Welcome back to America’s #1 Daily Podcast, featuring America’s #1 Real Estate Coaches and Top EXP Realty Sponsors in the World, Tim and Julie Harris.
Real estate agents, buyers, sellers, and renters all have the same question on their mind right now… Will the housing market crash? Will prices collapse and inventory avalanche? There are many conflicting ‘experts’ who claim a crash is looming. What follows are facts, not fiction.
After you hear all of these facts, the prevailing thoughts you will have are confidence, direction, and a sense of purpose. Your purpose is to be of service to others as a real estate professional. Your role is to be of service to those who need to buy or sell a home.
Knowledge equals confidence and ignorance equals fear. Our job is to educate you, motivate you and get you into action so let’s get started!
All Facts, No Fiction!
1. About 10% of all mortgages are adjustable rates. NOT like the great housing crash. Fewer than 1% of sales this year have been distressed, according to the National Association of Realtors.
IMPORTANT: Join #1 Real Estate Coaches Tim and Julie Harris’s Premier Coaching now for FREE. Included is a DAILY Coaching Session with a HARRIS Certified Coach. Proven and tested lead generation, systems, and scripts designed for this market. Instant FREE Access Now: YES, Enroll Me NOW In Premier Coaching https://members.timandjulieharris.com/
2. 40% of all homes are owned with no loan. Several states in the US have more than 50% mortgage-free homeowners.
Note: In 2008, California led the housing crash but currently, 30% of homeowners in that state have NO mortgage at all.
3. The average mortgage interest rate for homes closed in 2022, even with the higher rates of late, is less than 4.52%, most of which are 30-year fixed loans. More than 28% of closings are all cash. (up from 25% last year) You can’t default if there’s no mortgage, and you are unlikely to default if your rate doesn’t adjust to a payment you can’t handle.
4. According to Black Knight, US Mortgage delinquencies have fallen to an all-time low of just 2.75%. Don’t buy it when someone is selling you a list of REOs.
5. Home prices have inflated on average by 48% nationwide between 2020 and 2022. Just because they’re only going up by 1 to 5% this year is NOT something to be disturbed by! A 3% price reduction on a home that hasn’t sold is not the same as a price crash.
6. There will be approximately 4.5 million home sales in 2023. This means nearly 9 million commissions will be paid. How many do you need to meet or exceed your goals?
7. The Average days on the market have gone DOWN, not UP. Last year was 29, this year is now averaging only 22. This does not happen with a housing crash.
8. Demographics. There are 331,893,745 Americans. There are 72.1 million Millennials who are 26-41 years old. Baby Boomers 58-76, 71.6 million. One of those groups is growing in size as they grow their families. Immigrants are also a growing number of homebuyers. Both of those massive groups will be buying and selling in greater numbers over the next 10 years. Add to this Generation X which is 42-57 and has a group size of 65.2 million. Demand is quite healthy and supply is still low.
9. Buyers will continue to want to buy instead of rent. Refer to our podcast about why it’s still better to rent than buy. First-time buyers make up about 27% of today’s market.
10. The national unemployment rate is at historic lows of 3.7%. When you have a job, you pay your mortgage…especially when it’s an appreciating asset with a fixed payment. In 2009, unemployment peaked at 9.9%.
11. According to the National Association of Realtors, inventory we have a 2.6-month supply nationwide. We are still averaging fewer than 500,000 active listings and have not seen a significant uptick in inventory this year. Supply and demand dictate that prices will remain high as long as inventory is low, and it’s historically low!
12. The number of sales has declined to about the same rate as 2019, pre-pandemic numbers. That just means we went back to a slightly less hot but still seller’s market. Not a crash; a shift.
13. Inflation. The latest report on inflation quotes it as 9.1%, but it’s likely even higher than that. How does that affect housing? (Motley Fool) Inflation is an average increase in the prices for a collection of goods and services in a given economy over a set period of time, usually calculated by year.
Essentially, it’s the decrease in the purchasing power of the dollar over time.
Housing prices will continue to escalate, though likely at a lower percentage than the past couple of years. Rents will also continue to go up. So will your income, assuming you keep selling homes!
REITs, and rental properties including both residential and commercial all tend to do very well in inflationary times.
14. Government intervention. Even if housing values declined, inventory skyrocketed and demand dropped (HIGHLY unlikely…refer to the past points), the government now knows exactly how to intervene and has proven its willingness to do so. Forbearances, loan modifications, foreclosure moratoriums, rent forgiveness, and other tools are now at their disposal. None of that happened in the housing crash.
Bottom line? Stop freaking out! This time is not even close to being like last time! Build your skills in this market and they’ll serve you in ANY market.
IMPORTANT: Join #1 Real Estate Coaches Tim and Julie Harris’s Premier Coaching now for FREE. Included is a DAILY Coaching Session with a HARRIS Certified Coach. Proven and tested lead generation, systems, and scripts designed for this market. Instant FREE Access Now: YES, Enroll Me NOW In Premier Coaching https://members.timandjulieharris.com/
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