Who has to turn that narrative around? They were wrong. But they have. They come out saying hey, we got that wrong. Calm down Every no.

They didn't say that. That's our job To say. that's our moral obligation to fulfill because people are making bad decisions right now. not just because of mortgage rate, because are afraid great Realtors Remove that fear.

That's our job again. I Use the word pretty strongly moral obligation because I believe it to be true. Now how bad was the fear? Well I looked it up I Went all the way back to the remnants to where it started. Okay, when the the survey started which was in June of 2010.

That's when all the forecloses were out there and and everybody was a negative equity walking away from their houses. There's more fear now than then. Remember what happened in 2020? Remember like in In April They made this a big announcement that everyone's got to stay home for the rest of your life. Was there a fear then about the real estate market? Most definitely nowhere near as much fear as was generated last fall and winter.

We're concentrating so much on the things we can't control. We're not thinking about the things we can control that's stopping people from moving forward. We have to get out there. And I don't care if you knock on doors I Don't care if you scream I Don't care if you grab the mic from your your your Parish priest or and grab the mic and say listen I got to tell them something.

Prices aren falling I Don't care how you have to do it, you just got to get out there and do it. I Don't know know if this would be the last time he ever does this but I think it'll be one of the very few last times we ever get Steve Harney Face to face in an environment like this I think he deserves for what he has done for the industry. An enormous Round of Applause as he hits the stage. Ladies and gentlemen my friend Steve Harney Appreciate you man, that was one.

Have fun. Have fun. Sit down now. Sit Down You're eaten into my time.

Sit down. It's an honor to be here Ladies and gentlemen. I Truly mean that That word honor is kind of thrown around too easily Nowadays, not by me. It truly is an honor to be here.

and and let me tell you why. this is the greatest group of Realtors assembled every year without a doubt. Give yourselves a hand on that and from all over the place. you come here from different price points, different community, ities different everything and you come and share things to help each other out and sometimes I get confused.

I'll give you two examples: Mike Parker I think that's your where stand up Mike I I is Kristoff here usually I could see his jacket from about a half a mile away is Kristoff scream Kristoff if you hear no okay I wanted to use those was that someone getting killed or was that Kristoff I can't see you Kristoff But the reason I wanted to bring the both of you up two totally different people. you can both sit down now Michael thank you very much Mike is from you know Northern Kentucky a suburb of Cincinnati which isn't even in the state of Kentucky Who can't show a house on a Friday night cuz he still lives in one of those communities that everyone's at the football game under the lights and then you have Kristoff glamoring glitch of Beverly Hills and we have everyone here from all different markets say what's bringing them together. So I try to think about Mike who's a good friend of mine and Kristoff and I said the only thing I could think of Mike's office is in Floren Kentucky and I'm sure Kristoff is working with a buyer from Florence Italy So to have Florence connecting but not really. Ladies and gentlemen, what you all share is the same thing.

You care about your communities. You care about the people who live in your communities. You serve those people not just with their real estate needs which you're really good at, but with a whole bunch of different things. You are stalwarts in your community.

So yes, ladies and gentlemen, this is an honor. And the Sh stage just shaking is a little weird. This is an honor to be here. Now What I'm going to do is come over and sit down and talk to you about what I see is happening and what you need now.

I Know the first question has to be the question that your consumers are asking you. So I want you to take out your pad because I'm going to give you the answer to this question. What's going to happen with mortgage rates? How many people want that qu get the answer to that question if a consumer ask you that All right, here's the answer and write it exactly the way I Say it. How the hell am I supposed to know? Now for the people not from New York just take out the word hell and put the word heck in how the heck am I Ladies and Gentlemen let's get this straight.

the guy controlling it Jerman Powell he has no idea a the most renowned Economist in this country Mo Xandi has no idea I've talked to the Presidents of banks major Banks across. they have no idea. Why are you putting pressure on yourself that you're supposed to have some idea? It doesn't make sense. Please please please.

