Epic Real Estate Investing - The Housing Market Truth Nobody Wants to Admit (2008 again?) | 1389

Episode Date: November 21, 2024

In this episode, Matt takes a deep dive into the state of the housing market, exploring whether it's on the verge of a crash similar to the one in 2008. By comparing past trends with current data, he sheds light on the factors driving today’s market and challenges the widespread fears that have many speculating about another economic meltdown. In particular, Matt tackles the misleading narratives pushed by market pessimists, like 'Stan,' and breaks down why the housing landscape today is far different from the crisis of 16 years ago. He highlights key indicators such as the stability of 30-year fixed-rate mortgages, the surge in home equity, and the stronger financial health of homeowners, all of which are contributing to a more resilient housing market. Throughout the episode, Matt emphasizes the importance of not waiting for a potential housing crash, as doing so could result in missed opportunities and financial setbacks. Instead, he advises viewers on smart, proactive investment strategies—like expanding real estate portfolios, tapping into home equity, and utilizing other wealth-building tactics—that can help secure long-term financial growth in the face of uncertainty. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, strap in. It's time for the epic real estate investing show. We'll be your guides as we 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. Is the housing market about to crash like 2008? Are foreclosures rising, mortgage rates spiraling, and the bubble ready to burst? I mean, everyone from your neighbor to your broke brother-in-law Stan is sounding the alarm. But here's the thing. What if they're dead wrong? I'll show you the 2008 comparisons, the latest charts and data, and depending on how you interpret them, 2025 could be your make or break year.

Right? Let's dive in. And we'll start with Stan's favorite scare tactic, foreclosures. He'll probably pull up a headline from just this week, like foreclosures rising month over month and say, see, just like 2008. But here's what Stan isn't telling you. The 2008 housing crisis, it wasn't an overnight collapse. It was a slow-moving disaster years in the making. Back then, banks were handing out risky loans like candy. People were stuck with adjustable rate mortgages that exploded overnight, leaving families unable to pay. The cracks they started in 2005, widened

2006 and 2007, and finally broke in 2008 when a recession made everything worse. In 2008, you had something close to a bubble in home real estate. Fifty million people had mortgages roughly at that time out of 75 million homeowners. When that bubble burst, it hit home to probably 40% of the households in the country, these people that have mortgages on their houses. And fear spread in the month of September 2008 at a rate that was like a tsunami. Now, fast forward to today, do we have toxic loans? No, we don't.

After the 2010 qualified mortgage rule, most homeowners locked in stable 30-year fixed-rate mortgages. No surprise balloons, no skyrocketing payments, just predictability. It's like comparing a roller coaster to a little kitty train. And wages, they've been rising steadily for years. Refinancing booms in 2012, 16, 20, and 21 allowed millions of homeowners to lock in ultra-low rates. Oh, and the foreclosure headline, Stan loves to bring up, how they're inching up to pre-pandemic numbers. Well, they just turned in the other direction in Q3.

Stan might see a collapse, but all we see here is stability. You know Stan, right? I mean, every family has a stand, the one who knows everything about investing despite never actually doing it. And at this coming Thanksgiving dinner, you can bet he'll be there again, waving his fork and yelling, it's over, sell your house, rent, and wait for the bargains. This is 2008 all over again. Sounds terrifying, doesn't it? But at some point, you've got to stop and ask yourself,

is Stan's advice based on opinion or facts? Feelings or truths? He's been predicting a crash every year since 2010. And let's just say his track record, it ain't great. So in a time when people love to fat check the other side, but resist being fat check themselves, there's a huge cost when it comes to our financial decisions and investments. Because facts matter.

Opinions and feelings, they can be very damn. dangerous ingredients, poisonous even, when it comes to creating one's financial future. So let's continue putting Stan's housing market predictions under the microscope and see if they actually hold up at all. I mean, are we about to live 2008 all over again? Is 2025 finally the year of the crash or just another false alarm? And why does the 2008 crash myth still have such a grip on people like Stan? Well, because fear sells. And here's what Stan won't tell you, nor is anyone really even talking about it. Homeowners today are in the best financial shape we've ever seen.

Look at this. Back in 2010, over 23% of homes were underwater, meaning people owed more than their homes were worth. Today, that number is at its lowest level ever. And guess what? Now, over 40% of homes in the U.S. are completely mortgage-free. They don't owe anything on those homes. And for those with mortgages, the average loan-to-value ratio is under 50%

Compare that to the disastrous 85% loan to value situation in 2008. Simply put, today's homeowners have more equity, more stability, and more wealth than they did back then. Here's another fun fact for Stan. FICO scores for homeowners have been on fire since 2010. Borrowers today aren't just squeaking by. They're thriving. These aren't subprime borrowers barely scraping together a down payment.

