Epic Real Estate Investing - Market Madness: Unraveling the Twists and Turns of Real Estate's Future | 1265

Starting point is 00:00:00 This is Terio Media. Ladies and gentlemen, boys and girls, brace yourselves for the most exhilarating, mind-blowing episode of the epic real estate investing podcast yet. I can feel your hearts racing as we dive headfirst into the abyss of the unknown, the bizarre and the downright fascinating. First up, we're exploring the enigmatic world of the real estate market in 2023. Expect the unexpected as we delve into the weird and wonderful predictions made by the experts. With twists and turns you didn't see coming, we'll navigate the labyrinth of market changes

Starting point is 00:00:35 and reveal the secrets to preparing for the real estate roller coaster that awaits. Are you ready? Because this is going to be wild, but hold on tight, because we're not stopping there. As the storm clouds gather and the ominous shadow of Recession 2023 looms, fear not, where Captain Casharoo is here to save the day. We'll break down the complexities of recession into an easy-to-understand, explain it to me like I'm five style. Learn how to not only survive but thrive in these uncertain times as we uncover the strategies to protect yourself and capitalize on the chaos. And just when you

Starting point is 00:01:11 thought it couldn't get any better, we present to you the deal of the week. This gem of a property in Kansas City, Missouri is a once-in-a-lifetime opportunity for savvy investors. But wait, there's more. We're bringing you the good news that you've been craven to uplift your spirits and inspire you to reach for the stars. Let's celebrate the triumphs, the achievements, and the feel-good moments that make life worth living. Finally, we'll strap in for a rocket ride through the cosmos of cryptocurrency. Don't miss a second of this heart-pounding adrenaline-pumping episode of the Epic Real Estate Investing podcast. Let's get started. Hey, strap in. It's time for the Epic Real Estate Investing Show. We'll be your guides as we

Starting point is 00:01:54 navigate the housing market, the landscape of creative financing strategies and everything you need to swap that office chair for a beach chair. If you're looking for some one-on-one help, meet us at rei-aise.com. Let's go, let's go, let's go, let's go, let's go, let's go. Let's go. Hey, I had to just jump in here really quickly because it turns out everyone was wrong in their 2023 predictions. Or everyone was right? I mean, actually, most were right initially, but now they're wrong. And the few that were wrong initially, now they're right. I'm confused. For now, the real estate market of, of 2023, it's just flat out weird. Most housing analysts expected 2023 to be a really rough year

Starting point is 00:02:35 for the U.S. housing market. In fact, among the 29 major housing forecast models, 24 forecasted a national home price decline for 2023. And then, right out the gate this year, it was clear that the U.S. housing market, which saw a historic decline in home sales in the second half of 2022, was no longer in free fall mode. The crash of all crashes, in hindsight, looks to be nothing but a fender bender. The market stabilized around January through a combination of improved buyer confidence, tight supply, and a slight decline in home prices and mortgage rates doing just enough to improve affordability. Now, fast forward through April, and it's looking like the housing market hasn't just stabilized. It might be returning to growth mode predicts the real estate research firm

Starting point is 00:03:18 CoreLogic. After seven consecutive months of home price declines, the CoreLogic Home Price Index detected a 0.8% home price uptick in February. 2022 saw the U.S. housing market slip into the first price correction since the housing bust bottomed out 11 years ago. The correction was particularly sharp in markets like Phoenix and Seattle that saw home prices fall 10% and 16% respectively from their peak. In the eastern half of the country, the correction is much milder as some regional housing markets, including Cleveland, didn't see prices pull back even 1%. The correction seems to have all but lost its steam. Home prices are still high, and while there's been a slight decrease in demand, demand, albeit an artificial one due to interest rates, it hasn't been enough to significantly impact prices. In fact, existing and new home sales have inched up a bit this year, and home builder

Starting point is 00:04:08 confidence has improved, and firms like Zillow, CoreLogic, and Black Knight have all reported positive month-over-month home price increases this spring. So, what's going on? I mean, aren't we headed for a recession? I mean, if we're not in one already? Well, here's the deal so far. Housing affordability has improved this spring as the average 30-year fixed mortgage rate, which topped out at 7.3% in November, came back down to around 6.5%. Additionally, a lot of homes for sale, coupled with the market entering its busier spring period, has at least for now pushed the national housing market back into equilibrium. That said, under the hood, the housing market isn't exactly normal just yet.

