Epic Real Estate Investing - Market Update for Real Estate Investors | 1041

Episode Date: June 6, 2020

In today’s episode, Matt shares a firsthand opinion on market conditions from his realtor, current unemployment stats, and housing report for May 2020 issued by the National Association of Realtors. Tune in and find out what these updates mean for real estate investors and how you should treat them to get the most out of your investing! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-A.

Ace.com. Here's Matt. Hey there, Epic Investor. It's Matt Terrio from Epic Real Estate, where we show people how to invest in real estate with an emphasis on retiring early. This is the Epic Real Estate Investing Show. If it's your first time here, really glad that you found us. If you like what you hear, make sure you hit the subscribe button before you go. And if this is not your first time here, welcome back. And thank you for sharing this with your friends and your family. You're the absolute best for doing that. So thank you. All right, so got surprise yesterday if you were watching the news. Like who isn't watching the news these days?

And if you're not, good for you. I wish I could exercise that amount of restraint. But I just got to know what's going on. And particularly in these times, yeah, we got to know what's going on. And who knows what's coming next? 2020 has been an unbelievable year. But something happened yesterday makes it even more unbelievable. The job reports came out.

And even CNN constantly negative news, who would have loved probably nothing more than to report catastrophic job conditions and job numbers. Their headline was actually quite positive. A M.C.'s's biggest job increase ever of $2.5 million as economy starts to recover from coronavirus. So good news, right? I think so. It's refreshing. It's nice to hear something a little bit more on the positive. side. But some of the key points here, let's talk about it and what this means for us.

So key points here. Payrolls rose by $2.5 million in May and the unemployment rate sits at 13.3%. So still pretty high, though, but we were just expecting it to be a lot higher. So that's where the good news comes in. Wall Street estimates had been for a decline of 8.3 million and a job loss level of 19.5%. Which would have been the worst since the Great Depression Area. That would have officially put us over the top and that's where we all thought we were headed. The smartest people on Wall Street even thought so. Much of the gains come from those classified as temporary layoffs due to the coronavirus-related economic shutdown. So a little skewed, but the job numbers are always little skewed.

There's always a story behind the story. But still, not what anyone was expecting. And it was the leisure and hospitality industries that represented almost half the jobs gained. I know here in Vegas, we opened up the casinos and a lot of people are employed now. Shoot, we might even represent a million of those two and a half million. I don't know what the actual number is. But just with the Las Vegas economy having to do so much with, hospitality and in leisure and dining.

We were hit hard. The unemployment here was probably, I haven't actually checked the numbers, but I'd have to imagine for a single city percentage-wise. It was amongst the highest, if it wasn't the highest in the nation. Anyway, depending on how you interpret those points, it is good news for a lot of people,

two and a half million people, but leaves a lot to be desired for a whole bunch more. So that's one thing. Second thing, I got a text yesterday from my realtor in Oregon. As I have a few properties that I'm considering selling, and I likely will as soon as I come across the right opportunity to deploy those proceeds. But my realtor hit me up with a text saying that, hey, the buyers are back in full force. Let me know when you're ready.

I called him and he's just saying, yeah, there's more buyers than sellers right now. Inventory is really, really low, and everybody is out calling him and want to go and go look at properties, but there's no properties to look at are very few. And so those are just two big indicators there in a 24-hour period that suggest maybe the market isn't shifting like we thought. It's really funny. If you go back to, I guess, February-ish, and you look at all the projections, every single one of them was just dead wrong, whether it had to do with the economy or the or the virus and then the real estate market, just absolutely wrong. So proof that nobody, when you hear people say nobody has a crystal ball, nobody has one. At least the person that had it did not speak up

and let us in on that little secret. So yeah, the market, it's suggesting, the numbers are suggesting that the market isn't really anything shifting like we thought it would be. But then, or, you know, maybe it is. You know, this is that, we knew it was all a temporary situation. We knew there was going to be some resilience and there was going to be some bounce back. We just didn't know how high we were going to bounce. So we've bounced pretty good and much earlier than we thought. I mean, still a good portion of the nation.

I don't know what the numbers are because COVID hasn't been in the news lately all of a sudden. But I know New York is a starting phase one. So a lot of the, most of the country is still like not fully open yet. So we certainly weren't expecting any sort of bounce back until the cities were fully open. But, you know, regarding the job report, 13.3% unemployment is still really a bad number. That's really high. And, you know, we were finding plenty of deals when we were in the 4% mark. And now it's at 13.3% mark.

So still, three times the amount of problems we as real estate investors look to solve. So the good news is not all bad news. for those of you that were waiting for the opportunity of the real estate market like I was, certainly anticipating it. And then regarding my realtor message, not surprised at all that he's finding big demand, as I've heard that in several other markets as well, even had a couple agents here on the show in the last 45 days or so, how they concurred that they thought the market would be relatively unaffected,

and they actually thought it was going to be better. And so all indicators pointing to they may be right. You know, I went to National Association of Realtors and pulled their housing report for May. And so I wanted to see what the real numbers were rather than just trusting my gut and a couple of guests that we had on the stage or on the show. Let's see, national inventory declined by 19.9 percent, so almost 20 percent year over year. And inventory in the large markets decreased by 22 percent. The inventory of newly listed properties declined by 29. 4% over the past year and 28.6% in the large markets.

