Is the housing crash over? Was the 2022 correction really it for the housing market? New reports and articles from Goldman Sachs, The Wall Street Journal, and Altos Research hint that the housing market has finally reached its bottom. And with mortgage rates starting to fall and homebuyers returning to the market, could these real estate forecasts be correct? Or are they failing to account for basic economic forces that could lead to even deeper discounted home prices in 2023?
Dave Meyer, VP of Data and Analytics at BiggerPockets and host of the “On the Market” podcast, wants to know EXACTLY what caused these forecasters to change their tune. At the start of this year, any real estate professional or investor would have quickly told you that home prices were falling fast. So, how could everything have flipped just two months later? We’ll look at the data for supply and demand in TODAY’s housing market to decide whether or not this optimistic outlook is fact or fiction.
Dave will also give the four scenarios that he could see playing out in 2023, which is the most likely, and how investors can use this data to make better buying decisions in the coming months.
Think we’ve hit the bottom of this housing market? Let us know in the comments below!
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Check Out Last Week’s Episode on The Most Affordable Housing Markets in the US:
https://youtu.be/llDnFq7nFqE
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Articles Mentioned in Today’s Show:
Altos Research: https://blog.altosresearch.com/has-the-housing-market-already-found-the-bottom
Goldman Sachs: https://www.gsam.com/content/dam/pwm/direct-links/us/en/PDF/2023-isg-outlook.pdf?sa=n&rd=n
Mortgage Bankers Association: https://www.mba.org/news-and-research/research-and-economics/single-family-research/weekly-applications-survey
WSJ: https://www.wsj.com/articles/housing-market-shows-signs-of-thawing-11675617472
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Data provided by Redfin, a national real estate brokerage; https://www.redfin.com/news/data-center/
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00:00 Has the Housing Market Bottomed?
02:29 WILD Housing Market Predictions
03:53 Homebuyers Come Back
07:54 Supply Shoots Up
11:37 4 Scenarios That Could Unfold
17:20 Have We Found the Bottom?
national real estate investors association
SEEMS crazy…BUT they could be correct. The dollar…and we've already seen it with stocks. American society itself has become utter nonsense.
Bottom line housing may go up, down or sideways…….so what! This is an INVESTMENT REAL ESTATE website. What drives you as an investor is the DEAL. They can be had in good times and BAD times. Closing on a duplex in Elgin TX (30 mins outside Austin TX) 270k current rents 2k per month. No work to be done. The deal is because their rents are missed priced. In 12 months rents will be 3k a month! How do I know? I own the duplex next door and I am getting $1,500 for a 2 bedroom 1 bath. The duplex units I am buying next door are 2 bedroom 2 baths!!!!!! Doesn't matter the market phase, its the numbers!!!!!
Nice analysis! What's the cost of capital for institutional and other corporate investors in real estate? Presumably they're not paying what individuals are. Not sure what portion of the overall demand they represent, but it's something?
Is this prerecorded? Rates are pretty much 7% now
There is ZERO compelling data that the market has bottomed. Based on Interest rate lag time, the market won't bottom until January-April 2024.
🤣🤣🤣 so many times people called the bottom over during 2007-2011 until they got tired and quit
Really excellent framing of pretty complex scenarios here. Well done!
@thedatadeli the stats of deals might be better now, then the last couple of months. But couldnt that just be pend-up demand from previous months, somebody may "need to move" no matter the cost, i agree in affordability as a big driver in this market. However some people are irrational and will overspend to live the "family dream".
Thinking that housing is anywhere near bottom now is either irrational or a lie. The party is over. We just haven't seen a pop yet. Just wait.
Calling the bottom is the narrative currently being used by the housing pumpers that benefit from sales and prices going up. Interest rates are up, inflation is still uncomfortably high, average savings are down, credit card balances are up substantially, and the stock market is stagnating/correcting. All this affecting the wealth effect. Most importantly with inventory going up and FOMO being taken out of the market, the trend is clear, prices are correcting for the foreseeable future. That does not mean there won't be spikes, nothing goes down in a straight line. In the meantime, at every spike, the profiteers will keep coming up with nonsensical narratives, both to justify the ridiculous price gains and why they should continue. They have stuck to year over year metrics for the past 2 years while they benefitted the narrative. Now that those same YOY metrics no longer fit their narrative, they are pulling out monthly metrics and weekly metrics. There is only one real reason for those narratives though, it fills their pockets.
12:56 – Two variable: Inflation and Recession
13:58 – Scenario #1: Lower inflation, No recession
14:51 – Scenario #2: Lower inflation, With a recession
15:59 – Scenario #3: Higher inflation, With a recession
CRASH
im at 3.5% 2012 tax assessment why would I or any one sale to see 6.5 % loan and property taxes go up 3 -4 times sad for our kids and future grand kids have to move away to low cost areas
Awesome show Dave.
