After your last listing link was basically fraudulent deception I Don't know if he's just trying to pump the stock or what. hi Kevin Can you elaborate on your housing crash stance: Distressed debt is less than one percent and most loans are sub 4 rates. Appreciate all you do. This is correct.

So a lot of folks are calling for a real estate crash that could be worse than what we've seen. And the depths of the Great Recession That's bullcrap this crash. I In no way, none of the Research indicates to being anywhere near as bad as what we have seen in the Great Recession Now let's be real. There is going to be a lot of fear that comes to the real estate market in the next six months now.

I Want you to know this? We are, uh, when it comes to getting data, we are two months lagged thanks to the the way the case Shiller index works for Real Estate I could tell you today data data for January already I Could look at all the numbers the sales data for today in January and what does the case Shiller Do they spent time looking at November So this leads a lot of people to believe that real estate prices are actually still increasing because they hear the case Shiller index and they hear that oh, real estate prices November year over year actually up maybe four or five percent. But what's actually happened is that real estate prices have started to come down. And the question now is how much further will they come down. Do we expect a foreclosure crisis like we had in 2008? Absolutely not.

And it's true. It's not only because interest rates are substantially lower or had been substantially lower to where a lot of individuals who actually hold, uh, real estate are are not at debt distress. In fact, they're much better off just renting out their properties than than selling them. There's no necessary.

There's nothing necessitating them dumping their real estate, because unlike in the 2008 financial crisis, we don't have people who signed up for a negative interest rate to be able to qualify for the loan. And then we're told that don't worry when your rate readjusts to a seven percent interest rate, you could just refinance it. Oh, but wait, prices were falling. so you can't refinance anymore.

But you can't make a seven percent payment because you were never qualified to pay that. And what happens you get foreclosed on. We now have ability to be repay rules where the entire set of payments that you make you have to qualify for no matter if you started with a lower interest rate or you end up with a higher interest rate. So for example, if you have an adjustable rate mortgage, you have to show that you can actually qualify When and if that rate adjusts up to qualify for all of it, that's really important.

That alone is a huge difference. You also don't have Ninja loans which were no income, no job, no asset. loans where basically dead people were able to get loans. You have a pretty stringent lending environment where the average credit score of a home buyer before this started a recent takedown.

although it's probably still about this range, the average credit score of a buyer over the last 10 years has been in the range of 740 to 780. Average credit score of a home buyer back in the financial crisis was closer to 650, substantially weaker. Now if we look at the fear that's coming though, and this is the big fear that folks are going to capitalize on substantially over the next few months. It has to do with median sales prices.

Change it. Take a look at this. What you want to do here is you want to look at the Blue Line and I Want you to pretend that this blue line stays stable? That is. Home prices don't actually fall anymore.

Now let's just say home prices stay stable at a national median sales price of 350 000? Well, if you draw this line stable, going over to the right, what happens right now? Well, it actually shows that it's still above the red line, so it shows that home prices are still up year over year, right? But what happens when that blue line is right here under the big black line and all of a sudden in February we see that home prices were 353 000 last year and today they're 350 000. Well, what are you going to see? Oh my gosh, real estate prices are down one percent year over year. You're not going to hear the case Shiller index tell you that home prices are down one percent year over year until April What's going to happen? Then when you go to April of 2023, when you're in April and you get that first negative one percent. what are actually home prices down? You're over here.

Well if they're still at 350 and the median home price then was 374. Well then you're going to look and you're going to see that home prices are actually down about six and a half percent year over year in April. But the case Shiller won't tell you that until June And so now people are going to think, oh my gosh, the housing Market's getting worse and worse and worse. Panic, panic, panic.

That's when the real pain comes. in my opinion. Unless interest rates fall dramatically, the 10-year treasury goes down to say 3.4 uh, 2.5 to 2.75 you're not going to see a floor put under the real estate market. Instead, you'll get a lot more fear because now you actually have year-over-year price declines.

And when you get to the worst part is when you actually see home prices year over year at the end of May, go to a high of 389 000. and if they're just stable at 350, assuming no further declines, if they decline more, it'll be worse. But assuming no further declines, you're looking at about an 11 decline in prices year over year. that'll get reported not in June or May when it actually came out, but probably in July or August.