Starting point is 00:04:46 Some housing markets are booming right now, like Jackson, Tennessee, and Scranton, Pennsylvania, while other places like San Jose, Austin, and Las Vegas are still experiencing a home price correction. and even within a particular market, it can vary quite a bit. We know that the imbalance of supply and demand in the housing market is poised for long-term growth, but it's the short-term where the uncertainty lies. And the American people are sitting on pins and needles concerned about their financial futures, waiting to see the Fed's next move. I mean, we're talking about a government that year after year demonstrates fiscal incompetence,

Starting point is 00:05:18 lacking the most basic of financial competencies like balancing a checkbook. All current indicators are pointing to a future not nearly as grim as most predict. But here's the big variable that could send everything plummeting. History tells us that the Federal Reserve's inflation-fighting playbook starts with the U.S. housing market. And it goes like this. The central bank begins by applying upward pressure on mortgage rates. Soon afterwards, home sales fall and home builders begin to cut back.

Starting point is 00:05:42 That causes demand for both commodities like lumber and concrete and durable goods like refrigerators and doors to fall. Those economic contractions then slowly spread throughout the rest of the economy and, in theory helped to rain in runaway inflation. And that's exactly what we saw last year. The Fed started jacking up interest rates, mortgage rates spikes, and the U.S. housing market slipped into an old-school housing downturn. And here we are, spring 2023 changing course already. But will this uptick in new home sales be enough to stop the economic headwinds created by the housing slump? Well, since World War II, declines of greater than 10% in the annualized rate of investment in housing construction and

Starting point is 00:06:18 improvements have coincided with recession on all but two wartime occasions. when defense spending propped up the economy. In the last three quarters of 2022, declines in such investment hovered around 20%. And that is why most experts are still leaning into their predictions of the U.S. economy slipping into a mild, not deep recession. Yep, not deep. This is not 2008.

Starting point is 00:06:40 Even though a recession is likely, the housing recovery will then help to drive the overall economy recovery like it always has. But it's different this time, is the public sentiment. More famous last words have never been spoken. The U.S. housing activity will be driven in the next couple years by, one, the structural under supply of homes that prevailed since the 2008 global financial crisis. I mean, there's a decades worth of building deficit that you just can't ignore. Two, the robust demographic trends.

Starting point is 00:07:09 No, the peak age of the millennials are moving through the average age of the first-time homebuyer causing over the next few years more demand for housing than ever before in the history of the United States. Not to mention that the millennial sentiment toward homeownership has turned positive and three strong borrower fundamentals and high equity cushions. CoreLogic doesn't expect a further dip at all, but rather home values to rise 3% between January of 2023 to January of 2024. And if CoreLogic is right, then U.S. home prices would end 2003 back at price levels achieved at the height of the boom in June 2022. CoreLogic is convinced prices just bottomed out and we may be in for a period of steady growth. Now, Zillow, not as bullish as CoreLogic, but is still very optimistic that we've bottomed out

Starting point is 00:07:54 and is forecasting over 300 markets to mildly rise in values of 1% over the next 12 months. Now, on the other side of that, you've got Mortgage Bankers Association, Goldman Sachs, Fannie Mae, and Moody's, all in agreement that we have further to pull back before we head up again. But if we look at this chart that shows the disparity between the Bulls and the Bears, there's not that much of a gap between the two. What is undeniable, real estate is reverting to its time-honored adage. location, location, location. According to Zillow's data, cities like Phoenix, Las Vegas, and Atlanta are expected to see significant growth in the coming years. These cities have a strong job market, a growing population, and plenty of affordable housing options. In other locations, some cities are expected to see a decrease in home prices, including San Francisco, New York City, and Los Angeles.

