His Housing Market is Very Unhealthy. The Worst I have Ever Seen, How does yours Compare?

Video Closed Captioning:

one

well good afternoon everybody it is Matt

achy The Lumberjack landlord it is

fantastic friday

I made it I made it another week Dion

now is fully retired I’m still not but I

made it another week and right now I

gotta be honest we are absolutely

working on borrowed time there is no the

clock is getting very very small yes the

sand in that hourglasses fairly visible

exactly I feel like a soap opera it

might only take an hour no no so um Mike

what we wanted to talk to today today to

you about was New Hampshire data so I

like to go through kind of once a month

I get my report I read through it try

and understand what’s going on in the

state different counties I like sharing

this because I think a lot of people

don’t really understand the

affordability index and as far as I know

I don’t know that every state creates a

report like this but pretty darn near

close every state creates a report like

this yeah I would say every now every

State’s uh realtor board will report

something there are certainly

non-standards they’re all unique most

report transactions and pendings and

mediums there’s there’s kind of a format

but there are all different

this is why I’m talking about right July

until July 1st to July 19th we’re going

to get real estate agents will report

what they know redfinzilla will report

what they know States will report what

they know but the coup de gras comes

next Wednesday when Nar reports and boy

that’s gonna be a big day

it’s gonna be very big it’s going to be

very big so without further Ado let’s

kind of jump into some of the numbers

and see what these things look like

um I am going to and this is New

Hampshire State not yours not your

little you know 50 000 towns yes yes

this is New Hampshire State as Mike said

not to be confused with my little 50 000

towns

um I’m teasing him Michael I know you

are yeah I still can’t believe that you

know you’re you’re three buy boxes or

your three cities

yeah 120th the size of my little little

city yeah it’s true it’s crazy yeah I

mean everything’s bigger in California

right and then everything’s bigger than

they are in Texas it’s the way it goes

it’s like uh all right so we’ll change

over we’ll start sharing this screen I’m

going to share I think the entire screen

yeah I’m gonna do that uh let’s see here

here we go we’ll share the entire screen

I’m a little nervous actually

oh yeah so they do year over year so I

put the two I basically do it did side

by side

okay okay so here is you know here over

here on the left this is the

affordability index was a 73

down again

okay to 70.

okay from May to June all right so this

is so this is June’s report right here

on the right yeah I see yeah this is

this is May’s report

all right so let me just walk top down

top down let’s go close sales yeah so so

can you uh okay close sales so here I’ll

do sales closer watch this

there we go that’s closer oops there you

go that’s fine so close sales went up in

June now that’s normal for New Hampshire

right yeah yeah we kind of we kind of so

big shopping season here is kind of

April so a lot of those transactions

close in June that’s when real because

everybody wants to be closing right

after school gets out and then moving

and then spending the rest of their

summer enjoying themselves okay so

median home price stayed flat month on

month better but up 12 because again I’m

looking at year on year stuff yes okay

uh volume oh look at that well that

makes sense right so volume that’s

that’s number of transactions times the

amount okay so that’s up yep uh days on

Market oh days on Market went down

yeah 13.