What's going to happen with mortgage rates? Who knows. This is what I'll tell you. My guess is we followed that that we have an economist. He follows that.

I think by the end of the year we're probably going to see a six at the beginning instead of a seven and probably prob the middle of next year we're going to see a five instead of a six. That's my guess and that's worth just as much. That guess is worth just as much. It's if you go in back and just meet a total stranger walking through looking for a bathroom, ask them.

their opinion is worth just as much as mine. Course, no one knows. So let's stop thinking so much about the things we have no control over and let's get back to the things we do have control over. That's what I want to accomplish today.

So number One people are going to ask me this question coming down the stairs. If you want to find me, this is the only place I am. It's used to be called Twitter now it's called X There's goingon to be some people I don't like that, then don't follow me there. What can I tell you? That's where I am.

If you don't like it there, then don't follow me. Here's the important thing, ladies and gentlemen, this is what we have to get. Concern leads to fear. What happens next: Fear turns to panic and then Panic turns to paralysis.

That's what's happening with your consumer right now. They're at the fear stage. There's only one person that can get them out of that and that's you. If we allow the fear to continue, they're going to start panicking.

If we, If that continues to happen, then what's going to wind up taking place is going to be a total paralysis. now. while Steve that people tell me Well the Market's already in a paralysis. What are you talking about? 4 million houses sell a year? That's not a good number? I'm not saying it's a great number, but let's talk about this.

Frozen Market If four million houses sell a year and I think I did the math right, that means 11,000 houses sell a day. If we do the they are just under 500 houses cell an hour. And that means about 8 cell a minute. So the next time your brother-in-law is on a 10-minute rant that you're never going to make another.

Penny Because another house is never going to sell. Tell them why you were yelling at me. 80 houses sold. Don't get caught up into this.

There's craziness out there. I'm not saying 4 million's enough and I'm not even worried about you if you didn't put money away after the last three great years you had. Well, a shame on you. I'm worried about those young people are trying to buy their first house.

They got some challenges right now and we have to help them. But worrying about the mortgage rate is not the answer. Let me tell you what is the answer. Ladies and gentlemen I Believe this very very strongly and I'll prove it to you.

which I like to do. The fear right now is about the market itself. The fear right now is our home. Pric is going to crap like 2008.

Now you might say well Steve You really think people are worried about that? Let me prove it to you. Here is a graph Consumer survey com into this year: the Orang Bars of the last 10 years. This is the number of people percentage wise that think prices are going to fall in the next year, so we can see that that number was real low going over. There's always going to be some people at averages around 12% What's the number on the Red Bar all the way to the right 37% Coming into this year, one out of three people thought prices were going to fall that we might be headed for another debacle.

That's what's keeping many people in their houses, not the mortgage rate. Well, Steve the mortgage rate. If they have a 3% why would they take? Ladies and gentlemen, life happens if you decide you no longer love the person that you married and aties decide that you could stay there for 3% mortgage rate, but that's going to last about two months. You're going to get out of there because life happens if you were a young couple, a Mni couple and you did the cool thing.

walkability was so important to you. So you bought that little tiny condo over the pizzeria on Main Street and now you find out you're pregnant. Guess what happens? Your 3% mortgage rate doesn't mean anything because life happens going back to Mike In the football. If you have a kid that's a great football player and you know if you move two school districts over, the guy who's coaching over there put five people in Division One programs last year.

Guess what? 3% mortgage rate doesn't mean anything. You're moving and heaven forbid your young couple that just gave birth to a baby that has special needs. With very few hospitals that can handle that need, you're moving to that hospital, that neighborhood. You're not holding on to your 3% mry.

You know why? Because life happens now. Of course, as the rates come down and they will, things will get better as far as more transactions. But right now there's another thing stopping some of these transactions that you do have control over. This because ladies and gentlemen, that was the beginning of the year.