So you've got another eight months of bad news actually baked in to the mainstream media narrative for Real Estate coming ahead of you, not behind you. So the bad news technically is still coming now. Of course, people like me are going to continue to report what's actually happening with that 350 number today. We could do this by looking at MLS data to get exactly what our most recent data is.

Uh, given that the Redfin data centers Center is about one week delayed, but we could also go into individual uh regions either through the multiple listing service uh with Realtors Or you could play around on the Redfin Data Center And you could actually see that in the case of Austin you had another decline last week. in median home prices, you're down to 450 in median home prices. That compares to a peak of 572. 450 divided by 572, that is a 21.5 drop is what you're going to get reported eventually.

It has already occurred from Peak to now, but the lag of that release is going to be quite interesting. Now, you do have people like the CEO of Redfin trying to mislead you into saying that. Oh well. the housing market is getting better the first violation of uh, the CEO of Redfin in my opinion is totally forgetting what happened in January of last year.

Let me make that clear here. He tweets and says in the second week of November the number of people going on a home for a tour with Redfin agents was down 33 year over year. but by the third week of January that number was only 19. Down 19 which is still bad, but it's better and they did the same analysis for people making offers.

I reply tweeted to this and I said dude January of 2022 everybody stayed inside because they were afraid of Omicron I Know that sounds wild, but in the last three weeks of January you had very few people going out to restaurants, movie theaters. real estate people didn't want to get on me or they were sick at home with army. So I think that's a bad comparison and you shouldn't make that kind of comparison. And again, I am not a real estate like Mega bear.

Who's saying we're gonna have a worse than 2008 crisis. But things are probably going to get worse before they get better unless that 10-year treasury yield plummets fast. This is what you want to pay attention to: the 10-year treasure yield. Yes, it's come down off of the four and a quarter percent where it was in September and October Yes, it is lower great.

but if it shelves over here at three and a half percent, it is still remarkably higher than the 1.5 percent we had. When interest rates were like two and a half percent. for real estate and mortgages, mortgage rates are still sitting at six to six and a half percent. Your buyer purchasing power is still down forty percent, and when you factor in the fear that's coming, you're probably going to have more pain than not.

But that doesn't mean 2008 level pain. It just still means more pain. Also, consider this: institutional redemptions for real estate investment trusts are still in backlog. That means companies like KKR or BlackRock are still having to potentially liquidate real estate to give their investors the money they say they will give them.

This same thing is happening in Australia Right now, Dexas announced the sale of six properties for 483 million Australian dollars in December signaling the willingness to dump assets just to provide the redemptions they promise to their clients to their customers. In America we have KKR Blackstone and Starwood. All of them are potentially facing liquidations due to withdrawal requests. So think about what you do have as a setup.

for 2023, you have year-over-year fud in terms of price decline. News that comes out: You have institutional liquidations not necessarily individual homeowners dumping who've locked in 30-year fixed rate loans, but institutions who have to dump when they get Redemption requests they don't have the luxury of saying. But but but guys, we locked in two and a half percent. People like, give me my damn money, right? That's the way institutional Investments work.

So you probably have more institutional liquidation along with a massive backlog of new construction. The highest backlog of new construction that we've seen since 2006.. So yeah, there is bad news again. I Don't think it's as bad as 2008, but it's certainly not good.

And here's another offense that really just pisses me off: I Think the CEO of Redfin is just pissed off that their stock is down Redfin stock year today? Uh, positive 41 sounds really good, right? Sounds great. One year down 76 percent. If you go even further and you go back to the peak, it's even scarier. This thing ran up to 96 bucks.

which means Peak to trough this suckers down 93 percent. Yikes. I actually bought Redfin at nine dollars in the pandemic? Uh, and I sold most of my Redfin about 40 bucks because we saw this real estate crash coming from a mile away and there is no way like 30 to 50 percent of agents are not going to leave the industry. That's bad when volumes Trend transactions go down.

