In this video, we delve into the intriguing world of real estate with our comprehensive analysis and predictions for the housing market in 2024.
Join us as we explore the factors influencing the real estate landscape and assess whether the long-anticipated market crash is on the horizon or if there are signs of continued growth.
Our expert panel examines key indicators, market trends, and economic factors to provide you with valuable insights into what the future might hold for the housing market.
Whether you’re a homebuyer, seller, or just curious about the state of real estate, this video is a must-watch for anyone looking to stay informed and make informed decisions in the dynamic world of property.
Don’t miss out on the latest predictions and trends—hit play now and stay ahead of the curve!
Transcript:
Chris Bounds 00:00
There’s a lot of stuff going on, I see a lot of opinions on where things might go. In the future, we’re gonna have a crash, we’re not gonna have a crash, it’s gonna be the greatest buying opportunity ever and everything in between. I’ve got a few opinions myself. But ultimately, when it comes down to it, inventory is low. There’s still a lot of demand, a lot of that demand has been held back by affordability. And we’re just not building enough. And that’s, that’s, that’s kind of been the story for a while. And not a lot has changed other than the affordability factor. And that’s just mainly because interest rates.
Rog Trigg 00:38
So yeah, let’s talk about those three things. You said affordability, inventory, and not a lot of inventory, because nobody’s building? Well, first of all, and you correct me if I’m wrong, I believe the reason and we’ve talked about this in numerous details here in jet lending, the reason why inventory is low, is because two things, in my opinion, one during the refi burn, which was a wet 2018 to 2021, or I’m sorry, 19 to 21. Little after COVID had picked up big time. You know, you’ve got people in interest rates that are 2.75 to three and a quarter. Yeah. So essentially, for the next 15 years, those properties are no longer on the market.
Chris Bounds 01:25
Yeah, it’s like a it’s like a percent of mortgages out there are below, I think 6%. And then I forget, I think it’s about 70% of those are below 5%. So you have and then the going rate right now is seven and a half ish. We’re talking conventional, that’s just 30 year averaging in the US right now ticked down a little bit, but and then such a large percentage of those are, you know, it’s in the fours threes, and then there’s a few lucky folks getting ridiculous twos. But yeah, why would they trade in a 3.25%, a 2.7% mortgage for seven and a half, like it would take something significant, like a job relocation, or maybe just financial hardship where they just have to sell but even in that situation, they’re probably better off from an affordability standpoint at the 2.7%. Then renting
Rog Trigg 02:27
Yes, def, definitely, if anybody’s watching this at any point in time, if you’re in one of those properties, it’s a 2.75 to a you know, three and a quarter. I mean, I’d even go as largest, you know, 4% Right now, you don’t sell that axe.
Chris Bounds 02:45
No, no, if it’s within Yeah, that two point difference. It’s just it’s a hard, it’s a hard pill to swallow emotionally. But then the affordability factor like you have to really need and are now just need, you don’t really want to. And that’s usually going to be more from job relocation kind of situations.
Rog Trigg 03:05
Yeah. And we just got back from the annual conference, the APL annual association of private lenders in the first day back in the office from being being at that convention, and they put out a lot of data stating exactly what we’re talking about, like, you know, 40% of the nationwide 40% of those mortgages are not going to be moved. And you should what you should do is say, hey, if I can afford to buy another house and rent this one out, that is good rental income, because it will cashflow now, you know, at the same time, if you can’t and like you said if it’s an absolute must that you sell that property, well, then you got to, you know, but that I think that’s what’s got a large number of you know, the population saying oh, it’s time to pump the brakes. Now, inventory, we talked about that being low affordability. You know, you got people, you know, two, three years ago that will go out and buy a seven $800,000 house and those were those were selling now people are like, oh, whoa, pump the brakes. Interest rates have increased by three 4%. So during this time, I gotta move down and market on what I’m able to afford, because Americans,
Chris Bounds 04:17
that part’s a little different. I so I’m talking to Houston and then I pay attention. I live in a pretty decent neighborhood in Sugarland. And I still I see homes fly off the market, like pretty close to list price, and there are seven 802 million plus. So I think from an affordability standpoint, like if you’ve got a good paying job and you’re well and a fluent, it becomes less of an impact for you then if you’re a first time homebuyer or you’re in that medium to low median income range where it really impacts you. I mean, if you can afford the payments and you can get a home it may not impact you as much but with the inventory He is being hurt by two reasons. Lack of we’re just not building enough. And there’s not enough inventory recycling in the market now, home, they’re just staying put. And then the affordability standpoint. You know, we’ve had the wages, the wage growth has not kept up with home price growth, huge gap for the past several years. Now, the one thing that has mitigated that for a lot of homebuyers is interest rates just kept going down and down and down. They did that for like 10 years straight, pretty much and then during COVID, collapsed in the twos. So that has been the saving grace for a lot of folks being able to afford a home. But the opposite reaction to that is prices just went up faster. Now, when you have interest rates triple, and like, you know, 18 month period, something has to give, and that’s why we’re just seeing all if there is a real estate collapse if there’s anything that has collapsed right now, it’s transactions, like we’re a 20 year low and transactions, which is
Rog Trigg 06:02
hard and a lot of people I mean, you got lenders, whether it be hard money lenders, or you know, long term 30 year mortgages, I mean, I talk to clients every day, and you know, he’s like, Hey, we’re in a rough time, you know, we see it maybe clearing up second quarter 2025 20 is waiting for sorry, but right now, you know, people have come up, they’re uneasy, you know, the confidence is really not there as far as your end buyer.