on today's video we're going to tell you all about the big giant market crash that's coming that's
really a lie hi this is chris morton real estate broker with exp realty in raleigh north carolina
and youtube is an amazing place we've had a lot of clients come from youtube and they are really well
educated they know what's going on in the real estate market they get a lot of information from
youtube about buying a house and how the whole process works unfortunately they're also watching
some videos out there that have become very very popular you've probably seen them the people doing
them have thumbnails with their hair on fire their eyes are bugging out and they look like
they have been running a marathon in a three-piece suit and they're all sweaty and flop sweaty and
anyway they're breathless and they're telling you the market's gonna crash well they've scared
a lot of people and in fact we've had clients come to us and say we want to buy a house in
raleigh we want to move to raleigh but we want to wait until after the housing market crashes
because we know it's coming and there's no need to overpay for a house now and it's tough because we
have to explain there's really no evidence of this housing market crash happening and
these people that are telling you that there's a crash coming or doing it for a lot of reasons that
are a little suspect some of them may have good intentions they may believe what they're saying
but a lot of these people know the old news media headline adage if it bleeds it leads meaning if
it's something really scandalous or dangerous or controversial it goes on the front page of
a newspaper and everybody reads it nobody reads about how their sunshine and daisy's going on
nobody wants to know about that they always want to know about the crash so
these people are feeding the public what the public wants to hear that the world's coming to
an end that the market's going to crash et cetera et cetera unfortunately we've had some people
who were looking in october november december of last year for a house they decided to sit on the
sidelines because the market was going to crash or they were just frustrated by the whole process
and now they're back in the spring looking for houses and these same size houses are 20 and
30 thousand dollars more so they've put themselves behind the eight ball because they listen to these
so-called experts in fact we made a video a while back where we made fun of these experts and told
them we don't really believe what they're saying that the market is not going to crash
there's lots of reasons to jump on our train and we're going to go over some of those today
and now those same experts on youtube are coming around and saying sorry we made a mistake we
don't see a correction happening in yada yada
so unfortunately they've heard a lot of people and we're going to call them out today and say
you shouldn't always believe what an expert says the experts are really yourself what you believe
is happening and what you see in the raw data so we're going to go over the facts what we believe
is happening what we believe we think is going to be happening in the future but please know
we don't have a crystal ball any more than these experts have and we can only just give
you the facts we can only give you what we see on the ground here in raleigh north carolina as
far as activities going and the number of buyers out here the number of sellers etc
and extrapolate the trends from that so the first reason we don't believe there's going to
be a market crash is the mortgage situation back in 2008 if you could fog a mirror you could get
a mortgage there were dogs that got mortgages in 2008 i'm not even joking it really is true and now
things are much stricter you have to very much qualify for the specific mortgage you're getting
and for the specific size home you're getting you have to have money down and you have to be
able to prove you're going to be able to pay for your mortgage in the future so it is very
true that there are less people out there that are risky in the mortgage game right
now than there was in 2008 2008 there were so many foreclosures because people couldn't pay
for their phony loans and they had to dump their home on the market and it caused more people to
have to dump their homes on the market because the market kept going down down down in value
so mortgages are stricter today harder to get and so of course there's less people out there that
are in these risky loans therefore less people are foreclosing and therefore there's less people out
there losing their home the second reason that we don't believe there's going to be a crash is
the supply issue going on we've talked about it in other videos there really should be at this time
of the year in the raleigh triangle market around 12,000 homes for sale we are sitting now at 2,000
homes for sale meaning if today 10,000 homes were dumped on the market it would not cause a crash
at all those homes would be gobbled right up in fact i would argue that with the number of people
coming into our area with the number of industries we have tech industries coming into our area
ten thousand homes probably wouldn't even cause an equilibrium to happen i'm suspecting we're
gonna need even more than ten thousand homes to get to a point where it's not a seller's market
or a buyer's market that it's pretty much in the equilibrium which is the happy days it
makes everybody less stressful i just see that as not being the case because supply is so low
and remember when demand is high and supply is low that causes prices to go up when supply is
high demand is low like in 2008 crash prices are going down and also bear in mind home value is
determined by what a buyer is willing to pay for a home it's not based on what the seller thinks
