Hey what's going on guys this is Daniel and this is Sam and we are the Kwak Brothers. in this video
what are we going to talk about yeah welcome back to the weekend edition so let's go talk about the
housing market update and a lot of you guys had questions about when is the housing market going
to happen is it going to happen tomorrow next week next month so we're going to talk about the
timing of the housing market and also just kind of throw a little forward shadow out there i will
have a video for you guys sometime next week about uh how to buy the dip in the real estate
how to buy the real estate debt right that's the title of the video so be sure to subscribe and
stay tuned all right speaking of what staying tuned to the housing market so this is a
article that both realtors.com and marketwatch put at the same time this morning uh and so it
says pending home sales sync as the housing market falls back to earth right so it talks about the
statistics that the annual basis pending home sales were up nearly 52 percent but this time
last year pending sales have fallen to a record low as the onset of kobe 19 pandemic brought
a real estate transactions to a corrupt halt so interestingly enough erupt i'm sorry erupt corrupt
that's incredible yeah we're saving that for the biden video uh but what happened right so every
region experienced a monthly decrease in pending home sales meaning what your purchase volume is
slowly declining by 3.5 on a monthly basis here's the question right now what is driving what is the
driving factor of that is it the interest rate increase that we saw because the mortgage rates
did go back up uh it's back to three percent um daniel alluded to the federal rate going back up
we'll get to that one just one sec uh is it the mortgage rate interest rate or do you think that
uh all the people who would have bought finished buying well here here's here's what i think it
is here's why i think cause remember this is what we have to look at these are pending home
sales meaning that your volume is down so here's what i ultimately think happened i think the last
12 months we've obviously had extreme amounts of record guys in terms of the housing market
prices being high median home sales price jumped up to 375 thousand dollars which is the highest
it's ever been in the history of the united states um here's what i ultimately is believing happening
you have people in in the housing market right now realizing that the inventory is too low that is
the ultimate number one driver as to why houses are so high is because the inventory's so low
you have all these people in zillow in red then looking for their home and you know what they're
doing now they're starting to rent you're having potential homeowners individuals guys like me
and you right because we rent actually people don't know that about us we rent because for
us it's more physical fiscally uh beneficial more efficient yeah and uh what what people are really
not realizing is a lot of these people looking for homes are now entering the rental market
rent has gone up substantially i think five percent increase uh from last year yeah why don't
you tell these that how much has rent gone up in our area alone it's insane i mean it's just even
in our own apartment the apartment area complex um your rent my my runs my runs going up from 1982
right to 21.82 yes and you know what's even crazier 200 yeah so my wife and i we live in
a 3-2 right and it's 2 000 square feet rent has gone up 600 the last three years in our local area
the market rent used to be 1900 for a three bedroom is now 2500. i told my wife
lisa we went from a steal to a deal yes what happened so let's circle back right because
we're going to talk about the housing market a lot of people are asking what is going to happen um
now i i think the real question is is this going to be an actual crash where um where i would
define a crash as 30 uh decrease in value or more or through a month's span of time are we talking
in one quarter right quarter by quarter to next quarter right got it 30 decrease and it could it
could happen in a span of two or three quarters right but is this so the real question is is this
going to be a crash or are we going to have a soft landing correction where how many will lose
maybe we'll see a decrease of about 10 value but that's just an actual natural here's what i think
i think it's going to be a very quick sand like death okay so i think the housing market is going
to experience kind of like what you said 10 month after month after or quarter after quarter after
quarter decrease but i don't think that's going to happen until next year because ultimately if
you're looking at this number people are looking at this number they're saying oh the housing
market's going to crash well no not necessarily it just means the volume the purchasing volume is
just decreasing by 3.5 meaning that your buyers are leaving the market so more people are going
into rentals which is why rents have been going up pretty much everywhere in the country because
there's more demand so you said next year what do you feel like as a driver for them for that to be
next year so ultimately the reason why i don't say this year and potentially it might not even happen
until fourth or third quarter of next year because you still have millions of millennial home buyers
waiting on the sidelines to be able to purchase their first home those need to be dried up correct
and the other idea also a lot of people don't and and this is a forgetting point that a lot
of people don't realize is that uh we haven't seen any distressed inventory hit the market
no not a long time yeah and if you factor that in if if we see a wave of distress distress inventory
these are uh pri these are homes that might go through pre-foreclosure or going through
foreclosure forbearance yeah we haven't even talked about forbearance play a role into that
so if the question is when right and i think daniel might be right in terms of combination of
different factors right we got um the the buyers kind of leaving the market but i think more so
that could hurt and cause some kind of housing market adjustments or correction and we don't know
