assessment that home prices will reduce by 5-10 % and not likely to be a crash. I think there is just to much equity in houses and with people for there to be a total crash similar to 2008.

[Vivekkrishnaseshadri]

“House prices never goes down. Only up or sideways.”

[boriskoblents]

Over in Missouri I have seen about a 10% drop and hold. Everyone was waiting for more but it looks like the sellers won the chicken game cuz those houses are finally selling.