the home is worth and truly it's not even based on what happened six to 12 months ago
or any data that an appraiser would use to value the home it's based strictly on what
a buyer thinks the home is worth and if there's simply just not a lot of supply and buyers are
picking over the tiny amount of really good homes that of course is going to drive prices up so
it's just a factor of what's going on in a natural factor of what's going on in our market right now
and of course as you can imagine and as we've talked about on previous videos this kind of
situation is causing a lot of stress we've gotten a number of clients coming to us from
youtube and two of them in particular have written six or seven offers each on homes
well over asking price and haven't been successful getting them so we're now in the business not only
of helping you find what kind of home you need helping you find the homes researching the homes
negotiating the homes and showing you the homes we're now also in the therapist business to kind
of talk people down from this stressful period of time and it's it's tough for everybody and
it's sort of a factor of the supply and demand and hopefully in the future it's going to get
better really soon on a side note from all of the supply issue is the corporate purchases that are
happening one of my clients has been tracking our market very very closely she's not local so she's
really depending on the data not on her eyes which quite frankly is probably the best way
to do things because you're kind of objective and she's seeing a number of homes that were
for sale back in the fall back in the winter when before they were really ready to buy that
were bought up and are now back on the market with very few improvements with a corporate seller at
a higher price so there's obviously investors in our market who are gobbling up homes unfortunately
i mean they're welcome to make a profit i'm not begrudging them for that but unfortunately they're
gobbling up the properties that a first-time homebuyer second time homebuyer would want to buy
and they're flipping them for a profit so that's also part of the supply issue we have right now
and again another reason why i don't think we're gonna have a crash anytime soon and
the third reason we don't think we're gonna have a crash is foreclosure so one of the big
pillars that these youtube experts were telling us about was that with the pandemic happening last
year we were going to see a ton of people getting foreclosed on they're going to lose their jobs
the home market was going to crash because foreclosures foreclosures foreclosures people
the banks would take people's houses well that didn't happen the federal government stepped in
and created a forbearance program you may have heard about it where basically anyone who felt
like they were not able to pay their mortgage could get a pause on their mortgage payments
and so a good number of people took the banks up on this offer and the good news is about 50
percent of those forbearances have been paid off they've been resolved because the people realized
they weren't getting free money they were gonna eventually have to pay the mortgage anyway so they
had their job they were okay they paid their mortgage back there's about fifty
percent that haven't quite got that done yet where they've gone through that process
the federal government is also stepping in to give them even more time to get this resolved so
the good news is it's unlikely that those forbearance owners homeowners are going to
have their homes dumped on the market through the foreclosure process in addition further good news
there was a study out recently that only three percent and actually a little less than three
percent of homes in the entire united states have negative or zero equity meaning the value of their
home is worth less than what their mortgage is that's what happened in the 2008 period
today only three percent have that issue going on the vast majority of people have a lot of equity
in their home and if they needed to they could sell it move to an apartment or a rental house
and actually turn a profit on their foreclosure forbearance house so highly unlikely that very
very many people will ever get into a foreclosure situation why not just put home on the market and
sell it and walk away with money in your pocket versus losing the whole bag of tricks and kitten
caboodle and the fourth reason we don't believe there's going to be a crash anytime soon is
the new construction is not getting dumped on the market right now so builders you would logically
think because we have such a supply deficit you would think those builders would be building
a ton of homes right now dumping them on the market to anybody who's willing to buy a house
and it would be a win-win for everybody unfortunately with material costs especially
lumber steel and even resin going up so high recently builders cannot afford to just start
building a ton of speculative homes in fact most builders i know are waiting way into the process
literally like the framing stage or even the drywall stage of a home before they put it
for sale on the market why are they doing this well they're doing it so they know exactly what
the home is going to cost a home that a builder is planning on building today and is a dirt lot
he has no idea or she has no idea what that final product is gonna cost based on material
costs so for them to guess what they should charge for that home six eight nine months
from now when the home is done they could end up losing their shirts so instead of doing that
they've been prudent they've been not building a lot of homes they're building a few at a time
and they've been building them very carefully so they know exactly what they have in them
so they don't take a loss unfortunately what this is doing instead of a builder putting 30 homes on