Starting point is 00:08:40 These cities have become prohibitively expensive for many people, and it's likely that the market will correct itself to some extent in the coming years. But the supply and demand factor is so lopsided in favor of the demand that nobody is predicting a housing crash. And here's what I mean. As of the recording of this video, inventory is finally climbing for the spring season. The market saw the most new listings in a week since September with 80,000 single-family homes on the market. And something you may hear at your next dinner party, yeah, but the housing bubble is about to pop. Who can afford a house at these prices? But 21,000 of those new listings that just hit the market were gobbled up almost immediately showing that demand is high for new supply, and so is the

Starting point is 00:09:20 ability to buy. Further, the percentage of homes on the market that had to lower their price dropped back to 29.4% this week, almost back under the levels of 2019. And the median price of single family homes this week is up 1% from last week to $441,000. The declines in home prices seem to be behind us. And the market is much healthier than it was late last year. While we still have half as many homes available for sale in the last decade, inventory has been climbing for a couple of months now. And this is important because the price of new listings is a forward leading indicator of future home sales prices.

Starting point is 00:09:57 And the price of new listings reflects the signals of future home sales. And the signals right now are not bad at all. This is because there are fewer home cuts now, meaning that homes on the market are getting offers around their list price. This means that the sales prices in the future are not falling. Hey, that's weird. That's weird. Hey, the numbers are the numbers, and they don't give a damn how you feel about them. So what is there for you to do now? Well, as long as you're not speculating and trying to time the market in the short term, it'd be really tough to lose with a long-term focus investing in real estate. As they say, don't wait to buy real estate, just buy real estate and wait. But hey, what do I know? I could be wrong. I mean, the majority of experts sure were. We'll be back with more right after this. Hit pause on whatever you're listening to and hit play on your next adventure.

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Starting point is 00:12:00 while the fresh flooring and garage door add a touch of sophistication to everyday living. These thoughtful features contribute to a nurturing environment that tenants will be proud to call home. Nestled in a thriving community, this property offers an array of essential amenities that cater to every aspect of life. Highly regarded schools, including Center Elementary, Center High School, and Southeast High School ensure a bright future for families, while a network of exceptional hospitals and clinics provide peace of mind. The surrounding area is teeming with recreational opportunities, enabling tenants to forge lasting memories with loved ones. With major grocery stores just around the corner and seamless access to main roads and highways,

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Starting point is 00:13:23 The United States GDP grew at a measly 1.1% annual rate in the first quarter of 2023. The slowest pace since the pandemic hit economy reopened. In a recent NPR article, some economists are predicting that we may be headed towards a very bad recession in the very near future. Are we going down? Wait, what is a recession really? And most people think it's a bad thing. But I heard there are opportunities for investments in entrepreneurs during a recession too.

Starting point is 00:13:52 I've heard the same thing. If there were only someone out there who could just explain it to me like I was five. Hey there, kiddos, Captain Casharoo here. And those are great questions. And let's start with what a recession is. Imagine you have a big jar of cookies. and every day you eat some cookies and your mom refills the jar with more cookies. But one day, your mom loses her job and can't buy more cookies to refill the jar.