yet whether you know if this is gonna be a soft correction or a giant crash i think what could
be a bigger contributor for that is gonna be the distressed inventory next year i agree when when
the forbearance programs and we still have 1.2 i believe 1.3 million distressed or 1.3 million
homeowners are in forbearance right now one set is set to expire and of course you know cfpb and
all these guys are lining up and saying hey we shouldn't do any foreclosures until 2022. so this
that that's you know a signal to me like oh okay that means the stress inventories will probably
not hit until 2022 nationwide yeah and you know what's really going to be interesting is i think
and ray dalio was saying it cathy whitaking and michael bury is saying it everybody is
warning us of hyperinflation everybody's warning us of inflation so think about this for a second
you guys if we're talking about homes decreasing in value let's say 10 every single quarter but at
the same time our nation is experiencing some level of inflation april showed us 4.2 percent
if it's at five percent six percent which is very high historically yeah very very high that's even
that's even higher than what the obama administration administered to recover
the market which was at around four twenty four point two percent in in you know the the
fall of 2008 yeah so think about this for a second what is the housing market going to look
like when the overall market or overall economy is experiencing very high levels of inflation
and at the same time the price of a home is going down down down down down you know what that equals
not good news for the middle class america oh absolutely it makes it harder for people
to buy um and and by the way we'll talk about this in just one second but there's a shift to
more people renting more millennials wanting to um they actually regret buying a home um yeah 64
of millennials actually reported in a survey they reported not being happy they regretted
buying homes you know the number one reason was the cost of maintenance yeah they didn't account
for the cost of maintenance yeah yeah so um the the the the point that i wanted to drive earlier
was um you know with less less buyers being introduced i i think there's gonna be more
um there's gonna be definitely more um institutional investors coming in
buying up more properties we're going to see more more i think more institutional ownership
than private individual ownership yeah overall yeah that's what we're going to save no i agree
i think i think a lot of our generation's moving towards single-family rentals yeah
absolutely so oh by the way talk about hyperinflation sometime next week we'll
have a video out for you guys uh talking about how hyperinflation affects the heloc strategy i know
we haven't talked about that in a while we haven't you know you're using yeah you gotta
dust it off we do got to take it out of the closet um but we're going to talk about that
next week uh and we'll talk about we're going to talk about how the inflation doesn't necessarily
affect uh paying off your mortgage anymore as much and i know traditionally people are like well with
the you know with the low interest rates and you know inflation doesn't it make it less attractive
to pay off your mortgage but there is a trap that most people don't talk about and we have to talk
about reality here's the thing too inflation is one of the most misunderstood words in economics
it's like fire you can either use it to you know get your s'mores and cook your hot dogs right and
have a great bonfire or it could be used to burn down your house right right inflation's one of
those things where it could either be good or it could be the bat it's just how it's used so again
guys thank you for watching let us know what do you guys think is happening in the housing market
what do you think the timing is going to be what do you think about inflation anything you want to
add in there yeah so really coming back to the idea when right the question mark went i mean
no one knows for sure no one knows the clues are there the writings on the wall is showing us that
it it could be sometime in 2022 we've yet to see any significant amount of distress inventory hit
the market so that's that's a big big thing all of you guys should be watching right now
uh especially if you guys are interested in buying the dip right and we'll talk about how to buy the
dip uh in terms of real estate goes and uh and i think that's what a lot of you guys are thinking
is you guys are waiting on the sideline like when is our turn right when is it our turn to
get the discount inventory i think we're going to see it um is it going to be 08 i don't think so
i don't think it's going to be as bad never know yeah but so that's just my personal production
is 2022 there's a combination of different factors happening uh affordability and all those things
but distressed yeah inventory is something that we're watching right now so again guys don't
forget to like this video subscribe to our youtube channel we're gonna have phenomenal content coming
next week and again let me know you guys thoughts in the comment section below what do you guys
think you heard our opinions yeah you heard our thoughts i wanna hear yours so again guys have
a great weekend also happy memorial day to those individuals especially who um have loved ones who
who served and unfortunately are not with us anymore uh we thank you much respect to those
individuals as well uh sam you're a veteran nick behind the camera he's a veteran anything you guys
want to add in regards to memorial day no let's just remember uh all those individuals that you
know actually did something for for the country right so for sure that being said we'll close
this out have a go oh nick nick's got something what do you got nick hey when you're at the beach
think about normandy think about the men who lost their lives on a beach no for our freedom
don't forget that don't thank me don't thank a veteran just remember who lost their lives for
this country that's right greatest place in the world see you guys have a great weekend