There are still one out of four people, one out of four that think prices are going to go down. So let's assume you had three people over for dinner tomorrow night. Somebody sitting at that table thinks prices are going to fall I Pray to God it's not you, but you have to have that conversation and pull that out if you go to a barbecue this. Saturday and there's 16 people there, Four of them think prices are going to fall.

Don't talk about mortgage rates. you have no control over that. Talk about where prices are. Right now.

In this weekend, when you walk out of your house of worship and the rest of the congregation and you were all heading for the parking lot, all 400 of you realize a hundred of them think prices are going to fall. What's our job right now to let them know that's not true now. I Want you to understand? It's not that they're crazy. Here's an actual headline from last: December from Fortune Magazine And there were tons of these kind of headlines: a 20% home price decline forecast Models are leaning.

Crash. Here's where the other 13 models have 2023 housing markets going all going down. There was a message being sent across the country at the end of last year because prices started to dip, that all everything was going to break loose and prices were going to crash. There was headline after headline after headline.

What did that cause one out of three people thinking the prices were going to come down? Still one out of four who has to turn that narrative around? They were wrong. But they have. They come out saying hey, we got that wrong. Calm down Every no.

They didn't say that. that's our job. To say that's our moral obligation to fulfill because people are making bad decisions right now. not just because of mortgage rate, because they're afraid.

Great. Realtors Remove that fear. That's our job again. I Use the word pretty strongly: moral obligation because I believe it to be true.

Now how bad was the fear? Well I looked it up. I Went all the way back to the remnants of where it started. okay when the the survey started which was in June of 2010. that's when all the forecloses were out there and and everybody was a negative equity walking away from their houses.

There's more fear now than then. Remember what happened in 2020? Remember like in In April They made this a big announcement that everyone's got to stay home for the rest of your life. Was there fear then about the real estate market? Most definitely nowhere near as much fear is was generated last fall or winter. We're concentrating so much on the things we can't control.

We're not thinking about the things we can control that's stopping people from moving forward. We have to get out there. and I don't care if you knock on doors I don't care if you scream I Don't care if you grab the mic from your your your Parish priest or and grab the mic and say listen I got to tell them something. Prices aren falling I Don't care how you have to do it, you just got to get out there and do it.

Here's what they were thinking: ladies and gentlemen I want you to I want you to see this what wind up taking place is And by the way, most agents know what's happening. Good agents understand what's happening. Great agents ex can can explain what's happening. Get that? Okay, this is what the experts thought.

This is the normal. We took out the two crazy years. you know 20 and 21. those other years is normally what happens with new listings coming to the market.

It starts off big, hits the middle of the Year may and then it tail is off for the rest of year. That happens every single year. So that year what happened well between May and June instead of coming down, they sprung up and every expert said you know what's going to happen this they're going to keep on listing. They're petrified, The prices are coming down.

This is what's going to wind up taking place. There's going to be a flood of listings on the market. and because there's a flood of listing on the market, the the prices are going to crash. That's what they said was going to happen.

Let's show you what did happen. the exact opposite. Not only do it go above what what was the norm, it's well below what's the norm. Ladies and gentlemen, that wasn't about interest rates.

If you go back to that same graph, those same people thought interest rates were going to come down. It wasn't a fear of interest rates, it was a fear that the market might crash again. I'm staying right where I am. We have to let them know that that was a myth.

It wasn't true. They lied to you. Maybe they didn't Well, some probably did for gain, but they just totally misunder to what was going to take place now. I Don't understand how you misunderstood it, right? So let me get this straight.

your thinking as an expert as an economist that people are going to see that the markets flowed up. So they're going to sell the house that has a 3% interest rate on it and droves to move into a rental that costs more than their mortgage cost. How how that come? How do you figure that out? But that's what they said. We have to to turn that around right now, ladies and gentlemen, in a very big way.

So let me show you how you can do that. Here is an actual month over month, not seasonally adjusted. That's what happens to prices in this country. Beginning year, they go up to the end of the year, they go down.

Not, they don't go down as far as losing value. They just don't go as up as much as they do at the beginning of the year. Which makes sense is the buyer. Market comes in.