These are buyers with high incomes, growing wages, and financial stability. And let's not forget the median down payment. In 2024, it's sitting at 15%, meaning today's homeowners have way more skin in the game than they did during the last crash. Combine all of that with tighter underwriting standards and 30-year fixed mortgages, and you've got a recipe for long-term success, not collapse.

Honestly, if I were to rate today's homeowners, I'd give them an A-plus. Meanwhile, Stan is working with the wrong data and failing the test. Now, he loves to throw around buzzwords like credit stress. He'll say, it's only a matter of time before credit stress triggers another wave of foreclosures. But here's where Stan's argument falls apart. Credit stress did spike during early COVID-19 and the recent inflation bursts. But guess what? Homeowners, they barely flinched. Why? Two words. Qualified mortgage. The lending standards introduced after 2010

ensured that borrowers could handle their debt, even during tough times. We haven't returned to pre-COVID-19 credit stress levels, and we likely won't anytime soon. The system is holding strong. While Stan screams collapse, the data screams stability. And what about housing inventory? Well, Stan might point to a market, say, like Florida, and tell you the market is oversaturated and prices are dropping and all that stuff. But here's the truth. New listings are at historic lows. Let's compare. In 2009, there were 274,614 new listings. In 2010, 359,534. In 2011, 315,915 new listings. And in 224, this year, just 48,863. That's a massive drop. Back then, stressed sellers flooded the market, dragging prices down naturally. Today, homeowners aren't selling because they're sitting on record

equity and ultra-low mortgage rates. And when you combine low inventory with strong demand, you get a housing market that's stable and thriving, not crashing. So what does all this mean for you? Well, here's the deal. Playing it safe in this market, or worse, following Stan's advice to sell everything and wait for a crash could be one of the most expensive mistakes you'll ever make. Because housing prices, they may not skyrocket in 2025, but they're also not going to collapse. In fact, houses today are likely as affordable as they're ever going to be, at least for the very foreseeable future. Inflation is real, and the strongest hedge the average person has against it is real estate. So here's what there is to consider. First thing, if you sit

on the sidelines waiting for a crash that isn't coming, you could miss out on locking in today's prices and rates. I mean, every year you wait, inflation is chipping away at purchasing power while home values climb steadily higher. Second thing to consider is, if you own a home and believe the doom and gloom headlines, selling now and waiting for bargains could wipe out your biggest financial advantage, your equity. That equity, it's your safety net, it's your leverage, and your ticket to building wealth. Selling would put you in stands camp, renting and watching prices rise while you're stuck on the sidelines. So where are the opportunities you do have in this market? Well, the first thing is consider buying another property. I mean,

If you've been thinking about expanding your portfolio or investing in real estate, now is the time. Rimple demand remains high, and every property you own is another hedge against inflation. The collective profit centers of income producing real estate amount to 25% plus year in and year out. Now, if your stock portfolio is producing that or more, hey, don't listen to me. If it's not, consider it. And if you don't know where to begin, Mercedes just updated the frustrated investors guide to passive income for the year 2025. If you'd like a copy, you can get it for free at Frustratedinvestor.com. Number two, reallocate underperforming assets.

If you've got cash sitting in savings, investments that aren't pulling their weight, or other low-growth assets, think about reallocating them towards income-producing real estate. Housing remains one of the most consistent and reliable ways to build long-term wealth. I mean, as far back as you can see, buy, buy, buy. That's never been bad advice. Selling has. Number three, leverage your home equity. If you're sitting on significant equity in your current home, consider tapping into it to purchase an income property.

Or two, with the right strategy, those properties could generate cash flow while appreciating in value over time. Not to mention mitigating your tax liabilities and benefiting from self-liquidating debt, something that no other asset class offers the average American in the way that income-producing real estate does. The smartest move you can make in 2025 is to tune out the stands of the world and focus on the debt. data. Thanksgiving, it's quickly approaching, and so is Stan with his crash predictions. He's stuck in the past, but you don't have to be. The market has changed. The rules have changed and the opportunities have changed. Real estate, it's not just a roof over your head. It's a wealth building tool. If you wait for a crash that isn't coming, or worse, make drastic moves based on bad advice, you'll find

yourself missing out while others secure their financial futures. Now's the time to act, not out of fear, but out of confidence in the numbers, the trends, and the opportunities staring us all right in the face. The housing market of 2025, it won't be perfect, but it'll be a far cry from the chaos of 2008. I'll see you next time. Take care. And that wraps up the epic show. 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. Living the dream. Yeah, yeah, we got the cash flow. You didn't know, home for it, we got the cash flow. This podcast is a part of the C-suite Radio Network.

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