How The Housing Crash Will Happen

In 2024, a potential housing crash could be triggered by a combination of overleveraged homeowners, speculative investments, tightening credit standards by financial institutions, and sudden interest rate hikes. The American Dream is being crushed by a global economic slowdown, buyer demand could decrease significantly. This may lead to plummeting property values and widespread foreclosures, with investor panic exacerbating the downturn. Government interventions might struggle to stabilize such a faltering market. In this video, we look at all these aspects so you can determine if now is the time to buy or sell your home.

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Kristina Smallhorn
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eXp Realty LLC,2900 Westfork Dr. Suite 401, Baton Rouge LA 70817
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Kristina Smallhorn is a licensed REALTOR® with the state of Louisiana, License number 0912122918
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[Grace.h-to]

Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.

[ameliablack]

I gave up trying to buy a house. I fixed my credit and took out my retirement money for a down payment. All my bills are paid off. But the lenders kept finding something wrong with the houses I was wanting to buy. So, after three attempts at buying a house and another lending fiasco I decided to live on my Indian reservation in a small 20 X 18 cabin. I will retire here and live off grid. At least I have no Bills.

[Riggsnic_co]

Inflation hits people a lot harder than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of. It's not surprising negative market sentiment is so high now. We really need help to survive in this Economy.

[stephenpotter]

The housing crash is so bad that I read about someone who had to rent half of her bed with someone just to afford rent. foresaw the housing crisis and sold my property. I then put it in the market. That was late February. I've lost more than 40% of my portfolio's value. It makes me really sad. How can I turn this situation around?

[KristinPMosher]

Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market

[ifeawosika]

Homes are already over expensive. They were in a bubble. I don't know where people are getting the money from to afford 400-500k homes.

[hankmarks]

I've been watching the housing market closely, Prices have been skyrocketing for years. It's going to be tough for first-time buyers to enter the market." how can one diversify $280k reserve .

[Soxandnicole]

Listening to your videos makes me appreciate the decisions we made to physically build our own home, while paying cash as we went. We would be in big doo doo if we didn't.

[jrbland]

THE SAD THING IS WE ALL KNOW THEY HAVE DOUBLED THE PRICE ON THESE HOUSES. THIS IS INSANE.

[tammybagwell]

Currently, in ny neighborhood in Dallas suburb, 4 homes for sale, 1 for rent and 3 more that have sat empty with no explanation
There doesn't seem to be a shortage of homes but a shortage of AFFORDABLE homes, we need a correction

[Iffy]

Personally I think that prices are going to drop, but they aren't going to drop as much as they should. Speculators are buying in cash, so with the huge jump in mortgage rates, they will have much less competition. If the cost of renting stays high, they have every reason to continue buying. If there is legislation passed that makes it much more unpleasant for speculators/investors to purchase homes, I think think prices will drop significantly.

[MakeamericaGreatagain-hj]

Rates on 30-year mortgages subtracted 8 basis points Friday, lowering the average to 8.33%. On Monday and Tuesday, the flagship average had bolted more than a third of a percentage point higher to set a new 23-year high of 8.45%. Do I just keep waiting for a housing crash with my $2 million in liquid assets or shift my attention to the equity market?

[marhlfld]

I've been studying this for a while now. It's absolutely going to crash. Worse than 2008. There are a lot of jobs available, but very low income jobs. They can bare afford to rent let alone buy. The rents are beginning to drop, but the house prices are dropping big time in Eastern TN. From several thousand to one I saw dropped $50k. Yet the house is still unaffordable. Buckle up Buttercups, it's going down.... while the dollar goes up, it takes more $ to purchase a loaf of bread. It's worth nothing, thanks to the Fed.

[sira]

Astronomical increase in property taxes+homeowners insurance+utilities are driving some of us out of our homes. Senior citizens are the worst affected. We have worked all our lives, retired in our forever homes and now cannot afford these expenses. I don't want to, but might be forced to living in a tiny home which is NOT how I wanted to spend the last chapter of my life. Speculators+corrupt county assessors are creating false market valuations. It's a very difficult time.

[strngenchantedgirl]

As long as there’s a housing shortage I don’t see how prices will fall. Another thing to talk about is the regulation of air b&b’s. A lot of cities are cracking down on short term rentals and people way over invested in that. If there’s a massive sell off of those it could be interesting.

[fgjf]

Many of the jobs that are listed are either part time jobs, or low paying full time that no one wants. This is why the available jobs have grown. If employers paid more, and executives paid themselves less, then those jobs would get filled. People currently working entry level jobs would move up to better paying jobs, and the entry level jobs would open up to those who are new to the workforce. Executives just need to take pay cuts and pay employees more. Instead, they want to keep their high salaries and bonuses, pay employees the least as possible, and raise prices of products, in order to pay themselves more.

[MetalPhoenix]

My 2 cents. Americans are at their highest debt to income ratio and their highest credit card debt. You add in student loans coming due. Plus, it sounds like airbnbs are starting to get sold (increasing inventory). Now if unemployment goes to 6 or even 9% (increasing inventory) and inflation stays stubbornly high. I definitely see a huge housing downturn.

Also, where I am, in Kansas City. The ratio of median income to housing cost is normally 2.67 (historically). Right now it's closer to 3.7 (housing is way over valued).

[cobyb.]

To summarize the entire video. No one knows for sure and the answer to all the questions is "only time will tell"

[johndurbin]

No one thought there would be a crash in 2007
2008: hold my beer

[richiehunt]

Nicely done video. We know that home transactions are the lowest since 1995. We also know we're at an all time high of debt-to-income ratio. But we have a very low unemployment rate (lowest since 2000 and 1945).

My view is that the market is basically frozen right now. People aren't buying and people aren't selling. And only few selected areas are building. I go back to what I thought back in 2021...any type of crash/correction will be market dependent. It will depend on a variety of factors for each market, particularly migration. This is where it's different from 2008 because we had more people moving and relocation than we did back then. And it depends on the net migration, how many people that migrated to a market stayed there and how accurately that market built new homes to meet their net migration. And it will also depend on the local economy, too.

Most homeowners just can't sell now because it makes no sense to do so. And in reality, it doesn't make sense for most people to buy because not only can many of them not afford it, but it's hard to justify the price increases, particularly with the rate hikes.

Even the homeowners that bought pre-COVID are having issues because their debt-to-income is high too. That just means to me that they are borrowing money. And they can continue to borrow money as long as they have a job. But if unemployment raises substantially those that become unemployed will not be able to borrow.

One thing that, to me, is a bad omen for the economy is AirBnB sales. Particularly in a place like Myrtle Beach where most of the AirBnB's are condos, usually on the ocean that charge significantly less than renting a room thru the resort because the resorts charge 'resort fees.' It's a vacation destination, yet AirBnB sales are down hte most there (IIRC down by 40%). Typically when an economy is not doing well, the vacation market feels it the most and given all of those factors it's a bit alarming to see the Myrtle Beach AirBnB market doing so poorly. Also, it was predicted after COVID that a bad recession would hit and luxury items would be the first to see their prices drop and we're starting to see that right now.

Anyway, I think what's going to happen is that once unemployment goes up and people start to lose their jobs and can't borrow anymore, we'll see a large mass of people downsizing by going from owning a home to renting instead of downsizing by going from owning a home to owning a smaller home. The smaller homes are just priced too high and the rates have gone up too much. These people will need liquidity and will sell the home and rent. And many will feel they can sell the home, rent and then when the rates go down again (usually due to unemployment) they can buy again, hopefully at a more reasonable price with a better rate.