Closed Captioning:
good morning good afternoon good evening
folks michael zuber one rental at a time
have a special guest coming back who is
doing work
for you folks you’ve been following my
channel for any length time you know i
talk about a 50-year spreadsheet all the
time it’s it took me about 24 hours to
put all that material together and what
we have is we’re welcoming john back to
the channel who’s taking it a step
further it’s now 52 years
and he has added a lot of extra
information so john welcome to the show
thank you michael i’m uh glad to be with
you again yeah thank you for doing this
uh we’re gonna pull it up in a minute uh
but when you think about the 52 year
spreadsheet and all the extra fields and
data that you’ve added do you have any
quick takeaways or thoughts uh before we
bring it up
well um it’s a lot of work to put it all
together but i think it’s worth it
because uh
it does tell a story yep um
especially around those recession years
yeah and and the big thing for me having
talked last week of the week before
about what what we’re looking at i’m so
happy to see that we added existing home
sales and new home sales being this yes
exactly exactly because
i’m on the record of saying that higher
interest rates are not necessarily going
to cause a crash
at least in price i am saying a crash
will occur in transaction that is
predictable so we’re going to look at
that and the other thing i want to tell
people right now is i have already
loaded this
in my free course and paid course
just go to the vid so get the free
course if that’s what you want
go to the bonus section it says 52 years
there’s a video and there will be two
attachments
one and just pick which one ever you
want uh so the data is already there you
don’t have to ask it is already loaded
we give it away for free because it is
so valuable so john let me bring it up
sure
here we go
oh gotta hit the share button
hopefully you’re seeing that now
got it
awesome so let’s talk about the rows
that you’ve added so first and foremost
let’s give everybody a look at the data
sources something that is paramount to
me is everybody who get looks at this
data can check the data
this is where the sources of the
information come from if you want to
argue the quality of the source go ahead
we’re just inputting records
this is not fake stuff this is all data
you can go back and double check
but when you look at these new fields
these were the two that were important
for me u.s new home sales and u.s
existing home sales
yes green or red
if you see the numbers go down um
significantly
i made them red
got it
so really for me because again we’re
going into a rising interest rate
environment
so let’s watch this together so again
i’ve not looked at this data we’re doing
this together on purpose so let’s see if
i can do this we’re going to look at row
7 in row 5.
so let’s see where interest rates jump
so okay so 1973 to 1974 they went up a
point
transactions went down about a hundred
or five percent
no big deal
uh next time they jumped oh let’s look
at 78 to 79 oh not much
so 78 interest rates went from nine they
went to 11.
ah but look at what happened in 80.
folks this is why i keep telling you
that
everybody expects housing to act like
the stock market where it just
instantaneously
real estate’s not that way it’s some
it’s in economics we call it price
inelastic
think about it this way you think your
house is worth a hundred grand your
neighbor sold for 105 suddenly you think
yours is worth 110. you list it for 110
nothing happens
most of you just take it off the market
you’ll sell it later
right that’s time right it’s listed for
90 days it’s listed for six months it’s
not instantaneous
so the drop
in existing home sales from 1978 call it
4 million
to 1980 call it 3 million that’s
25
that’s exactly 25
and then it goes further look at 81. oh
my god look at 82.
we went from 4 million sales
to 2 million
in a five-year period that is 50
folks that is a crash
but now look at price row six
price went up
all the channels
talking about rising interest rates
causing a housing crash
don’t know history
we can have a crash in transactions
without a crash in prices this is what i
keep telling people and people don’t get
it they they want to argue with real
numbers and
that that is shocking 78
1978 to 1982 that is
that’s that’s what i think is happening
i think we are in a rising rate
environment look at that interest rates
went from nine to sixteen percent
yeah the data to prove it now yeah data
interest rates go up 700 they went up 80
they went that’s about an 80 jump
transactions crashed prices went up what
did pricing do from 78 so let’s not even
include 78 79 80 81 82
prices went up 40 percent people
transactions crash 50
prices go up 40
that is amazing you can
i wanna i’m gonna people ugh this pisses
me off people don’t get it that’s a very
telling period because i think that’s
that’s the environment we’re in
rights are gonna raise quickly
transactions gonna crash prices are not
going to crash nationally
it’s not going to happen
well we’re in an inflationary period
exactly and a little uh humor for you
roses are red violets are blue taxation
is theft and inflation is too ah i like
that
so the other thing to look at is wages
because again i’m a big believer in
wages so let’s look at what wages did 79
to 82.
