Hey everyone me kevin here: let's talk about what a lot of folks online are talking about, and that is the coming real estate crisis in this video. We're going to talk about the truth about the coming real estate crisis by looking at data, we're going to look at catalyst to see what the heck is actually potentially going to happen to the real estate market. After we go through data of what's actually happening and then we'll analyze, is it going to be better to wait to buy real estate, or is it going to be better to wait after you buy that is buy and then wait well folks, let's determine that in This video, of course, this video is sponsored by me and the programs on do yourself: property management, rental renovations, being a real estate agent or real estate. Investing to get from zero to millionaire check out those programs linked down below with a coupon code expiring.

On the 29th of october, which means the price is going up, thanks to all that inflation - all right, let's get into this, so first foreclosures jumped 32 from the second quarter. That means q2 to q3 of 2021. We saw foreclosures go up a third, that's a lot and that's leaving a lot of folks scratching their heads going. Okay, are we about to have a foreclosure and eviction crisis because, after all, foreclosures are up 67 percent higher we're right now, the level of foreclosures? We have is 67 or two thirds higher than where we were in the third quarter of 2020..

Now a lot of this has to do with, of course, the end of foreclosure prevention programs or just straight out bans on certain types of foreclosures, specifically those related to covet other foreclosures were able to still process. But when we look at the statistics, the statistics are a little bit less alarming than these headline percentages. We in september began the process on 25 209 foreclosures, usually at least before the pandemic, so on a typical month before the pandemic, we would have had somewhere around 40 000 evictions or sorry foreclosures get started on a monthly basis. This means right now our foreclosure level is still about 15 000 per month below average, so these percentages and growths of foreclosure are really a sign that we're coming out of a hole i mean the fact is, for the first few months of the pandemic, we went Down to about three to four thousand foreclosures per month, we went to virtually nothing this persisted substantially throughout the first year of the pandemic, not particularly this low but low levels substantially lower, and so the fact that we're up at 25 000 still represents a reduction of Almost a 40 from where we previously were, which is kind of incredible.

I think that a story headline should really be hey. Foreclosures are 40 lower than where we were pre the pandemic, but the headlines obviously sell the news story, a lot more because people enjoy fear, and i think it's really not that people want to be in a fearful environment. It's that and i'm on the same boat. I agree with: we want cheaper housing.

We want to be able to afford housing again, so we're looking everywhere for signs that maybe this market's finally going to give us some discounts so that we can buy it's totally logical that we would feel that way, because prices have gone ridiculous by some measures and In many cities up over 20 you've got institutional buyers buying between 25 to 20 of properties, because they realize the real estate market is where it's at, with how low interest rates that we have right now i mean it's insane. People are qualifying for 30-year fixed-rate loans for 2.8, 2.9 3. Some are even getting better deals. It's nuts.

Now then, we look at forbearances and evictions and when we look at the active forbearance number, the amount of properties that are actually in forbearance, we're down to about 1.4 million household units throughout the country or about 2.6 percent that are active. This is actually nicely declining. Without us actually seeing a substantial boost in properties hitting the market, in fact, the amount of properties which we'll see in a moment hitting the market is declining. We'll look at actual statistics in a moment and uh.

You would think that if forbearances is expiring and people are being stressed out of their homes, that maybe they would come up for sale, but we're not seeing that because remember forbearance was actually one of the most beautiful blessings for homeowners. It was the best stimulus check in my opinion that you could get. I mean you were essentially able to not make your principal an interest payment in some cases, even taxes and insurance for up to a year and sometimes even longer, and then you were able to take that money that you owed. Add it in most cases to the back of your loan or as a second loan to the back of the property, and now the sudden, unless you were refinancing your home or you were selling you're not having to make that payment.

So if, let's say your housing payments, two thousand dollars - and you can kick that down the road 27 years - that's 24 000 - that you're not spending for the period of a year or potentially even longer, taking that down the road for 27 years. It's basically free money as long as you're investing in the meantime, because, thanks to compound interest, you'll make way more money. Investing that 24 000 than paying it in 27 years is actually a really wonderful thing. So forbearance i've been a big bull on seeing declining numbers and seeing uh declining numbers of forbearance and, at the same time, seeing declining number of homes available for sale.

Not a surprise to me, the forbearances ending, really, especially since you could just raise your hand and go. I want four bearings. You didn't actually have to prove that you had a hardship. In many cases, certain like va was a little more tougher, but in many cases you didn't have to prove anything kind of uh kind of not a surprise.