Keep it up Dave! Anyways insightful.
guys, i bought a lot this last year and now the price has declined a lot less than when i bought it. do i just increase rent like crazy? i use abnb mostly. why no one rent my houses? inflation sucks for us all, lets be a team rent pls. 2021 my rent was 250 a day, now its 600 a day due to high inflation, no eggs, nothing! i learned everything from rob as a mentor. help help. rent from me, need cash fast. rob stopped answering my emails, help, rent. now pls.
The market is never going to “bottom.”
Most people at this point cannot afford a mortgage and many people can barely pay their rent. Anybody that thinks this market is stable is high.
Recession may not be here until job market is good, inflation continues. So the mortgage rates for few more years.
Every data video: “Could be this, we don’t know…”
The single family houses I've seen recently are nasty. They are dumps waiting for a match! I am earning more money than I ever have in my lifetime. I've owned 2 homes. They were both sold after 10+ years of use and renovations and upkeep. I cannot afford to rebuy any of the homes I have owned. The market is a mess. While there may be jobs being filled those jobs do not meet the inflation rate over the past 10 years. People are not keeping their homes in resale condition they are just ditching and running and expecting a return on investment. You gotta invest to get a return.
Hi David, thanks for these videos, they’re great! Federal reserve notes came out suggesting another interest rate hike this year to slow inflation…so the question is whether or not there is a recession to determine which scenario we end up in
We are already in a housing recession. The theme of this video should be “we don’t know”. He says that multiple times in the video.
Mortgage rates are up 80pts in 2 weeks, inventory is up close to that. Haven't hit the bottom yet. Economy is stagnant. People believe realtors BS too much. They have a great PR machine. I'm in Northern California and expect another 10-15% drop in the next 2 years and I am a realtor.
Sacramento still higher house prices. Ave 3 bed house is min $475,000
Every time David green makes a video, Jerome Powell watches and decides to keep rates higher for another six months
5 percent interest going to stay forever . Housing mortgage will be 7.5 percent for next 20 years . 7.5 percent + 1.5 percent property tax + 1.5 percent maintenance and insurance . Total 10.5 percent loosing a year . Rent r 2.75 percent . Housing it’s not investment anymore housing prices will drop 75% . In the next 5 years
Man I hope we can get some more inventory here in MN, market is pretty crazy here currently
P/E ratio for housing market. Median home price for the area/median wage earnings in area. Currently to reach equilibrium this should equal 30% to 35% of a person income spent on housing. In my area we have 16% decrease need in the housing market.
Could you explain when you say, you predict prices down 10% YoY as compared to the prediction if the housing market has bottomed – isnt this expected to happen anyway irrespective of housing market is bottomed or not as prices from peak May 2022 will likely more than 10% low YoY in May of 2023?
It bottomed. People are comfortable at their low 3% rate. Inventory might slightly go up but you won’t see many homes on the market due to low rates.
Excellent explanation with the 4 possible scenarios; analyzing inflation and recession trends. Gave me so much clarity! Thank you! 👏🏻
Overall summary: He don’t know
Sounds like a trap to me, banks are greedy. At least a 25 percent pull back.
Yes national data is important but nobody invests nationally, they invest locally. You really gotta localize for actionable insights.
i hope the housing market crashes worse than 2008. Fuck realtors and investors.
Almost got a house that I could “afford” till you realize some people burnout and there’s hidden expenses..
The housing market hasn't bottomed, this year will be slow, and values will tank as demand is down and inventory is up slightly compared to demand
Sorry, that topic is not even debatable, so I’m going to go watch something that is a little more plausible, I guess being optimistic is OK, but come on bro, it’s hard for you to keep the Straight face trying to explain this,
and what about inflationary recessions? mic drop
Housing market moving so fast you can tell who pre-records videos and releases them days later.
The banks will have to raise interest because the fed is still raising the cost of the money banks use.
I think your unaffordability metric is lagging. Mortgage rates are back to 7%.
We ARE in a recession
Hey David you dont give your reasoning in why prices will only go down 10%?
Also why did you edited out how you calculate affordability?
I’m buying and holding of the numbers work no matter what 🫶
There really hasn’t been a correction in home prices compared to what they were before the pandemic. That indicates we haven’t bottomed. Also, a recession is likely and the results of that future event are speculative. If inventory increases due to recession, we will see major price decreases. Also not accounted for is new construction inventory being at 8-9 months supply right now. This is the “hidden” issue people aren’t talking about. Combine that with recession/job layoffs, housing will be in a real mess.
I LOVE the information this channel puts out (especially what Dave does), but I absolutely cannot stand the random, incredibly generic b-roll coverage. Who is making the decision to add this in? It adds nothing to the video. Nothing. Not a single person is going "oh, I'll watch more of this video because they put up a shot of a weather woman while Dave was talking about forecasting interest rates". If anything it makes me want to stop watching. Just terrible a terrible choice.