pending sales down a little bit so it

could get some softening but that might

be the summer difference yep months of

Supply oh months of supplier up

yep so yeah one five so yeah 1.5 now it

was 1.2 so new listings up 10 okay all

right month on month

that makes sense homes for sale more

homes for sale that again that makes

sense

and pricing again as opposed to list

down slightly month on month yep and the

affordability as you said has gone down

again yeah again can I see the year on

year for June yep yeah sure so year on

year for June is right there

right here yeah my I can’t can I move

this oh can you can you see no I can see

it but our pictures were in it but I can

I moved us I didn’t know I could do okay

it’s funny I’ve used Zoom for three

years didn’t know I could do that okay

here we go so year on year

yes uh

uh oh so that’s a year to okay so year

to date okay I see what they’re doing

month so this is yeah this is this is

this this is June of 21 this is June of

22 and then year to date year to date

correct see I don’t usually see

year-to-date summarize so that’s Shout

Out New Hampshire yeah nicely they do a

good job with this so closings this so

again right what am I keep saying

transactions are down so transactions

are down 15 year to date yep

okay that makes sense media look at that

what do I keep telling people

transactions down price up so again

transactions down year to date 15 prices

up roughly 16. yep that’s that’s that’s

kind of what I keep talking about and

people keep yelling at me about yeah

volume oh volume is down yep volumes

down because we’re having a real

inventory issue

oh okay yeah yeah okay got it days on

Market oh look at that days on Market

are up

or no way down

Market 23. yep verse 30. yep pendings oh

the Market’s slowing though

right I think days on Market is going to

go up next month because you’re slowing

with your pendings yep I think so

new listings ooh you still have an

inventory problem we do very much so

that’ll be that’ll be rectified with

pending slowing down

you’re still like you keep telling me

and I keep going what the hell your

Market’s still red hot you’re still

getting roughly 104 of asking correct

104.6 right here yep and yeah your

affordability crash so I would say New

Hampshire not healthy

correct maybe early signs of inventory

building

but again

I I again I I would be so we have 50

states plus the District of Columbia so

they Nar will Report 51 areas yeah

um let’s just say it’s 50 for easier

math I suspect

40 of the 50 so 80 of the markets to be

what you have less transactions higher

median or higher median prices there

will be 10 exceptions and in the

exceptions it won’t be price it will be

transactions I suspect there will be 10

states a la Florida given everything I’m

in Reading will be up in transactions

yeah so here’s

here’s here was the number that kind of

blew me away Mike

um where is it uh it is

hold on I saw one number that actually

scared the Daylights out of me

it was on condos

um

so I think it happens in condos first

okay like in like in a lot of markets it

kind of happens with condos first

yeah um

pending sales are way down closed sales

are way down

um

month supply it’s only up 10 but there’s

a bunch of big projects about to hit in

my area yeah

um one’s for sale but they’re still

getting well over asked the

affordability yeah better but it’s still

  1. yeah it’s your Market’s just not

healthy nope

nope here’s the here’s the closed sales

so we’re kind of so we’re lower than we

were in 2020 we’re lower than we were in

21 but we still don’t have a bunch of

inventory

the median price has gone from 330 to

407 to 460. yeah

yeah and again I think that happens

again it’s more of a structural problem

so this is what this is really funny so

this morning I did a live stream about

Phoenix in Vegas yep uh so I would love

to if you don’t know it’s cool but this

is what I asked my audience I was like

hey tell me what the median price is so

the median price for you is like 460 or

something we just looked at

what is your median price median price

460 yeah

so so what I would love you to do today

if you can or have one of your Realtors

do it is get a flash of inventory right

how many listings are below 460 and then

how many listings are above

because the median price is all about

meeting of closing it doesn’t say median

inventory yeah give me one second I’ll

tell you I so I have that so the reason

I’m asking this is because I have to

figure out are there more states or

cities like Phoenix or more States in

cities like Vegas right because Vegas

pain is happening above the media

Phoenix Payne so far unique but I

believe there are others

is below the media and in Phoenix I

believe you’re going to have horrible

price degradation because again median

price is it’s not average it’s not this

it’s not emotional it’s the freaking

middle number and if you’re building

inventory below the media the median has

to fall that’s why Vegas is going to be

sticky because again the pain is above

the media

so I I asked my audience today take some

numbers right flash it today flash it

August 1st flash it August 15th and

let’s see what’s going on around the

country yeah I’ll try and get those

numbers for you it’s not cooperating

with me right now but yeah we’re going

to look at so sub four so are we doing

medians so sub 460 basis yes no it has

to be right on the median so sub 460 how

many active sub uh above 460 write it

down and then I want to look August 1st

and I want to look August 15th because

what we need to figure out Matt is the

rate of change let’s just say for

example you have 812 below 460 and you

only have five something above 460. that

means nothing to me what I want to know

is the rate of change where is inventory