So we're not really seeing negative news out of foreclosures we're seeing positive news out of foreclosures, seeing expected and positive news out of uh the forbearance programs and then, when we look at evictions, this is also where we get some scary headlines. Evictions are technically we've got court filings that for evictions that are up 8.7 last month, you would expect actually potentially even a bigger number here, because a lot of the eviction protections have expired in september, especially in certain states like california, where there were the eviction. Protections lasted longer, and so we expect filings to continue to ramp up across the nation, but here's the thing we are still sitting at half the rate of evictions that we had previously now. This is worth noting that cities like houston, milwaukee and phoenix that have not seen eviction protections are seeing evictions at either at historic average levels or higher than historic average levels, but, ironically, evictions aren't necessarily leading to sales.

We would think that if there's an eviction crisis, maybe we'll see more homes come on the market and there'll be more liquidity and buy and prices will come down as buyers go shopping, but something totally different is happening instead of people evicting someone and then selling the Property people are raising rents substantially, so somebody that you evicted for two thousand dollars a month, maybe now you're able to put the property on the market for sometimes in many cases, actually, 20, more or 2 400 per month. Your cash flow roughly and essentially just went up 20, so when goldman sachs sees a danger of about 750 000 evictions coming and quite frankly, just a little sidebar here, uh. If all 750 000 of those came on the market, that would be a 10 increase in the amount of annual inventory and if they all came on at the same time, that would be a sign of a potential crash right. But when goldman sachs sees 750 000 families at risk of eviction, a lot of landlords are just preferring to raise rents rather than sell the properties.

So really, if, if we're looking at maybe 750 000 evictions, maybe we'd actually only see about a third of those or less like 20 of those even hit the market. Instead, the other landlords are just raising rents with new tenants. So you kind of have this double bad, like the eviction crisis, isn't really driving home prices down the eviction crisis if anything is driving, rents up which gets more institutional buyers and more investors interested in buying real estate and actually potentially boost property values, maybe in the Short term you'd have a small headwind. Let's say even a third of the evictions occurred that goldman sachs sees well.

A third would bring us to about a boost of maybe uh another 200 000 properties on the market somewhere around there. If they all came at the same time, well that'd be an annual boost of about 3.3. If they all came at the same time, maybe we'd see a small headwind to prices, assuming all the evictions just got processed at the same time and appetite wasn't available in the market for people to buy these properties. Maybe pricing could come down what fractionally a few percent, maybe, but it seems like bigger rents, might be more of a driver to actually push prices up, and this is why we really haven't seen a big fat catalyst driving housing prices down, because the things that we Thought would be bad, like foreclosure aren't happening because of the forbearance mitigation programs.

As forbearance mitigation expires, people aren't selling their homes because if they sold their homes, they'd have to pay off what they basically just hung on to the end of a 30-year loan. So why sell? Why refinance if anything, it's just like, ah just stay in the position you are and not make that payment so again less liquidity. So we thought foreclosures would be bad they're, not that we're 40 lower than where we were. We thought forbearance would be bad, but it's actually a good thing and uh folks in in the community.

When i say we folks in the community thought that evictions would be bad but they're actually helping drive, rents up, which is just feeding the frenzy of this real estate, like it's all willy wonka backwards. It's very very bizarre. Now, at the same time, congress was expecting to inject 322 billion dollars into a program to bolster low-income housing as part of joe biden's build back better plan. The three and a half trillion dollar infrastructure plan - uh well uh, 200 billion dollars of that 322 - would have gone to the poorest attendance and poorest neighborhoods to help more individuals participate in voucher programs.

Well right now that entire program is expected to potentially be cut. So, in other words, housing prices are going up, rents are going up the poor, getting screwed more. The people who don't own real estate are getting screwed more and so far we're not seeing the catalyst yet for a coming real estate. Housing crash, which is kind of mind-blowing, because again it's totally the opposite of what was expected.

In fact, there there were, and there still are dozens upon dozens upon dozens of real estate or youtube channels that comment on real estate. I don't want to call them real estate, youtube channels, uh individuals who comment on the housing market, that there's going to be a coming housing crash because look at the statistics of this there and the other. When we actually look at the numbers, it's like bro. What are you looking at? There's no problem.

Now, that's not to say we want to stick our head in the sand because there will be issues. Let's go into some of the issues. First: inflation folks, people like investing in real estate to protect against inflation, but it's not good for rents for tenants, rents are going up and the cpi, the consumer price index is understating the shelter component. Why? Because we don't actually measure the actual increase of all rents.

Most of the time we're looking at rent increases in a lagging manner and then we're looking at owner's, equivalent rents for people who are or who own their homes. But the problem is people's belief as to what their rent would be for their home in this survey. Tends to lag what's actually happening in the markets, substantially more than than actual rents, like people actually renewing their lease contracts and a lot of people are in contract. So it takes time for rents to go up.

