Did you know that in the month of june 15 of properties that fell under under contract meaning that they received an offer and the seller. Accepted the offer. 15 them fell out of contract after being in contract. What's going on guys.

That's ricky with tackle solutions. I know our main focus on this channel is about investing and trading in the stock market. I wanted to change things up a lot of you guys know that you know we flip about two to three different uh properties in the arizona market pretty often uh this is our first full year going into this uh. We're still trying to stay pretty consistent with buying two to three deals every single month.

We're just choosing to be more selective and i wanted to share some of the new data that i learned about why properties are sitting on market. A little bit more why there's such a high drop off rate at 15 of properties. That fall under contract. And what this means to maybe you as a homeowner or someone that's interested in buying a home so again.

If you guys learned something new in this video and or if you guys would like to see future videos like this please all i literally ask you to do is to drop a thumbs up subscribe to the channel and comment down below any questions you might have about the housing market. So one of the first things that i want to share with you is this data first uh so. 15 of properties that are under contract have fallen out of contract in the month of june. One in five sellers are dropping their ask price and that was back in may i also did this quick little uh just i live in the city of gilbert right.

And i thought i would use my city as an example and i would encourage you to do the same for yours. It's fun. It's fun to understand kind of where the market is at right now and i'm going to show you exactly what i use for that uh with that being said a year ago. The average mortgage interest rate was about three percent as of right.

Now. The average mortgage interest rate to get a loan is about six percent or at least around that six percent range that is when it comes down to the monthly payment. I'm gonna give you an example of this and why it's so significant you might not think so. With how things might look of three percent to six percent like you know that's not that big of a jump.

But when it comes down to how a mortgage is actually calculated. It's actually a pretty significant jump and then the other things that i want to bring up is 194. Compared to last year. We are seeing an increase so so housing prices of what we are experiencing now to what we were experiencing last year are up still 194.

Now why is that important to know well housing prices from a year ago are still higher. But now interest rates to take out a loan and purchase a property interest rates are even higher. So it's not even so much about the property value being up. But it's how much more expensive.

It is to actually take out a loan to purchase a property with that and i'm actually going to start sharing my screen. So you can see exactly what it is that i mean by that uh this is when i searched that mortgage calculator put it popped up with 67. I'm trying to use an average of six percent. If yeah i did hear somewhere as high as seven to eight percent.

I'm not going to use that as as an example and also i'm gonna use the average loan amount. I think at least in my area or at least in arizona is right around 450 000. I'm gonna calculate what it was last year at three percent of course this is before insurance. I'm pretty sure.

But the monthly payment would be right around right under nineteen hundred dollars. Think about this nineteen hundred dollars to purchase a four hundred and fifty thousand dollar house. Think about you know what family what individual of their net income is going to be going to their mortgage right. I mean 1900.

Not too bad now look at this the same property value so i'm not going to adjust that but from a year ago. Property values are up 19 in my area now imagine interest rates being out what they are now six percent. It went from under 1900 to nearly jumping a full one thousand dollars a month. A thousand dollars a month.

This is a what's not a thousand dollars it's about 800 it's a 70 jump on your mortgage payment. But think about that so it's not even that the property value is more expensive right because even a year ago. With interest rates being at three percent. Let's see how high we can go a year ago.

You could have purchased the house. I'm pretty sure it should be for six hundred thousand dollars. So a hundred and fifty thousand dollars. More you get you know more of a house right a year ago with a three percent interest rate and your payment would still be less than what it would be today for a 450 dollar house.

Let's see what we would be capped at six hundred and fifty thousand dollars. Um. Which is right around so imagine being able to have purchase a six hundred fifty thousand dollar house versus a four hundred and fifty thousand dollar house your mortgage would have been the same with a three percent interest rate. You can see why buyers are less inclined.

Less motivated to purchase a house for or with interest rates being this high. So when asking the question. Why are so many buyers that are going under contract to purchase a property canceling at such a high rate well obviously as the federal reserve continues to raise interest rates this will only have a more negative influence on the overall housing market as now we are sitting seeing property values or properties sit on market for a much longer period of time now one of the things that i wanted to talk about is what i was able to pull up over here. So it says in my area.

The medium sale price is 600 000. If you live in california probably significantly more if you live in other areas again this could be a lot less but i'm just using mine as an. Example we can see that um house housing prices are up 194. From where they were last year.

I like looking at this because it gives me a better understanding of why we are seeing property sit on market for a longer period of time. Why we're seeing more people cancel why it's less motivating for a home buyer to purchase right now with interest rates with how expensive. It is it all makes sense. This is why it's so important to understand by raising interest rates.

You make it less not well. Yeah. You make it less affordable to be able to purchase a property therefore you're less motivated to end up buying one now. This is one that i wanted you guys to make sure that you can see 398 homes were sold in the month.

If i'm not mistaken in the month of june. So year over year. This is down 20 meaning that in comparison to last year 20 less properties were sold in the month of june than they were last year. So obviously we are beginning to see a transition from a seller's market to a buyer's market property values are still high.