building and this is why Vegas and

Phoenix are fascinating

Phoenix so far is the only Market that

is ballooning inventory below the media

Vegas is like most markets I look at

ballooning inventory above the median so

we may see horrible price degradation in

Vegas above you may see 100K 150k 200k

price Cuts in Vegas but if it’s above

the median all it does is pulls the

median higher because we’ve structurally

broken the housing market I believe

there’s a great economic paper that will

be written on this subject it’s why it’s

fascinating to me and why nobody should

care except the Thousand economists that

look at this data but yeah I think I

think the freaking housing market is so

broken

I agreed I mean Mike we went from 17

days

last year to 13 days on Market yeah your

Market’s not healthy the state of New

Hampshire not healthy not healthy at all

it might be the most I don’t know this

for sure it is certainly the most

unhealthy State I have data on I don’t

have data on most but of the 12 I’ve

looked at it’s the most unhealthy I

agree with you

um so here’s the pending sales thing so

last year we had 1889 this year only

  1. our Market just remains super

super tight oh yeah you’re not going to

get price degradation in a market like

that no no well that’s so that’s the

issue that’s the issue is that we’re not

seeing last weekend three open houses

all three of them sold for 20 30 and 50

000 over asking price yeah you’re not

going to see media your median price is

going up in a market this time your

price is going up it just is it’s supply

and demand it

and again New Hampshire is odd because

again you get those Rich Massachusetts

and New Yorkers coming in paying cash

they’re not sensitive to mortgage rates

no correct they’re like hey charge me

ten percent I don’t care I’m writing a

check doesn’t matter that’s exactly

right well I mean we had so we had um so

I sold one of my properties to somebody

that sold their two-bedroom co uh

two-bedroom condo in South Boston they

sold it for about a million bucks and

they owed four or five hundred thousand

they they literally wrote a check for

six hundred thousand dollars for the

house that I sold them yeah they they’re

they’re not raped or really even price

sensitive they’re like I just want it at

all no debt we’re done that that house

was 2600 square feet on five acres of

land and a super high-end remodel yeah

so this this is why migration is again

the FED broke housing the pandemic

forced migration caused people to work

different dude the housing market

is going to be so disrupted the next

couple years it’s for a guy who is in

studies this stuff for 30 years the next

two years are going to be fascinating

for me to watch yeah I mean year to day

I mean 70 is our affordability index

that’s the worst affordability I’ve seen

in any state and again your scale is

different than mine right yours is one

to two hundred mine is zero to one

hundred uh so a 70 probably equates to

like a freaking 12 or 11 in my market

right it’s just very unhealthy yeah and

we were at one I mean so here’s the

thing kind of historically I mean look

look here where we typically are kind of

historically this is yeah where where so

the highest you were oh so yours is not

zero to 200 yours is zero to 300 okay

yes it can go to yes so yeah you are

what the top the top end is what’s kind

of deceived so what’s interesting about

this is oh that’s condo sorry yeah

that’s condos yeah so we’re looking at

single family so it’s so basically

capped out at like 210 215 one month

yeah

um and that was in 2012 and I was buying

kind of through here yeah again I don’t

know your Market at all but looking at

this chart anything at 150 is okay yes

70 not okay

yeah and that’s the thing is like lowest

on record look at that look like this is

this is five six seven and eight right

here yeah that’s bubble time and look at

us here we are dog legged well below

that and again you are not going to see

any you’re you’re not having a housing

crash sorry your prices aren’t again you

will have a transaction crash and we’re

seeing that but your prices are not

going to fall thank you Mike Zuber you

were right

I I mean these all these people just

screaming at me like how can

transactions fall and price is not I’m

like you don’t understand median price I

mean just leave me alone it freaking

drives me crazy

like here’s the this is this is the

insanity this is now so this is all

property this is all property yeah

15.7 up from last year yeah and closed

sales down 12 and you’re gonna date 14-3

I’m telling you yeah it’s New

Hampshire’s you yeah I think you were

called I think you called this you

thought some by the end of next year

your Market would see a negative number

I think is what you said yes yeah

what you want to take that back I mean

are you not looking at these numbers so

here’s the only reason that I think that

is that so in my in my um in my small

cities in my in my tiny towns

there there is there are two

developments oh so you have an inventory

coming there are two developments one of

them is uh 440

okay apartments and to give you an idea

of scale that is now just so I’m clear

when you say Apartments you mean rental

units not condos like they sell in New

York these are rentals okay rentals yes

okay so 440 of those units then there

will have like another 120 units that

they’re doing in that same development

there will be condos oh okay so 440 but

but that’s 3x the largest

multi-family that’s ever been built here

hmm

I believe that when that finishes end of

next year beginning of 24 I believe that

there’s going to be massive Supply

however that is all what’s the funniest

thing is they’re the ones who built this

the currents currently the largest at

145 or 144.