look at that wages went up 30 percent
folks
interest rates are going up
so think about this interest rates go up
700 basis points what would that mean so
i think we bottomed out at like two and
a half
so that would mean rates go to nine and
a half
that would without question cause real
estate to crash by fifty percent
transactions
prices
don’t necessarily crash if wages go up
30 in four years real estate won’t crash
we have evidence you guys are arguing
when you’re not looking at the data it’s
crazy
sorry i this is the period i so wanted
to see when you were putting this
together
so i got a i got a little passionate
about that any other uh let’s actually
look at the last couple years let’s go
let’s go oh sorry there we go let’s look
at 20 and 21. so where do we go
yeah so 21 6 mil this is what this oh
god damn
so many people want to argue with me
supply versus demand and i keep telling
people we don’t have a supply problem
look at 20 21 verse 20 20. if we have a
supply problem people we would have less
flipping transactions
because there’d be nothing to sell
the only reason we had half a million
more sales
is because people wanted to sell we just
have a demand problem the federal
reserve took rates to an artificially
low level everybody could buy it two and
a half and we sold a lot of homes in 18
days or less
it was not a supply problem there were
plenty of homes sold 6.13 million homes
500 000 more than 2020 it was not a
supply problem it was a demand problem
created by the federal reserve
crazy well if you go from 2021 into 2022
um
if you could show this on screen
i got this from the uh
let me look at this national
association of realtors
oh yeah let me go back to you one sec
stop sharing
oh look at that
look how it drops yeah
it’s dropping existing home sales are
dropping yeah yeah
that’s what i keep telling people
housing crap we are going to have a
housing crash
in transactions not in price
oh hey we’re already there yeah exactly
yeah anything else on this i’m going to
go back to the spreadsheet because this
is amazing and again folks don’t ask
it’s already there just go to the show
notes below get the free course go to
the bonus section it is all there for
you i’ve already i may i took time out
of my morning to load it early because i
know everybody is going to want that
want this yes there is one more uh bonus
uh statistic for you affordability look
at that
yes
again
um these are national numbers not your
city red red or green
national numbers it’s all calculated
from the spreadsheet there’s no new
numbers uh awesome uh created here it’s
the spreadsheet gives us these numbers
oh look at you there’s the formula if
you want to if you want to argue math
there’s the formula
look at that i love this this is awesome
so again red would mean unaffordable
correct yes
trending that direction got it okay
oh my god look what happened and all
this is again 8
78 to 82 is the period that i’m looking
at
rising rate environment fast rising rate
environment real estate crash
transactions not price
of unaffordable because of interest rate
wages catch up and this stayed
unaffordable for how long
when did it go green oh it went green in
- well that’s a decade wow
yeah i think the entire decade
and then we have stock stuff still down
here uh people keep talking to me about
the stock market the stock market was
basically dead money for a decade right
so we go from 90.
like
so what is this so
from 90.3 to 90 basically 0.3
what year was that
78 from 70 to 78 the stock market did
nothing i think that’s the environment
we are in today as well
the only people that i keep i’ve said
this so many times are becoming
a broken record the only people that won
the 70s john were people that bought
homes in 70 71 or 72. 30-year fixed-rate
debt let in face inflation take your
rents higher let inflation uh make your
housing value go up and then oh by the
way when rates crash
because when did rates crash
so what was rates so rates were about
seven and a half no wait where are they
here they are eight and a half seven and
a half are there when did they go down
to like five i don’t think it was until
like 2000 let’s see
when did they see their first five so
here we go 2003
so then you refi and you get all that
cash flow yeah
it’s crazy
so john any other takeaways from this
this is this is a pretty complete
spreadsheet now i think we got yes it’s
uh
it’s a pretty good tool to examine
history of uh
real estate yeah and this is why we can
have a housing crash in transactions not
in price look at the data john has done
this work for you we’ve cited sources so
don’t argue with john or i it’s this if
you don’t like the data sources
i don’t know what to tell you uh but at
the end of the day john uh any other
closing thoughts i want to personally
thank you for doing this we’re giving
this away for free a day of my time more
of your time
it’s just
amazing to help everybody that follows
old rant rules that’s right one rental
at a time baby john thank you very much
for doing this greatly appreciate it
you’re very welcome thank you for having
me again you got it