But this is why you're seeing properties sit on market for a lot longer and this is why you're seeing a higher drop off rate because again it's less motivating. It's less um. I would say attractive to purchase a property with everything that's going on right now and especially with the idea of uncertainty. If we do go into a recession.

You know what happens after that that uncertainty is less motivating for a potential new home buyer. The other thing that i thought that it would be pretty interesting to cover is that the days that a property sits on market. This is super important if you're interested in buying and or selling a property in your area. The reason.

This is important is it went from 17 days on average last year. That it would take for a property to sell now it's 26. So we're seeing i mean. That's a pretty significant jump and most likely as interest rates continue to rise all we're going to see is this rise even more the number of homes sold probably going to get smaller and hopefully the biggest thing is hopefully we can see the medium sale price actually begin to go down right like we said one in five sellers are beginning to finally drop their ask price and it's not that oh my god the market's gonna it's not necessarily that you should be scared of selling your house.

I think at this point is because it's less motivating for someone to purchase a property with housing prices being expensive and also interest rates being expensive. It it just makes sense that now you have less of an incentive. Because mortgage rates are that much higher therefore people can afford less. Because of how expensive interest rates are when you take out a mortgage.

So again. I just think that we're finally beginning to kind of cool off with the housing market in the sense. That sellers are finally beginning to realize that yeah my property probably wasn't even actually valued that and now it goes back to its true value. Now.

What do i make out of all of this i mean you can go down into this and you can really get into it of you know how competitive the market that you're in right in comparison to other markets. It tells you a bunch of data that i think is super super useful. Especially if you're thinking of buying and selling an area. But the reason that i bring this all up is because for myself as a house flipper.

I've been trying to be pretty selective with the opportunities. I choose to take advantage of one of the things that i always love to share is that just because things are a little bit more risky doesn't mean that i need to avoid all opportunities. Obviously if you come across your dream home. And it comes up at a fair price you can always buy a property get it at the current interest rate and then refinance one or two years later maybe when they begin to drop.

So understand that something that might be expensive. Now doesn't mean that it always has to be that way especially if it's something that you actually want to acquire right. But that you should understand what leverage you have right now as a buyer and or as a seller. If you're a seller you need to understand that hey properties are sitting on market a little bit longer.

It's less you know motivating for buyers to purchase right now. Because of how expensive interest rates are and the uncertainty aspect. This is for both buyers and sellers is everyone's taking a risk sellers are taking a risk because they're potentially selling below. What previous.

Ask price were but also buyers can be taking a risk. Because of the uncertainty of this potential recession right the way that i look at this is again you should just understand what you have to work with when it comes down to knowing that we are transitioning from a seller's market to a buyer's market. I'm just choosing to be more selective and making sure that our net margins are still there instead of trying to forecast that hey you know we can buy this property and five to six months later it's probably going to be worth more. We can't expect that same type of growth that we were experiencing a year ago.

It's not that you need to be scared. It just means that you need to be more selective and this goes to everyone right if you're interested in potentially selling your house. Maybe why this is why connecting with a cash buyer could be interesting. I've seen a lot of properties go up for sale they price drop.

They go under contract they cancel the contract they go under contract they cancel the contract and it's this continuous back and forth of they're not able to close on the property. Because buyers continue to cancel due to the uncertainty. I don't know about you i don't know if this is something that you've been considering i want you to know that if you're in the arizona area. I'm only doing arizona right now i live in arizona right myself.

And my business partner are buying up properties in the average um six. Hundred thousand dollars or less range. So if your property is valued at less than six hundred thousand. We've been trying to buy them cash right so if you want to be able to you know receive cash within ten days for your property.

You're interested in selling and or just want to see what we would offer i encourage you the third link in the description is my instagram feel free to send me a direct message just be like hey ricky. I saw your video. I'm interested in selling a property. I'd like to see what you could offer cash.

If you have friends family neighbors that are interested in potentially selling instead of having to pay real estate commissions all of that stuff we pay you cash. We have a title company facilitate the whole thing and we get you paid in about 10 days right if you know anyone interested in selling a house then again we can pay you either a percentage and or a flat fee of a couple thousand dollars just for connecting us if we actually end up buying that property. So we're still looking for deals out there we know that they're out there they're just harder to find. And it really just comes down to you know what it is that you want we know a lot of people that unfortunately because of financial situations.

Changing whatever the case might be things are tough right now um and we would hate to see people lose their houses uh. Just because they don't actually end up putting their house up for some so if there's anything that we can do to be of value for you again. We're open to anything we're open to any form of creative way and how to acquire your property. If that's what it is that you need right now so feel free to send me a message right now on instagram.

I'd be more than happy to connect i respond to all of my direct messages just give me about 24 hours to get back to you so i really do appreciate you guys time. I hope that um you know you learned something new in this video. If you did i hope that i earned your thumbs up please. Consider subscribing and again.

If you have any questions about the real estate market. And you think that we can be of value for you just feel free to comment down below like always let's make sure that we end the year on our green now take it easy team.