um

they’re gonna be doing this one that’s

gonna be like 450. what’s amazing is

they’re gonna basically it’s like an

apple story they’re going to be

taking their own people that want to

move up from here to here the problem is

cost basis in this other building the

cost basis Mike is going to be Insanity

they’re going to have a hard time

filling those and making any money like

they’re going to be giving away months

and security deposits so but again I’m

wondering you’re trying to tell me all

this like you’re going to somehow back

into your lower prices which I don’t

understand how you would call that right

they’re gonna get they’re going to have

to have rent at such a level

that’s probably going to keep people in

the 140 because the the margin right

it’s not worth the extra 400 bucks or

whatever it is and oh by the way at some

point buying a home is better than this

new margin I I can’t look at these

numbers

and see how you could call a price crash

I mean I don’t get it or correction

correct I think because I think that

people will I I think that instead of

buying homes I think people will move

into these super luxury they could they

could I mean it’s I mean if we get a

seven or an eight handle on 30-year

money maybe that and that’s kind of the

idea right is hey we’re not we’re not

sacrificing lifestyle we absolutely love

it here this is beautiful I mean it’s

literally right on the waterfront like

it’s gorgeous it’s gonna be a beautiful

area yeah so if I were to look at these

numbers for like August and September so

a couple more months out I still I

expect close transactions to fall and I

expect your median price to I don’t know

maybe it comes down but it’ll still be

plus eight plus nine percent uh I mean I

mean again the biggest issue for us

Remains the Same which is

months of Supply we went up point one

slowly but surely and that was over a

year ago but from again the big key for

us this time around was we went to one

five from one two yeah so if you look at

if you look at where we were and I think

we were at well that’s both the

combination of slower demand and more

Supply it’s just this is how markets

heal themselves it is so much slower

than everybody everybody expects this to

be an nft or a crypto or a stock and

change overnight dude housing is so much

slower than we all were well so do you

know what this so this number right here

this number that’s one two right here do

you know what that number was in March

of 22 of of this year March of this year

it’s one two now one five and one five

now I’m gonna go like point eight yes

point it was point seven yeah oh that

was close so here’s the thing so March

right point seven we’re jogging up to

1.2 we’re jogging now up to 1.5 yeah so

I mean again point seven to point two I

mean if you were one of those channels

you could say that’s a hundred percent

increase in in months of Supply right

so what we’re what I’m really waiting to

see is how aggressively the line has

grown right because now we’re talking

about a 460 000

medium price this would be a good

question for you because I think this is

important

and again I think this all starts on the

20th of July what will be more impacted

in New Hampshire

will it be the loss of buyers who are

scared like nope I’m going to sign a new

lease I’m going to sign up for another

year

or is it going to be buyer or sellers go

fear missing out I’m going to sell my

thing to a Massachusetts or New York

buyer I’m out at the top one of those

two things is going to move first right

I don’t know what it’s going to be in

every state I don’t certainly don’t know

what it could be in New Hampshire do you

think more people get afraid or you

think more Supply comes on because I

don’t think they move equally

I don’t know I think the thing that I’m

most concerned I think I think

affordability continues to get worse oh

yeah that’s exactly what these numbers

say yeah because 73 to 70 like Mike

we’re in we’re in territory that we’ve

never seen before like not even close

well you’re a territory that most States

haven’t seen I mean New Hampshire again

could be the most unhealthy and again

it’s all migration it is this is why

Vegas got hit really hard over the last

two years right so you had these people

selling their 1950s you know boxes

in LA and buying cash and they were not

price sensitive and now that might be

unwinding when you realize in August

it’s 120 degrees and you’re like

freaking why do I only want to live in

an oven

so um yeah it’s it’s dude the housing

market is fascinating to me consumers

it’s just I geek out at this stuff I

really am I’ve been look at the median

price every month uh for almost 30 years