the market like they normally would do they're putting three or four on the market making it
impossible to add to this supply deficit problem we have and again causing prices to go up and up
and up so what will the future of housing look like well we've kind of hinted in this video
about our opinion that we think things are going to level out and the rapid increase in prices
we're seeing right now are going to slow down a little bit i don't think that means are going to
collapse and the prices are going to go down but i think they're going to level out and get a little
bit easier for everyone both the buyers and the sellers and don't forget the real estate agents
and this cooling off we're talking about is going to be a great thing for especially the
buyers of those three so they're gonna have more opportunity less competition
instead of having 30 offers on a home or 40 offers on a home there's going to be two or three offers
on a home real estate agents are going to benefit because they're not going to have to run out show
a property write a contract at midnight get a contract over to the listing agent at 1am and all
of that craziness that's going on right now and of course sellers are going to be better off because
they're not going to be stressed with multiple offers trying to decide who to pick
you're literally have people's lives and futures in your hands when you're selling a home and so
they're not gonna have to deal with all that they're gonna be able to take their time
everyone's gonna get a fair shot and it's gonna be a lot easier when this finally does happen and it
will happen eventually we will have some leveling off and why the main reason it's going to happen
is capitalism simple greed buyers will finally have more inventory to choose from when sellers
get wind of what their neighbors are doing or home owners get wind of what their neighbors are doing
and what the neighbors sold their house for the obscene amazing profit that the that the next door
neighbor made so someone's gonna see that they're gonna see how easy it was relatively to get their
home sold and they're gonna start putting their home on the market i had this conversation with a
client just this week that's coming here and i said we will eventually have this happen
eventually people who can't afford to move and by afford i mean they don't have a job commitment
here maybe they've lived the the raleigh lifestyle and they're looking to move to the coast and be
on the beach or move to the mountains that kind of thing we are very fortunate in the
state of north carolina that you can easily make that move within two or three hours of raleigh
and prices are a little bit better if not quite a bit better on both the coasts and the mountains
of north carolina or like the east down east part like greenville havelock that part of north
carolina has some really good prices as well so those people that are maybe retired or they don't
necessarily need to be here or don't necessarily care about the raleigh lifestyle anymore because
they've lived it for 40 50 years those people can now sell their home move away they've got
a ton of equity which is great for them they've got a great nest egg and that opens that home up
for a future buyer from local or out of state whatever and that cycle will eventually happen
and it will cause things to soften up a little bit and so all this added inventory will mean
prices will start leveling out instead of homes escalating 10 20 30 50 75,000 in a couple months
they're gonna escalate a thousand two thousand three thousand five thousand that sort of thing
now there are some markets that could have a potential slowdown reduction like san francisco
and los angeles the big cities new york has had a slow down already however these markets are
already bouncing back so this may not actually be a long-term trend i don't think it's going
to be a trend in most of the country and there's some select cities where we may not even ever see
the slowdown i'm talking about those would include austin texas phoenix arizona and yes raleigh north
carolina why are these cities these special cities out there well they are very popular
in the media they've gotten voted very popular by the general public as great places to live
the industry the tech giants are moving into those cities and so again you keep putting trying to put
ten pounds of sugar in a five pound sack you're gonna have a problem and
no matter how slow the sand that's the sugar goes into that sack it's still going into that sack so
that could be an issue for these select cities i think the rest of the country will definitely see
that slow down and reduction in the avalanche of price increases not sure about the select cities
i'm talking about we'll find out time will tell so what is the takeaway from all this
well the takeaway we want to share with you is do not trust any of the experts including us
when you just are deciding if you should buy or sell a home or not buy or sell a home you
need to go based on what you're seeing the hard data say and your gut if you are ready and need
to buy a new house or sell your current house then now is the time to do that don't wait for
some special market uh correction or adjustment or magical thing that's gonna happen because it won't
happen the experts have been telling us we're gonna have a crash any second now oh wait now
now okay it'll happen next week you get the point they've been
saying this for months now they're finally coming around and saying
there isn't going to be a crash or most of them are finally seeing our side of things
so trust your gut do what you think is right and of course you know what's right that is like and
subscribe below we'd love to hear your comments and we'll see you next time take care bye bye