So really, you could have this this wind, this uh, you know tailwind of inflation, getting uh that, or rather rents that are pushing inflation, higher and higher and higher, longer and longer and longer, because rents are such a lagging indicator, and this is why the more we're Seeing these eviction moratoria expire, the more we potentially think rents will actually just go up higher, leading to more inflation longer and then again, it takes time for the owner's equivalent rents to go up, so cpi could really get propped up by rental inflation substantially over the Next year and that's going to be something that keeps that measure higher now, let's look at some actual housing price data. Let's go to my favorite here: the real estate stock market data section on the redfin data center and then i'm going to give you a prescription for real estate. Okay. So what do we got here? We've got.

A new listings are declining right along the expected. Uh sort of path, usually around august september october school season - begins it's very, very common to see housing uh listings slow down and for us to see a substantial decline in these listings, and a lot of this is again school season. Then you get into the winter and holiday season, in my opinion, well i'll talk about my opinion in a moment in terms of what i would recommend, but anyway, let's look at medium median sales prices. You generally want to look at this.

Instead of average we did see oops, let's go to median. Here we go median sale price. There we go. We did see a small decline in median sales prices, which is good at the end of 2020.

We did see a substantial increase in prices at the end of 2020., we're not seeing that push again. We're actually going much more towards a very 2019 2018 style of softening and reduction in this time of year, and this is because usually the people who have to sell homes right now are selling more distressed properties like somebody wants top dollar. Usually - and you can't say this about everyone, but i would say more times than not are going to wait to sell the property until let's say the springtime. You know like a march and april kind of time frame so worth noting.

And then, when we look at pending sales, this is obviously declining here still above, and this is very interesting, still higher, still more pending sales than where we were in 2018, 19 and 20., which, if you look at homes, sold because people like oh there's, no housing Available there's no housing available. It's not actually true, because if you look at 2019 and 2018, we are selling more homes now than we did in 2019 and 18. they're just selling faster, so it gives the it gives the appearance of shelves being bare of housing stocks. So to speak, but the reality is we're selling more than we did in 19 and 18 and we're on par with what we're selling in the second half of 2020., all right now, let's get to uh, let's get to the prescription, so uh my my opinion and I i get nothing out of this okay, it doesn't matter to me uh.

Well, i mean the one thing that i do get something out of. Is you checking out those programs linked down below in full transparency that money goes to me, but it can also help you analyze your deals if you get into escrow and you're going to learn a whole lot about getting into the real estate sector uh, if you Check out those programs linked down below, especially if you're, a stocky or somebody who's, not super well-versed in real estate, but quite frankly, even especially if you're a real estate investor, never hurts to challenge your uh, your perspectives, uh and uh. If i can help save you thousands of dollars by doing one thing a little differently, you can pay for itself many times over, but anyway, so uh. What would i prescribe for for the housing market right now? Oh right, i would do what i did.

I would look for a good deal and buy now. I'm not saying go all in because i do think that uh in november and december, you usually have your best opportunity to get fixer uppers, because again the people who are trying to list homes to sell them around thanksgiving and new year's or christmas or hanukkah or Whatever you celebrate, those are folks who have to sell and they're more inclined to take a potential quicker offer lower offer they're selling fixer-uppers. Whatever look for properties that you can fix up, ideally ones that still have a bunch of junk around those - are the best uh and and try to find something a little below market value. I did just buy two properties for in the 700s and i expect them to be worth around the mid 900s to almost a million no they're not going to break a million, but somewhere in that range.

I bought two of those properties. They don't need a lot of work. They need about 30 40 000 worth of work. So i'm super excited about these properties and uh yeah, i'm putting my money where my mouth is.

I i look at this data and i'm like i, don't see a coming crash. Now is there a catalyst for something that could be a big headwind to the real estate market, yeah? Absolutely and that's the federal reserve raising rates which we do expect. That rates will start going up in the second half of 2020 by about a quarter of a percent that would generally affect real estate. The real estate market, by about two and a half percent, should be a headwind, but as or i should say, as rents continue to go up, we might still see some propping of real estate prices.

I don't expect to have this crazy run that we've had in the last year, but i would expect real estate to still be propped up relative to those rate increases and probably be healthy for rates to go up a little bit. But i'm going to try to refinance as much as possible to get my rates as low as possible right now so uh anyway. Thank you so much for watching this video. If you found it helpful, consider subscribing share the video.

If you think somebody else would benefit from this perspective, check out the programs link down below and folks we'll see in the next one thanks again, bye like and subscribe bye, you.