Starting point is 00:14:18 So you start eating fewer cookies because you don't want to run out. But since you're eating fewer cookies, the jar now doesn't need to be refilled as often. This means that your mom doesn't need to buy as many cookies from the store, and then the store doesn't make as much money selling cookies. So the store might have to lay off some of its own. workers because it can't afford to pay them. And if those workers don't have a job, they might not have enough money to buy cookies and the things that they need for their kids. And this cycle, it continues. This is what happens in a recession. Okay, got that. But how do recession start in the

Starting point is 00:14:54 first place? I love that question. You know how sometimes you save your allowance to buy a toy that you really want? Well, sometimes grown-ups do the same thing, but for bigger things like cars, houses, or vacations. But when they're worried about the future or they don't have as much money, they might not want to spend it on those things anymore. So why do people start worrying about the future in the first place? People worry about the future because sometimes things happen that they don't expect or that they can't control. I mean, have you ever been scared of something you didn't understand, like a loud noise or a dark room? It's kind of like that. But for grownups, yes, grownups get scared too. And sometimes banks and other important places that help people with money have problems.

Starting point is 00:15:40 We ran out of money. And when this happens, they might not be able to lend money to people or businesses that need it. And that scares people. Other times, wars can make things very hard for people and businesses. You know, when countries are fighting with each other, it can be harder to trade with other countries. And sometimes the price of things like oil, which helps us make important things like gas for cars. That can go up really high, really fast. and this can make it harder for people to drive their cars or for businesses to ship their products.

Starting point is 00:16:09 And sometimes the stock market, which is like a big store where people buy and sell pieces of companies. That can go down really fast. Now, when any or all of these things happen, people get worried about the future and don't spend as much money. But you know what? Even when things are scary, we can still be brave and help each other out. Thanks, Captain. So how long do recessions last? The answer to that question is a big fat depends.

Starting point is 00:16:34 Sometimes it's like a little bump in the road and it only lasts for a few months. Kind of like when you get a little scratch or a bruise and it goes away in just a few days. I mean, it might hurt a little bit, but it's not too bad and things go back to normal pretty quickly. Other times, it can last for much longer, even for several years. It's kind of like when you get a really bad boo-boo and it takes a long time to heal. You might need to see a doctor or take medicine and it might take a while before you actually feel better. So the length of a recession, it can depend on many different things. Sometimes it depends on how bad the recession is or what caused it.

Starting point is 00:17:10 Other times, it depends on what people and governments do to try to make things better. For example, when a government tries to help, they might do things like give people money or create jobs so that people can have enough money to buy the things that they need. Not like when your mommy or your daddy gives you a treat or a big hug when you're feeling sad. Those types of things can help you feel better faster. But if they give you too many treats and too many hugs, that can make you fat and lazy. And although you may feel good today, it can be really bad for your health in the future. Here's a fun fact.

Starting point is 00:17:44 One thing that most people don't realize when it comes to how long a recession lasts is, sometimes how people feel about the economy can make a big difference in how long it does last. You see, when people are scared or worried about money, they might not want to spend it. When lots of people feel this way, it can make things harder for business. because they don't sell as much stuff. And then businesses are forced to lay off some of their workers, and that's really sad. But when people feel happy and positive about the economy,

Starting point is 00:18:12 they spend more money and help businesses, which can create jobs and make things better for everyone. So you see how people feel about the economy can make a big difference in how long a recession lasts too. When people are happy, things can get better faster. But when people are scared, things might take longer to get better. Now, we can all help if we just stay positive and keep spending money on the things that we need. So while we're in a recession, where are the opportunities?

Starting point is 00:18:39 See, you're thinking positively already. I like that. So, some companies that provide really important things like food or health care might not be as affected by a recession as other companies. That means that if you invest in these companies, you might be able to make money even when other companies aren't doing as well. Or maybe you have an idea for a business that can provide something really important, during a recession, like fixing things or providing education.

