We need to talk about the housing market crash because everything you read about or hear about online is telling us about how horrible home buyer affordability is. Which is true, it's like the worst since right before the Great Recession Not only that, but mortgage rates have been rising virtually all year now, breaking over 8.3% only just in the last two days, falling for the first time in months, lot of folks realizing on one hand, even though there's very little inventory. on the other hand, the people willing to pay the high prices of real estate today are starting to become further and fewer between. In other words, while people might have been willing to pay these high prices for Homes at high interest rates or have had cash saved up from the pandemic Lucky them That or those sets of fires might be dwindling.

And so we could be be in this weird transitionary state where as the FED says, rates stay higher for longer, housing gets screwed. In fact, that's what Jerome Powell told us right. Jerome Powell Just yesterday said I'm talking to my industry contacts and they are concerned to a significant degree about what the impact of higher for longer will have on the housing market because that impact is starting to be seen. Look, it's been volatile when rates first went up from basically 2.7% to like 5% We saw the real estate market hit somewhat of a wall.

The coid markets dropped about 20% The non-co that's going to be the the markets everybody kind of fled to during Coid, right? So your Austin Texas your Boise Idah, right? We saw those surge. We saw rents slowly catch up afterwards and try to surge as well. Then by the end of the year we saw that pain had been hit and come. January 23 We started seeing a recovery.

That's LED Some markets to actually now be positive year-over-year Florida Positive year year-over-year San Diego Positive year-over-year Other parts of the country still negative and potentially trending right back towards where they were at the end of last year like Austin went- 20% Then positive 10% Now it's trending back toga 20% So the question is what happens going forward, Especially when you have a Jpow sending the warning signal. What is the most realistic answer for what's going to happen? Well first, there are considerations. Yes, today, inventory is substantially low, but even though inventory is substantially low, if you have a lower amount of buyers, you could still see pain in the housing market. We in the specific housing markets that we are looking at and we are looking at many different housing markets.

With my real estate startup travel to over 200 different cities 200 different times this year years it's been nuts. Uh, that's just this year alone. It's a lot of traveling. But point is, we started seeing markets hit a wall right around September which is when rates started Rising Even more, that's when we went from like a 7 and 1/4% interest rate to like an 8 and A/ Qu% interest rate That extra percent almost started feeling like the straw that broke the camel's back.

Properties that were comping for 600,000 were all of a sudden selling for 530,000 It was like a 12% hit to the market. In the spam of a month, the market hit a wall. It's probably because of that straw that broke the camels back really again in a low inventory environment, driving available buyers even lower. Now you have a lot of people suggesting, well, we're going to wait to the spring to sell and so a lot of people are fearful that.

Okay, well, if everybody says they're going to wait until the spring to sell their homes, and yes, that's when there are more buyers on the market. What if inventory 10 X's and buyers 5x, you're going to have a surge of inventory which could also depress prices, especially in a higher for longer regime. So the question is, what the hell do you do? How do you put all of the damn information together Because it's exhausting, Everybody has a different opinion, nobody knows what the hell is going to happen, and it's creating a lot of fear, uncertainty, and doubt. and rightfully so because you don't want to buy a place and then get decimated because it falls in value.

So the first thing that absolutely everybody should do and then I will give you my prediction. The very first thing that everybody should do is they should consider when are they getting into real estate themselves Because ultimately I think every single person watching this video should become a homeowner. That is number one. When is it your time? and if it's not your time right now, are you at least saving money and preparing for that time? Okay, number number two: how are you protecting yourself when you buy real estate is not like the stock market where you go in and you wow there two Apache helicopters right above me that that's odd I'm on FSD by the way that I have not seen before.

Okay, odd. uh. Anyway, the second thing that you need to do is ask yourself, how are you protecting yourself How many Apaches are around you No. When you buy something in the stock market, you're just hoping the stock market doesn't tangle on you.

You can have all the fundamental research in the world, which usually works in the long term, but in the short term you have no protection unless you're hedging, right? That's why the options Market exists. But that's hard. That's trading and it's a job. What privilege do you have in the real estate market? Well, the real estate market is so imperfect.

it is horribly inefficient. terribly inefficient, inefficient, uh agents? Uh, and I'm not I'm not saying that to bag of in the industry I'm just saying humans by Nature are inefficient, Computers are much more efficient, and real estate is a human business. It's a people business. You have to be there on the ground talking to the painters, the vendors, the people, the contractors, the Realtors the inspectors.

uh, the city officials. You have to be involved with everybody. And if you're not involved with everybody, you're not getting a good deal. So you have to be in the markets that you're investing in.

The beauty is you can insulate yourself and protect yourself by getting a good deal in real estate off. Market is a fantastic way to do that. Tell everybody you know that is an agent in your community or a wholesaler or whatever. This is what we're looking for.

Bring us a deal like this. We'll work with you. That is a fantastic way to try to get less competition when you're buying. But you can get great deals on the market too.

