WEBVTT - Real Estate Predictions: No Crash but High Demand Expected

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<v Speaker 2>Matt, I'll start with you said we haven't we haven't

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<v Speaker 2>had this conversation a long time. We've been talking about stocks,

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<v Speaker 2>and I think it's good timing because they saying that

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<v Speaker 2>we're about to enter into a recession. Twenty five percent

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<v Speaker 2>chance Goldman Sex I think said that there is a

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<v Speaker 2>chance of a recession. So stock market has crashed relatively,

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<v Speaker 2>but real estate is still you know, holding on right,

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<v Speaker 2>but that it's a domino effect usually, so are we

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<v Speaker 2>going to see a real estate correction happen in the

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<v Speaker 2>residential real estate market? Over the next twelve months in

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<v Speaker 2>your opinion.

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<v Speaker 3>No, no, And I think I've said this probably one

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<v Speaker 3>hundred times over the past two years. I do not

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<v Speaker 3>see a crash happening. We have already been in the

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<v Speaker 3>midst of a correction over the past eighteen months since

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<v Speaker 3>interest rates have gone up. You know, home prices are

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<v Speaker 3>not appreciating that twenty to thirty percent as they were

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<v Speaker 3>during the pandemic years, but appreciation is still appreciation. If

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<v Speaker 3>you look at the year over year numbers, home equity

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<v Speaker 3>and homes have appreciated. You know, right now you have

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<v Speaker 3>about eleven point five trillion dollars and tappable home equity

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<v Speaker 3>right now in America, and that's a new high. Right now,

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<v Speaker 3>there's thirty two million mortgage holders who can access at

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<v Speaker 3>least one hundred k in equity right now. So the

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<v Speaker 3>market has still the housing market has been doing a

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<v Speaker 3>little bit more than just holding on. I think it's

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<v Speaker 3>still going strong. You know, year over year is up

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<v Speaker 3>over five percent nationwide. And if you look at historically

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<v Speaker 3>over the past sixty five years, homes have appreciated on

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<v Speaker 3>average about three and a half to four percent. So

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<v Speaker 3>even if you look at year over year with home

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<v Speaker 3>appreciation is still doing better than what is averaged over

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<v Speaker 3>the last you know, sixty five years. So real estate

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<v Speaker 3>is one of those things.

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<v Speaker 4>It goes with the market is ebbs and flows to it.

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<v Speaker 3>But as long as you buy right, you're going to

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<v Speaker 3>put yourself in a good position to win.

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<v Speaker 1>So the wind has to be built in. Well, I'm

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<v Speaker 1>gonna come to you because Matt, that's a pretty interesting

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<v Speaker 1>stitsm that thirty two million people can actually apply for

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<v Speaker 1>mortgage of that amount. But well as your originating mortgage

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<v Speaker 1>is how big or what's the delineation between saying all right,

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<v Speaker 1>we're gonna wait for mortgage rates to come down, or

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<v Speaker 1>we're going to act now. Right at seven and a

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<v Speaker 1>half percent for a thirty year fixed I mean, yes,

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<v Speaker 1>perspective is key. That's high for this generation. For other

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<v Speaker 1>generations it's not. But as we see the market is

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<v Speaker 1>pulling back, interest rate cuts sounded like they're going to

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<v Speaker 1>be coming. How do you prepare people to say, yes,

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<v Speaker 1>we're going to pull the trigger here and maybe refinanced later,

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<v Speaker 1>or we grab here because it could go higher. We

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<v Speaker 1>don't really understand, We don't really know where the market's going.

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<v Speaker 5>My philosophy on this is more or less stay ready,

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<v Speaker 5>so you don't have to get ready. It's always those

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<v Speaker 5>when you're an investor, if it already happened, is too late.

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<v Speaker 5>I think Ian said that right, you have to prepare

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<v Speaker 5>and see this coming. So right now, application, as far

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<v Speaker 5>as I'm seeing personally, they're already increasing because people are

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<v Speaker 5>hearing the word on the street that because of the

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<v Speaker 5>market performing negatively, it is causing interest rates to go down.