You lose money at Redfin You lose money at Zillow You lose money at Expi, so not Investments I want to be exposed to, but this right here just really grinds my gears. The CEO of Redfin says bidding wars are still the exception, but not the rule and says this is a property in Sarasota Florida which just got 23 offers and me having previously been an eBay seller I know I can get a lot of offers for things if I just listed up a book and then the market sets the price right and then I could tell everybody how I got 100 offers on my property or my product or whatever and it makes it seem popular. but I actually tweet replied the CEO and I used Zillow to help me and I wrote detail helps. A 299 000 listing is what the CEO is talking about here which was listed in a neighborhood where other properties are listed for 400 to 525 000 uh as list prices.

So in other words you under listed a property potentially by over a hundred thousand dollars and it got 23 offers a duh. you can have the market Fall another 20 and still be up money on that deal if you get it for the right price. So another misleading thing. So we got the misleading information about Omicron We have the misleading information about the multiple offers property.

Uh here when we talk about Seattle seeing potentially 12 offers on a 1.4 Million Dollar Listing with 155k over asking for the home what do we have? No link to the listing so I can't even look up and see what's going on over here, let me tell you about Seattle because I just visited Seattle to look at the real estate market. You know what? I Learned the agent's talking to me about how they're not getting inbound referrals anymore because people are leaving Amazon Vacating a 28 story office building, relocating 2 300 employees from the office out of Seattle They're pausing development of their campus in Bellevue Washington Why do I have this sort of data? It's because I'm running a real estate startup. We're starting a real estate startup. It's a startup after all, called House Hack.

Learn more about Househacko and Househack.com We'll be doing a reggae release. Uh, probably in about uh, two months. But anyway, Meta subleasing two of its Seattle offices because it's laid off so much staff, they can't pay the rent without subleasing the empty space. Microsoft is letting three of its leases expire.

That's 1.7 million square feet of offices and new offices that they were planning. They have canceled the Downtown Seattle office. Uh, the Downtown Seattle Association that is Uh says that half of Seattle's core space is Office Space and new leases are down 33 percent compared to before the pandemic. This makes sense because you've got massive layoffs coming to areas like this: Six percent layoff at Spotify Tesla's laid off a ton of white collar workers Google's laid off 12 000 workers Uh, you've got Wayfair laying off 1750 workers Microsoft 10 000 workers Meta 11 000 workers Snap 20 Gone 13 Outlift gone Twitter more than half gone Salesforce 10 gone Coinbase: 20 gone Redfin Multiple rounds of layoffs Open Door Multiple rounds of layoffs I Think you've got two like 20 layoffs at Open Door The amount of layoffs that are happening in Tech are insane.

So if you're going to be the CEO of Redfin and you're going to tell me that a listing in Seattle got 12 offers, but you're not going to give me the listing link after your last listing link was basically fraudulent. It's fraudulent in my opinion. to say that a listing got 23 offers and not tell the world that it was potentially under listed by as much as 150 000 or as much as 225 000. That's misleading I mean that is just pure deception I Don't know if he's just trying to pump the stock or what, but I You know I I Used to hold Glenn Kelman in esteem, but this kind of stuff pisses me off.

It makes me think you don't know what you're doing. you're the CEO of Redfin You're not actually providing context and instead what are you doing is you're providing quotes about how Redfin agents are saying oh, things seem to be getting better. We used to say take your time but now we're not saying that anymore. Now we're saying the bottom is in: let's go Buy I Have five people looking to get pre-approved says one lender.

Well, how do we know your lender a isn't just a slow B and B Oh my gosh, Imagine that in January people want to get pre-approved duh, When do most buyers buy most buyers Buy in March most sellers sell in July Of course more people are going to get pre-approved That's just the nature of of of what happens in the cyclicality of Real Estate Or let's get some more quotes instead of facts on some listings. I'm starting to see offer deadlines again. it just bothers me that you have a CEO that rather than providing data uh, like their own Redfin data center will provide, rather than looking at that sort of data, we're using anecdotes to talk about the real estate market. It's just ridiculous.