So what that's saying right there is inventory is 20% lower than it was this time last year. And it is declined by, or the newly listed properties have declined by 30% over last year. And then the May national median listing price was $330,000. Isn't that amazing? $330,000 is now the national median listing price. price of a home. But that's up 1.6% year over year, so a little bit of appreciation there. And then nationally, homes sold in 71 days in May, 15 days more slowly than this time last

year. All right. So per my realtor, the demand is up. Per the stats of the National Association of realtors, inventory is way down. And I think that could be expected, right? I'll read some more from this report. But, you know, everybody's been in lockdown, right? Everyone's been in quarantine.

And buyers got some pent-up demand. They're ready to get out and start looking at houses. But sellers, that supply might be pent up as well. But I'm not surprised at all that people haven't been listing their house while they're in quarantine because they've probably decided that there's no one to come and see it because everybody's in lockdown. And then where will I go? and what will I go look at when I'm ready to buy the next house. So I think it's still really early to tell what's really going on here.

Let's see, May housing data releases reveals that the U.S. housing market likely reached its low point during mid-April. All right. So the low point was in April. So they're saying the window's already shut. If you didn't buy in April or take advantage of any opportunities in April, you missed it. And they're suggesting that because of constrained new listings and minimal price growth. Signs of recovery emerged as yearly declines in new. listed inventory slowed and listings prices recovered. However, despite many positive trends,

COVID-related challenges linger as homes were on the market more than two weeks longer than this time last year. All right, so sales are slower, but per my agent and the two agents that we had on the show, they don't think that's going to be an issue. They think the demand is up there. It's been pent up and it's ready to be unleashed. Anything else in here? here, got the median price point, days on market have been extended, inventory is low. So the buyers are out, but just buying more slowly is what it's saying. The number of listings have dropped considerably mostly due to stay-at-home orders. And additionally, they had nowhere to go if they did sell.

All that to say, just a lot of uncertainty still. We still don't know anything. But at least we got some feedback, right? We got some data. And then we can't ever. forget right now that we're at an 11 to 12 year bull run on appreciation. You know, when the average is between 8 to 10 years when the market is on its way up and it shifts. So an adjustment is way overdue. This is the longest bull run ever. But apparently what we've been through as a society

and as an economy over the last few months, the housing market looks pretty strong, at least strong enough to stand its ground through all of that. So what does that mean for us, you and I? Well, I still think it's smart to stay away from the long-term projects, meaning your long-term fix and flips. And even if you are going to take one on, I wouldn't try and scale that to any degree and have three or four projects going on. Make sure your property's cash flow for the deals that you are going to take on just in case you do get stuck and watch the economy. I'll certainly keep you informed the best I can here, but it's your money, it's your investments, it's your responsibility, it's your livelihood and your happiness that's at stake.

So watch and listen and try and navigate through all of the political stuff and just try and pull out the facts and then try and determine what that's going to mean for you as a real estate investor. And, you know, anything also, here's another thing to consider. anything you hear from the media or read in the paper or read online or even hear from, I don't know, your waiter or waitress or your barber, understand that all of that information is all retail information. We don't operate in retail. We operate in the wholesale market below retail. The mainstream information is all about on-market deals, right?

On-market real estate. We deal in off-market real estate. and I still see it, although, you know, I might have softened up a bit with yesterday's news, but I still see the unemployment being a big enough issue to create some opportunities over the next few months that weren't there pre-COVID. Because when you look at that, we deal in problems. We follow the problems. We know the profit will follow.

And it's, with all that said, whether it goes good or bad, up or down, it's always a good time to invest in real estate as long as you're cash flowing. Just make sure your strategy adjusts with the market conditions. All righty. So full steam ahead over here. And one of the things that I had mentioned when we first went into quarantine was, had a lot to do around the retail market with potentially the multiple listing service holding more inventory and houses sitting longer.

So the data says they have been sitting longer, but we don't know how much of that is due to the actual buying activity or like the demand of buyers or just being in, you know, lockdown mode. But still, I think it's going to behoove you at some point. There's a great book called Dig Your Well Before You're Thirsty. I don't even know if I ever read it. It's sitting on my shelf. But I kind of feel like I got the essence of the book just by reading the title.

Dig Your Well Before You're Thirsty. So you might want to start strengthening up some of your realtor relationships still. I would still consider that if you haven't done it already. And tomorrow, I'll talk about that on how to do that and where your expectations should be and then how to work with those realtors so you get the biggest bang for your buck and you can create a nice win-win, mutually beneficial relationship with a realtor. So you both make more money. You both do more deals and make more money.

All righty. So if you found this episode valuable, who else do you know? That would also find a valuable because there's a good chance that you do know somebody. and when that name comes to mind, please share this with them and ask them to click the subscribe button when they get here, and I'll take great care of them.

All righty, that's it for today. God loves you, and so do I. Health, peace, blessings, and success to you. I'm Matt Terrio. Live in the dream. The cash flow.

Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home for them. We got the cash flow. Podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com