Housing Market Crash 2024: Why Hasn't It Happened Yet? (The Only 3 Things Holding It Up)

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Main Idea: The Housing Market has been held up by 3 very strong Supply Constraints even though demand has weakened substantially. In this video, we'll talk about what those 3 Supply Constraints are, how to monitor them, and what it means for the Housing Market in 2024 and beyond.

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[Susanhartman.]

Keep in mind that during the 80’s people were encouraged to save due to the interest rates. Right now there’s very little incentive to save because those who are saving are watching those who are reckless taking it in. I’ve been trying to save for a home and it’s been discouraging to watch prices continue to not budge because there’s people willing to get into a mortgage where they’re paying 40% of their income. It’s insane.

[rpdrpd]

Larry is right, the other ancillary expenses of owning a home; real estate taxes, homeowners insurance, HOA fees are becoming staggering. Even if a retiree is fortunate enough to own their home outright, these runaway expenses will chew up a fixed income budget quickly.

[VictoriaWood-ucmp]

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 .

[Ron]

Excellent analysis and that's exactly what's happening -- developers are building apartment complexes. I see it everywhere here in the Northeast. I also see ridiculously high asking prices for existing homes and they are simply not selling.

[peej]

There isn’t really a supply issue. It’s the hogging of supply from investors. Which will continue to push to be a problem as it creates disparity between the rich and poor. Big polarization between families who can and can’t raise families to the American dream standard is a threat to the government which will be forced to change this. Either through policy or interest rate hikes. Sooner or later the bubbles gotta pop and rents have to match incomes

[KozyTapes]

During the Great Wealth Transfer the bequeathed estates will be sold for very high valuations but due to the increase in renters, the risk assets will continue to be debased.

[bthomas]

Most apartment developers are "merchant builders." They build, stabilize (lease-up), and sell. They don't stay in the investment to collect long term rental income. They typically get bought out by REITs, pensions funds, etc. With that said, it is very hard to make new apartment projects pencil in the current environment, with a 50-year peak in supply holding down rents. The projects delivering today were started years ago in the ZIRP (zero interest rate period) when project economics where vastly different.

[MianHussnain-tuwi]

Money is not meant to control people, rather it is meant to be put to work producing more money for you. You cannot build wealth without putting money in its rightful place.

[vinniewho]

what about supply constraint since existing homeowners cannot afford new loans at high rates when they are enjoying low rates from past 15 years before the interest rate hike? what is the statistics on this factor

[KarenLavia]

fear a housing crash due to people buying homes above asking prices with little equity. If prices drop, affordability and potential foreclosures may arise, worsened by future layoffs and rising living costs. I want to invest more than $300k, but I'm not sure on how to mitigate risk.

[uploadtime]

Your chart @ 4:23 is investor sales being at 26%, NOT ownership. So they are buying ~26% in Q1 2024, but they are still a small percentage of owners, overall.. it almost felt like you are saying investors own 26% of low-priced homes, which i believe is close to just 2%, overall OWNED by investors.. thoughts?


Also, you cite climate change for increasing insurance costs. Inflation means it takes more to replace or rebuild a damaged house or car, and that means insurance costs correlate..

[vcracing]

The law of supply and demand still applies. We have a shortage of housing between 2M-6M units. Until that resolves, housing prices overall, are not going anywhere. Oh, and since rent hasn't kept up with home prices, expect rent to go up.

[seanmclaughlin]

The building of apartments benefits only from volume. To build a house costs $275-$350 per square foot. The low is $250 and you would be hard pressed to fine it that low. Module homes is where it’s at.

[maverick]

But when interest rates drop, many home owners who didn't sell because of their low interest rate mortgages will be more inclined to sell so that will increase market supply and therefore reduce home prices as demands will continue to be low despite lower interest rates given the continued increase in debts held by Americans

[MikeStefanoff]

Larry my HOI increased 136% in 2023 ($1, 100 to $2, 600) and another 85% ($2, 600 to $4, 800) on top of that in 2024. I’m fearful for 2025. It’s a real problem in California if you’re in a Fire Zone like I am.

[stargazer]

We have a lot of small rent only home builders.

[hersdera]

I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?

[esselfly]

If it does happen it will take years for there to be a correction anyways. Worst time to buy a house.

[Magnus_Magnesium]

My flood insurance tripled in one year. It’s ridiculous. Still wouldn’t sell though as I couldn’t buy another anyways at these prices.

[NorthStarPNW]

What's your take on how U.S. $34 trillion debt and the Soc Security deficit affects future investing strategy?