So again, do I expect the real estate market to crash like 2008? No, but you look at the home builders and they're struggling. Contracts a DR Horton down 38 percent They uh, they had contracts come in as they just reported earnings at Uh at just 13 382 versus the 14 528 that were expected. Massive moderation in demand for housing. The same thing is happening at Uh KB Homes and a lot of the other builders KB Homes down like 68 in contract signings or sorry.

their cancellations are up to 68 which is way above the usual like 12 cancel rate you see on new construction. It's insane. So yes, I do expect there's pain coming to real estate. Uh again, do I expect it to be as bad as uh 2008? No.

but is there pain coming? Oh yeah oh yeah. Now what I do think is interesting though is you do have entertaining uh commentary on Redfin from a lot of Clueless people on real estate or Redfin Reddit I mean uh and some of them were actually entertaining to to look at and oh wow one of them has been removed by the moderators. uh anyway there was a this post about pretty sure wife hates the house we just moved into and when I was reading the post this person's talking about how they bought a home on septic and on a busy road and I'm like first of all you're an idiot. You should have taken the zero to millionaire real estate investing course which tells you not to buy a yeah but a yeah but is a property where like look I bought this cool house.

Yeah, but it's on a busy street yeah but it's abnormal in your area to be on septic. It's stupid. You're selling an abnormal product and even if you want to go rent it out, you're going to have less desirable tenants who find it okay to live on a busy road and and more likely to move in. GTFO If your wife moved into a house and hates it, what do you think the wives of tenants are going to think? Or the tenants themselves? whatever, What do you think they're going to think when they move in? They're going to hate it too.

Don't buy abnormal real estate. Don't be a dummy. A dummy in real estate is somebody who buys a yeah but a yeah. But is any property that's next to an auto repair shop, a graveyard on a busy road? or Worse all three which I have seen before next to a graveyard, auto repair shop and busy road? That's stupid.

Properties under high tension power lines. Not normal power lines. That's normal, but high tension power lights? Stupid. You'll glow in the dark and die.

There are some properties you just don't buy now I don't know what it is with with Reddit removing a lot of uh the the the posts that I'm trying to talk about here. but here's you actually still have the post of the picture here. This is a good one. They actually wrote a rare time in which you wish you had an HOA This is another thing that I actually teach in the zero to millionaire real estate investing course.

Coupon code expires January 30th You want to buy properties in a homeowners association to rent them out. Most people most home buyers who come to me are like why would I want to buy a home in an HOA They're going to tell me what to do. Well, then don't do stupid. It's very simple.

An HOA is almost like a property manager for the neighborhood. It makes sure people aren't dumb and leave rusty water heaters on their lawn, park on the grass, or put Billboards in their front yards or do stupid stuff like this. picture here where you have a Joe Biden poster saying he has dementia Jared Polis sucks Joe Biden's an idiot Biden Remorse Biden wasn't elected, he was D what is that installed? Oh my God Anyway, so like these are the stupid things that HOAs prevent because these are the things that ruin neighborhoods. These are the things that make a mess.

and you might agree with those posters, but you don't want that in your neighborhood because it's going to lower property values in the neighborhood. It's going to lower desirability of people wanting to buy I Don't care if you're a democrat or a republican, but if I am a real estate investor I want your money. That's the way it works I want you renting my properties and I want you demanding to rent in my neighborhood because it increases rents. it increases sales prices I Don't want dummies like this jerk with all his signs ruining property values in the neighborhood I Don't want that and so I actually prefer to invest in neighborhoods that have small HOAs Again, you got a rules body.

you've got a way to actually Force compliance. It's a great thing you don't want people leaving their Christmas decorations up all years all year long because they're too damn lazy to take it down. That's how You ruin neighborhoods. I've gone through 2003 built neighborhoods.

There's a 2003 built neighborhood in my city and then there's a 2004 built neighborhood in my city. One of them has an HOA the other one doesn't. The one that doesn't have the HOA has people growing squash in their front yards RVs Parked all over the place and everyone painting their home a stupid insane different color from black to neon orange I Kid you not, I will take you through that neighborhood and show you it is stupid. You go through the HOA neighborhood that has an 18 a month HOA No RVs No cars parked on the grass.

Consistent paying schemes. Wow. Higher property values? Imagine that. Imagine real estate actually being better when you have some homogeneity.

and Conformity and you don't have stupid yeah butts. Wow. I Don't know. Real estate's simple, but apparently a lot of people don't think so.