HOUSING WILL CRASH WHEN THIS HAPPENS AND NOT A DAY SOONER. Thank You Jason Hartman

Video Closed Captioning:

hi my name is michael zuber author of

one rental at a time

and if you’ve been following my channel

for any length of time you know that i

believe at least in this year and next

there will not be a housing crash

there will be a crash in transactions

but most of you want a crash in values

i’ve done my best to give you history

i’ve done my best to kind of share with

you my story but sometimes

a picture is worth a thousand words so i

want to give credit where credit is due

this idea came from a facebook post from

jason hartman if you don’t know who

jason hartman is go check him out he’s

been putting out excellent investing

advice for a long long time i’ve been

lucky enough to interview him on my

channel a couple of times so again if

you’re not following jason hartman

do yourself a favor and go check him out

so what i’ve done here is take jason’s

simple post

and i’ve turned it into a picture and

i’m going to answer

when will housing crash

and to be clear i am talking about

values when where housing

prices crash

a lot of you have been saying oh my god

interest rates are six percent housing

is going to crash

i do not think that is true and again i

think this picture

holds the answer so again remember

as somebody who studied economics way

back when what is one of the rules that

you and i talk about all the time

supply

and demand

supply is really easy to understand in

real estate it’s hey

how many active listings are there

got it

demand

is a different piece demand actually has

two variables

one is the desire

the want to

but there is a second test

and that is

can you

this is what we are seeing we are seeing

demand destruction because those who

could

those who wanted and could can’t at

higher rates

so this picture we’ll talk about it

so again let’s pretend let’s go back in

time

interest rates are three percent

that circle

is demand

what we have inside this square

is supply

and if you were paying attention in 2020

in 2021 we saw inventories drop

we saw days on market drop

so what we had was not a supply problem

we just had demand

that blew away supply

but okay michael great stop giving me

the history lesson tell me when it’s

gonna crash

well let’s continue this journey

together

obviously interest rates weren’t three

percent all the time they were rising

they’re now four percent

what happens

remember demand two variables the want

to and the can

when rates went up to four percent that

was a moment in time where everybody

rushed in

but some people couldn’t so i would

argue

that demand shrank

but it was still much much much bigger

than supply

this is why you could have case-shiller

index go up

19.2 percent

after rates went to four percent

because again demand dwarfed supply but

okay okay okay

now

what happens to five percent

well

now you are having true

demand destruction

right now you’ve got 200 basis points

you have a whole bunch of people who

were qualified can’t now you have a

whole bunch of people scared not doing

anything

but still

the demand

is greater than supply

what happens at six percent

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right

the big question is

will demand ever beat supply but

remember

i’ve been trying to help you understand

that given the sudden

rise in

prices or the price of money the cost of

money the cost of capital we are seeing

a very very interesting thing

this may appear

that demand is getting closer to supply

and maybe in some markets dem and would

be less than supply and the world ends

but if you’ve been following my channel

you know that the fed broke housing

because what happens to supply of homes

at six percent

let me get another color real quick

this is what happens to supply

what we are seeing today is not only

demand destruction these circles

we are seeing supply destruction

supply is going to get cut in half

and as long as supply

is less than demand and some might argue

two or three x less

we can’t have a housing crash now

in your market your buy box your

specific area

maybe

if you’re in florida

right no chance your demand circles are

way bigger than supply

folks real estate can not crash

nationally speaking

until supply

dwarfs demand

we need inventory to stack up not only

do we need inventory to stack up we need

correctly priced inventory today we have

a lot of hope and prayers i talk to real

estate agents all the time

they have hope and prayers

folks i am sorry

interest rates could go to seven percent

as long as demand

exceeds supply

no crash it is economics 101.

let me know what you think of this it is

all supply and demand one more time

shout out jason hartman for giving me

the idea for this picture for this video

i hope you all have an amazing day it is

friday is it friday yeah it’s friday

take care of yourself have a wonderful

weekend

if you want to start doing real estate

investing and learn your market your buy

box what average good or great buy the

course below how to get started one

rental at a time join the private

facebook group we will be going live in

that facebook group tomorrow at 9am take

care everyone bye

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