median price means something to me I

know a lot of people wig out well you’re

talking about median price and uh dude

that’s what I’ve been looking at for 30

years well yeah I mean sorry the data

only matters when you’re comparing

Apples to Apples when you’re tracking

the same thing yeah don’t change the

rules just because you don’t like the

outcome

yeah let’s look at houses on Hills yeah

yeah exactly let’s start charting those

but yeah like I said I mean I think the

numbers in our area I expected when we

hit in the sixes for rates I expected

that that was going to start to slow

things down the Realtors here said it

has started to slow things down but but

and my one agent loves to correct me he

said Matt I don’t need 20 offers I said

because that’s what we talk about all

the time yeah I’m still I’m still

getting two or three I don’t have empty

open houses I’m not having people not

show up at all to an open house yeah

this this is why new hand and again

sometimes it’s just being in the right

place sure and New Hampshire given

what’s going on with taxes and migration

and work from home you win you win and

there are a few spots there are a few

spots in New Hampshire is likely one of

them that will be

um

would be very strong next year yeah I

think I think you’re in one of them I

don’t know how you see a 10 drop but

that’s okay so I think it’s so I think

the not so I don’t think it’s gonna be

10 in my area I think it’s gonna be I

think nationally it’s gonna be 10 oh you

are calling National oh my national yeah

yeah National No Myers there’s no way

it’s going down 10 points I might every

morning that’s part of my prayer time is

that okay it would go down

but Mike this is the hilarious thing so

I just heard so we just so we signed on

the dotted line on another deal today

nice yeah very excited so we’ll do it

we’ll do a dive on that deal uh sometime

but what’s really interesting is yeah

you got to close it first we don’t talk

about deals today exactly well yeah so

they just they just literally right

before the call they said hey all the

funds have been dispersed so it’s closed

okay and on record

um but what’s really interesting is it

it’s kind of a problem now because

two of the agents actually asked by name

of the selling agent if I was the one

who won the property that is that is a

problem you’re becoming a dominant force

in your Market that’s not good I don’t

like that I I want to be the man behind

the eye Behind the Green curtain not the

iron ones but you need to fish in a pond

that’s bigger than 50 000. as soon as

hey as soon as I can find a market that

gives me my returns like this yeah like

that’s the thing for me is it’s like you

know that because the bank even said you

did a lot of transactions last year I

said sure they said was there a reason

why I go you’re giving me money at

almost oh yeah exactly when money’s free

I like to use it I think we told people

I mean giving me money fixed debt at

3.75 why wouldn’t I right there isn’t

anything I wouldn’t buy at that yeah I

know a guy that has a shirt that says I

use inflation to get rich ask me how I

like that guy yeah let me borrow all the

money I can sub for it I can earn

twelves 18s and 24s kind of an easy

trade right well like how smart does

Barry’s starting like look for Starwood

Hotels he had a hundred million from the

German government at one percent one

yeah yeah one percent yeah man I love

that Mike tell everybody where they can

find you my friend one rental at a time

and we do a live stream on Saturdays at

8 A.M and if you are one of my students

we’re doing a deep dive two weeks in a

row on house hacking uh tomorrow

Saturday the 16th will be house hacking

roommate Style with Spencer Cornelia and

Todd Baldwin and next week the one and

only Lumberjack and Dion talking about

house hacking units I’m so excited I

know nothing about these topics but the

channel brings experts and we can bring

it out I think I think house hacking uh

will make more uh gen Z and Millennials

millionaires by the time they’re 30 than

anything else well listen you’re not

getting in the New Hampshire housing

market I’m not sure how second so

look at the numbers you need three or

four salaries to buy some of this stuff

which would make sense but as I always

say we try and create great content for

you please please subscribe hit the like

button we had definitely you’re coming

out with some crazy crazy stuff as far

as product reviews and interviews with

amazing people like Mike Zuber from one

rental at the time and more to come Mike

thanks so much for the time we’ll see

you in segment number two awesome

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