Starting point is 00:19:04 Education? Oh, you know, if you start a business like this, you might be able to help people and make money at the same time. Now, during a recession, some things might be cheaper than usual, like stocks or real estate. And if you do your research and talk to grown-ups who know about investing, you might be able to buy these things for a lower price and make money when they go up and value later on. And sometimes, people come up with really cool new ideas for things that can help people during a recession. Like, maybe a new kind of technology that can make things easier or more efficient. So if you invest in companies that are working on these new ideas,

Starting point is 00:19:39 you might be able to make a lot of money in the future. But remember, my little friend, all investments carry risks, and it's important to talk to grownups who know about investing before you make any decisions. Just like how you ask a grownup to help you when you want to cross the street. You should ask for their help when you want to make smart investments too. Hey, can you go back a little bit and tell me some more of about investing in real estate during a recession. Investing in real estate during a recession can be a really good idea,

Starting point is 00:20:06 but it's important to be smart about it. You should look for properties that are on sale because they might be cheaper than normal during a recession. For example, look for foreclosures. Sometimes when people can't pay their mortgages, the bank takes back their house and sells it to recover the money that they loan to the owner to buy it in the first place. These are called foreclosures,

Starting point is 00:20:25 and they can be a good opportunity to find a property at a lower price. Or, number two, look for distressed property. Some properties might be in poor condition or need repairs, which can make them harder to sell. You can find lower prices here, too. Or, number three, look for property owners that are experiencing distress. You know, sometimes people go through a tough time like a divorce, a job loss, or they're just on a run of bad luck, and that causes big problems in their lives. And they need money quickly to address those problems.

Starting point is 00:20:54 So some will sell their properties fast at a discount so they can solve those problems entirely. Problem solved. It's also important to buy in areas that are likely to recover quickly from the recession, such as places with lots of jobs and lots of people moving in. You know, right now, Arizona, Florida, Nevada, Texas, Georgia, and Alabama are good places to look, as well as many places in the Midwest. You see, there are a lot of folks that have kind of had it up to here with big city living. Hey, thanks for the tips. So where does the country stand right now? Well, the economy, it's not doing so well right now. People's are worried about spending their money, and banks are being very careful about who they lend money to. This means that the country's economy is not growing as fast as it used to. It might even get

Starting point is 00:21:40 worse in the next few months because prices are going up, and so are interest rates. But people are still buying things, which helps keep the economy going. You're welcome. Some people in Congress are also fighting over how much money the government can borrow, which could make things even harder. And even though some companies like McDonald's and General Motors are still making money, they are also cutting jobs. So things might get a little tougher, but a lot of very smart people don't think the country will fall into a really bad recession this year. If it does it all. Okay, got it. So what should we do now? You know, you have really good questions. I like that about you. And because of your questions, I think you're going to be just fine. But here are three things to do for now.

Starting point is 00:22:22 Number one, be mindful of your spending. You know, during a recession, it's important to be careful about how much money you spend. It's important to only buy the things you really need. And that could be goods, it could be services, and or investing in yourself to make you smarter and better prepared for the future. That one's really popular during times like this. And number two, look for opportunities. Even though recessions can be tough, they can also create opportunities for investing

Starting point is 00:22:46 and entrepreneurship. Number three, stay positive. During a recession, it's really easy to feel scared or pessimistic about the future. But it's important to try to stay positive and optimistic. We talked about how our feelings can impact the length of a recession. And if we know recessions don't last forever and things will eventually get better, why wait to feel better? Thanks for sitting tight while we pay our light bill. We'll be back right after this. Boarding for flight 246 to Toronto is delayed 50 minutes. Oh, what? Sounds like Ojo time. Play Ojo. Great idea. Feel the fun. With

Starting point is 00:23:22 all the latest slots in live casino games and with no wagering requirements. What you win is yours to keep groovy. Hey, I won! Boarding will begin when passenger Fisher is done celebrating. 19 plus Ontario only. Please play responsibly. Concerned by your gambling or that if someone close to you, call 186653310 or visitcomexontera.ca. Mainstream media is ripping us apart. This is news to bring us together and make some money in the process.

Starting point is 00:23:55 First up, I've got some delightful news for real estate investors. The consumer price index for April 2023 shows a slight dip in inflation. What does this mean for you? Well, the Fed has signaled a potential pause and rate hikes causing mortgage demand to surge. So if you're looking to buy a home, it's time to dance like nobody's watching because it's a great time to lock in those low rates. In the world of sports, the Georgia football team fresh off their national title win, has declined a White House invitation due to scheduling concerns. But, hey, on the bright side, they must be super busy preparing for another fantastic season. And you know what they say?