That's a 48-year average. Prices go up and it's the price In the summertime as people go on vacation and everything prices don't raise as much. It's kind of logical, but I wanted you to see it because this is what the experts got wrong. because prices teil off doesn't mean they depreciate and we'll talk about that in a second.

That's like saying I'm going up a hill in a car and I'm going 50 miles an hour because the hill is steep I went down to 45 miles an hour. Well that means I slowed up. It didn't mean I shoved the car in reverse and went back down the hill. So we have to understand what's taking place and last year what happened, the confusion that set in.

and I'm going to take this graph and minimize it so it's the same graph you just saw I just made it smaller. Here's what happened. ladies and gentlemen, in the first half of the Year prices appreciated well above what they should have appreciated at it was to tail into some craziness. So what was required at the second half of the Year some sort of adjustment which we got and as soon as that adjustment started, what did the people say? What did the experts start saying? Here comes another one.

You thought 2008 was bad. Just wait. Well ladies and gentlemen, that didn't happen. So let's take a look at this year what has happened so far.

The Orange is what I showed you before last year. The black is what is the norm the 48 year average. The green is what happened this year. January The prices are still down a little bit in February They didn't go up as much as They normally do.

Next couple of months they went up a little bit more than they normally do, but nowhere near where they went up last year and I need to stop right here. First of all, let's give a hand to Mark Davis and I thought he was unbelievable. Give him a big hand and the thing he was most right about is don't send this out if there are agents out there sending this graph hoping people understand it. I Don't want to call you A, but my vocabulary is too weak I Don't know what the word is.

You have to explain stuff. You have to teach stuff to people. You can't throw stuff people, but you need to understand it first so you can explain it to them. So what do we have? We have normal appreciation coming, ladies and gentlemen, and let's take a look at it.

Here's the actual graph. Mark Showed you only with a black background last year. appreciation was too high at the beginning of the year, all the way to the left. The end of last year there was an adjustment.

Then at the beginning of this year what happened, we got back to normal. Where are we right now? Normal. Does that show red lines getting bigger and bigger and bigger as you go all the way to the right? No, it shows green lines. Prices are going up now.

Ladies and gentlemen, remember this because this is what's going to happen in about a month, maybe six weeks from now. you're going to hear it again. Prices are falling. No, they're not de just not appreciating at the same level they did earlier in the year.

So what we're going to see I want you to say is just this deceleration of appreciation is not the same thing as depreciation. If I'm going up a hill at 50 miles an hour and my speed drops to 45 I am not going in reverse I'm still going up the hill just a little slower that that's what they need to know. But ladies and gentlemen, there's some headlines coming baby. they're coming and if you want to you want to see me, call them morons, go to.

Twitter I Don't care if you hate it or not, my son who owns the company won't let me do it live. But on Twitter I am a free man. So what's going to happen this year? prices are going up maybe a little bit more than this year. they're going to come down.

We might even see one red Bar one month this year. but what's going to wind up taking place? The average appreciation from 1980 to 2022 was 4.92% Guess what? we're going to wind up this year about somewhere around 5% And you know what people are going to say? Well, it wasn't the 20% it was two years ago, right? Thank God That's not the bad news, dope, that's the good news. The other thing I Want you to see there because it's important when people tell you. well.

prices always go up and they always go down. That's just not true. Here's 1980 all the way through They went when there was a recession. A recession caused by housing.

All the other years they went up again. Let's repeat this because I want to get something over with right now. Most agents know what's happening. Even the agents not here kind of know what's happening every.

AG in here I think understands what's happening. You're the best of the best. And ladies and gentlemen, let me just address that for a second because I said that before. You are great.

The greatest Asians in the country. That doesn't surprise me because Tom Ferry What does he attract in his whole life? Every aspect of his life. Greatness. In every aspect of his life, He attracts greatness.

