Hello, everyone and welcome back to a new video Sean's, a name and Finance is the game today, so the housing market now we're coming to the end of 2019 here and if you're, somewhat interested in the financial stability of the real estate market. You will know that we are at absolute all-time highs when it comes to home prices. So in terms of what's gon na happen in 2020, our historic highs, a good thing: are they a bad thing? Well, the only way to truly find out is to look at our past and learn from that and do all so hit that like button on this video, but here we go now. I recently made a video on my prediction for the recession.

That's supposed to happen in 2020 kind of similar to this video. So if you haven't seen that I will leave that link down below for you to check out, but in this video in particular, I'm going to be focusing primarily on the real estate market. In my recession, video, I talk about, what's specifically going to cause our next recession: spoiler alert, it's not the housing market. So in this video I want to talk about what might happen to the real estate market in 2020.

Key word is what might happen because nobody can truly predict the future or know what's gon na happen. All we can do is look at past trends and what happened in the past to be able to get a good gauge of what we're about to get into in 2020. Again, if you watch my recession, video you'll know how effective this actually is, but back to historic highs for home prices right now now this is a really good thing for people selling their house, because they're getting top dollar for what they ended up paying for it. On now, this is a problem for first-time home buyers or people who are looking to buy a house because they're like holy smokes.

These houses are very expensive, so we're in what we call a seller's market. A seller's market is an economic situation in which goods or shares are scarce and sellers can keep prices high they're with me, because we're going back to economics 101 right here, but this is a basic, very basic supply and demand graph. So when supply is low, the price is higher, because the demand for that little supply goes up. It's like Tesla's.

When they first came out. Everyone wanted a Tesla and poro Elon couldn't make them quick enough, so the supply was really low, but so many people wanted them that it drove the price up, because people were paying to get in front of the waitlist. And again, I just made it a seller's market for Elon Tesla. The same thing is happening right now.

In the real estate market, there are very little homes for sale in the same amount of buyers, if not even more buyers out looking to buy a house. So when sellers are listing, their homes are going wow we're getting multiple offers on this home. Let's just Jack our price up, and this is the sole reason why the home prices are going so high right now, and everyone thinks we're blowing up a bubble to where it's going to pop in 2020. I just agree with that, because I want to actually compare what happened back in the day in 2008-2009, when we actually saw a massive housing crash.

The difference between the pupu show back then and what's going on now, is a few things, one of which is the fact that interest rates are very low right now back then interest rates were actually pretty high and, more importantly, anyone could qualify for a mortgage back In the day again, I talked about this in my recession, video. I don't want to dive into too much depth in this video, but just know that the difference between back then and now is the fact that one rates are lower and two. The restrictions that the feds that put on qualifying for a mortgage are much tighter. You can't just go apply for a mortgage and get one these days back in the day you could.

So what does that do for our market? Well, it makes it a little bit stronger and another thing: that's important is the fact that the feds learned from the mistakes back in the days for why the housing market crashed and they're doing everything they can now to make sure that doesn't happen again. Hence why I don't think we're gon na have a bursting of the bubble in 2020 more on that in a little bit, but when rates are low, that means that more buyers can actually qualify for a home, so their monthly payment goes down on that purchase price And they go hey now. I can afford this, but we're still trending in this upward trend of sellers are going well, there's still a lot of buyers, so I'm still gon na keep raising my price and we're still kind of in this weird balancing act of trying to make these little motions And little movements to make sure we get back towards that equilibrium, but we're not really there and we'll never ever get to a perfect equilibrium in any kind of market, whether it's real estate stocks or anything. But the important thing is making minor adjustments to take the scale from here back down to maybe here or maybe here or getting it closer and closer to that equilibrium mark wash up pause.

So what I'm trying to get out is the fact that the market constantly ebbs and flows. It goes up and down up and down up and down constantly going up and down. We just happen to be in a very high point right now, and everyone who's, uneducated or doesn't work in the real estate industry is going hmm. Last time we were at these very high points was back in 2008 and what happened after that? Oh yeah, we crashed.

So, in my opinion, the circumstances have changed tremendously this go-around and I really don't think we're gon na crash now. I do think that we are gon na see a slowdown in 2020 about around q3 when the presidential election is in like full swing, and I think that's because people are going to be a little bit more conservative with their money and there's not gon na, be As many people buying homes now, when there's not that many people buying homes, that means that homes that are on the market are gon na be sitting on there for a little bit longer when homes sit on the market for a little bit longer, sellers tend to Go okay, maybe we'll drop the prices a little bit, so I do think we are gon na see a cooling-off period and kind of a more leveling out of the market next year. But I do not think we're gon na see a massive crash again absent flows up and down up and down up and down. So after it does correct itself, it will eventually work its way back up to that upward trajectory that we're on right.

Now again, this is just my opinion. No one can say for sure, what's actually going to happen, but I want to know your opinion down below. In the comments it's okay to disagree with me, I want to know down there. I always love learning about what people think are gon na happen, but regardless my rebuttal to this entire will the market crash.

Will it not crash debate is the fact that, if you're playing the long-term game in any financial investment, the long-term game is usually the smarter choice. It's the fact that the market is going to be continually going up on average over the course of the last 30 years. Homes have appreciated at a rate of 5.3 percent, regardless of the massive spikes during the boom or the crashes external factors like inflation scarcity, as we overpopulate the earth and just the rising cost of goods is going to always keep home prices going upwards. So if you're worried about when you should enter the market and maybe buy your first home, then I can confidently tell you that there is no better day to buy your first home than yesterday.

Take my situation, for example, back in 2018, is when I really wanted to buy my first house - and I was kind of looking around, but everyone kept saying: no Sean don't buy a house. The markets about to crash just wait another year and prices will come down and then you can buy a house and you'll be in a really good spot. So I was super picky. I was so looking at homes, but I was super picky and was like alright yeah.

Maybe I should wait a little bit. Maybe I should wait a little bit. I continued to pay rent to my sister on her mortgage now. Back in 2018, interest rates were about 4.5 % to about 5 %, so that's another thing to take into consideration, because in 2019, when the feds actually lowered the interest rates, I was like now's the time to do it, because historically interest rates are the lowest they've.

Like ever been what was it competitive to get into my house? Yes, it was. I ended up going in 5 G's higher than the asking price just to make sure I got it and then, when I actually got it appraised at appraised for 3 G's more than that now fast-forward six months later. If I got it appraised today, it would probably be worth about 14 to 15 grand more than that appraised value. Six months later, that's pretty insane and again, there's no denying it.

We are currently in a boom. So, to recap: I do think home prices will slightly go down in 2020. I don't think we're gon na see the massive crash or burst that everyone's expecting it to be, but I do think it will level out a little bit in 2020 and kind of cool off in the market. But again home prices over time have gone up.

On average about 5 % a year, which is pretty impressive - that's just my two cents, though nobody can really predict the future. But if I had to make an educated guess, then this is what it would be and I'm a mortgage lender and AZ. So I guess what do I know, but hopefully you enjoyed the video. If you did.

I would really appreciate if you can hit that like button also subscribe, if you're new around here, always trying to make some great content for you and otherwise, I will see you in the next video.