Starting point is 00:24:33 Champions don't rest on their laurels. They practice. Next, let's go to the box office. The much-anticipated Super Mario Brothers movie is shattering records like Mario does bricks. It's fun, it's nostalgic, and it's taking the world by storm. So buckle up, grab your mushrooms, and race down to your nearest theater to experience. the adventure. In fossil-tastic news, a dog in Colorado has uncovered a complete dinosaur fossil, renewing interest in a rural coal town. Just goes to show you never know what treasures your four-legged

Starting point is 00:25:03 friend might dig up on your next walk. Jurassic bark, anyone? Now, let's turn to a heartwarming story of heroism. A formerly homeless man saved the day by stopping a runaway baby stroller just moments before it rolled into traffic. Talk about being in the right place at the right time. The baby is safe and sound, and our hero has reminded us that everyone has the potential to make a difference. And finally, we have the story of a 100-year-old Florida woman who survived the Holocaust and celebrated her birthday by throwing the first pitch at a Yankees' raise game. A century of life and still going strong, she showed us it's never too late to have a ball. It's a home run in the game of life. And that's the good news. Until next time, be happy. It's contagious. Spread it far and wide.

Starting point is 00:25:50 It's not a passing fad, it's the future of money. What happened this week in cryptocurrency? First up, we have a tale of intrigue and deception. As a former Coinbase manager has handed a two-year prison sentence for their role in a $1.5 million crypto scheme. In an ironic twist worthy of a Shakespearean play, it seems that even those who were once trusted with the keys to the digital kingdom can't resist the siren call of illicit gains, but fear not fellow crypto enthusiasts for Justice has been served,

Starting point is 00:26:27 and the blockchain remains as secure as ever. And remember the next time you're tempted to take a walk on the dark side, Lady Justice has her eyes on you, and she's got a mean backhand. In more uplifting news, the world of Crypto Wales is making a splash with their latest obsession. Peppa coin. This quirky and irreverent digital currency has seen a massive surge in trading volume, as Crypto's big fish have gobbled up millions on Binance. It's a testament to the unpredictable nature of the crypto ecosystem,

Starting point is 00:26:58 where today's joke can be tomorrow's jackpot. So whether you're a crypto minnow or a full-blown Leviathan, keep an eye on Peppa coin, and remember to hold on to your sense of humor as we navigate these wild, digital waters. Now, you might be wondering why crypto prices are down. Well, it turns out that the answer lies in a mix of global economic factors and a good old-fashioned game of musical chairs.

Starting point is 00:27:21 As inflation falls to a surprising 4.9% in April, Bitcoin has risen above the $28,000 mark, proving that there's always a silver lining, even in a bearish market. So as you watch your digital assets fluctuate, just remember the wise words of the late, Great Warren Buffett. The stock market is a device for transferring money

Starting point is 00:27:43 from the impatient to the patient, and in the world of crypto, patience is truly a virtue. And that's it for the Crypto Chronicles. Until next week, keep calm, trade on, and may Satoshi's spirit guide you to digital prosperity. See you in the next block. And that wraps up the epic show.

Starting point is 00:28:03 If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. peace, blessings, and success to you. I'm Matt Terrio.

Starting point is 00:28:19 Living the dream. Yeah, yeah, we got the cash flow. You didn't know home for it. We got the cash flow. Okay, only 10 more presents to wrap. You're almost at the finish line. But first, there, the last one. Enjoy a Coca-Cola for a pause that refreshes.

Starting point is 00:29:07 This podcast is a part of the C-suite radio network. For more top business podcast, visit c-sweetradio.com

Epic Real Estate Investing - Market Madness: Unraveling the Twists and Turns of Real Estate's Future | 1265

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