SCARY Redfin 2022 Real Estate Predictions Or Just Once Again Using Percentage instead of Absolute #s

Video Closed Captions: 

good morning everyone how you doing

today michael zuber one rental at a time

and as promised at the end of the daily

financial news this morning we are going

to talk about red fins

2022 yes 2022 is right around the corner

we’re going to talk about the 10

red fin real estate predictions

first thing i want to give you a warning

about

their uh predictions

can be twisted in a way that is

scary

folks that may have taken this data i’m

guessing some of them will use the

percentages versus absolute numbers and

if you wanted to you could take this

redfin report given red finn’s name or

cachet

and yes you could create scary fearful

crash crisis whatever you want to call

it videos

that is not who i am

i’ve been in the game for 20 now 21

years i’ve bought and sold in all kinds

of markets

i can take

data and kind of internalize it and see

where others are led astray so we’re

going to go through all 10 right now and

i will talk about each one individually

and then give you my thoughts on them

so first and foremost

redfin sees

interest rates on the 30-year mortgage

going up 20

yes folks i fully expect some channels

to talk about interest rates going up 20

percent

but let’s look at the absolute number or

even better the math

so here is the deal

redfin is talking about interest rates

going from 3

to three point six percent

if you’ve been watching my predictions i

actually think they are coming in low

but let’s do the math

folks

math i know it’s a it’s a four-letter

word i get it

i like that math is a four-letter word

that makes me laugh inside that makes me

chuckle

anyways

let’s see what a 3.6 versus a 3 mortgage

rate means to mom and dad who buys a

home

you have to make all kinds assumptions

about credits and credit and down

payment and all of that but here’s the

deal

roughly speaking average home in the

united states

a rise to 3.6 percent means

you pay

100

a month more

now normally speaking that hundred bucks

would hurt affordability and you know i

am a huge fan of affordability when

affordability gets too low i sell

however we are in an inflationary period

just like the 70s and the 70s brought us

wage inflation

so let’s just do the math again

one hundred dollars times twelve is

twelve hundred dollars a year

if you want to double that because of

taxes that becomes twenty four hundred

dollars

in the wage cycle that we are currently

facing if you get a wage increase of

more than twenty four hundred dollars

that house is not less affordable

it is more affordable

so these channels talking about price

or

price and interest rate only

are doing you a disservice

they are either ignoring the third

variable or worse

they are too inexperienced to realize

that wages is the third variable

of affordability it is all about

affordability folks prices can go up a

hundred percent

interest rates could go up but if wages

go up 200 percent

it is still

wickedly affordable

now i use those numbers just to be

shocking

but it is about affordability price

interest rate and wages

in a normal time

a 20 rise in interest rate would crush

affordability but does anybody think we

are in normal times

wages last time i checked are up five

percent

five percent on the average family of

four’s income of seventy grand

that is thirty five hundred dollars

thirty five hundred is more than twenty

four hundred so we may not like to think

it

price up interest rate up

it actually could be more affordable and

that’s what people found in the nineteen

seventies

so

i think redfin is low i think rates will

be just shy of four percent their high

is three point six that is number one

number two

they think price appreciation is going

to slow to three percent

um

that would be a real estate slowdown

i’ve been calling for a real estate

slowdown for a while

but let’s be really let’s just be real

with each other a three percent price

appreciation next year is actually going

to be below inflation

i i can’t wrap my hand around that

housing is an asset it is what people

want

there is no chance in my opinion of

housing going up less

than

inflation if inflation is five percent

i think housing goes up eight or nine

percent if inflation is three percent i

think housing goes up six or seven for

redfin to think housing only goes up

three percent

is to miss the impact of inflation in my

opinion so i think they are wickedly low

on that one

number three

where i yeah number i guess that was

kind of one a and one b

so here’s number two i guess they expect

new listings

to hit a 10-year high

i agree i’ve been calling for that for a

while i think there’s been a lot of

people sitting on the sidelines for a

couple of years and they are going to uh

we’re going to have movement we are

going to have movement i don’t think

we’ve had

i think we’ve had some i don’t think

we’ve had the real wave so i do think

that is coming

and again real estate slowdown i’ve been

calling for it do the work do all of

that stuff so i agree with redfin that

yes i think we will have record listings

next year i think they got that one

right

rents

rents so

excuse me rents are going to be up seven

percent

according to redfin

uh i will say this

they’re saying price appreciation of

three but rent of seven

i think that ratio is correct

again if you’ve been watching my channel

for any length of time you know that

prices go first rents go second

and what redfin is essentially saying

is rents will exceed price increases i

think that is correct as i said earlier

i think redfin is low on the three

percent but i do think they’re right i

think rents will exceed

uh housing price appreciation it happens

all the time rents lag values by about

nine to 12 months

number four

redfin i think is kind of talking their

book

on this one redfin is simply saying that

people will be relocating to cheaper

areas

don’t they always do that at some level

i know why redfin would want to put it

there right they

that’s what they do right they list

housing so you know i guess yeah i know

you know you’re going to leave la and go

to vegas you’re going to leave la go to

phoenix

you’re going to leave new york go to

florida

but

that one kind of feels like a layup like

isn’t that true every year

but okay

number five get a little political here

redfin people are going to increasingly

vote with their feet

if you do not like the politics of new

york or california you will leave if you

don’t like the politics of

washington or

illinois you will leave i think again i

think that is true i think these are

things

that we will start to see evolve over a

decade i think

i think yes we have become a more

politicized environment and if you don’t

like it you leave makes total sense to

me

number six

condos to explode both the development

of single-family homes can’t keep up

you can you can move up you can put up a

lot more condos together and they’re a

cheaper price point uh millennials and

gen z can’t afford houses so they’re buy

condos i think that makes sense

i do think condos uh condos could see

more appreciation than houses next year

that did not occur last year

houses were up quite more a lot more

than condos

seven kind of a

kind of punched zillow in the nose on

this one

redfin is saying that home uh i buyers

high buyers will focus on profit

not size

the

why do you want to be the biggest

company losing a lot of money that never

made sense to me

never made sense

next home buyers to focus on climate

change

huh

i don’t get this one does that mean

we’re not gonna buy beachfront

properties

i didn’t really know what they meant by

this

i uh

i don’t know i’ve never i’ve never met a

buyer who made a decision based on

climate

maybe it happens

maybe i don’t see it but maybe

affordable housing to become more

political

yep definitely that’s number eight

or nine i forget where i’m at and then

the last one i have

is real estate commissions to be under

attack

again the doj they’re saying the

department of justice to come after real

estate commissions

so again i think redfin did a good job i

think redfin’s essential message in

their list of 10 is

the real estate slowdown is real right

if i were to tagline what they said

right more inventory they’re calling for

higher rates and much much lower

price increase

sounds like the housing slowdown to me

i do expect some channels to take these

reports and make them uber scary

i don’t see anything here that is truly

scary it’s just a real estate market

that is going to have more inventory and

more choices and if you do the work you

can always find a great deal it is

always a great day to do a great deal

interest rates at 3.6 percent may sound

high when you’re used to three i’ve been

doing this since they were in the sevens

and had loans and ten

so it will be interesting to see what

happens so that’s what i have for my

first live stream i want to thank uh

faraz invest to wealth and eli for

watching i will do another live stream

here

shortly take care bye

 

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