That's the type of person he is. But you know why. You know about greatness. What does greatness demand? What do you demand? The best? And I don't know if you know, but Tom is rated as the number one real estate coach in the country, not by me, his friend, by the people who look at that kind of stuff and rate that kind of stuff.

And I'm not 100% sure the number of years in a row, but I think it's 107 years in a row. That's been the case. But you could ask. Okay, I'm not 100% sure.

but now this is what I'm going to get attacked off as I walked off stage because for 17 years I had the same complaint Steve This National stuff is really good but I need it in my local market Steve and for 17 years I said shut up I can't do that and I still can't do it. But I want to let everybody know now KCM figured it out. We're going to give you local information right down to your ZIP code. write down to your ZIP code on your Market We already have 10 data sources that we're doing.

Most of them are about inventory. The reason we started with inventory Because we're going to be on a March the next two months months at KCM to teach you how to get that inventory. That's our goal. Our biggest challenge in the last two months was getting the pricing right.

What's our goal In the next two months get you listings between Tom and US you're set. That's where out the first 10. I think eight of them are about inventory. so you have that right down to your local market.

National Insights Local. You'll be able to put the national over the locals can say this is what's happening in the nation. This is what's Happening Here For 17 years you've been busting my chops about this. I thought I get a bigger hand when I say it's available now.

pick up your phones like you do. Copy the IQ code. You can go right there and find out more about it if you want. and for the people saying I'm not really care.

You can also get my slide presentation if you want right on that uh QR code. So go ahead and do that. KCM has a booth in the back when I'm finished here. I'm going to head back there if you have any questions, I'll be more than happy to answer them right.

But ladies and gentlemen, this is what KCM is dedicated to from now really to the end of the year. Building inventory, helping you build the inventory we need. Now let's go back to this. Fear number two, it's 2008 all over again What they mean by that and the and the experts were talking about this.

Well you know what? Steve The foreclosures are coming back I know it. Prices are dropping. We're going to have all sorts of problem. There's a recession coming and this is going to happen and this is going to happen and then martians are going to attack us.

Now we know they're really are UFOs and they're going to destroy our the world guys. Chill out, chill out. So I'm going to go rapid fire through these. This is what they said because facts will alleviate fear.

recession will cause unemployment a Skyrocket Well so far we haven't seen a Recession and as far as the uh unemployment rate is concerned, let's assume it doubled. It wouldn't be what it was in 2008 if it doubled. Most people saying we think it's going to go to Five that Chairman Po will pull it back at five Five isn't even the 75 year average in this country. So all those people like your brother-in-law or that guy who's doing YouTube videos out of his mother's basement saying the world is going to crash when they talk to you, have this stuff on your phone.

No actually, you're wrong. Let me show you well the other thing. Why are they saying? well, it's the highest Mortgage Debt ever in American history. What do you say to that? Steve $12 trillion is owed Well ladies and gentlemen, of course, because houses went up and more people bought houses, the amount of mortgage money is going to go up.

The only thing that matters is this graph. What's the mortgage debt? To the amount the money people make and it's not high? It's one of the lowest that's ever been in history. So they want to compare it to 2008 when October 2007 was the highest It Ever Was and 7.2% mortgage de to income disposable income. Right now it's almost half that and it's lower than it was in 1980.

So this whole concept that there's too much Mortgage Debt out You're wrong. Not true. millions are leaving the forbearance program now that the forbearance programs over all those people that come out as foreclosures. Well ladies and gentlemen, let me show you how many people left in the For For Bar program.

You have to look all the way to the right next to the little graay things. You know, All those other people, all those other color lines. They're already out. They caught up, they sold the house, they paid off their mortgage, they worked out a deal with the bank.

The forbearance plan helps so many families to avoid foreclosure and there's almost nobody left in it. So these people say millions of people are come out, you're wrong and I'm It's hard so hard for me not to say because at the end of each one of those sentence I want to say you're wrong. but I I'm not supposed to say that. So I'm not going to say that.

but Steve I Just read a headline for Clauses are up 187% over 2021. That's true. Let's take a look at 2021. See that little little red dot all the way to the right Because remember, you weren't allowed to foreclose houses in 2021.

