Epic Real Estate Investing - U.S. Housing Market: 10 Crash Facts vs Fiction | 1398

Episode Date: December 16, 2024

In this episode, we debunk the myth of an imminent housing market crash by presenting ten compelling reasons why the market remains stable. Key factors include persistently low housing inventory, a strong historical upward trend in home prices, low mortgage delinquency rates, stringent lending standards, and high homeowner equity. The episode highlights localized robust demand in cities like New York, Los Angeles, and Miami, and the predominance of fixed-rate mortgages that buffer homeowners from rising interest rates. Despite economic challenges, Americans' financial resilience continues to support market stability, bolstered by expert predictions of modest price growth. Finally, the significant lack of oversupply in the market diminishes the likelihood of a crash. The overall lesson: the housing market trends upward over time, making it more crucial to be in the market rather than timing it perfectly. Don't miss out on valuable insights and strategies for navigating the current housing market. 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. The biggest lie about the housing market crash just got exposed for 10 different reasons. Reason number one, persistent low housing inventory. There are simply not enough homes to go around. I mean, imagine a game of musical chairs with 10 players, but only 6 chairs. When the music stops, chaos ensues. That's the current housing market in a nutshell. Inventory levels are hovering around 1.8 million homes, far below the 2.25 million.

With demand crushing supply, prices are staying strong and even rising. Now, I know if you're noticing prices fall in your market, it just means they're going up in others. That's how averages work. And for a market to crash, you need more houses than people. But right now, we have more people than houses, and that alone should be enough to expose the market crash predictions. But even with that, we're just scratching the surface because there's reason number two, strong historical upward trend in home prices. I mean, come with me, let's take a quick trip down memory lane. In 1950, the median home price in the U.S. was just $7,000. Fast forward to today, and we're looking at over $400,000.

That's not just inflation. That's the power of real estate appreciation despite the dips and crashes in between. Think of it like planting a tiny seed that grows into a towering oak tree. Sure, storms may sway its branches, but the tree stands a little taller every year. Similarly, home prices may wobble, but over time, they keep climbing. And there's more that you need to know. Reason number three, low mortgage delinquency rates. Some skeptics argue that people defaulting on mortgages could trigger a crash. But here's the reality. Serious mortgage delinquencies, those 90 days late or more, are at historically low levels. Picture a ship, sailing smoothly on calm waters. That's the mortgage market right now. Homeowners are keeping up with payments, and there's no storm.

InSight. Still with me? Great, because the next point is crucial. Reason number four, tight lending standards. Remember the Wild West of Lending before the 2008 crash? Well, back then, getting a mortgage was as easy as just snapping your fingers. Those days are over. Banks have tightened lending standards significantly, ensuring that borrowers are truly qualified. It's like a well-guarded fortress. You can't get in without meeting strict criteria. This reduces defaults and add stability to the market. But how does this affect you personally? Well, imagine standing on the edge of a vast canyon.

Some see a daunting chasm. Others see breathtaking beauty and opportunity. The housing market is that canyon. While some are paralyzed by fear of a crash, others are seizing the moment at places like cash flow savvy. They just released the new edition of the Frustrated Investors Guide to Passive Income at Frustratedinvestor.com. You can grab a copy there for free.

Reason five. High homeowner equity. Homeowners today have more equity in their homes than ever before. It's like having a safety net under a tightrope walker. Even if they stumble, they won't hit the ground. This equity cushion means people are less likely to default, even during economic hiccups, keeping the market steady. Now, wait until you hear what's happening here.

Reason number six, continued price increases in key markets. Let's zoom into some hotspots. New York City up 7% this year. Los Angeles up. 4.6% Miami, up 2.3%. These aren't just numbers. They're signals of robust, localized demand. It's like a rising tide lifting all boats. Even in places where prices dipped slightly, they're already bouncing back. The so-called crash in Florida, more like a speed bump. So what's really at stake here? If you keep waiting for a crash that never comes,

you might miss out on building equity, securing your financial future, and owning a piece of the American dream. Remember, time in the market beats timing the market. Reason number seven, expert predictions of modest price growth. Don't just take my word for it. I'm just some guy on YouTube. Major financial institutions like Goldman Sachs predict home prices will rise by 4.4% next year. The average forecast among experts is a 2.6% increase. They've crunched the numbers, and the trajectory is clear, upward.

So why are some people still convinced a crash is imminent? Reason number eight, predominance. of fixed rate mortgages. You see, one argument is that rising interest rates will sink the market. But here's the thing. The majority of homeowners have locked in low fixed rate mortgages. It's like having a thermostat set to the perfect temperature. It doesn't matter if it's scorching or freezing outside. Inside, everything stays comfortable. So even if rates climb, most homeowners won't feel the pinch. This insulation keeps the market stable. The problem is that so many are being swayed by doom and gloom narratives. They're like sailors refusing to embark because of

rumored storms, missing out on the journey and the treasure that awaits. Let's face it, there are voices out there profiting from your fear. Sensational headlines and clickbait stories, they grab your attention that offer little substance. It's time to cut through the noise and look at the facts because there's still more at play. Reason number nine, Americans' financial resilience. Despite economic challenges, rising costs, job market fluctuations, Americans are proving financially resilient. They're paying their mortgages, they're managing their debts, and they're staying afloat. I mean, picture a marathon runner hitting their stride, not slowing down despite the uphill terrain. This collective resilience bolsters the housing

market's foundation. Don't let fear hold you back. As Warren Buffett famously said, be fearful when others are greedy and greedy when others are fear. Fearful. Right now, fear is keeping many investors and aspiring investors on the sidelines, waiting for just the right dip in the market. But the data doesn't lie. The housing market, it ain't dipping. And finally, the nail in the coffin for crash predictions. Reason number 10. Coring market to crash, oversupply is a key ingredient. But as we've discussed, inventory is tight. There's a lack of oversupply in the market. It's like trying to flood a desert. It just doesn't happen. fewer homes for sale, there's less chance for prices to collapse. Supply and demand are at an imbalance

that currently favors strong stability. You know, I think back to my friend who bought a home for $175,000 in Austin, Texas at the peak in 2007. Prices plummeted like seemingly the day after he closed on his home, but today he's up $500,000. His timing, it wasn't perfect, but real estate rewarded his patience. Another friend who bought at the bottom is up $500,000. $150,000. The difference here, minimal in the grand scheme. The lesson here is clear. Over time, the market trends upward.

I mean, it's never been a bad time to buy, ever. Just a bad time to sell. 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. Health, 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 us, we got to cash flow. This podcast is a part of the C-suite Radio Network.

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