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<v Speaker 5>So those people that have been sitting on the sidelines

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<v Speaker 5>are now effectively jumping in. But because of that, this

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<v Speaker 5>is what we had going on in the pandemic. When

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<v Speaker 5>people jump in because the rates are low, we do

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<v Speaker 5>have supply issues. So how many people are actually going

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<v Speaker 5>to be able to take advantage of this little blip

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<v Speaker 5>in the rates, whether it be permanent or not, because

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<v Speaker 5>everybody needs some type of housing over their head. But

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<v Speaker 5>I feel like the past couple of years, while rates

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<v Speaker 5>have been high, it's been used as more of a

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<v Speaker 5>reason to not get into the market. So application volumes

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<v Speaker 5>are up. I think that you know, week over week,

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<v Speaker 5>application volumes are reported through Wednesday, so next Thursday we'll

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<v Speaker 5>hear about the last seven days. I think we're going

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<v Speaker 5>to see those applications going up and people realizing, Ooh,

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<v Speaker 5>I might have already missed the boat because they're down

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<v Speaker 5>a little bit and pulling the trigger on those homes

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<v Speaker 5>they otherwise wouldn't have prior to the last couple of days.

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<v Speaker 4>Yeah, let me add to that real quick, MOE.

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<v Speaker 3>Right now, the market the mortgage market rate for conventional

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<v Speaker 3>mortgage ended today at six point three seven five percent.

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<v Speaker 3>That's if you bind a prime at residents single family

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<v Speaker 3>home seven sixty seven.

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<v Speaker 4>Eighty plus credit scores. Right.

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<v Speaker 3>But once we start seeing these FED rate cuts, which

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<v Speaker 3>we all believe is going to start happening in September.

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<v Speaker 3>Even though the Feds lowering the FED funds doesn't directly

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<v Speaker 3>impact mortgage rates, I firmly believe we're going to start

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<v Speaker 3>seeing more traction of interest rates going down as well.

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<v Speaker 3>So once we start seeing rates in that five range,

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<v Speaker 3>there's going to be a whole little buyers that's going

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<v Speaker 3>to hit the market. Even with the Mooleman recession coming,

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<v Speaker 3>you're still going to have a slow buyers that's on

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<v Speaker 3>the slot sidelines right now that can't afford the buy

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<v Speaker 3>but they've just been waiting and waiting for a moment

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<v Speaker 3>like this. So for those of you who have been

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<v Speaker 3>trying to kind of like time the market and play

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<v Speaker 3>like double dutch, you got one foot in, one foot

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<v Speaker 3>out type shit, like it's about to be over for you,

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<v Speaker 3>because I personally believe home price is going to a

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<v Speaker 3>skyrocket at that point once all these market me personally.

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<v Speaker 5>Buying demand, your absolutely marketing.

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<v Speaker 3>The demand is still there, right, It's still there even

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<v Speaker 3>with rate seven eight percent. Now, once we start seeing

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<v Speaker 3>five and a half low fives on a thirty year mortgage.

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<v Speaker 4>Forget about it. Priced out?

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<v Speaker 3>Yeah, people gonna get priced out, Like look at the

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<v Speaker 3>tappable equity right, Look how many people have equity right now?

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<v Speaker 4>So you're going to see more inventory right now?

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<v Speaker 3>Inventory is at four point one months, right, that's still

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<v Speaker 3>technically a seller's market. Anything above six months of inventory

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<v Speaker 3>is a bias market, right, So.

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<v Speaker 4>You're going to see some inventory.

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<v Speaker 3>Are people who got all this equity now they want

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<v Speaker 3>they have an opportunity now to trade up or downside

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<v Speaker 3>because the rates are more favorable. It's not eight percent,

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<v Speaker 3>it's you know what I'm saying, five percent, So they're

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<v Speaker 3>gonna put that on the market. But it's still going

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<v Speaker 3>to be over for a lot of people. They're going

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<v Speaker 3>to get priced out, and there's nothing you can do

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<v Speaker 3>about it.

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