Of course it's 187% over nothing. What are these people thinking? Homeowners already not paying their mortgage? Steve I Know it, there's a recession coming. Things are tough. Everything is there.

All right. First off, that's not even true. Do are serious delinquencies so far this year actually going back to January 2022 How many people are 90 days behind? Not only are not more people not paying their mortgage, there were more people paying their mortgage than there was back then is the exact opposite of what they're saying. Those morons.

You have to have this information, but you can't stutter. If you stutter, they're empowered. not I Don't want anybody call anybody? Well, well, maybe you know one or two you could say that to, but most people you shouldn't call. Here's the real essence of it.

This is from: Marina Walsh the Vice President of Industry Analysis In MBA the seasonally adjusted mortgage delinquency rate fell to the lowest level since MBA Survey began in 1979. Not only is it high, it's the lowest level has ever been Boy by a resilient job market homeowners that continue to make their mortgage payments well. Steve What about negative equity? Don't tell me prices came down. There's going to be negative equity, Ladies and gentlemen, here's the the answer to that.

I'm going to show you on the left the amount of homes that were negative equity during the great Financial crisis and on the right, the number of homes are in negative equity right now. Ready? No, we're nowhere near that. We're not going to get anywhere near that. There's just too much equity in the country Not going to happen.

Okay So it's really, really important ladies and gentlemen that we get that how many homes are in negative equity See that little red slash there. That's how many You know what? that big number there is that 38.7% people who own their house free and clear they could buy their next house without worrying about getting a mortgage. Are you talking to those people? or are you still worried about the mortgage rate now? I'm going to end with this: You own an Apple Store You don't own a McDonald's see I came from New York in New York It snowed a lot and there was snow storms. You could be trapped in your house for 4 days if you owned a McDonald's and it snowed And you were trapped.

People were trapped in the house for four days. Guess what? You lost all those meals. People didn't sit in there home and not eat and wait until the snow melted. You lost the breakfast, lunch, and dinner for all four of those days.

If you owned an Apple store and somebody wanted to buy an iPad and they don't want to buy it online, they want to go in touch it tast. Get the accessories and everything. but there was snow. You lost four days with people coming into your store.

You did not lose one sale. Not one sale did you lose. Because once that snow melts and once those streets are cleared, guess what's going to happen? They're going to come. And ladies and gentlemen, my guess it's going to be next spring in the buyer Market You're going to have an avalanche of business Avalanche And you know what? I'm worried about I'm worried that you're in panic instead of in preparation because the great Apple store manager is saying I Got to put an extra couple of people on I Got to make sure I have extra Apple and iPads you have to get extra listings to be ready for that time.

You have to stop talking about mortgage rates and what's the answer if they say what's going to Happ with Mor how the hell am I supposed to know that will end the conversation. Tell nobody knows the guy running it doesn't know why would I know you're not going to lose a deal. As a matter of fact, you're going to lose the deal of the agents that are are panicking, not preparing. You're going to pick their deals up.

The agents who are not here are not on the simoc cast. You're going to pick de deals up. All you need is patience ladies and gentlemen, everything's going to be fine now just to make sure this is not a room of panic. I'm going to give you seven words I'm going to end with this going to give you seven words the people from New York Don't write these down.

Here are the seven words: Calm down, Sit, sit down, think plan, Act the same seven words I gave you in April of 2020 Did it work then? Yep. Is it going to work now? Yep. Just calm down. Sit down.

Thank Plan Act Now how many people here from New York Yell out you have 11 words So write these down. Calm the F down. Sit the F down than Plan act Sorry New Yorkers Speak a different language I Apologize for that ladies and gentlemen. I'm going to end with this: You have one or two choices: Panic or prepare for an on the business that's coming.

We're going to have a couple of months wait on it, but it's coming. Your choice. I You gave me a half hour of your life just now I Hope I gave you a decent return on your Investments.