You just have to make sure you're not foming. That's when you get multiple offers and all of a sudden everybody's like oh, I I got to pay more cuz I got to win the deal. You could always win the deal. You could win 100% of the offers you're writing, But if you're winning 100% of the offers you're writing, you are overpaying.

Simple. It's that simple. Like people are like, oh, I lose out on so many offers. It's like, okay, well, you're not paying enough, You don't know your market, and if you're winning all your offers, you're paying too much.

There's a right balance. So what is the rule of thumb that you should be focused on? Number two is getting wedge deals. I Teach this in all the courses that I have on real estate and building your wealth. Go to Meetkevin.com to learn those.

They're phenomenal. I've been doing this for what coming up 14 years now I Love this! This game is easy and there is so much availability that I'm not afraid to share this Intel with you because there are no shortages of deals which I'm very excited about. So what do you want to do? You want to do what we just did on a house. We just bought a house in a neighborhood where a model near model match four-bedroom two bath was selling for like $817,000 next to a busy road.

We're like, wow, that's like an $830,000 property. You know, adjusting for the busy road it might be like $8.40 That's crazy though. Why would you want to buy that next to a busy road? So we get one not on a busy road? in in a way better part of the neighborhood for 605 and it probably needs like 60k worth of work. So that means if we're looking at being into it for say 6 65, call at 670 and the place is going to be worth $840 Okay we we are looking at a delicious spread of like $170,000 in equity.

That's awesome because that means the market would have to fall 20% for us to go to zero on Equity but we still wouldn't be upside down. How crazy is that? Those are the kind of deals you want to look for. This particular deal, not everybody's going to be able to pull it off the way we did because this was a seller that that came to us and said look, I'm willing to sell this house for a discount because I need the money in five business days I'm like I can make it happen but the numbers are going to have to be right. They're like let us know what you think go inspect the property I give a number I Go inspect the property I'm like oh God it is even a little bit more work than I expected.

You get a better deal. Okay, you make the numbers work for you. You have to be patient in this market and have that desire to miss a deal. And then you get good deals.

Okay, that's how you insulate yourself. Now the third thing is any kind of talk about timing that this is going to be 08 all over again. It's going to be a horrible Market recession. Whatever.

Okay, remember in ' 08, prices fell like 38% so that's pretty extreme. That was based on people having uh Ninja loans. no income, no job, no assets, liar loans uh variable variable interest interest rate loans. Not like the 30-year fix most people are on right now who are locked in.

You were getting paid to dump your property back then. Okay, remember that you were given money to short sell your home just to cooperate with the short sell process and you were giving given move out money just to get out. That's what we had in ' 08 that facilitated a 38% drop. If you have already a 10% drop in markets now and you're insulating Yourself by another 20% you're basically insulated by 30% and I don't think there's any way in hell we see the same kind of explosion of loans that we saw in 2008 Because the loan portfolio is so different.

Today, people are being paid to stay today. 30-year fixed rate mortgage at, you know, most people, 90% of people under 4% It doesn't make sense for people to sell, so it artificially keeps inventory low. Yes, it's rigged. Yes, the real estate market should have fallen a lot more, but guess what? it doesn't doesn't have to.

You've got unique circumstances here that say, doesn't have to not paying people to sell Now Is it possible that rates stay higher for longer and keep sort of a boot on the neck of the economy? Because after all, Drome Powell says we're keeping rates higher for longer? Of course, it's possible, But here's what you have to pay attention to. Not just the opinions of people quite frankly, you should have your own opinion, but what you really want to pay attention to is I'll tell you in a second House Act Closed its fundraise yesterday. It's my real estate startup. However, there were some people who got caught yesterday in the glitchiness of a lot of people trying to use the software at the same exact time.

So if you didn't get into the offering and uh, you were having technical issues yesterday, email us at Ious Hack.com for people who were trying to get in yesterday and were having problems. we're making sure that they still have access so you can still read the offering circular at House Hack.com but the website it has been changed and you can't invest there. You have to email us, email us at IR House.com but otherwise the round is closed. which we're grateful for because it's exhausting to fund raise.

Uh did very well though. very, very happy for all of our investors, we're going to do great. So what do you really need to pay attention to the 10-year treasury? That's it. Pay attention to the 10-year treasury because it doesn't matter if Jpow keeps rates.

High The 30-year mortgage rate is based on or trades roughly around what the 10year mortgage does or the 10 year treasury does and there's a spread between the two, so it's not always perfect. Uh, and I'm not saying the 30-year mortgage rate is what the 10e is. It's not what I'm saying. What I'm saying is when the 10e goes down, mortgage rates go down okay, and there's a spread between the two.

That's all you got to remember. So what does that mean? Watch the tenure. because if the tenure starts plummeting because jal's like we've reached cap and everybody starts buying bonds because they're like bonds are about to Skyrocket in value yields plummet, the real estate market ain't going to crash, and the best possible time to buy real State might quite potentially be what I've been saying for a year to 2 years now. Q3 Q4 2023 Here we are baby.

Q4 2023 Let's go.